EXHIBIT 99.1
PREDICTIVE SYSTEMS, INC.
FORM OF EMPLOYEE OPTION AGREEMENT
THIS OPTION AGREEMENT dated this <<Date_Granted>> is by and
between Predictive Holdings, Inc., a corporation organized under the laws of the
State of Delaware ("Company") and <<Name>> ("Optionee").
RECITALS
WHEREAS, Optionee is employed by the Company's subsidiary, Predictive
Systems, Inc. ("Systems");
WHEREAS, in connection therewith, the Company has agreed to grant an
option to Optionee to purchase shares of the Company's Common Stock, par value
$.001 per share ("Common"), upon the terms and conditions contained herein.
NOW, THEREFORE, it is agreed:
1. Grant of Option. Company hereby grants to Optionee, provided
Optionee is still employed by the Company, Systems or an affiliated company as
at the Date of Vesting (defined below) and the date of exercise, the irrevocable
right and option (the "Option") to purchase <<Total_Options>> shares of common
stock of the Company (the "Option Shares") at a price of $7.50 per share. The
Options shall vest as follows (the date of each such vesting being a "Date of
Vesting" with respect to the Options covered thereby):
(i) <<Vest_1>> Options will vest as of <<Vest_Date_1>>
(ii)<<Vest_2>> Options will vest as of <<Vest_Date_2>>
(iii)<<Vest_3>> Options will vest as of <<Vest_Date_3>>
(iv)<<Vest_4>> Options will vest as of <<Vest_Date_4>>
2. Option Term. The term of each Option shall be for a period of five
(5) years commencing on the Date of Vesting, provided that all unexercised
Options shall terminate and be without further force and effect upon termination
of the Optionee's employment with the Company or Systems or any affiliated
company. Notwithstanding the foregoing, in the event that Optionee's employment
is terminated by reason of Optionee's death or disability, this Option shall
remain exercisable by Optionee (or his estate or personal representative)
throughout the term contemplated by the first clause of this Section 2.
3. Exercise of Option. Each Option may be exercised as to all or any
portion of the Option Shares at any time from and after the Date of Vesting of
the Option during the term of the Option.
4. Method of Exercise. Each Option may be exercised by giving written
notice of exercise of the Option to the Company at the address and in the manner
set forth below. The notice shall state Optionee's election to exercise the
Option and the number of Option Shares with respect to which the Option is being
exercised. The notice of exercise shall be accompanied by full payment (in cash
or by check) of the amount of the purchase price of the Option Shares as to
which the Option is being exercised. A certificate or certificates for the
Shares as to which the Option is exercised shall be delivered to Optionee as
soon as practicable after the notice and payment has been received by the
Company.
At the option of Optionee, in lieu of payment of the Option
Price for the Option Shares, and provided that the Common is publicly traded
such that a Current Market Price can be determined as hereinafter set forth, the
Optionee shall have the right to instruct the Company to issue to Optionee the
Net Shares issuable as determined in accordance with the following formula:
NS = OS - [OP/CMP x OS]
NS = Net Shares
OS = Number of Shares issuable upon exercise of
the Option
OP = Option Price
CMP = Current Market Price as defined below.
For purposes of this Agreement, the term "Current Market Price" shall
mean (i) if the Common Stock is traded in the over-the-counter market and not in
the NASDAQ National Market System nor on any national securities exchange, the
average per share closing bid prices of the Common Stock on the fifteen (15)
consecutive trading days immediately preceding the date in question, as reported
by NASDAQ or an equivalent generally accepted reporting service, or (ii) if the
Common Stock is traded in the NASDAQ National Market System or on a national
securities exchange, the average for the fifteen (15) consecutive trading days
immediately preceding the date in question of the daily per share closing prices
of the Common Stock in the NASDAQ National Market System or on the principal
stock exchange on which it is listed, as the case may be. For purposes of clause
(i) above, if trading in the Common Stock is not reported by NASDAQ, the average
referred to in said clause shall be as reported in the "pink sheets' published
by National Quotation Bureau, Incorporated or as reported by the NASD Electronic
Bulletin Board, as appropriate. The closing price referred to in clause (ii)
above shall be the last reported sale price or, in case no such reported sale
takes place on such day, the average of the reported closing bid and asked
prices, in either case, in the NASDAQ National Market System or on the national
securities exchange on which the Common Stock is then listed. If the Common
Stock is not so listed or reported as provided herein, then the Current Market
Price shall be the price as determined in good faith by the Board of Directors
to be the fair market value per share.
5. Privileges of Stock Ownership. The holder of the Option shall not
have any of the rights or privileges of a stockholder of the Company with
respect to any Option Shares issuable upon the exercise of the Option until
certificates representing such Option Shares shall have been issued and
delivered by the Company to such holder.
6. Adjustments to Number and Purchase Price of Option Shares. If the
outstanding shares of the Common Stock of the Company are increased, decreased,
changed into or exchanged for a different number or kind of shares or securities
of the Company through merger, consolidation, combination, exchange of shares,
other reorganization, recapitalization, reclassification, stock dividend, stock
split or reverse stock split, but specifically not including any acquisition of
a subsidiary by means of a stock-for-stock merger or other exchange of stock, an
appropriate and proportionate adjustment shall be made in the maximum number and
kind of shares as to which the Option may be exercised pursuant to this
Agreement. Any such adjustment in shares subject to the Option shall be made
without change in the aggregate purchase price applicable to the unexercised
portion of the Option, but with a corresponding adjustment in the price for each
share covered by the Option.
Adjustments under this paragraph shall be made by the Board of
Directors of the Company consistent with the terms and provisions hereof, and
their good faith determination as to what adjustments shall be made, and the
extent thereof, shall be conclusive.
7. Legal Requirements.
a. The Company may require Optionee, or any transferee, as a
condition of exercising the Option, (1) to give written assurances
satisfactory to the Company as to the Optionee's knowledge and
experience in financial and business matters and/or to employ a
purchaser representative reasonably satisfactory to the Company who is
knowledgeable and experienced in financial and business matters, and
that he or she is capable of evaluating, alone or together with the
purchaser representative, the merits and risks of exercising the
Option; and (2) to give written assurances satisfactory to the Company
stating that such person is acquiring the Option Shares subject to the
Option for such person's own account and not with any present intention
of selling or otherwise distributing the Option Shares. These
requirements, and any assurances given pursuant to such requirements,
shall be inoperative if (i) the issuance of the Option Shares upon the
exercise of the Option has been registered under a then currently
effective registration statement under the Securities Act of 1933, as
amended (the "Securities Act"), or (ii) as to any particular
requirement, a determination is made by counsel for the Company that
such requirement need not be met in the circumstances under the then
applicable securities laws.
b. The Option and the Option Shares shall not be sold or
transferred until either (i) they first shall have been registered
under the Securities Act, or (ii) the Company first shall have been
furnished with an opinion of legal counsel, reasonably satisfactory to
the Company, to the effect that such sale or transfer is exempt from
the registration requirements of the Securities Act.
c. Option Shares issued pursuant to this Option shall be subject
to the provisions of Section 3 of the Shareholders Agreement dated as
of March 31, 1995 between the Company, Optionee and certain other
persons. Certificates representing the Option Shares shall bear the
following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY
NOT BE TRANSFERRED, SOLD, PLEDGED, HYPOTHECATED, OR
OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE WITH AN
AGREEMENT BETWEEN THE COMPANY AND THE HOLDER OF THE
SECURITIES, A COPY OF WHICH IS ON FILE AT THE OFFICES
OF THE COMPANY."
The certificates evidencing the Option Shares issued upon exercise of the Option
will also bear the following restrictive legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
("THE ACT") AS AMENDED, AND MAY NOT BE OFFERED, SOLD
OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED
UNLESS AND UNTIL SUCH SHARES ARE REGISTERED UNDER THE
ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY IS OBTAINED TO THE EFFECT THAT SUCH
REGISTRATION IS NOT REQUIRED."
8. General Provisions.
a. The subject headings of the sections and paragraphs of this
Agreement are included for purposes of convenience only, and shall not
affect the construction or interpretation of any of its provisions.
b. This Agreement constitutes the entire agreement between the
parties pertaining to the subject matter contained in it and superseded
all prior and contemporaneous agreements, representations, and
understandings of the parties. No supplement, modification, or
amendment of this Agreement shall be binding unless executed in writing
by all of the parties. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a continuing waiver. No
waiver shall be binding unless executed in writing by the party making
the waiver.
c. This Agreement may be executed simultaneously in one or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
d. This Agreement shall be binding on, and shall inure to the
benefit of, the parties to it and their respective heirs, legal
representatives, successors and permitted assigns.
e. All representations, warranties, covenants and agreements of
the parties contained in this Agreement, or in any instrument,
certificate, opinion, or other writing provided for in it, shall
survive the execution and delivery hereof.
f. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed to have been
duly given on the date of service if served personally on the party to
whom notice is to be given, or on the third day after mailing if mailed
to the party to whom notice is to be given, by first class mail,
registered or certified, postage prepaid, and properly addressed as
follows:
To the Company: Robert Belau
President
Predictive Holdings, Inc.
145 Hudson Street, 6th Floor
New York, New York 10013
To Optionee:
Any party may change its address for purposes of this
paragraph by giving the other parties written notice of the new address in the
manner set forth above.
IN WITNESS WHEREOF, the parties have executed this Option
Agreement as of the day and year first above written.
"COMPANY"
PREDICTIVE HOLDINGS, INC.
By:
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Name: Robert Belau, President
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"OPTIONEE"
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Signed