Exhibit 10.1

 

HUDSON HIGHLAND GROUP, INC.

BOARD OF DIRECTORS

STOCK OPTION AGREEMENT

 

STOCK OPTION AGREEMENT (“Agreement”) made as of the [DAY]th day of [MONTH],
[YEAR], by and between HUDSON HIGHLAND GROUP, INC., a Delaware corporation (the
“Company”) and [FIRST NAME LAST NAME] (the “Optionee”).

 

W I T N E S S E T H:

 

WHEREAS, pursuant to the Hudson Highland Group, Inc. Long Term Incentive Plan
(the “Plan”), the Company desires to grant to the Optionee and the Optionee
desires to accept an option to purchase shares of common stock, $.001 par value,
of the Company (the “Common Stock”) upon the terms and conditions set forth in
this Agreement.

 

NOW, THEREFORE, the parties hereto agree as follows:

 

1. Grant. Subject to the terms and conditions set forth herein, the Company
hereby grants to the Optionee an option to purchase up to [OPTIONS] shares of
Common Stock at a purchase price per share of $[PRICE]. This option is intended
to be treated as an option that does not qualify as an incentive stock option
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended.

 

2. Vesting. As of the date of this Agreement, 40% of the option will be vested
and exercisable. Except as specifically provided otherwise herein, the remainder
of the option will vest and become exercisable, if at all, in accordance with
the following schedule based upon the number of full years of the Optionee’s
continuous service with the Company or an affiliate (as defined below) of the
Company following the date of this Agreement. As used in this Agreement, the
term “affiliate” means an affiliate of the Company within the meaning of Rule
405 under the Securities Act of 1933, as amended.

 

Full Years of Continuous

Service

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   Incremental
Percentage of
Option
Exercisable

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    Cumulative
Percentage of
Option
Exercisable

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1

   20 %   60 %

2

   20 %   80 %

3

   20 %   100 %

 

If any fractional shares would result from the strict application of the
incremental percentages set forth above, then the actual number of shares
vesting on any specific date will cover only the full number of shares
determined by rounding the number of shares to be issued from the strict
application of the incremental percentages set forth above to the nearest whole
number. Unless sooner terminated, the option will expire on the tenth
anniversary of the date hereof.

 

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3. Exercise. Any portion of the option which has vested and is exercisable may
be exercised in whole or in part by delivering to the Executive Vice President,
Human Resources of the Company at its corporate headquarters in New York, New
York (a) a written notice specifying (1) the number of shares to be purchased,
(2) the date of this Agreement and the specific number of shares referred to in
Section 1 of this Agreement, (3) the Optionee’s home address and, if the
Optionee has one, the Optionee’s social security or U.S. taxpayer identification
number and (4) delivery instructions with respect to the shares of Common Stock
issuable upon exercise, and (b) cash payment in full of the exercise price,
together with the amount, if any, deemed necessary by the Company to enable it
to satisfy any federal, foreign or other tax withholding obligations with
respect to the exercise (unless other arrangements acceptable to the Company in
its sole discretion have been made). The Company may from time to time change
(or provide alternatives to) the method of exercise of the option granted
hereunder by notice to the Optionee, it being understood that from and after
such notice the Optionee will be bound by the method (or alternatives) specified
in any such notice. The Company (in its sole and absolute discretion) may permit
all or part of the exercise price to be paid with shares of Common Stock which
have been owned by the Optionee for at least six months, or in installments
(together with interest) evidenced by the Optionee’s secured promissory note.

 

4. Issuance of Shares. No shares of Common Stock shall be sold or delivered
hereunder until full payment for such shares has been made. The Optionee shall
have no rights as a stockholder with respect to any shares covered by the option
until a stock certificate for such shares is issued to the Optionee. Except as
otherwise provided herein, no adjustment shall be made for dividends or
distributions of other rights for which the record date is prior to the date
such stock certificate is issued.

 

5. No Assignment of Option. This option is not assignable or transferable except
upon the Optionee’s death to a beneficiary designated by the Optionee in a
written beneficiary designation filed with the Company or, if no duly designated
beneficiary shall survive the Optionee, pursuant to the Optionee’s will and/or
by the laws of descent and distribution, and is exercisable during the
Optionee’s lifetime only by the Optionee or the Optionee’s guardian or legal
representative.

 

6. Termination of Service. If the Optionee’s service as a director of the
Company ceases for any reason other than death, then, unless sooner terminated,
that portion of the option which is exercisable on the date the Optionee ceases
service will remain exercisable for a period of six months after such date (one
year in the case of an Optionee whose service ceases by reason of disability (as
defined below)) but in no event after the expiration of the option in accordance
with Section 2, and the remaining portion of the option will automatically
expire on such date. If the Optionee’s service ceases by reason of the
Optionee’s death, then, unless sooner terminated, the option will become fully
vested (to the extent it was not vested on the date of death) and will remain
exercisable by the Optionee’s beneficiary for a period of one year after the
date of the Optionee’s death but in no event after the expiration of the option
in accordance with Section 2. Any vested option which is not exercised within
the applicable six month or one-year period following termination of service
will automatically expire. For purposes hereof, the term “disability” means the
inability of the Optionee to perform the customary duties of the Optionee’s
service with the Company or an affiliate of the Company by

 

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reason of a physical or mental incapacity which is expected to result in death
or be of indefinite duration as determined by the Committee (as defined in the
Plan).

 

7. Securities Law Restrictions. Notwithstanding anything herein to the contrary,
the option shall in no event be exercisable and shares shall not be issued
hereunder if, in the opinion of counsel to the Company, such exercise and/or
issuance may result in a violation of federal or state securities laws or the
securities laws of any other relevant jurisdiction.

 

8. Capital and Corporate Changes.

 

(a) Adjustments Upon Changes in Capitalization. The number and class of shares
covered by this option and, if applicable, the exercise price per share shall be
adjusted proportionately or as otherwise appropriate to reflect any increase or
decrease in the number of issued shares of Common Stock resulting from a
split-up or consolidation of shares or any like capital adjustment, or the
payment of any stock dividend, and/or to reflect a change in the character or
class of shares covered by the Plan arising from a readjustment or
recapitalization of the Company’s capital stock.

 

(b) Change in Control. If, in connection with a Change in Control (as defined
below), the stockholders of the Company receive capital stock of another
corporation (“Exchange Stock”) in exchange for their shares of Common Stock
(whether or not such Exchange Stock is the sole consideration), and if the Board
of Directors of the Company (the “Board”) so directs, then this option will be
converted into an option to purchase shares of Exchange Stock. The number of
shares and exercise price under the converted option will be determined by
adjusting the number of shares and exercise price under this option on the same
basis as the determination of the number of shares of Exchange Stock the holders
of Common Stock will receive in connection with the Change in Control and,
unless the Board determines otherwise, the vesting conditions with respect to
the converted options will be substantially the same as the vesting conditions
set forth herein. If the Board does not direct a conversion of the outstanding
option in connection with a Change in Control, then the Optionee will be
permitted to exercise the outstanding option in whole or in part (whether or not
otherwise vested or exercisable) prior to the Change in Control, and any
outstanding option which is not exercised before the Change in Control will
thereupon terminate.

 

(c) Definition of Change in Control. For purposes hereof, the term “Change in
Control” shall be deemed to occur if (1) there shall be consummated (A) any
consolidation, merger or reorganization involving the Company, unless such
consolidation, merger or reorganization is a “Non-Control Transaction” (as
defined below) or (B) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all, or substantially all,
of the assets of the Company; (2) the stockholders of the Company shall approve
any plan or proposal for liquidation or dissolution of the Company; (3) any
person (as such term is used in Section 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)), shall become the
beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of
more than 50% of the combined voting power of the Company’s then outstanding
voting securities other than pursuant to a plan or arrangement entered into by
such person and the Company; or (4) during any period of two consecutive years,
individuals who at the beginning of such period constitute the entire Board
shall cease for any

 

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reason to constitute a majority thereof unless the election, or the nomination
for election by the Company’s stockholders, of each new director was approved by
a vote of at least two-thirds of the directors then still in office who were
directors at the beginning of the period or who were so approved. A “Non-Control
Transaction” shall mean a consolidation, merger or reorganization of the Company
where (1) the stockholders of the Company immediately before such consolidation,
merger or reorganization own, directly or indirectly, at least a majority of the
combined voting power of the outstanding voting securities of the corporation
resulting from such consolidation, merger or reorganization (the “Surviving
Corporation”); (2) the individuals who were members of the Board immediately
prior to the execution of the agreement providing for such consolidation, merger
or reorganization constitute at least 50% of the members of the board of
directors of the Surviving Corporation, or a corporation directly or indirectly
beneficially owning a majority of the voting securities of the Surviving
Corporation; and (3) no person (other than (a) the Company, (b) any subsidiary
of the Company, (c) any employee benefit plan (or any trust forming a part
thereof) maintained by the Company, the Surviving Corporation or any subsidiary,
or (d) any person who, immediately prior to such consolidation, merger or
reorganization, beneficially owned more than 50% of the combined voting power of
the Company’s then outstanding voting securities) beneficially owns more than
50% of the combined voting power of the Surviving Corporation’s then outstanding
voting securities.

 

(d) Fractional Shares. In the event of any adjustment in the number of shares
covered by this option pursuant to the provisions hereof, any fractional shares
resulting from such adjustment will be disregarded, and the option, as adjusted,
will cover only the number of full shares resulting from the adjustment.

 

(e) Determination of the Board to be Final. All adjustments under this Section
shall be made by the Board, and its determination as to what adjustments shall
be made, and the extent thereof, shall be final, binding and conclusive.

 

9. Plan Provisions. The provisions of the Plan shall govern if and to the extent
that there are inconsistencies between those provisions and the provisions
hereof. The Optionee acknowledges receipt of a copy of the Plan prior to the
execution of this Agreement.

 

10. Administration. The Committee will have full power and authority to
interpret and apply the provisions of this Agreement and act on behalf of the
Company and the Board in connection with this Agreement, and the decision of the
Committee as to any matter arising under this Agreement shall be binding and
conclusive as to all persons.

 

11. Binding Effect; Headings. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. The subject headings of Sections of this Agreement are
included for the purpose of convenience only and shall not affect the
construction or interpretation of any of its provisions. All references in this
Agreement to “$” or “dollars” are to United States dollars.

 

12. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware. This Agreement constitutes
the entire agreement between the parties with respect to the subject matter
hereof and controls and supersedes any prior understandings, agreements or
representations by or between the parties,

 

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written or oral with respect to its subject matter and may not be modified
except by written instrument executed by the parties. The Optionee has not
relied on any representation not set forth in this Agreement.

 

IN WITNESS WHEREOF, this Agreement has been executed as of the date first above
written.

 

HUDSON HIGHLAND GROUP, INC.

By:

       

Name:

   

Title:

  Optionee – Signature   Optionee – Print Name

 

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