1. |
Vesting Commencement Date: January 15, 2018
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2. |
Number of Units. 18,258,679
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3. |
Exercise Price. $1.00 per Unit
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4. |
Vesting. The Option shall initially be unvested. Subject to Section 4(c), fifty percent (50%) of the
Option shall vest based solely on continued service as set forth herein (the “Time-Based Options”), and the remaining fifty percent (50%) of the Option shall vest
based on both performance and service vesting conditions (the “Performance-Based Options”), as follows:
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(a) |
Time-Based Options: The Time-Based Options shall become vested in 13 installments, as follows:
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Vesting Date
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Cumulative Vesting Percentage
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January 15, 2019
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25%
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April 15, 2019
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31.25%
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July 15, 2019
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37.50%
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October 15, 2019
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43.75%
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January 15, 2020
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50%
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April 15, 2020
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56.25%
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July 15, 2020
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62.50%
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October 15, 2020
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68.75%
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January 15, 2021
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75%
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April 15, 2021
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81.25%
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July 15, 2021
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87.50%
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October 15, 2021
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93.75%
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January 15, 2022
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100%
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(b) |
Performance-Based Options: The Performance-Based Options shall become vested as follows, subject to you
remaining continuously employed by or continuing to provide services to the Company or one of its Subsidiaries from the Date of Grant through the applicable date of such event:
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i. |
When and if MOIC reaches 1.75X, the Performance-Based Options will become vested with respect to fifty percent (50%) of the underlying Units (the “Cliff Portion Percentage”). If and as MOIC increases from 1.75X to 2.5X, the Performance-Based Options will become vested with respect to a portion of the underlying Units calculated as the
product of (A) 1 – the Cliff Portion Percentage multiplied by (B) (MOIC – 1.75)/.75, with full vesting of the Performance-Based Options when and if
MOIC reaches 2.5X.
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ii. |
Upon the occurrence of a Sponsor Exit that is also a Sale of the Company as defined in the LLC Agreement described in Section 5 below (such collective occurrence referred to herein
as a “Trigger Event”), the Performance-Based Options shall, regardless of MOIC, become vested with respect to forty percent (40%) of the underlying Units, but only
if, giving effect to the Trigger Event, a MOIC of less than 1.75X has been realized.
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(c) |
Acceleration. Notwithstanding the foregoing, the Time-Based Options shall become vested in their
entirety upon the occurrence of a Trigger Event, provided that you remain continuously employed by or continue to provide services to the Company or one of its Subsidiaries to the effective time of such Trigger Event or your employment is
terminated without Cause and in connection with, but before the effective time of, the Trigger Event; it being understood that if the Trigger Event occurs pursuant to a definitive agreement and your employment is terminated prior to the
entry into that definitive agreement, it shall not be deemed to be in connection with such Trigger Event. The vesting that results from a Trigger Event shall be subject to but effective immediately prior to the consummation of the Trigger
Event.
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5. |
Exercise. Only the vested portion of the Option may be exercised and the Option may be exercised only
for whole Units. The Option may be exercised only before its termination, which will be accelerated upon termination of your service with the Company as described in Section 6(b) of the Plan. In order to exercise the Option, you must
deliver written notice to the Company of your intention to exercise, setting forth the number of whole Units with respect to which the Option is to be exercised, along with payment, in cash (certified check or bank draft) or as an
electronic funds transfer to the Company, of the exercise price and applicable withholding taxes. As a condition to the exercise of the Option, you must also become a party to the Limited Liability Agreement of the Company, or the limited
liability agreement or stockholders agreement of any successor to the Company (the “LLC Agreement”), if then still in effect, which contains certain restrictions
relating to the Option Units.
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6. |
Representations.
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(a) |
You understand that the Units to be received upon exercise of the Option (or other equity of a successor to the Company issued upon exercise of the Option) (“Option Units”) have not been, and may not be, registered under the Securities Act and other applicable Securities Laws and, accordingly, the Option is being granted to
you only pursuant to exemptions from registration under the Securities Act and applicable Securities Laws. You understand that the Company does not anticipate registering the Option Units, and you acknowledge that the Company has not made
any representations that it will register the Option Units under the Securities Act or any other applicable Securities Laws.
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(b) |
You understand and agree that, unless the Company has filed a registration statement on Form S-8 under the Securities Act covering the Option Units, the Option Units will
constitute “restricted securities” under the Securities Act and may not be pledged, re-offered or resold in the United States or to, or for the account or benefit of U.S. persons, except in transactions exempt from, or not subject to, the
registration requirements of the Securities Act and as may permitted under the LLC Agreement.
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(c) |
You understand that the Option and Option Units may not be transferred, sold, disposed of, or encumbered except in limited circumstances in accordance with the Plan and the LLC
Agreement, and there is not any current, or anticipated market for the Option Units.
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7. |
Restrictions; Forfeiture; Other Relief. You acknowledge and agree, that in the event that you engage in
any Restricted Activity during the term of your employment with the Company or its Subsidiaries or at any time during the twelve (12) month period following your termination of employment for any reason, or otherwise engage in misconduct as
described in Section 14(e) of the Plan, then in addition to any other remedy which may be available at law or in equity to the Company, the Option shall at the discretion of the Board be forfeited effective as of the date on which such
violation first occurs, and, in the event that any Units were acquired upon the exercise of the Option and/or you received any profit on the sale of any such Units, in each case, during the period beginning one year prior to the date of
such activity, then such Units shall immediately be forfeited and returned to the Company without additional consideration, and the Company may require you to repay to the Company any profit received pursuant to any such sale.
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8. |
Entire Agreement. This Award Agreement, the Plan, the LLC Agreement, and any Other Agreement contain
the entire agreement and understanding of the parties hereto with respect to the subject matter contained herein and supersedes all prior communications, representations and negotiations in respect thereto. You acknowledge and agree that
the grant of the Option hereunder satisfies in full any obligation to issue stock options or other equity awards to you as contemplated by any employment agreement or offer letter or other understanding between you and the Company or any
Affiliate that predates this Award Agreement, and you do not have any further right to receive any options, stock or other equity awards from the Company or any of its Affiliates.
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9. |
Amendments. This Award Agreement and the Option granted hereunder is subject to modification or
adjustment upon the occurrence of certain events as provided under the terms of the Plan; provided; that the Board may not unilaterally take any such action with
respect to the Option if such amendment would materially and adversely affect the rights of the Grantee under this Award Agreement without the Grantee’s written consent. Notwithstanding the preceding sentence, in the event of a Sponsor
Exit, any modification or adjustment made pursuant to Section 12(b) of the Plan, shall not be considered material and adverse to the rights of the Grantee under this Award Agreement.
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10. |
Counterparts. This Award Agreement may be executed in one or more counterparts (including via facsimile
and electronic image scan (pdf)), each of which shall be deemed to be an original, but all of which together shall constitute one and the same.
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Sincerely,
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||||||
HireRight GIS Group Holdings LLC
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By:
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||||||
Title:
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Agreed to and Accepted by:
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Guy P. Abramo
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Date:
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