EXHIBIT 10.3
THE PRINCETON REVIEW GLOSSARY
In many documents and agreements used by The Princeton Review, we use certain
terms. In order that all of those documents refer to the same things in the same
way, we have created this Glossary.
1) "Agreed Value" is the fair market value of the Company as determined by the
Company through the valuation committee set up in the Stockholder's
Agreement.
2) "Board" shall mean the Board of Directors of the Company.
3) "Cause" shall mean:
a) dishonesty or the willful engaging by an employee in illegal conduct,
if such acts materially injure the company;
b) the willful and continued failure of an employee to perform the
material duties of his or her employment (other than any such failure
resulting from incapacity due to physical or mental illness), after a
written demand for substantial performance is delivered to the
employee which identifies the manner in which the employee has not
substantially performed his or her duties;
c) the willful engaging by an employee in gross misconduct in connection
with the performance of his or her duties which is materially
injurious to his or her employer; or
d) disloyalty towards the Company which results in material harm to the
Company, which specifically shall include, but not be limited to,
actions which are inconsistent with the fiduciary duty owed TPR
arising by law from employment as an officer and agent of TPR;
e) provided however, that prior to termination for cause, the employee
shall have a reasonable opportunity to be heard before a special
meeting of the Board of Directors.
4) A "Change in Control" shall mean:
a) an acquisition or acquisitions of 30% or more of the Company's then
issued and outstanding voting stock, with preferred stock on an
as-converted basis, that results in a change in the CEO or Chairman of
the Board, by an outside entity or entities (as defined below);
b) a merger or consolidation of the Company, unless (1) following the
transaction, former stockholders of the Company continue to hold at
least 50% of the voting
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stock of the surviving entity or (2) the transaction is effected to
implement a recapitalization in which no outside entity or entities
acquire control of 50% or more of the Company's voting stock;
c) during any period of two consecutive years, individuals who at the
beginning of such period were members of the Board cease for any
reason to constitute at least a majority thereof (unless the election,
or the nomination for election by the Company's stockholders, of each
new director was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning of
such period);
d) a liquidation or dissolution of the Company, or sale of substantially
all of its assets to an outside entity or entities; or
e) the execution of a binding agreement which, if consummated, would
result in a Change in Control as defined above;
i) provided, that, notwithstanding anything to the contrary in the
foregoing, neither the initial public offering of the common
stock of the Company, nor the temporary holding of Company
securities by an underwriter pursuant to an offering of such
securities, shall be deemed to constitute, or otherwise be
treated as, a Change in Control.
ii) For purposes of this definition, an "outside entity" includes
"person" or "group" within the meaning of Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934 as of April 1,
2000. Notwithstanding anything to the contrary in the foregoing,
an "outside entity" shall not include SG Capital Partners, L.L.C.
5) "Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
6) "Common Stock" shall mean the common stock of the Company.
7) "Committee" shall mean the Compensation Committee of the Board or such
other committee appointed either by the Board or by such Compensation
Committee to administer the Plan.
8) "Company" shall mean The Princeton Review, Inc.
9) "Deferral Period" shall mean the period during which receipt of an award of
Deferred Stock shall be deferred.
10) "Deferred Stock" shall mean an award of deferred stock granted to an
employee under the Stock Incentive Plan.
11) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
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12) "Incentive Stock Option" shall mean a Stock Option that is an "incentive
stock option" within the meaning of Section 422 of the Code.
13) "Fair Market Value" shall mean the closing sale price of the Stock on a
given date as reported on the NASDAQ, or such other national securities
exchange as may be designated by the Company, or, in the event that the
Stock is not listed for trading on a national securities exchange but is
quoted on an automated system, on such automated system. Until the Company
is public, Fair Market Value shall be set to the Agreed Value.
14) "Non-Qualified Stock Option" shall mean a Stock Option which is not an
Incentive Stock Option.
15) "Reassigned" shall mean:
a) a material detrimental change in an employee's duties, titles or
reporting responsibilities from those in effect;
b) the relocation of the employee by more than 50 miles from the office
at which he or she was based, or, if the employee consents to
relocation, the failure by TPR to pay the Executive's reasonable
moving expenses and indemnify him or her against loss realized in the
sale of his or her principal residence in connection with the
relocation;
c) TPR's failure to have any successor assume the Agreement; or
d) any other material breach by TPR of the Agreement.
16) "Related Company" shall mean any affiliate of the Company designated as
such by the Committee.
17) "Restricted Stock" shall mean an award of shares of Stock granted to an
employee pursuant to the Stock Incentive Plan.
18) "Stock" shall mean the common stock of the Company.
19) "Stock Incentive Plan" shall mean The Princeton Review, Inc. 2000 Stock
Incentive Plan, or any successor plan thereto.
20) "Stock Option" shall mean an award to purchase shares of Stock granted to
an employee pursuant to The Princeton Review's Stock Incentive Plan, which
may be either a Non-Qualified Stock Option or an Incentive Stock Option.
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