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Exhibit 10.3    
    


 
 

HIRERIGHT, INC.
  EMPLOYEE STOCK PURCHASE PLAN    
    


        HireRight, Inc. (the "Company"), a Delaware corporation, hereby establishes and adopts the HireRight, Inc. Employee Stock Purchase Plan (the
"Plan"). 


1.     PURPOSE  


        The purpose of the Plan is to provide eligible employees of the Company and its subsidiaries with an opportunity to participate in the Company's success by
purchasing the Company's common stock through payroll deductions. The Company intends the Plan to qualify as an "employee stock purchase plan" within the meaning of Section 423 of the Internal
Revenue Code of 1986, as amended (the "Code"), and the provisions of the Plan shall be construed in a manner consistent with the requirements of Section 423 of the Code. 


2.     DEFINITIONS  



        2.1.    "Account" shall mean the account maintained on behalf of the Committee
to which are credited (i) payroll deductions pursuant to Section 6 and (ii) shares of Common Stock acquired upon exercise of an option pursuant to Section 7. 


        2.2.    "Authorization Form" shall mean a form established by the Committee
authorizing payroll deductions as set forth in Section 4 and such other terms and conditions as the Committee from time to time may determine. 



        2.3.    "Board" shall mean the board of directors of the Company. 


        2.4.    "Committee" shall mean a committee of at least three members, designated
by the Board to administer the Plan, which may consist of directors, officers or other employees. 


        2.5.    "Common Stock" means the shares of common stock of the Company. 



        2.6.    "Compensation" shall mean the salary of a Participant from the Company
or a Designated Subsidiary. Compensation shall be determined prior to the Employee's pre-tax contributions pursuant to Section 125 and Section 401(k) of the Code. 


        2.7.    "Designated Subsidiaries" shall mean Subsidiaries that have been
designated by the Committee from time to time, in its sole discretion, as eligible to participate in the Plan. 



        2.8.    "Eligible Employee" shall mean any Employee who has completed at least
ninety (90) days of continuous full-time employment with the Company or a Subsidiary excluding: 



        (1)   any
Employee who customarily is employed for 20 hours or less per week; 


        (2)   any
Employee who customarily is employed for not more than five (5) months in a calendar year, or 



        (3)   any
Employee who would own for purposes of Section 424(b)(3) of the Code, stock possessing five percent (5%) or more of the total combined voting power or value
of all classes of stock of the Company (or of a Subsidiary or parent, if any). 




        2.9.    "Employee" shall mean any person who is regularly employed in the United
States by the Company or a Designated Subsidiary but excluding leased employees, as described in Section 414(n) of the Code, and any payroll service or agency employee; i.e., an individual for
whom the direct pay or compensation with respect to the performance of services for the Company or a Designated Subsidiary is paid by any outside entity, including but not limited to a payroll service
or temporary employment agency. The determination whether an individual is a payroll service or agency employee shall be made solely based on the method of paying the individual for his or her
services, without regard to whether 







 

the
individual is considered a common law employee of the Company or a Designated Subsidiary for any other purpose. 



        2.10.    "Exercise Date" shall mean the last business day of each Offering
Period in which payroll deductions are made under the Plan. 


        2.11.    "Fair Market Value" per share as of a particular date shall mean the
closing price of the Common Stock as reported on the principal securities exchange on which the Shares are traded on that date (or if there was no reported prices on such date, on the last preceding
date on which prices were reported). 


        2.12.    "Offering Date" shall mean the first business day of each Offering
Period. 


        2.13.    "Offering Period" shall mean a period of six (6) months, or such
other period of time as determined from time to time by the Committee. In no event shall an Offering Period exceed twenty-seven (27) months. The first Offering Period shall commence on the date
established by the Committee. 


        2.14.    "Participant" shall mean an Eligible Employee who participates in the
Plan. 


        2.15.    "Subsidiary" shall mean any corporation having the relationship to the
Company described in Section 424(f) of the Code. 



3.     SHARES SUBJECT TO THE PLAN  


        Subject to Section 14, 225,000 shares of Common Stock may be issued under the Plan. Such shares may be authorized but unissued Common Stock, authorized and
issued Common Stock held in the Company's treasury or Common Stock acquired by the Company in the open market or otherwise. If the total number of shares which would otherwise be subject to options
granted under the Plan on an Offering Date exceeds the number of shares then available under the Plan (after deduction of all shares for which options have been exercised or are then outstanding), the
Committee shall make a pro rate allocation of the shares remaining available for option grant in as uniform a manner as shall be practicable and as it shall determine to be equitable. In such event,
the Committee shall give written notice to each Participant of such reduction of the number of option shares affected thereby and shall similarly reduce the rate of payroll deductions, if necessary. 


4.     PARTICIPATION  


        4.1.    Each Eligible Employee on an Offering Date shall become a Participant as of the Offering Date by completing an
Authorization Form and filing it with the Committee by the date required by the Committee pursuant to such method as it may be establish from time to time in its sole discretion. Such authorization
will remain in effect for subsequent Offering Periods, until modified or terminated by the Participant. 


        4.2.    Any person who first becomes an Eligible Employee during an Offering Period shall become a Participant as of the first
day of a subsequent Offering Date by completing an Authorization Form and filing it with the Committee by the date required by the Committee pursuant to such method as may be established by the
Committee from time to time in its sole discretion. Such authorization will remain in effect for subsequent Offering Periods, until modified or terminated by the Participant. 



        4.3.    A person shall cease to be a Participant upon the earliest to occur of: 



        (a)   the
date the Participant ceases to be an Eligible Employee for any reason; 


        (b)   the
first day of the Offering Period beginning after the date on which the Participant ceases payroll deduction under the Plan pursuant to Section 6.1; or 



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        (c)   the
date of a withdrawal from the Plan by the Participant as provided in Section 9. 




5.     GRANT OF OPTION  


        5.1.    On each Offering Date the Company shall grant each Participant an option to purchase shares of Common Stock, subject to
the limitations set forth in Sections 3 and 5.3. 


        5.2.    The option price per share of the Common Stock subject to an offering shall be, determined by the Committee and
communicated to Participants at least five (5) business days prior to the deadline for Participants to file their Authorization Forms for the Offering Period to which the Authorization Form
applies. In no event may the option price per share of Common Stock be lower than the lesser of (i) eighty-five percent (85%) of the Fair Market Value of a shares of Common Stock on
the Offering Date or (ii) eighty-five percent (85%) of the Fair Market Value of a share of Common Stock on the Exercise Date. 



        5.3.    No Participant shall be granted an option which permits the Participant's rights to purchase Common Stock under the Plan
and all other employee stock purchase plans of the Company to accrue at a rate which exceeds $25,000 of the Fair Market Value of the Common Stock on the Offering Date for each calendar year in which
such option is outstanding at any time; for purposes of this limitation, there shall be counted only options to which Section 423 of the Code applies. 


6.     PAYROLL DEDUCTIONS  



        6.1.    A Participant may, in accordance with rules adopted by the Committee, file an Authorization Form that authorize a
payroll deduction of any whole number percentage from one percent (1%) to fifteen percent (15%) (or such other percentage as may be established by the Committee from time to time in its sole
discretion) of such Participant's Compensation on each pay period during the Offering Period. A Participant may increase such payroll deduction effective as of each Offering Date provided the
Participant files an Authorization Form requesting the increase in accordance with rules established by the Committee. A Participant may decrease or cease payroll deductions during an Offering Period
by filing an Authorization Form requesting the decrease or cessation in accordance with rules established by the Committee. 



        6.2.    All payroll deductions made by a Participant shall be credited to the Participant's Account. A Participant may not make
any additional payments to the Participant's Account. 


7.     EXERCISE OF OPTION  


        7.1.    Unless a Participant withdraws from the Plan as provided in Section 9, the Participant's option to purchase
shares of Common Stock will be exercised automatically on the Exercise Date, and the maximum number of full and fractional shares of Common Stock subject to such option will be purchased for such
Participant at the applicable option price with the accumulated payroll deductions in the Participant's Account. 


        7.2.    The shares of Common Stock purchased upon exercise of an option hereunder shall be credited to the Participant's Account
and shall be deemed to be transferred to the Participant on the Exercise Date and, except as otherwise provided herein, the Participant shall have all rights of a stockholder with respect to such
shares. Shares of Common Stock received upon stock dividends or stock splits shall be treated as having been purchased on the Exercise Date of the shares to which they relate. 


8.     DELIVERY OF COMMON STOCK  


        As promptly as practicable after receipt by the Committee of a request for withdrawal of Common Stock from any Participant in accordance with rules established by
the Committee, the Committee shall 


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arrange
for delivery to such Participant of one or more stock certificates representing the shares of Common Stock which the Participant requests to withdraw. Withdrawals may be made no more
frequently than twice each calendar year unless approved by the Committee in its sole discretion. 


9.     WITHDRAWAL; TERMINATION OF EMPLOYMENT  


        9.1.    A Participant may withdraw all, but not less than all, the payroll deductions and cash dividends credited to the
Participant's Account at any time by giving written notice to the Committee which is received at least thirty (30) days prior to the Exercise Date (or such other notice period as may be
established by the Committee from time to time in its sole discretion). All such payroll deductions and cash dividends credited to the Participant's Account will be paid to the Participant promptly
after receipt of such Participant's notice of withdrawal and the Participant's option for the Offering Period in which the withdrawal occurs will be automatically terminated. No further payroll
deductions for the purchase of shares of Common Stock will be made for the Participant during such Offering Period, and any additional cash dividends during the Offering Period will be distributed to
the Participant. 


        9.2.    Upon termination of a Participant's status as an Employee during the Offering Period for any reason the payroll
deductions and cash dividends remaining credited to the Participant's Account will be returned (and any future cash dividends will be distributed) to the Participant or, in the case of the
Participant's death, the estate of the Participant, and the Participant's option will be automatically terminated. A Participant's status as an Employee shall not be considered terminated in the in
the case of a leave of absence agreed to in writing by the Company or a Subsidiary (including but not limited to, military and sick leave), provided that such leave is for a period of not more than
six (6) months or reemployment upon expiration of such leave is guaranteed by contract or statute. 



        9.3.    A Participant's withdrawal from an offering will not have any effect upon such Participant's eligibility to participant
in a subsequent offering. 


10.   DIVIDENDS  


        10.1.    Cash dividends paid on Common Stock held in a Participant's Account shall be distributed to Participants as soon as
practicable. Dividends paid in Common Stock or stock splits of the Common Stock shall be credited to the Accounts of Participants. Dividends paid on Common Stock in property (other than cash or Common
Stock) shall be distributed to Participants as soon as practicable. 


        10.2.    No interest shall accrue on or be payable with respect to the payroll deductions or credited cash dividends or a
Participant in the Plan. 


11.   ADMINISTRATION  


        The Plan shall be administered by the Committee, and the Committee may select a third party administrator to whom its duties and responsibilities hereunder may be
delegated. The Committee shall have full power and authority, subject to the provisions of the Plan, to promulgate such rules and regulations as it deems necessary for the proper administration of the
Plan, to interpret the provisions and supervise the administration of the Plan, and to take all action in connection therewith or in relation thereto as it deems necessary or advisable. Any decision
reduced to writing and signed by a majority of the members of the Committee shall be fully effective as if it had been made at a meeting duly held. The determination of the Committee on any matters
relating to the Plan shall be final, binding and conclusive. The Company will pay all expenses incurred in the administration of the Plan. No member of the Committee shall be personally liable for any
action, determination, or interpretation made in good faith with respect to the Plan, and all members of the Committee shall be fully indemnified by the Company with respect to any such action,
determination or interpretation. 


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12.   NO TRANSFERABILITY  


        Neither payroll deductions credited to a Participant's Account nor any rights with regard to the exercise of an option or to receive shares of Common Stock under
the Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will or the laws of descent and distribution) by the Participant. Any such attempt at assignment,
transfer, pledge or other disposition shall be without effect, except that the Committee may treat such act as an election to withdraw funds in accordance with Section 9. 


13.   USE OF FUNDS  


        All payroll deductions received or held by the Company under the Plan may be used by the Company for any corporate purpose, and the Company shall not be obligated
to segregate such payroll deductions. 



14.   EFFECT OF CERTAIN CHANGES  


        In the event of any recapitalization, merger, consolidation, reorganization, stock dividend, stock split, reverse stock split, combination or exchange of shares,
repurchase of shares, distribution of cash or property (other than a regular cash dividend) spin-off or similar transaction or other change in corporate structure affecting the Common
Stock or the value thereof, the Committee in its sole discretion shall determine the appropriate equitable adjustments, if any, to be made under the Plan, including without limitation adjustments to
the number of shares of Common Stock which have been authorized for issuance under the Plan but have not yet been granted under options, as well as the price per share of Common Stock covered by each
option under the Plan which has not yet been exercised. 


15.   TERMINATION OR AMENDMENT  


        The Board may at any time terminate, suspend or amend the Plan as it shall deem advisable. No such termination may adversely affect options previously granted
without the consent of affected Participants. No amendment shall be effective unless approved by the stockholders of the Company if stockholder approval of such amendment is required to comply with
applicable law, including the rules and regulations of the principal securities exchange on which the Common Stock is traded. 



16.   NO EMPLOYMENT RIGHTS  


        Nothing in the Plan shall confer upon any Participant the right to continue in the employment of the Company or any Subsidiary or affect any right which the
Company or any Subsidiary may have to terminate the employment of any Participant at any time for any reason. 


17.   GOVERNING LAW; REGULATIONS AND OTHER APPROVALS  


        17.1.    This Plan and the right of all persons claiming an interest hereunder shall be construed and determined in accordance
with the laws of the State of California without reference to principles of conflict of laws. 


        17.2.    The obligation of the Company to sell or deliver shares of Common Stock with respect to options granted under the Plan
shall be subject to all applicable laws, rules and regulations, including all applicable Federal and state securities laws, and the obtaining of all such approvals by governmental agencies as may be
deemed necessary or appropriate by the Committee. 


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18.   WITHHOLDING OF TAXES  


        If the Participant makes a disposition, within the meaning of Section 424(c) of the Code and regulations promulgated thereunder, of any shares of Common
Stock issued to such Participant pursuant to the Participant's exercise of an option, and such disposition occurs within the two-year period commencing on the day after the Offering Date
or within the one-year period commencing on the day after the Exercise Date, such Participant shall, within five (5) days of such disposition, notify the Company thereof and
thereafter immediately deliver to the Company any amount of Federal, state or local income taxes and other amounts, if any, which the Company informs the Participant the Company is required to
withhold. 


19.   MISCELLANEOUS  


        19.1.    If any provision of the Plan shall be held unlawful or otherwise invalid or unenforceable in whole or in part by a
court of competent jurisdiction, such provision shall (a) be deemed limited to the extent that such court of competent jurisdiction deems it lawful, valid and/or enforceable and as so limited
shall remain in full force and effect, and (b) not affect any other provision of the Plan or part thereof,
each of which shall remain in full force and effect. If the making of any payment or the provision of any other benefit required under the Plan shall be held unlawful or otherwise invalid or
unenforceable by a court of competent jurisdiction, such unlawfulness, invalidity or unenforceability shall not prevent any other payment or benefit from being made or provided under the Plan, and if
the making of any payment in full or the provision of any other benefit required under the Plan in full would be unlawful or otherwise invalid or unenforceable, then such unlawfulness, invalidity or
unenforceability shall not prevent such payment or benefit from being made or provided in part, to the extent that it would not be unlawful, invalid or unenforceable, and the maximum payment or
benefit that would not be unlawful, invalid or unenforceable shall be made or provided under the Plan. 


        19.2.    As used in the Plan, the words "include" and
"including," and variations thereof, shall not be deemed to be terms of limitation, but rather shall be deemed to be followed by the words
"without limitation." 



        19.3.    The captions in the Plan are for convenience of reference only, and are not intended to narrow, limit or affect the
substance or interpretation of the provisions contained herein. 


20.   EFFECTIVE DATE; APPROVAL OF STOCKHOLDERS  


        The Plan shall be effective as of the effective date of the Company's initial public offering. The Plan shall be submitted to the stockholders of the Company for
approval within twelve (12) months after the date the Plan is adopted by the Board. The Plan is conditioned upon the approval of the stockholders of the Company as well as the effective date of
the Company's initial public offering. The Plan and all outstanding options issued thereunder shall be null and void and of no effect if the foregoing conditions are not satisfied. 


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Exhibit 10.3


HIRERIGHT, INC. EMPLOYEE STOCK PURCHASE PLAN