Document:

<PAGE>

July 24, 1998

Mr. (ADDRESSEE_NAME)
(STREET_ADDRESS)
(CITY_STATE_ZIP_CODE)

Dear (NAME):

This letter is intended to provide you with additional employment security as
follows:

If at any time during the five year period following the date of this letter
there shall occur a "Change of Control" (as defined below) while you are
employed by Ampex Corporation (the "Company") or a subsidiary and if you (1) are
terminated; (2) have your compensation and benefits reduced to less than 90% of
your then current compensation and benefits, not including stock options and
your savings plan; or (3) are relocated to a work location more than 50 miles
from your current work location by the Company (or its successor) within 24
months after the date of such Change of Control, then you shall be entitled to
the following:

(a)   Salary continuation (as defined below) for a period of 24 months from the
      date of such Change of Control; and

(b)   Continued participation in the Company's medical and insurance benefit
      programs (or similar programs of its successor) for such 24 month period.

"Change of Control" shall mean (i) any "person" or "group" (as such terms are
used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended) other than Sherborne Holdings Incorporated, a Delaware corporation, or
its affiliates (as such term is used in such Act) shall become the "beneficial
owner" (as defined in Rules 13d-3 and 13d-5 under such Act) of voting stock of
the Company entitling such person or group under ordinary circumstances to elect
a majority of the members of the Board of Directors of the Company or (ii) the
sale of all or substantially all the assets of the Company to an unaffiliated
third party.

"Salary continuation" shall mean continuation of your monthly salary payments at
the annual base rate of salary in effect at the date of such termination, plus
annual incentive compensation equal to the average percentage incentive award to
you in the last three years (or such lesser period as you shall have been
employed) times such annual base salary; it being understood and agreed that if
you shall continue to be employed by the
<PAGE>

Mr. (ADDRESSEE_NAME)
July 24, 1998
Page 2

Company (or its successor) after the date of such Change of Control and shall be
subsequently terminated (i) your salary continuation during such 24 month period
shall be at a rate not less than would have been in effect if you had been
terminated on the date of such Change of Control, and (ii) the Company (or its
successor) shall receive credit for any salary and incentive awards payable to
you in respect of such period of employment. Long-term performance incentive
awards shall not be included hereunder, but shall be payable to the extent
provided in the relevant long-term incentive plan document. Salary continuation
provided hereunder shall be offset by any severance or similar amounts otherwise
payable to you by the Company (or its successor) and shall cease in the event
you accept employment during such 24 month period with any other company engaged
in the manufacture or sale of instrumentation or data storage products in the
United States. All payments shall be subject to applicable withholding taxes.

Your participation in medical and insurance benefit programs will be subject to
the terms of the controlling plans and will be continued during the period
unless similar benefits are provided by a successor or subsequent employer.
Other benefits, such as automobiles or memberships will not be continued, nor
will contributions be made nor additional service time accrue to savings,
pension or supplemental retirement plans.

It is not intended that this letter deprive you of any of the normal benefits
that you would receive on any termination of your employment at Ampex. For
example, if you were terminated near the end of the two year period recited in
the letter and you were entitled under applicable Ampex policy to receive
benefits, such as salary continuation, which would extend beyond the completion
of the two years, you will not be deprived of those benefits. Further, although
the salary continuation provided in the letter will not result in the accrual of
additional service time for pension and other purposes, other service accruals,
if any, provided under Ampex policy would be applied if appropriate.

Notwithstanding anything to the contrary above, if all or any portion of the
payments or benefits provided to you pursuant to this letter, either alone or
together with other payments or benefits which you receive or are then entitled
to receive from the Company or any of its subsidiaries or affiliates, would
constitute a "parachute payment" within the meaning of Section 280G of the
Internal Revenue Code of 1986 as amended (the "Code"), such payments or benefits
shall be deferred or reduced to the extent necessary so that no portion thereof
shall be subject to the excise tax imposed on you under Section 4999 of the Code
and such that all such payments and benefits are deductible under Section 280G
of the Code. The deferral or reduction, if any, shall be made with respect to
such payments and benefits as the Company in its sole discretion shall
determine, provided, that nothing in this paragraph shall result in a reduction
or deferral of any amounts payable to you under any long-term incentive plan in
accordance with the relevant plan documents.

Nothing herein is a guarantee or contract of continued employment. Your
entitlement to the additional benefits provided herein is subject to your
continued compliance with all your obligations to the Company (including without
limitation obligations as to protection of confidential information) now or
hereafter in effect.
<PAGE>

Mr. (ADDRESSEE_NAME)
July 24, 1998
Page 3
This letter sets forth our entire understanding and agreement concerning the
subject matter hereof, and may not be amended, supplemented or waived in any
respect except by a writing signed by the Company. If any clause or provision
hereof shall be held to be invalid or unenforceable, such invalidity or
unenforceability shall not impair or affect the remainder of the agreement. You
may not assign any of your rights or interests herein.

Please sign a copy of this letter and return it to me.

Very truly yours,
AMPEX CORPORATION

BY:/s/ Edward J. Bramson
   --------------------------------
Edward J. Bramson
Chairman

UNDERSTOOD AND AGREED:

-----------------------------------
       (ADDRESSEE_NAME)<PAGE>
                                                                    EXHIBIT 10.1

                               LeadersOnline, Inc.

                             2000 STOCK OPTION PLAN
<PAGE>

                                TABLE OF CONTENTS
                                -----------------

ARTICLE I      PURPOSE OF PLAN............................................    1

ARTICLE II     EFFECTIVE DATE AND TERM OF PLAN............................    1
2.1            Term of Plan...............................................    1
2.2            Effect on Awards...........................................    1
2.3            Stockholder Approval.......................................    1

ARTICLE III    SHARES SUBJECT TO PLAN.....................................    1
3.1            Number of Shares...........................................    1
3.2            Source of Shares...........................................    1
3.3            Availability of Unused Shares..............................    1
3.4            Adjustment Provisions......................................    2
3.5            Reservation of Shares......................................    2

ARTICLE IV     ADMINISTRATION OF PLAN.....................................    2
4.1            Administering Body.........................................    2
4.2            Authority of Administering Body............................    3
4.3            No Liability...............................................    3
4.4            Amendments.................................................    3
4.5            Other Compensation Plans...................................    4
4.6            Plan Binding on Successors.................................    4
4.7            References to Successor Statutes, Regulations and Rules....    4
4.8            Issuances for Compensation Purposes Only...................    4
4.9            Invalid Provisions.........................................    4
4.10           Governing Law..............................................    4

ARTICLE V      GENERAL AWARD PROVISIONS...................................    4
5.1            Participation in the Plan..................................    4
5.2            Award Documents............................................    4
5.3            Exercise of Award..........................................    5
5.4            Payment For Awards.........................................    5
5.5            No Employment Rights.......................................    6
5.6            Restrictions Under Applicable Laws and Regulations.........    6
5.7            No Privileges of Stock Ownership...........................    7
5.8            Nonassignability...........................................    7
5.9            Information to Recipients..................................    7
5.10           Withholding Taxes..........................................    8
5.11           Legends on Awards and Stock Certificates...................    8
5.12           Effect of Termination of Employment on Awards..............    8
    (a)        Termination of Employment...................................   8
    (b)        Alteration of Vesting and Exercise Periods..................   8
    (c)        Leave of Absence............................................   9
5.13           Lock-Up Agreements.........................................    9

ARTICLE VI     STOCK OPTION AWARDS........................................    9
6.1            Nature of Stock Option Awards..............................    9
6.2            Option Exercise Price......................................    9
6.3            Option Period and Vesting..................................    9
6.4            Special Provisions Regarding Incentive Stock Options.......    9

                                       i
<PAGE>

ARTICLE VII    RECAPITALIZATIONS AND REORGANIZATIONS......................   10
7.1            Corporate Transactions Not Involving a Change in Control...   10
7.2            Corporate Transactions Involving a Change in Control.......   10
   (a)         Acceleration of Awards.....................................   10
   (b)         Employment Termination.....................................   10
7.3            Provision for Awards Upon Change in Control................   11

ARTICLE VIII   PUT AND CALL OPTIONS........................................  11
8.1            Put and Call Options.......................................   11
8.2            Option Events..............................................   12
8.3            Adjustments for Changes in Capital Structure...............   12
8.4            Termination of Article VIII................................   12

ARTICLE IX     DEFINITIONS................................................   12

                                      ii
<PAGE>

                              LeadersOnline, Inc.

                            2000 STOCK OPTION PLAN

                                   ARTICLE I
                                PURPOSE OF PLAN

     The Company has adopted this Plan to promote the interests of the Company
and its stockholders by using Awards of Incentive Stock Options and Nonqualified
Stock Options to purchase shares of the Company's Common Stock to attract,
retain and motivate employees, officers and directors of, and consultants and
advisors to, the Company to encourage and reward their contributions to the
performance of the Company and to align their interests with the interests of
the Company's stockholders.  Capitalized terms not otherwise defined herein
shall have the meanings ascribed to them in Article IX.
                                            ----------

                                   ARTICLE II
                        EFFECTIVE DATE AND TERM OF PLAN

     2.1  Term of Plan.  This Plan became effective as of the Effective Date
          ------------
and shall continue in effect until the Expiration Date, at which time this Plan
shall automatically terminate.

     2.2  Effect on Awards.  Awards may be granted only during the Plan Term,
          ----------------
but each Award granted during the Plan Term shall remain in effect after the
Expiration Date until such Award has been exercised, terminated or expired in
accordance with its terms and the terms of this Plan.

     2.3  Stockholder Approval.  This Plan shall be approved by the Company's
          --------------------
stockholders within 12 months after the Effective Date.

                                  ARTICLE III
                             SHARES SUBJECT TO PLAN

     3.1  Number of Shares.  The maximum number of shares of Common Stock that
          ----------------
may be issued pursuant to Awards shall be 5,380,000, subject to an automatic
increase on each anniversary of the Effective Date equal to three percent (3%)
of the shares of Common Stock outstanding on the immediately preceding December
31, and further subject to adjustment as set forth in Section 3.4.  The maximum
                                                      -----------
number of shares of Common Stock for which Awards may be granted to any Eligible
Person in any one calendar year shall be 1,250,000, subject to adjustment as set
forth in Section 3.4.
         -----------

     3.2  Source of Shares.  The Common Stock to be issued under this Plan
          ----------------
will be made available, at the discretion of the Board, either from authorized
but unissued shares of Common Stock or from previously issued shares of Common
Stock reacquired by the Company.

     3.3  Availability of Unused Shares.  Shares of Common Stock subject to
          -----------------------------
unexercised portions of any Award that expire, terminate or are canceled, and
shares of Common Stock issued pursuant to an Award that are reacquired by the
Company pursuant to the terms of the Award under which such shares were issued,
will again become available for the grant of further Awards under this Plan.
<PAGE>

     3.4  Adjustment Provisions.
          ---------------------

          (a) (i)  If the outstanding shares of Common Stock are increased,
decreased or exchanged for a different number or kind of shares or other
securities, or if additional shares or new or different shares or other
securities are distributed in respect of such shares of Common Stock (or any
stock or securities received with respect to such Common Stock), including
without limitation through merger, consolidation, sale or exchange of all or
substantially all of the assets of the Company, reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split, spin-off or other distribution or event with respect to such shares of
Common Stock (or any stock or securities received with respect to such Common
Stock), or (ii) the value of the outstanding shares of Common Stock of the
Company is reduced by reason of an extraordinary cash dividend, an appropriate
and proportionate adjustment may be made in (1) the maximum number and kind of
shares subject to this Plan as provided in Section 3.1, (2) any limitations on
                                           -----------
the number of shares with respect to which Awards may be granted to any Eligible
Person, (3) the number and kind of shares or other securities subject to then
outstanding Awards, and/or (4) the price for each share or other unit of any
other securities subject to, or measurement criteria applicable to, then
outstanding Awards.

          (b) No fractional interests will be issued under this Plan resulting
from any adjustments.

          (c) To the extent any adjustments relate to stock or securities of the
Company, such adjustments shall be made by the Administering Body, whose
determination in that respect shall be final, binding and conclusive.

          (d) The grant of an Award pursuant to this Plan shall not affect in
any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge or to consolidate or to dissolve, liquidate or sell, or
transfer all or any part of its business or assets.

          (e) No adjustment to the terms of an Incentive Stock Option shall be
made unless such adjustment either (i) would not cause such Option to lose its
status as an Incentive Stock Option or (ii) is agreed to in writing by the
Administering Body and the Recipient.

     3.5  Reservation of Shares.  The Company will at all times reserve and
          ---------------------
keep available shares of Common Stock equaling at least the total number of
shares of Common Stock issuable pursuant to outstanding Awards.

                                   ARTICLE IV
                            ADMINISTRATION OF PLAN

     4.1  Administering Body.
          ------------------

          (a) This Plan shall be administered by the Board or by a Committee of
the Board appointed pursuant to Section 4.1(b).
                                --------------

          (b) The Board in its sole discretion may from time to time appoint a
Committee (which may be a subcommittee of an existing committee of the Board)
consisting solely of at least two Board members who are intended to qualify as
Non-Employee Directors to

                                       2
<PAGE>

administer this Plan and, subject to applicable law, to exercise all of the
powers, authority and discretion of the Board under this Plan. The Board may
from time to time increase or decrease (but not below two) the number of members
of the Committee, remove from membership on the Committee all or any portion of
its members, and/or appoint such person or persons as it desires to fill any
vacancy existing on the Committee, whether caused by removal, resignation or
otherwise. The Board may disband the Committee at any time and revest in the
Board the administration of this Plan. The Committee shall report to the Board
the names of Eligible Persons granted Awards, the number of shares of Common
Stock covered by each Award, and the terms and conditions of each such Award.

     4.2   Authority of Administering Body.
           -------------------------------

          (a) Subject to the express provisions of this Plan, the Administering
Body shall have the power to implement (including the power to delegate such
implementation to appropriate officers of the Company), interpret and construe
this Plan and any Awards and Award Documents or other documents defining the
rights and obligations of the Company and Recipients hereunder and thereunder,
to determine all questions arising hereunder and thereunder, and to adopt and
amend such rules and regulations for the administration hereof and thereof as it
may deem desirable.  The interpretation and construction by the Administering
Body of any provisions of this Plan or of any Award or Award Document shall be
conclusive and binding.  Any action taken by, or inaction of, the Administering
Body relating to this Plan or any Award or Award Document shall be within the
absolute discretion of the Administering Body and shall be conclusive and
binding upon all persons.  Subject only to compliance with the express
provisions hereof, the Administering Body may act in its absolute discretion in
matters related to this Plan and any and all Awards and Award Documents.

          (b) Subject to the express provisions of this Plan, the Administering
Body may from time to time in its discretion select the Eligible Persons to
whom, and the time or times at which, Awards shall be granted, the nature of
each Award, the number of shares of Common Stock that underlie each Award, the
exercise price and period for the exercise of each Award, and such other terms
and conditions applicable to each individual Award as the Administering Body
shall determine.  The Administering Body may grant at any time new Awards to an
Eligible Person who has previously received Awards regardless of whether such
prior Awards are still outstanding, have previously been exercised as a whole or
in part, or are canceled in connection with the issuance of new Awards.  The
Administering Body may grant Awards singly or in combination with other Awards,
as it determines in its discretion.  The exercise price, and any other terms and
conditions of the Awards may be established by the Administering Body without
regard to existing Awards or other grants.

     4.3   No Liability.  No member of the Board or the Committee or any
            ------------
designee thereof will be liable for any action or inaction with respect to this
Plan or any Award or any transaction arising under this Plan or any Award,
except in circumstances constituting bad faith of such member.

     4.4   Amendments.
           ----------

          (a) The Administering Body may, insofar as permitted by applicable
law, rule or regulation, and subject to Section 4.4(b), from time to time
                                        --------------
suspend or discontinue this Plan or

                                       3
<PAGE>

revise or amend it in any respect whatsoever, and this Plan as so revised or
amended will govern all Awards hereunder, including those granted before such
revision or amendment.

          (b) Except as otherwise provided in this Plan or in the applicable
Award Document, no amendment, revision, suspension or termination of this Plan
or any outstanding Award may diminish any rights of the Recipient under any
Award previously granted without the written consent of such Recipient.

     4.5   Other Compensation Plans. The adoption of this Plan shall not affect
           ------------------------
any other stock option, incentive or other compensation plans in effect from
time-to-time for the Company, and this Plan shall not preclude the Company from
establishing any other forms of incentive or other compensation for employees,
officers or directors of, or advisors or consultants to, the Company, whether or
not approved by stockholders.

     4.6   Plan Binding on Successors.  This Plan shall be binding upon the
           --------------------------
successors and assigns of the Company.

     4.7   References to Successor Statutes, Regulations and Rules.  Any
           -------------------------------------------------------
reference in this Plan to a particular statute, regulation or rule shall also
Statutes, Regulations and refer to any successor provision of such statute,
regulation or rule.

     4.8   Issuances for Compensation Purposes Only.  This Plan is intended to
           ----------------------------------------
constitute an "employee benefit plan," as defined in Rule 405 promulgated under
the Securities Act, and shall be administered accordingly.

     4.9  Invalid Provisions.  In the event that any provision of this Plan is
          ------------------
found to be invalid or otherwise unenforceable under any applicable law, such
invalidity or unenforceability shall not be construed as rendering any other
provisions contained herein invalid or unenforceable, and all such other
provisions shall be given full force and effect to the same extent as though the
invalid and unenforceable provision were not contained herein.

     4.10  Governing Law.  This Agreement shall be governed by and interpreted
           -------------
in accordance with the internal laws of the State of Delaware, without giving
effect to the principles of the conflicts of laws thereof.

                                   ARTICLE V
                           GENERAL AWARD PROVISIONS

     5.1   Participation in the Plan.
           -------------------------

           (a) A person shall be eligible to receive grants of Awards under this
Plan if, at the time of the grant of the Award, such person is an Eligible
Person.

           (b) Incentive Stock Options may be granted only to Eligible Persons
meeting the employment requirements of Section 422 of the IRC.

     5.2   Award Documents.  Each Award granted under this Plan shall be
           ---------------
evidenced by an agreement duly executed on behalf of the Company and by the
Recipient, or by a confirming memorandum issued by the Company to the Recipient,
setting forth such terms and conditions

                                       4
<PAGE>

applicable to the Award as the Administering Body may in its discretion
determine. Awards will not be binding upon the Company, and Recipients will have
no rights thereto, until such an agreement is entered into between the Company
and the Recipient or such a memorandum is delivered by the Company to the
Recipient, but an Award may have an effective date on or after the date of grant
but prior to the date of such an agreement or memorandum. Award Documents may
but need not be identical and shall comply with and be subject to the terms and
conditions of this Plan, a copy of which shall be provided to each Recipient and
incorporated by reference into each Award Document. In case of any conflict
between this Plan and any Award Document, this Plan shall control.

     5.3   Exercise of Award.  No Award shall be exercisable except in respect
           -----------------
of whole shares, and fractional share interests shall be disregarded. An Award
shall be deemed to be exercised when the Secretary or other designated official
of the Company receives written notice of such exercise from the Recipient,
together with payment of the exercise price made in accordance with Section 5.4
                                                                    -----------
and any amounts required under Section 5.10. Notwithstanding any other provision
                               ------------
of this Plan, the Company and/or the Administering Body may impose, by rule
and/or in Award Documents, such conditions upon the exercise of the Award
(including without limitation conditions limiting the time of exercise to
specified periods) as may be required to satisfy applicable regulatory
requirements.

     5.4   Payment For Awards.
           ------------------

          (a) The exercise price for an Award shall be payable upon the exercise
of an Award granted hereunder by delivery of cash payment or such other
consideration as the Administering Body may from time to time deem acceptable in
any particular instance.

          (b) The Company may assist any Recipient in the payment of the
exercise price of an Award by lending such amounts to such person on such terms
and at such rates of interest and upon such security (if any) as shall be
approved by the Administering Body; provided, however, that any such loan must
be full recourse to the Recipient.

          (c) The exercise price for Awards may be paid by delivery to the
Company by or on behalf of the person exercising the Award of Common Stock held
by such person for at least six months, duly endorsed in blank or accompanied by
stock powers duly endorsed in blank, with signatures guaranteed in accordance
with the Exchange Act if required by the Company, or retained by the Company
from the stock otherwise issuable upon exercise or surrender of vested and/or
exercisable Awards previously granted to the Recipient and being exercised (if
applicable) (in either case valued at Fair Market Value as of the exercise
date); provided, however, that (i) the Company and/or the Administering Body may
allow exercise of an Award in a broker-assisted or similar transaction in which
the exercise price is not received by the Company until promptly after exercise,
and/or (ii) the Administering Body may allow the Company to loan the exercise
price to the person entitled to exercise the Award, if the exercise will be
followed by a prompt sale of some or all of the underlying shares and a portion
of the sale proceeds is dedicated to full payment of the exercise price and
amounts required pursuant to Section 5.10.
                             ------------

          (d) Recipients will have no rights to the assistance described in

Section 5.4(b) or to the exercise techniques described in Section 5.4(c), and
--------------                                            --------------
the Company may offer or permit

                                       5
<PAGE>

such assistance or techniques on an ad hoc basis to any Recipient without
incurring any obligation to offer or permit such assistance or techniques on
other occasions or to other Recipients.

     5.5   No Employment Rights. Nothing contained in this Plan (or in Award
           --------------------
Documents or in any other documents related to this Plan or to Awards granted
hereunder) shall confer upon any Eligible Person or Recipient any right to
continue in the employ of the Company or any Affiliated Entity or constitute any
contract or agreement of employment or engagement, or interfere in any way with
the right of the Company or any Affiliated Entity to reduce such person's
compensation or other benefits or to terminate the employment or engagement of
such Eligible Person or Recipient, with or without cause. Except as expressly
provided in this Plan or in any document evidencing the grant of an Award
pursuant to this Plan, the Company shall have the right to deal with each
Recipient in the same manner as if this Plan and any such document evidencing
the grant of an Award pursuant to this Plan did not exist, including without
limitation with respect to all matters related to the hiring, discharge,
compensation and conditions of the employment or engagement of the Recipient.
Any questions as to whether and when there has been a termination of a
Recipient's employment or engagement, the reason (if any) for such termination,
and/or the consequences thereof under the terms of this Plan or any document
evidencing the grant of an Award pursuant to this Plan shall be determined by
the Administering Body and the Administering Body's determination thereof shall
be final and binding.

     5.6   Restrictions Under Applicable Laws and Regulations.
           --------------------------------------------------

          (a) All Awards granted under this Plan shall be subject to the
requirement that, if at any time the Company shall determine, in its discretion,
that the listing, registration or qualification of the shares subject to Awards
granted under this Plan upon any securities exchange or interdealer quotation
system or under any federal, state or foreign law, or the consent or approval of
any government or regulatory body, is necessary or desirable as a condition of,
or in connection with, the granting of such an Award or the issuance, if any, or
purchase of shares in connection therewith, such Award may not be exercised as a
whole or in part unless and until such listing, registration, qualification,
consent or approval shall have been effected or obtained free of any conditions
not acceptable to the Company.  During the term of this Plan, the Company will
use its reasonable efforts to seek to obtain from the appropriate governmental
and regulatory agencies any requisite qualifications, consents, approvals or
authorizations in order to issue and sell such number of shares of its Common
Stock as shall be sufficient to satisfy the requirements of this Plan.  The
inability of the Company to obtain any such qualifications, consents, approvals
or authorizations shall relieve the Company of any liability in respect of the
nonissuance or sale of such stock as to which such qualifications, consents,
approvals or authorizations pertain.

          (b) The Company shall be under no obligation to register or qualify
the issuance of Awards or underlying securities under the Securities Act or
applicable state securities laws.  Unless the issuance of Awards and underlying
securities have been registered under the Securities Act and qualified or
registered under applicable state securities laws, the Company shall be under no
obligation to issue any Awards or underlying securities unless the Awards and
underlying securities may be issued pursuant to applicable exemptions from such
registration or qualification requirements.  In connection with any such exempt
issuance, the Company may

                                       6
<PAGE>

require the Recipient to provide a written representation and undertaking to the
Company, satisfactory in form and scope to the Company and upon which the
Company may reasonably rely, that such Recipient is acquiring such Awards and
underlying shares for such Recipient's own account as an investment and not with
a view to, or for sale in connection with, the distribution of any such
securities, and that such person will make no transfer of the same except in
compliance with any rules and regulations in force at the time of such transfer
under the Securities Act and other applicable law, and that if shares of stock
are issued without such registration, a legend to this effect (together with any
other legends deemed appropriate by the Company) may be endorsed upon the
securities so issued. The Company may also order its transfer agent to stop
transfers of such securities. The Company may also require the Recipient to
provide the Company such information and other documents as it may request in
order to satisfy the Company as to the investment sophistication and experience
of the Recipient and as to any other conditions for compliance with any such
exemptions from registration or qualification.

     5.7   No Privileges of Stock Ownership. Except as otherwise set forth
           --------------------------------
herein, a Recipient of an Award shall have no rights as a stockholder with
respect to any shares issuable or issued in connection with the Award until the
date of the receipt by the Company of all amounts payable by the Recipient in
connection with the exercise of the Award. Status as an Eligible Person shall
not be construed as a commitment that any Award will be granted under this Plan
to an Eligible Person or to Eligible Persons generally. No person shall have any
right, title or interest in any fund or in any specific asset (including shares
of capital stock) of the Company by reason of any Award granted hereunder.
Neither this Plan (or any documents related hereto) nor any action taken
pursuant hereto shall be construed to create a trust of any kind or a fiduciary
relationship between the Company and any person. To the extent that any person
acquires a right to receive an Award hereunder, such right shall be no greater
than the right of any unsecured general creditor of the Company.

     5.8   Nonassignability. Unless the Administering Body shall otherwise
           ----------------
determine on a case-by-case basis, no Award granted under this Plan shall be
assignable or transferable except (i) by will or by the laws of descent and
distribution, or (ii) subject to the final sentence of this Section 5.8, upon
                                                            -----------
dissolution of marriage pursuant to a qualified domestic relations order. Unless
the Administering Body shall otherwise determine on a case-by-case basis, during
the lifetime of a Recipient, an Award granted to such person shall be
exercisable only by the Recipient (or the Recipient's permitted transferee) or
such person's guardian or legal representative. Notwithstanding the foregoing,
(i) no Award owned by a Recipient subject to Section 16 of the Exchange Act may
be assigned or transferred in any manner inconsistent with Rule 16b-3
promulgated under the Exchange Act, and (ii) Incentive Stock Options may not be
assigned or transferred in violation of Section 422(b)(5) of the IRC (or any
comparable or successor provision) or the regulations thereunder, and nothing
herein is intended to allow such assignment or transfer.

     5.9   Information to Recipients.
           -------------------------

          (a) The Company shall determine what, if any, financial and other
information shall be provided to Recipients and when such financial and other
information shall be provided after giving consideration to applicable federal
and state laws, rules and regulations, including without limitation applicable
federal and state securities laws, rules and regulations.

                                       7
<PAGE>

          (b) The furnishing of financial and other information that is
confidential to the Company shall be subject to the Recipient's agreement that
the Recipient shall maintain the confidentiality of such financial and other
information, shall not disclose such information to third parties, and shall not
use the information for any purpose other than evaluating an investment in the
Company's securities under this Plan.

     5.10 Withholding Taxes.  Whenever the granting, vesting or exercise of
          -----------------
any Award, or the issuance of any shares upon exercise of any Award or transfer
thereof, gives rise to tax or tax withholding liabilities or obligations, the
Company shall have the right to require the Recipient to remit to the Company an
amount sufficient to satisfy any federal, state and local withholding tax
requirements arising in connection therewith. The Company may, in the exercise
of its discretion, allow satisfaction of tax withholding requirements by
accepting delivery of stock of the Company or by withholding a portion of the
stock otherwise issuable in connection with an Award, in each case valued at
Fair Market Value as of the date of such delivery or withholding.

     5.11 Legends on Awards and Stock Certificates.  Each Award Document and
          ----------------------------------------
each certificate representing shares acquired upon vesting or exercise of an
Award shall be endorsed with all legends, if any, required by applicable federal
and state securities and other laws to be placed on the Award Document and/or
the certificate. The Award Documents and share certificates shall also contain
legends reflecting the restrictions and rights contained in Article VIII as long
as such restrictions and rights are applicable. The determination of which
legends, if any, shall be placed upon Award Documents or the certificates shall
be made by the Administering Body and such decision shall be final and binding.

     5.12 Effect of Termination of Employment on Awards.
          ---------------------------------------------

          (a) Termination of Employment. Subject to Section 5.12(b) and except
              -------------------------             ---------------
as otherwise provided in a written agreement between the Company and the
Recipient (which may be entered into at any time before or after termination of
employment), in the event of a Recipient's termination of employment for any
reason whatsoever (with or without cause), including death, Permanent Disability
or retirement, Awards (whether or not vested) shall expire and become
unexercisable as of the earlier of (i) the date such Award would expire in
accordance with its terms had the Recipient remained employed and (ii) 30 days
after the date of termination. The provisions of this Section 5.12(a) may be
modified to the extent deemed advisable by the Administering Body in Award
Documents pertaining to directors or other non-employees providing consulting,
advisory or other services to the Company or an Affiliated Entity.

          (b)  Alteration of Vesting and Exercise Periods.  Notwithstanding
               ------------------------------------------
anything to the contrary in Section 5.12(a), the Administering Body may in its
                            ---------------
discretion (i) elect to accelerate the vesting of all or any portion of any
Awards that had not become exercisable on or prior to the date of a Recipient's
termination and/or (ii) designate shorter or longer periods in which an Award
may be exercised following such termination; provided, however, that any shorter
exercise periods determined by the Administering Body shall be effective only if
provided for in the Award Document that evidences the grant to the Recipient or
if such shorter exercise period is agreed to in writing by the Recipient.

                                       8
<PAGE>

           (c)  Leave of Absence.  In the case of any employee on an approved
                ----------------
leave of absence, the Administering Body may make such provision respecting
continuance of Awards as the Administering Body in its discretion deems
appropriate, except that in no event shall an Award be exercisable after the
date such Award would expire in accordance with its terms had the Recipient
remained continuously employed.

     5.13  Lock-Up Agreements.  Each Recipient agrees as a condition to receipt
           ------------------
of an Award that, in connection with an Initial Public Offering and upon the
request of the Company and the principal underwriter in such Initial Public
Offering, any shares of Common Stock acquired or that may be acquired upon
exercise or vesting of an Award may not be sold, offered for sale or otherwise
disposed of without the prior written consent of the Company or such
underwriter, as the case may be, for a period of not more than 180 days after
the effective date of the registration statement with respect to such Initial
Public Offering.

                                  ARTICLE VI

                              STOCK OPTION AWARDS

     6.1   Nature of Stock Option Awards.  Stock Option Awards may be Incentive
           -----------------------------
Stock Options or Nonqualified Stock Options and shall be so designated in the
Award Document.

     6.2   Option Exercise Price.  The exercise price for each Stock Option
           ---------------------
shall be determined by the Administering Body as of the date such Stock Option
is granted. The exercise price shall be no less than the Fair Market Value of
the Common Stock subject to the Stock Option as of the date of grant, provided
that in no event shall the exercise price be less than the par value of the
Common Stock. The Administering Body may, with the consent of the Recipient and
subject to compliance with statutory or administrative requirements applicable
to Incentive Stock Options, amend the terms of any Stock Option to provide that
the exercise price of the shares remaining subject to the Stock Option shall be
reestablished at a price not less than 100% of the Fair Market Value of the
Common Stock on the effective date of the amendment.

     6.3   Option Period and Vesting.  Stock Options granted hereunder shall
           -------------------------
vest and may be exercised as determined by the Administering Body, except that
exercise of such Stock Options after termination of the Recipient's employment
shall be subject to Section 5.12. Each Stock Option granted hereunder and all
                    ------------
rights or obligations thereunder shall expire on such date as shall be
determined by the Administering Body, but not later than 10 years after the date
the Stock Option is granted and shall be subject to earlier termination as
provided herein or in the Award Document.

     6.4   Special Provisions Regarding Incentive Stock Options.
           ----------------------------------------------------

           (a)  Notwithstanding anything in this Article VI to the contrary, the
                                                 ----------
exercise price and vesting period of any Stock Option intended to qualify as an
Incentive Stock Option shall comply with the provisions of Section 422 of the
IRC and the regulations thereunder.  As of the Effective Date, such provisions
require, among other matters, that (i) the exercise price must not be less than
the Fair Market Value of the underlying stock as of the date the Incentive Stock
Option is granted, and not less than 110% of the Fair Market Value as of such
date in the case of a grant to a Significant Stockholder; and (ii) the Incentive
Stock Option not be exercisable after the expiration of ten years from the date
of grant of such Incentive Stock Option, or five years

                                       9
<PAGE>

from the date of grant in the case of an Incentive Stock Option granted to a
Significant Stockholder.

          (b)  The aggregate Fair Market Value (determined as of the respective
date or dates of grant) of the Common Stock for which one or more Stock Options
granted to any Recipient under this Plan (or any other option plan of the
Company or any Affiliated Entity) may for the first time become exercisable as
Incentive Stock Options under the federal tax laws during any one calendar year
shall not exceed $100,000.

          (c)  Any Options granted as Incentive Stock Options pursuant to this
Plan that for any reason fail or cease to qualify as such shall be treated as
Nonqualified Stock Options.

                                  ARTICLE VII

                     RECAPITALIZATIONS AND REORGANIZATIONS

     7.1  Corporate Transactions Not Involving a Change in Control. Subject to
          --------------------------------------------------------
the provisions of Article VIII, if the Company shall consummate any
Reorganization not involving a Change in Control in which holders of shares of
Common Stock are entitled to receive in respect of such shares any securities,
cash or other consideration (including without limitation a different number of
shares of Common Stock), each Award outstanding under this Plan shall thereafter
be exercisable, in accordance with this Plan, only for the kind and amount of
securities, cash and/or other consideration receivable upon such Reorganization
by a holder of the same number of shares of Common Stock as are subject to that
Award immediately prior to such Reorganization, and any adjustments will be made
to the terms of the Award in the sole discretion of the Administering Body as it
may deem appropriate to give effect to the Reorganization.

     7.2  Corporate Transactions Involving a Change in Control.
          ----------------------------------------------------

          (a)  Acceleration of Awards.  If a Change in Control occurs and in
               ----------------------
connection with such Change in Control any Recipient's employment with the
Company is terminated, then, subject to the terms of any written employment
agreement between the Company and the Recipient and the specific terms of any
Award, such Recipient shall have the right to exercise or receive the full
benefit of the Recipient's Awards granted under this Plan as a whole or in part
during the applicable time period provided in Section 5.12, without regard to
                                              ------------
any vesting requirements or other milestones.

          (b)  Employment Termination.  For purposes of this Section, but
               ----------------------
without limitation, a Recipient's employment with the Company will be deemed to
have been terminated in connection with a Change in Control if (i) the Recipient
is removed from the Recipient's employment with the Company by, or resigns the
Recipient's employment upon the request of, a Person exercising practical voting
control over the Company following the Change in Control or a person acting upon
authority or at the instruction of such Person (other than a Recipient's
termination for cause); (ii) the Recipient's position is eliminated as a result
of a reduction in force made to reduce over-capacity or unnecessary duplication
of personnel within one year after the consummation of the Change in Control; or
(iii) the Recipient resigns for "good reason" which means any of the following
(without the Recipient's consent):

               (A)  the assignment to the Recipient of duties substantially
     inconsistent with the Recipient's position (including offices, titles,
     reporting requirements or

                                      10
<PAGE>

     responsibilities), authority or duties as in effect prior to the Change in
     Control, or any other action by the Company which results in a diminution
     or other material adverse change in such position, authority or duties;

               (B)  the Company requiring the Recipient to be based at any
     location more than thirty (30) miles from the Recipient's location prior to
     the Change in Control; or

               (C)  any other material adverse change to the terms and
     conditions (including compensation and benefits) of the Recipient's
     employment (except changes which apply to all employees on an equal or pro
     rata basis).

     7.3   Provision for Awards Upon Change in Control.
           -------------------------------------------

     As of the effective time and date of any Change in Control, this Plan and
any then outstanding Awards (whether or not vested) shall automatically
terminate unless (a) provision is made in writing in connection with such
transaction for the continuance of this Plan and for the assumption of such
Awards, or for the substitution for such Awards of new awards covering the
securities of a successor entity or an affiliate thereof, with appropriate
adjustments as to the number and kind of securities and exercise prices, in
which event this Plan and such outstanding Awards shall continue or be replaced,
as the case may be, in the manner and under the terms so provided; or (b) the
Board otherwise shall provide in writing for such adjustments as it deems
appropriate in the terms and conditions of the then-outstanding Awards (whether
or not vested), including without limitation (i) accelerating the vesting of
outstanding Awards and/or (ii) providing for the cancellation of Awards and
their automatic conversion into the right to receive the securities, cash or
other consideration that a holder of the shares underlying such Awards would
have been entitled to receive upon consummation of such Change in Control had
such shares been issued and outstanding immediately prior to the effective date
and time of the Change in Control (net of the appropriate option exercise
prices).  If, pursuant to the foregoing provisions of this Section 7.3, this
                                                           -----------
Plan and the Awards shall terminate by reason of the occurrence of a Change in
Control without provision for any of the actions described in clause (a) or (b)
hereof, then any Recipient holding outstanding Awards shall have the right, at
any time within thirty (30) days prior to the consummation of the Change in
Control, to exercise the Recipient's Awards to the full extent not theretofore
exercised, including any installments which have not yet become vested.

                                 ARTICLE VIII

                             PUT AND CALL OPTIONS

     8.1  Put and Call Options.  The Company shall have the right to purchase
          --------------------
from a Recipient (the "Call Option") and a Recipient shall have the right to
cause the Company to purchase from such Recipient (or such Recipient's permitted
transferee pursuant to Section 5.8) (the "Put Option") all of the shares of
Common Stock acquired pursuant to Awards granted under this Plan and then owned
by such Recipient or acquired by such Recipient within thirty (30) days
thereafter pursuant to the exercise of Awards in accordance with Section
                                                                 -------
5.12(a), upon the occurrence of any Option Event (as defined in Section 8.2).
-------                                                         -----------
The Call Option or the Put Option shall be exercised by the Company or a
Recipient, as the case may be, within ninety (90) days following the date of an
Option Event (the "Purchase Period"). The Call Option or the Put

                                      11
<PAGE>

Option shall be exercised by the Company or a Recipient, as the case may be,
giving the other written notice on or before the last day of the Purchase Period
of the intent to consummate either the Put Option or the Call Option. The
purchase price shall be equal to the Fair Market Value of such shares as of the
date of the Option Event. Upon exercise of either the Put Option or the Call
Option, the Recipient shall deliver to the Company the share certificate or
certificates representing the shares being purchased, duly endorsed and free and
clear of any and all liens, charges, encumbrances and other adverse interests,
and the Company shall deliver or cause to be delivered to the Recipient (or the
Recipient's permitted transferee) a check in the amount of the purchase price.

     8.2   Option Events.  The following events are each an "Option Event":
           -------------

                (i)   Termination of an employee-Recipient's employment with the
Company or any Affiliated Entity, voluntarily or involuntarily, for any reason
whatsoever (with or without cause), including death, Permanent Disability or
retirement;

                (ii)  Cessation of a director-Recipient's service to the Company
as a member of the Board for any reason whatsoever, including death,
resignation, removal or failure to be reelected; provided, however, that if such
director continues in service as an employee of the Company or any Affiliated
Entity, then no Option Event shall be deemed to have occurred; and

                (iii) Specifically with respect to, but not limited to, non-
employees of the Company or any Affiliated Entity, the occurrence of any other
event designated as an Option Event in the Award Document.

     8.3  Adjustments for Changes in Capital Structure.  If there shall be any
          --------------------------------------------
change in the Common Stock of the Company through merger, consolidation,
reorganization, recapitalization, share dividend, share split, combination or
exchange of shares, or the like, the restrictions contained in this Article
shall apply with equal force to additional and/or substitute securities, if any,
received by a Recipient in exchange for, or by virtue of the Recipient's
ownership of, shares of Common Stock acquired in connection with an Award under
this Plan.

     8.4  Termination of Article VIII.  This Article, and the rights and
          ---------------------------
obligations of the Company and Recipients hereunder, shall terminate upon the
earliest of (a) the Company becoming an Exchange Act Registered Company; (b) the
consummation of the Company's Initial Public Offering; or (c) immediately prior
to the consummation of a Change in Control (unless the Incumbent Board at such
time determines that this Article shall not terminate by reason of such Change
in Control).

                                  ARTICLE IX

                                  DEFINITIONS

     Capitalized terms used in this Plan and not otherwise defined shall have
the meanings set forth below:

     "Administering Body" means the Board as long as no Committee has been
appointed and is in effect and shall mean the Committee as long as the Committee
is appointed and in effect.

                                      12
<PAGE>

     "Affiliated Entity" means any Parent Corporation or Subsidiary Corporation.

     "Award" means any Stock Option granted or sold to an Eligible Person under
this Plan.

     "Award Document" means the agreement or confirming memorandum setting forth
the terms and conditions of an Award.

     "Board" means the Board of Directors of the Company.

     "Change in Control" means the following and shall be deemed to occur if any
of the following events occur after the Effective Date:

          (a)  Any Person (other than the Current Parent Corporation) becomes
the beneficial owner (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of fifty percent (50%) or more of either the then outstanding
shares of Common Stock or the combined voting power of the Company's then
outstanding securities entitled to vote generally in the election of directors;
or

          (b)  Individuals who, as of the consummation of the Initial Public
Offering, constitute the Board of Directors of the Company (the "Incumbent
Board") cease for any reason to constitute at least a majority of the Board of
Directors of the Company, provided that any individual who becomes a director
after the effective date hereof whose election, or nomination for election by
the Company's stockholders, is approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered to be a member
of the Incumbent Board unless that individual was nominated or elected by any
Person (other than the Current Parent Corporation) having the power to exercise,
through beneficial ownership, voting agreement and/or proxy, twenty percent
(20%) or more of either the outstanding shares of Common Stock or the combined
voting power of the Company's then outstanding voting securities entitled to
vote generally in the election of directors, in which case that individual shall
not be considered to be a member of the Incumbent Board unless such individual's
election or nomination for election by the Company's stockholders is approved by
a vote of at least two-thirds of the directors then comprising the Incumbent
Board; or

          (c)  Consummation by the Company of the sale or other disposition by
the Company of all or substantially all of the Company's assets or a
Reorganization of the Company with any other Person other than a Reorganization
that would result in the voting securities of the Company held by stockholders
of the Company immediately prior thereto (or, in the case of a Reorganization
that is preceded or accomplished by an acquisition or series of related
acquisitions by any Person, by tender or exchange offer or otherwise, of voting
securities representing five percent (5%) or more of the combined voting power
of all securities of the Company, immediately prior to such acquisition or the
first acquisition in such series of acquisitions) continuing to represent,
either by remaining outstanding or by being converted into voting securities of
another entity, more than fifty percent (50%) of the combined voting power of
the voting securities of the Company or such other entity outstanding
immediately after such Reorganization (or series of related transactions
involving such a Reorganization) in the same proportion such stockholders held
the voting securities of the Company immediately prior to the Reorganization; or

                                      13
<PAGE>

          (d)  Approval by the stockholders of the Company or any order by a
court of competent jurisdiction of a plan of liquidation of the Company.

     "Committee" means the committee appointed by the Board to administer this
Plan pursuant to Section 4.1.
                 -----------

     "Common Stock" means the Class A Common Stock of the Company, as
constituted on the Effective Date of this Plan, and as thereafter adjusted as a
result of any one or more events requiring adjustment of outstanding Awards
under Section 3.4 above.
      -----------

     "Company" means LeadersOnline, Inc, a Delaware corporation.

     "Current Parent Corporation" means Heidrick & Struggles International, Inc.
and any of its Subsidiary Corporations.

     "Effective Date" means January __, 2000, which is the date this Plan was
adopted by the Board.

     "Eligible Person" shall include directors, officers and employees of, and
consultants and advisors to, the Company or any Affiliated Entity.

     "Exchange Act" means the Securities Exchange Act of 1934, as amended.

     "Exchange Act Registered Company" means that the Company has any class of
any equity security registered pursuant to Section 12 of the Exchange Act.

     "Expiration Date" means the 10th anniversary of the Effective Date.

     "Fair Market Value" of a share of the Company's capital stock as of a
particular date shall be:  (i) if the stock is listed on an established stock
exchange or exchanges (including the Nasdaq National Market), the average of the
highest and lowest sale prices of the stock quoted for such date as reported in
the Transactions Index of each such exchange, as published in The Wall Street
Journal and determined by the Administering Body, or, if no sale price was
quoted in any such Index for such date, then as of the next preceding date on
which such a sale price was quoted; or (ii) if the stock is not then listed on
an exchange or the Nasdaq National Market, the average of the closing bid and
asked prices per share for the stock in the over-the-counter market as quoted on
The Nasdaq Small Cap Market on such date (in the case of (i) or (ii), subject to
adjustment as and if necessary and appropriate to set an exercise price not less
than 100% of the fair market value of the stock on the date an option is
granted); or (iii) if the stock is not then listed on an exchange or quoted in
the over-the-counter market, an amount determined in good faith by the
Administering Body; provided, however, that (A) when appropriate, the
Administering Body, in determining Fair Market Value of capital stock of the
Company, may take into account such other factors as it may deem appropriate
under the circumstances and (B) if the stock is traded on the Nasdaq Small Cap
Market and both sales prices and bid and asked prices are quoted or available,
the Administering Body may elect to determine Fair Market Value under either
clause (i) or (ii) above. Notwithstanding the foregoing, the Fair Market Value
of capital stock for purposes of grants of Incentive Stock Options shall be
determined in compliance with applicable provisions of the IRC. The Fair Market
Value of rights or property other than

                                      14
<PAGE>

capital stock of the Company means the fair market value thereof as determined
by the Administering Body on the basis of such factors as it may deem
appropriate.

     "Incentive Stock Option" means a Stock Option that qualifies as an
incentive stock option under Section 422 of the IRC, or any successor statute
thereto.

     "Initial Public Offering" means the Company's first public distribution of
Common Stock pursuant to an underwritten offering under a registration statement
declared effective under the Securities Act.

     "IRC" means the Internal Revenue Code of 1986, as amended.

     "Non-Employee Director" means any director of the Company who qualifies as
(i) a "non-employee director" within the meaning of Rule 16b-3 promulgated under
the Exchange Act, and (ii) an "outside director" within the meaning of Section
162(m) of the IRC.

     "Nonqualified Stock Option" means a Stock Option that is not an Incentive
Stock Option.

     "Parent Corporation" means any Parent Corporation as defined in Section
424(e) of the IRC.

     "Permanent Disability" shall mean that the Recipient becomes physically or
mentally incapacitated or disabled so that the Recipient is unable to perform
substantially the same services as the Recipient performed prior to incurring
such incapacity or disability (the Company, at its option and expense, being
entitled to retain a physician to confirm the existence of such incapacity or
disability, and the determination of such physician to be binding upon the
Company and the Recipient), and such incapacity or disability continues for a
period of three consecutive months or six months in any 12-month period or such
other period(s) as may be determined by the Administering Body with respect to
any Award, provided that for purposes of determining the period during which an
Incentive Stock Option may be exercised pursuant to Section 5.12 hereof,
                                                    ------------
Permanent Disability shall mean "permanent and total disability" as defined in
Section 22(e) of the IRC.

     "Person" means any person, entity or group, within the meaning of Section
13(d) or 14(d) of the Exchange Act, but excluding (i) the Company and any
Affiliated Entity, (ii) any employee stock ownership or other employee benefit
plan maintained by the Company that is qualified under the Employee Retirement
Income Security Act of 1974, as amended, and (iii) an underwriter or
underwriting syndicate that has acquired the Company's securities solely in
connection with a public offering thereof.

     "Plan" means this 2000 Stock Option Plan of the Company.

     "Plan Term" means the period during which this Plan remains in effect
(commencing the Effective Date and ending on the Expiration Date).

     "Recipient" means an Eligible Person who has received an Award under this
Plan.

     "Reorganization" means any merger, consolidation or other reorganization.

                                      15
<PAGE>

     "Securities Act" means the Securities Act of 1933, as amended.

     "Significant Stockholder" is an individual who, at the time a Stock Option
is granted to such individual under this Plan, owns more than ten percent (10%)
of the combined voting power of all classes of stock of the Company or of any
Parent Corporation or Subsidiary Corporation (after application of the
attribution rules set forth in Section 424(d) of the IRC).

     "Stock Option" means a right to purchase stock of the Company granted under
Section 6.1 of this Plan.
-----------

     "Subsidiary Corporation" means any Subsidiary Corporation as defined in
Section 424(f) of the IRC.

                                      16

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