HARRIS INTERACTIVE INC. NON-QUALIFIED STOCK OPTION AGREEMENT (Employee Participant — Revised Effective for Grants Made After May 1, 2008)
EXHIBIT 10.1
▇▇▇▇▇▇ INTERACTIVE INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
(Employee Participant — Revised Effective for Grants Made After May 1, 2008)
(Employee Participant — Revised Effective for Grants Made After May 1, 2008)
THIS AGREEMENT, entered into as of the Grant Date (as defined in Section 1), by and between
the Participant and ▇▇▇▇▇▇ Interactive Inc. (the “Company”);
WITNESSETH THAT:
WHEREAS, the Company maintains the ▇▇▇▇▇▇ Interactive Inc. Long-Term Incentive Plan (the
“Plan”), which is incorporated into and forms a part of this Agreement, and the Participant has
been selected by the committee administering the Plan (the “Committee”) to receive a Non-Qualified
Stock Option Award under the Plan;
NOW, THEREFORE, IT IS AGREED, by and between the Company and the Participant, as follows:
1. Terms of Award. The following terms used in this Agreement shall have the meanings
set forth in this Section 1:
| (a) | The “Participant” is . | ||
| (b) | The “Grant Date” is . | ||
| (c) | The number of “Covered Shares” shall be shares of Stock. | ||
| (d) | The “Initial Exercise Date” is the one-year anniversary of the Grant Date. | ||
| (e) | The “Exercise Price” is $ per share. |
Other terms used in this Agreement are defined in Section 9 and elsewhere in this Agreement.
2. Award and Exercise Price. The Participant is hereby granted an option (the
"Option”) to purchase the number of Covered Shares of Stock at the Exercise Price per share as set
forth in Section 1. The Option is not intended to qualify as an “Incentive Stock Option,” as
defined in the Plan and in Section 422(b) of the Code.
3. Date of Exercise.
(a) The Option shall become exercisable with respect to:
(i) 1/4th of the Covered Shares as of the Initial Exercise Date; and
(ii) 1/48th of the Covered Shares as of the end of each of the next 36
calendar months thereafter,
provided, however, that to the extent that the Option has not become exercisable on or before the
Participant’s Date of Termination, such Option shall no longer become exercisable in accordance
with the foregoing schedule as of any date subsequent to the Participant’s Date of Termination
except as provided in the immediately following paragraph. Exercisability under this schedule is
cumulative, and after the Option becomes exercisable under the schedule with respect to any portion
of the Covered Shares, it shall continue to be exercisable with respect to that portion, and only
that portion, of the Covered Shares until the Expiration Date (described in Section 4 below).
(b) Notwithstanding Section 3(a), the Option shall become immediately exercisable with respect
to all of the Covered Shares (whether or not previously vested) upon the occurrence of the
Participant’s Date of Termination by reason of the Participant’s death or Disability if such Date
of Termination is after the Initial Exercise Date.
(c) Notwithstanding the provisions of this Section 3(a), the Option shall become immediately
exercisable with respect to all of the Covered Shares (whether or not previously vested) upon the
date of a Change in Control if the Participant’s Date of Termination does not occur before such
Change in Control and a Complying Assumption does not occur in connection with the Change in
Control. If a Complying Assumption occurs in connection with the Change in Control, then the
Option shall become immediately exercisable with respect to all of the Covered Shares (whether or
not previously vested) if the Participant’s Date of Termination occurs upon or in the one-year
period immediately following a Change in Control (as defined in the Plan) unless such Date of
Termination is due to termination of Participant by the Company for Cause or Participant’s
voluntary termination of his or her employment without Good Reason.
4. Expiration. The Option, to the extent not theretofore exercised, shall not be
exercisable on or after the Expiration Date. The “Expiration Date” shall be earliest to
occur of:
(a) the ten-year anniversary of the Grant Date;
(b) if the Participant’s Date of Termination occurs by reason of Disability or death, the
one-year anniversary of such Date of Termination;
(c) if the Participant’s Date of Termination occurs for reasons other than death or
Disability, thirty days after the Date of Termination; and
(d) the date of any breach by Participant of his or her obligations under Section 8 of this
Agreement.
In the event of the Participant’s death while in the employ of the Company, the Participant’s
executors or administrators (or the person or persons to whom the Participant’s rights under the
Option shall have passed by the Participant’s will or by the laws of descent and distribution) may
exercise, any unexercised portion of the Option to the extent such exercise is otherwise permitted
by this Agreement.
Any Option exercised subsequent to the Participant’s Date of Termination as permitted
hereunder shall be exercisable only to the extent vested at the time of the Participant’s Date of
Termination, regardless of the reason for the termination, and no extension of time beyond the
Participant’s Date of Termination shall permit exercise beyond the date such Option would otherwise
expire if no termination had occurred.
5. Method of Option Exercise. The Option may be exercised in whole or in part by
filing a written notice with, and which must be received by, the Secretary of the Company at its
corporate headquarters prior to the Expiration Date. Such notice shall (a) specify the number of
shares of Stock which the Participant elects to purchase; provided, however, that not less than one
hundred (100) shares of Stock may be purchased at any one time unless the number purchased is the
total number of shares available for purchase at that time under the Option, and (b) be accompanied
by payment of the Exercise Price for such shares of Stock indicated by the Participant’s election.
Payment shall be by cash or by check payable to the Company, or, at the discretion of the Committee
at any time: (a) all or a portion of the Exercise Price may be paid by the Participant by delivery
of shares of Stock acceptable to the Committee (including, if the Committee so approves, the
withholding of shares otherwise issuable upon exercise of the Option) and having an aggregate Fair
Market Value (valued as of the date of exercise) that is equal to the amount of cash that would
otherwise be required; and (b) the Participant may pay the Exercise Price by authorizing a third
party to sell shares of Stock (or a sufficient portion of the shares) acquired upon exercise of the
Option and remit to the Company a sufficient portion of the sale proceeds to pay the entire
Exercise Price and any tax withholding resulting from such exercise.
6. Withholding. All distributions under this Agreement are subject to withholding of
all applicable taxes. At the election of the Participant, and subject to such rules as may be
established by the Committee, such withholding obligations may be satisfied through the surrender
of shares of Stock which the Participant already owns, or to which the Participant is otherwise
entitled under the Plan.
7. Transferability. The Option is not transferable other than as designated by the
Participant by will or by the laws of descent and distribution, and during the Participant’s life,
may be exercised only by the Participant or the Participant’s legal guardian or legal
representative. However, the Participant, with the approval of the Committee, may transfer the
Option for no consideration to or for the benefit of the Participant’s Immediate Family (including,
without limitation, to a trust for the benefit of the Participant’s Immediate Family or to a
partnership or limited liability company for one or more members of the Participant’s Immediate
Family), subject to such limits as the Committee may establish, and the transferee shall remain
subject to all the terms and conditions applicable to the Option prior to such transfer. The
foregoing right to transfer Option shall apply to the right to consent to amendments to this
Agreement and, in the discretion of the Committee, shall also apply to the right to transfer
ancillary rights associated with the Option. The term “Immediate Family” shall mean the
Participant’s spouse, parents, children, stepchildren, adoptive relationships, sisters, brothers
and grandchildren (and, for this purpose, shall also include the Participant).
8. Non-Competition; Non-Solicitation.
(a) Consideration for this Section. Participant acknowledges and agrees that:
(i) the benefits afforded by this Agreement are discretionary and over and above the ordinary
employment compensation provided by the Company to Participant, and in making its decision to offer
Participant the benefits afforded by this Agreement the Company relied upon and was induced by the
covenants made by Participant in this section,
(ii) in accepting the grant evidenced by this Agreement Participant is receiving an asset of
significant value, which is adequate consideration for the restrictions imposed by this Agreement,
(iii) Participant’s position with the Company places Participant in a position of confidence
and trust with the clients and employees of the Company,
(iv) the Company’s business is carried on throughout the world and accordingly, it is
reasonable that the restrictive covenants set forth below are not limited by specific geographic
area,
(v) the course of Participant’s employment with the Company necessarily requires the
disclosure of confidential information and trade secrets related to the Company’s relationships
with clients (such as, without limitation, pricing information, marketing plans, budgets, designs,
methodologies, products, client preferences and policies, and identity of appropriate personnel of
clients with sufficient authority to influence a shift in suppliers) as well as other confidential
and proprietary information, (such as databases, methodologies, and technologies),
(vi) Participant’s employment affords Participant the opportunity to develop a personal
acquaintanceship and relationship with the Company’s employees and clients, which in some cases may
constitute the Company’s primary or only contact with such employees and clients, and to develop a
knowledge of those client’s and employee’s affairs and requirements,
(vii) the Company’s relationships with its established clientele and employees are placed in
Participant’s hands in confidence and trust, and
(viii) it is reasonable and necessary for the protection of the goodwill
and business of the Company that Participant make the covenants contained in this Agreement.
(b) Restricted Activity.
(i) Participant agrees that during the term of Participant’s employment, Participant shall
not, directly or indirectly, as a director, officer, employee, agent, partner or equity owner of
any entity (except as owner of less than 4.9% of the shares of the publicly traded stock of a
corporation which Participant does not have in fact the power to control or direct), or in any
other manner directly or indirectly engage in any activity or business competitive in any manner
with the activities or business of the Company.
(ii) For a period of one year after Participant’s Date of Termination, with respect to any
services, products, or business pursuits competitive with those of the Company, Participant shall
not, directly or indirectly, whether as a director, officer, employee, consultant, agent, partner,
equity owner of any entity (except as owner of less than 4.9% of the shares of the publicly traded
stock of a corporation which Participant does not have in fact the power to control or direct),
participant, proprietor, manager, operator, independent contractor, representative, advisor,
trustee, or otherwise, solicit or otherwise deal in any way with any of the clients or customers of
the Company:
(A) with whom Participant in the course of employment by the Company acquired a
relationship or had dealings,
(B) with respect to whom Participant in the course of employment by the Company was
privy to material or proprietary information, or
(C) with respect to whom Participant was otherwise involved in the course of employment
by the Company, whether in a supervisory, managerial, consultative, policy-making, or other
capacity involving other Company employees who had direct dealings with such clients and
customers.
Such clients and customers include any client or customer to whom the Company sold services or
products in the two years prior to the Date of Termination, any prospective client or customer of
the Company for whom a proposal was prepared or to whom any other marketing presentation was made
within the year prior to the Date of Termination, or any prospective client or customer for whom
pursuit was actively planned by the Company within the year prior to the Date of Termination and in
respect of whom the Company has not determined to cease such pursuit.
(iii) For a period of one year after the Date of Termination, Participant shall not (including
without limitation on behalf of, for the benefit of, or in conjunction with or as part of, any
other person or entity) directly or indirectly:
(A) solicit, assist, discuss with or advise, influence, induce or otherwise encourage
in any way, any employee of Company to terminate such employee’s relationship with Company
for any reason, or assist any person or entity in doing so,
(B) employ, assist, engage, or otherwise contract or create any relationship with, any
employee or former employee of Company in any business or venture of any kind or nature, in
the case of a former employee unless such person shall not have been employed by Company for
a period of at least one year and no solicitation prohibited hereby shall have occurred
prior to the end of such one year period, or
(C) interfere in any manner with the relationship between any employee and Company.
(c) Remedies. Participant acknowledges that the Company’s legal remedies for a breach
of this Section 8 shall be inadequate, and that without limitation of Company’s rights to any other
remedy at law or equity available to it, the Company (i) shall be entitled to obtain
injunctive relief to enforce this provision, and (ii) shall be entitled to cancel any rights under
this Agreement, and (iii) shall be entitled to recover from the Participant any Stock for which
this option has been exercised, or if such Stock has been transferred or sold, an amount equal to
the value thereof, and such Stock and the proceeds thereof shall be held in a constructive trust
for the purposes of enforcement hereof. The Company’s rights to enforce this Agreement shall
survive any vesting and/or forfeiture of rights hereunder. If any part of this Section 8 shall be
deemed illegal or unenforceable, this section shall be deemed modified and then enforced to the
greatest extent legally enforceable.
9. Definitions. For purposes of this Agreement, the terms listed below shall be
defined as follows:
(a) “Cause” means (A) refusal or substantial failure to perform (other than due to
physical or mental disability), or misconduct in the performance of, the ordinary and customary
duties of Participant as reasonably required by the Company or the successor company, provided that
such refusal, failure, or misconduct has continued after the Company or the surviving or acquiring
entity or successor company (“successor company”) has given Participant five business days written
notice of same, (B) overt and willful disobedience of orders or directives issued by the Company or
successor company that are within the reasonable scope of Participant’s duties to the Company or
successor company, (C) conviction of or commission of any felony by Participant, whether or not
related to performance of duties under this Agreement, (D) commission of any other illegal act if
committed in connection with the performance of duties for the Company or successor company if such
act could reasonably tend to bring the Company or successor company into disrepute, or (E) material
violation of the Company’s or successor company’s written rules, regulations or policies of general
application provided that such violation has continued after the Company or successor company has
given Participant five business days written notice of same.
(b) Complying Assumption. A Complying Assumption pursuant to Section 3(c) shall occur
if in connection with a Change in Control the surviving or acquiring entity or successor company ,
or its respective parent company, assumes, continues, or substitutes for the Option as provided in
Section 4.15 of the Plan.
(c) Date of Termination. The Participant’s “Date of Termination” shall be the first
day occurring on or after the Grant Date on which the Participant’s employment with the Company and
all Related Companies terminates (irrespective of the reason for termination and whether such
termination is voluntary or involuntary); provided that a termination of employment shall not be
deemed to occur by reason of a transfer of the Participant between the Company and a Related
Company or between two Related Companies; and further provided that the Participant’s employment
shall not be considered terminated while the Participant is on a leave of absence from the Company
or a Related Company approved by the Participant’s employer. If, as a result of a sale or other
transaction, the Participant’s employer ceases to be a Related Company (and the Participant’s
employer is or becomes an entity that is separate from the Company), the occurrence of such
transaction shall be treated as the Participant’s Date of Termination caused by the Participant
being discharged by the employer.
(d) Disability. Except as otherwise provided by the Committee, the Participant shall
be considered to have a “Disability” during the period in which the Participant is unable, by
reason of a medically determinable physical or mental impairment, to engage in any substantial
gainful activity, which condition, in the opinion of a physician selected by the Committee, is
expected to have a duration of not less than 120 days.
(e) “Good Reason” means (i) material breach of the Company’s or successor company’s
obligations to Participant, provided that Participant shall have given reasonably specific written
notice thereof to the Company and/or successor company, and the Company and/or successor company
shall have failed to remedy the circumstances within ten business days thereafter, (ii) any
decrease in Participant’s base salary as in effect immediately prior to any Change of Control, or
any material decrease in Participant’s benefits if such modification is not of general
applicability to other similarly situated employees, or (iii) the relocation of Participant’s
principal office to a location more than thirty (30) miles
from the location of his/her office immediately prior to the Change in Control; provided,
however, that Participant’s principal office shall not be deemed to be relocated by virtue of
Participant being required to spend up to ten working days per month on average in the Company’s or
successor company’s, and their respective affiliate’s, other offices.
(f) Retirement. “Retirement,” as defined by the Company’s applicable retirement plan,
or if not formalized under a plan, by the Company’s policies and procedures.
(g) Plan Definitions. Except where the context clearly implies or indicates the
contrary, a word, term, or phrase used in the Plan is similarly used in this Agreement.
10. Heirs and Successors. This Agreement shall be binding upon, and inure to the
benefit of, the Company and its successors and assigns, and upon any person or entity acquiring,
whether by merger, consolidation, purchase of assets or otherwise, all or substantially all of the
Company’s assets and business. In the event of the Participant’s death prior to exercise of this
Award, the Award may be exercised by the estate of the Participant to the extent such exercise is
otherwise permitted by this Agreement. Subject to the terms of the Plan, any benefits
distributable to the Participant under this Agreement that are not paid at the time of the
Participant’s death shall be paid at the time and in the form determined in accordance with the
provisions of this Agreement and the Plan, to the beneficiary designated by the Participant in
writing filed with the Committee in such form and at such time as the Committee shall require. If a
deceased Participant fails to designate a beneficiary, or if the designated beneficiary of the
deceased Participant dies before the Participant or before complete payment of the amounts
distributable under this Agreement, the amounts to be paid under this Agreement shall be paid to
the legal representative or representatives of the estate of the last to die of the Participant and
the beneficiary. Neither the benefits or obligations under this Agreement may be transferred or
assigned by Participant except as otherwise expressly provided herein or in the Plan.
11. Administration. The authority to manage and control the operation and
administration of this Agreement shall be vested in the Committee, and the Committee shall have all
powers with respect to this Agreement as it has with respect to the Plan. Any interpretation of
the Agreement by the Committee and any decision made by it with respect to the Agreement is final
and binding.
12. Plan Definitions. Notwithstanding anything in this Agreement to the contrary, the
terms of this Agreement shall be subject to the terms of the Plan, a copy of which may be obtained
by the Participant from the office of the Secretary of the Company.
13. Amendment. This Agreement may be amended by written Agreement of the Participant
and the Company, without the consent of any other person.
THIS AGREEMENT SHALL NOT BE EFFECTIVE UNLESS A COPY SIGNED BY THE PARTICIPANT IS DELIVERED TO
THE COMPANY WITHIN FORTY-FIVE (45) DAYS AFTER THE GRANT DATE.
IN WITNESS WHEREOF, the Participant has executed this Agreement, and the Company has caused
these presents to be executed in its name and on its behalf, all as of the Grant Date.
| Participant | ||||||
| Name: | ||||||
| Dated: | ||||||
| ▇▇▇▇▇▇ Interactive Inc. | ||||||
| By: | ||||||
| Its: | ||||||