PRT GROUP INC.
AMENDED AND RESTATED 1996 STOCK INCENTIVE PLAN
1. Purpose.
The purpose of the PRT Group Inc. 1996 Stock Incentive Plan
(the "Plan") is to align the interests of directors, officers, other
employees and consultants of PRT Group Inc., a Delaware corporation
("PRT") and its subsidiaries, now held or hereafter acquired
(collectively with PRT, the "Company"), with those of the stockholders of
PRT; to attract, motivate and retain the best available executive
personnel and key employees of the Company by permitting them to acquire
or increase their proprietary interest in PRT; and to reward the
performance of individual officers and other employees in fulfilling
their personal responsibilities for long-range achievements.
2. Definitions.
The following terms, as used herein, shall have the following
meanings:
(a) "Award" shall mean any Option granted pursuant
to the Plan.
(b) "Award Agreement" shall mean any written agreement,
contract or other instrument or document between PRT
and a Participant
evidencing an Award.
(c) "Board" shall mean the Board of Directors of PRT.
(d) "Cause" shall mean (i) the engaging by the
Participant in willful misconduct that is
materially injurious to the Company, (ii) the
embezzlement or misappropriation of funds or
property of the Company by the Participant or
the conviction of the Participant of a felony
or the entrance of a plea of guilty or nolo
contendere by the Participant to a felony, or
(iii) the willful failure or refusal by the
Participant to substantially perform his duties
or responsibilities that continues after being
brought to the attention of the Participant (other
than any such failure resulting from the
Participant's incapacity due to disability). For
purposes of this paragraph, no act, or failure to
act, on the Participant's part shall be considered
"willful" unless done, or omitted to be done, by him
not in good faith and without reasonable belief that
his action or omission was in the best interest of
the Company. Determination of Cause shall be made by
the Committee in its sole discretion. Any such
determination shall be final and binding on a
Participant.
(e) "Code" shall mean the Internal Revenue Code of 1986,
as amended from time to time.
(f) "Committee" shall mean the committee of the Board
comprised of at least two Non-Employee Directors
which administers the Plan as
provided herein.
(g) "Common Stock" shall mean the Common Stock, par
value $0.001 per share, of PRT.
(h) "Company" shall have the meaning set forth in
Section 1 hereof.
(i) "Effective Date" shall have the meaning set forth in
Section 8(j) hereof.
(j) "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended from time to time.
(k) "Fair Market Value" of a share of Common Stock
on any date shall be the fair market value of
such Common Stock as determined by the
Committee in its sole discretion pursuant to
such policies as to valuation as may be adopted
be the Board; provided, that if the Options
granted pursuant to an Award are Incentive
Stock Options, the Fair Market Value of a share
of Common Stock shall be determined in
accordance with Section 422 of the Code;
provided, further, that (A) if the Common Stock
is admitted to trading on a national securities
exchange, Fair Market Value on any date shall
be the last sale price reported for the Common
Stock on such exchange on such date or, if none, the
next earlier date on which a sale was reported, (B)
if the Common Stock is admitted to quotation on the
Nasdaq National Market or other comparable quotation
system, Fair Market Value on any date shall be the
last sale price reported for the Common Stock on
such system on such date or, if none, the next
earlier date on which a sale was reported, or (C) if
the Common Stock is admitted to quotation on the
Nasdaq Stock Market, Fair Market Value on any date
shall be the average of the highest bid and lowest
asked prices of the Common Stock on such system on
such date or, if none, the next earlier date on
which a sale was reported.
(l) "Incentive Stock Option" shall mean an Option that
meets the requirements of Section 422 of the Code,
or any successor provision, and is designated by the
Committee as an Incentive Stock Option.
(m) "Initial Public Offering" shall mean a public
offering of Common Stock pursuant to a registration
statement under the Securities
Act.
(n) "Non-Employee Director" shall mean a member of the
Board who is not also an employee of the Company.
(o) "Nonqualified Stock Option" shall mean an Option
other than an Incentive Stock Option.
(p) "Option" shall mean the right, granted pursuant to
the Plan, of a holder to purchase shares of Common
Stock.
(q) "Participant" shall mean an officer, other employee
or consultant of the Company who is, pursuant to
Section 4 of the Plan, selected to participate in
the Plan and Non-Employee Directors eligible to
participate in the Plan pursuant to Section 7
hereof.
(r) "Plan" shall have the meaning set forth in Section 1
hereof.
(s) "Plan Year" shall mean PRT's fiscal year.
(t) "PRT" shall have the meaning set forth in Section 1
hereof.
(u) "Securities Act" shall mean the Securities Act of
1933, as amended from time to time, and as now or
hereafter construed, interpreted and applied by
regulations, rulings and cases.
(v) "Ten Percent Stockholder" shall mean a
Participant who, at the time an Incentive Stock
Option is to be granted to such Participant,
owns (within the meaning of Section 422(b)(6)
of the Code) stock possessing more than ten
percent (10%) of the total combined voting
power of all classes of stock of the Company
within the meaning of Sections 422(e) and
422(f), respectively, of the Code.
3. Administration.
The Plan shall be administered by the Committee. The
Committee shall have the authority, in its sole discretion, subject to
and not inconsistent with the express provisions of the Plan, to
administer the Plan and to exercise all the powers and authorities either
specifically granted to it under the Plan or necessary or advisable in
connection with the administration of the Plan, including, without
limitation, the authority to grant Awards; to determine the persons to
whom and the time or times at which Awards shall be granted; to determine
the type and number of Awards to be granted, the number of shares of
Common Stock to which an Award may relate and the terms, conditions,
restrictions and performance criteria relating to any Award; to determine
whether, to what extent, and under what circumstances an Award may be
settled, cancelled, adjusted, forfeited, exchanged, or surrendered or
accelerated or an Option or Options may be repriced to a lower exercise
price; to construe and interpret the Plan and any Award; to prescribe,
amend and rescind rules and regulations relating to the Plan; to
determine the terms and provisions of Award Agreements, consistent with
the terms and provisions of the Plan; and to make all other
determinations deemed necessary or advisable for the administration of
the Plan, consistent with the terms and provisions of the Plan. The
Committee shall consist of two or more persons who are intended to be
"disinterested persons" within the meaning of Rule 16b-3 under the
Exchange Act.
4. Eligibility.
Awards may be granted to officers, other employees and
consultants of the Company in the sole discretion of the Committee. In
determining the persons to whom Awards shall be granted and the type of
Award, the Committee shall take into account such factors as the
Committee shall deem relevant in connection with accomplishing the
purposes of the Plan. In addition, Non-Employee Directors of the Company
will be granted options as set forth herein.
5. Stock Subject to the Plan.
(a) Number of Shares. The maximum number of shares of Common
Stock reserved for issuance pursuant to the Plan shall be 4,302,000. All
such shares of Common Stock shall be subject to equitable adjustment as
provided herein. Such shares may, in whole or in part, be authorized but
unissued shares or shares that shall have been or may be reacquired by
the Company in the open market, in private transactions or otherwise. If
any shares subject to an Award are forfeited, cancelled, exchanged or
surrendered or if an Award otherwise terminates or expires without a
distribution of shares to the Participant, the shares of Common Stock
with respect to such Award shall, to the extent of any such forfeiture,
cancellation, exchange, surrender, termination or expiration, again be
available for Awards under the Plan.
(b) Equitable Adjustment. In the event that an extraordinary
transaction or other event or circumstance affecting the Common Stock
shall occur, including, but not limited to, any dividend or other
distribution (whether in the form of cash, stock or other property),
recapitalization, stock split, reverse stock split, reorganization,
merger, consolidation, spin-off, combination, repurchase, share exchange,
sale of assets or other similar transaction or event, and the Committee
determines that a change or adjustment in the terms of any Award is
appropriate, then the Committee may, in its sole discretion, make such
equitable changes or adjustments or take any other actions that it deems
necessary or appropriate (which shall be effective at such time as the
Committee in its sole discretion determines), including, but not limited
to (A) causing changes or adjustments to any or all of (i) the number and
kind of shares of stock or other securities or property which may
thereafter be issued in connection with Awards (including Awards to
Non-Employee Directors pursuant to Section 7 hereof), (ii) the number and
kind of shares of stock or other securities or property issued or
issuable in respect of outstanding Awards, (iii) the exercise price
relating to any Award, and (iv) the limitation on Option grants pursuant
to Section 6(a)(9) hereof, and (B) cancelling outstanding Awards in
exchange for replacement awards or cash, it being understood that the
Committee shall have the authority to cause different changes or
adjustments to be made to any Awards held by Participants even if such
Awards are identical and such Participants are similarly situated;
further, provided, however, that with respect to Options which are
intended by the Committee to remain Incentive Stock Options subsequent to
any such adjustment, such adjustment shall be made in accordance with
Section 424 of the Code.
6. Stock Options.
Each Option granted pursuant to this Section 6 shall be
evidenced by an Award Agreement, in such form and containing such terms
and conditions as the Committee shall from time to time approve, which
Award Agreement shall comply with and be subject to the following terms
and conditions, as applicable.
(a) Stock Options
(1) Number of Shares. Each Award Agreement shall state
the number of shares of Common Stock to which the Option relates.
(2) Type of Option. Each Award Agreement shall state that
the Option constitutes an Incentive Stock Option or a Nonqualified Stock
Option.
(3) Option Exercise Price. Each Award Agreement shall
state the Option exercise price, which, except as provided in Section
6(a)(7)(B) below, or except as otherwise determined by the Committee,
shall not be less than one hundred percent (100%) of the Fair Market
Value of the shares of Common Stock covered by the Option on the date of
grant. The Option exercise price shall be subject to adjustment as
provided in Section 5 hereof. Unless otherwise expressly stated in the
Committee resolution expressly granting an Option, the date as of which
the Committee adopts the resolution expressly granting an Option shall be
considered the day on which such Option is granted.
(4) Method and Time of Payment. The Option exercise price
shall be paid in full, at the time of exercise, in cash (which may
include cash received from the Company as compensation or cash borrowed
from the Company), in shares of Common Stock having a Fair Market Value
equal to such Option exercise price, in a combination of cash and Common
Stock (or other consideration deemed acceptable by the Committee) or, in
the sole discretion of the Committee, through a cashless exercise
procedure.
(5) Term and Exercisability of Options. Each Award
Agreement shall provide that each Option shall become exercisable over a
period determined by the Committee in its discretion; provided, that the
Committee shall have the authority to accelerate the exercisability of
any outstanding Option at such time and under such circumstances as it,
in its sole discretion, deems appropriate. The exercise period shall be
not more than ten (10) years from the date of the grant of the Option, or
such shorter period as is determined by the Committee. The exercise
period shall be subject to earlier termination as provided in Section
6(a)(6) hereof. An Option may be exercised, as to any or all full shares
of Common Stock as to which the Option has become exercisable, by written
notice delivered in person or by mail to the Secretary of PRT, specifying
the number of shares of Common Stock with respect to which the Option is
being exercised, together with payment in full of the Option exercise
price. For purposes of the preceding sentence, the date of exercise will
be deemed to be the date upon which the Secretary of PRT receives both
the notification and such payment.
(6) Termination. If a Participant's employment by the
Company terminates, the Committee will have the exclusive authority to
determine if and for how long, and under what conditions, such Option may
be exercised after such termination; provided, however, that in no event
will an Option continue to be exercisable beyond the expiration date of
such Option; provided, further, that if an Award is of Incentive Stock
Options, such Incentive Stock Options must be exercised within ninety
(90) days after any termination which is not a result of death or
disability.
(7) Incentive Stock Options. Options granted as Incentive
Stock Options shall be subject to the following special terms and
conditions, in addition to the general terms and conditions specified in
this Section 6.
(A) Value of Shares. The aggregate Fair Market Value
(determined as of the date the Incentive Stock Option is
granted) of the shares of Common Stock with respect to which
Incentive Stock Options granted under this Plan and all other
plans of the Company become exercisable for the first time by
each Participant during any calendar year shall not exceed
$100,000.
(B) Ten Percent Stockholder. In the case of an Incentive
Stock Option granted to a Ten Percent Stockholder, (x) the
option exercise price shall not be less than one hundred ten
percent (110%) of the Fair Market Value of the shares of
Common Stock on the date of grant of such Incentive Stock
Option, and (y) the exercise period shall not exceed five (5)
years from the date of grant of such Incentive Stock Option.
(8) Nontransferability of Common Stock. Each Award
Agreement shall provide that upon receipt of any shares of Common Stock
acquired through the exercise of the Options granted hereby ("Option
Shares") prior to an Initial Public Offering, the Participant shall
execute a stockholders agreement (a "Stockholders Agreement") with
respect to the shares of Common Stock to which such Option relates, in
such form and containing such terms and conditions as the Committee shall
from time to time approve, including, without limiting the forgoing, any
restrictions on the transferability of such Option Shares.
(9) Maximum Grant of Options. No Plan Participant may
receive an Award or Awards of Options covering in excess of 200,000
shares of Common Stock in any Plan year.
(10) Option Shares Holding Period. In each Award
Agreement evidencing an Award granted to a Participant prior to an
Initial Public Offering, the Participant receiving the Award shall
covenant and agree to hold and not sell or otherwise dispose of any
shares of Company Common Stock acquired through the exercise of the
Options granted thereby ("Option Shares") for a period of not less than
six months after the exercise of the Options under which such Option
Shares were acquired; provided that any Option Shares acquired after an
Initial Public Offering shall be freely transferrable upon receipt of
such Option Shares, subject to applicable law.
(11) Right of First Refusal. If, prior to an Initial
Public Offering, a Participant shall determine to sell any Option Shares
after the end of any applicable holding period, the Company shall have a
right of first refusal to repurchase any such Option Shares at the Fair
Market Value of the Option Shares at the time the Participant so
determines to sell such Option Shares; provided, that the Company shall
be under no obligation to repurchase such Option Shares.
7. Non-Employee Director Options.
Notwithstanding any other provision of the Plan to the
contrary, the provisions of this Section 7 shall apply to and govern
grants of Options to Non-Employee Directors. Except as set forth in this
Section 7, the other provisions of the Plan shall apply to grants of
Options to Non-Employee Directors to the extent not inconsistent with
this Section. The provisions of this Section 7 shall not be amended more
than once every six months, other than to comport with changes in the
Code, the Employee Retirement Income Security Act of 1974, as amended, or
the rules promulgated thereunder.
(a) General. Non-Employee Directors shall receive Nonqualified
Stock Options in accordance with this Section 7. The purchase price per
share of Common Stock purchasable under Options granted to Non-Employee
Directors shall be the Fair Market Value of such share on the date of
grant. No Award Agreement with any Non-Employee Director may alter the
provisions of this Section 7 and no Option granted to a Non-Employee
Director may be subject to a discretionary acceleration of exercisability
or vesting.
(b) Initial Grant. As of August 1, 1996, each person who is
then a Non-Employee Director (an "Initial Director") shall be granted
automatically, without action by the Committee, an Option to purchase
3,000 shares of Common Stock.
(c) Grants to New Non-Employees Directors. Each person who,
after August 1, 1996, becomes a Non-Employee Director for the first time
(a "Subsequent Director"), shall, at the time such director is elected
and duly qualified, be granted automatically, without action by the
Committee, an Option to purchase 3,000 shares of Common Stock.
(d) Annual Grants to Continuing Directors. On the date of each
annual meeting of stockholders of the Company, commencing with the 1997
annual meeting of stockholders, each continuing Initial Director shall be
granted automatically, without action by the Committee, an Option to
purchase 3,000 shares of Common Stock. On the date of each annual meeting
of stockholders of the Company subsequent to a Subsequent Director's
becoming a Non-Employee Director, each continuing Subsequent Director
shall be granted automatically, without action by the Committee, an
Option to purchase 3,000 shares of Common Stock, unless such Non-Employee
Director received a grant pursuant to paragraph (c) above by reason of
being elected a Non-Employee Director at such annual meeting.
(e) Vesting. Each Option granted to a Non- Employee Director
shall vest and become exercisable with respect to fifty percent (50%) of
the shares of Common Stock subject thereto on the date of grant thereof
and fifty percent (50%) of the shares of Common Stock subject thereto on
the first anniversary of the date of grant thereof, provided that such
Non-Employee Director shall have continually served as such from such
date of grant through and on such anniversary date; provided, however,
that each Option shall become immediately vested and exercisable in full
upon the death of the Non-Employee Director. Sections 6(a)(5) and (6)
hereof shall not apply to Options granted to Non-Employee Directors.
(f) Duration. Subject to the immediately following sentence,
each Option granted to a Non-Employee Director shall remain outstanding
for a term of 10 years from the date of grant. Upon the cessation of a
Non-Employee Director's membership on the Board for any reason, Options
granted to such Non-Employee Director shall expire upon the earlier of
(i) three (3) years from the date of such cessation of Board membership
or (ii) expiration of the term of the Option. The Committee may not
provide for an extended exercise period beyond the periods set forth in
this Section 7(f).
8. General Provisions.
(a) Compliance with Legal Requirements. The Plan and the
granting and exercising of Awards, and the other obligations of the
Company under the Plan and any Award Agreement or other agreement shall
be subject to all applicable federal and state laws, rules and
regulations and to such approvals by any regulatory or governmental
authority or agency as may be required. The Company, in its discretion,
may postpone the issuance or delivery of Common Stock under any Award as
the Company may consider appropriate and may require any Participant to
make such representations and furnish such information as it may consider
appropriate in connection with the issuance or delivery of Common Stock
in compliance with applicable laws, rules and regulations.
(b) Nontransferability. Awards shall not be transferable by a
Participant other than by will or the laws of descent and distribution
or, if then permitted by Rule 16b-3 under the Exchange Act, pursuant to a
qualified domestic relations order as defined under the Code or Title I
of the Employee Retirement Income Security Act of 1974, as amended, or
the rules thereunder, and shall be exercisable during the lifetime of a
Participant only by such Participant or his guardian or legal
representative.
(c) No Right To Continued Employment. Nothing in the Plan or
in any Award granted or any Award Agreement or other agreement entered
into pursuant hereto shall confer upon any Participant the right to
continue in the employ of the Company or to be entitled to any
remuneration or benefits not set forth in the Plan or such Award
Agreement or other agreement or to interfere with or limit in any way the
right of the Company to terminate such Participant's employment.
(d) Withholding Taxes. Where a Participant or other person is
entitled to receive shares of Common Stock pursuant to the exercise of an
Option or is otherwise entitled to receive shares of Common Stock or cash
pursuant to an Award hereunder, the Company shall have the right to
require the Participant or such other person to pay to the Company the
amount of any taxes which the Company may be required to withhold before
delivery to such Participant or other person of cash or a certificate or
certificates representing such shares.
Upon the disposition of shares of Common Stock acquired
pursuant to the exercise of an Incentive Stock Option, the Company shall
have the right to require the payment of the amount of any taxes which
are required by law to be withheld with respect to such disposition.
Unless otherwise prohibited by the Committee or by applicable
law, a Participant may satisfy any such withholding tax obligation by any
of the following methods, or by a combination of such methods: (a)
tendering a cash payment; (b) authorizing the Company to withhold from
the shares of Common Stock or cash otherwise payable to such Participant
(1) one or more of such shares having an aggregate Fair Market Value,
determined as of the date the withholding tax obligation arises, less
than or equal to the amount of the total withholding tax obligation or
(2) cash in an amount less than or equal to the amount of the total
withholding tax obligation; or (c) delivering to the Company previously
acquired shares of Common Stock (none of which shares may be subject to
any claim, lien, security interest, community property right or other
right of spouses or present or former family members, pledge, option,
voting agreement or other restriction or encumbrance of any nature
whatsoever) having an aggregate Fair Market Value, determined as of the
date the withholding tax obligation arises, less than or equal to the
amount of the total withholding tax obligation. A Participant's election
to pay his or her withholding tax obligation (in whole or in part) by the
method described in (b)(1) above is irrevocable once it is made, may be
disapproved by the Committee and, if made by any director, officer or
other person who is subject to Section 16(b) of the Exchange Act, must be
made (x) only during the period beginning on the third business day
following the date of release of the Company's quarterly or annual
summary statement of sales and earnings and ending on the twelfth
business day following the date of such release or (y) not less than six
months prior to the date such Participant's withholding tax obligation
arises.
(e) Amendment and Termination of the Plan. The Board or the
Committee may at any time and from time to time alter, amend, suspend, or
terminate the Plan in whole or in part; provided that, no amendment which
requires stockholder approval under applicable Delaware law or in order
for the Plan to continue to comply with Rule 16b-3 under the Exchange Act
shall be effective unless the same shall be approved by the requisite
vote of the stockholder(s) of PRT. Notwithstanding the foregoing, subject
to the other provisions of the Plan, no amendment shall affect adversely
any of the rights of any Participant, without such Participant's consent,
under any Award theretofore granted under the Plan. The power to grant
Options under the Plan will automatically terminate on July 31, 2006. If
the Plan is terminated, any unexercised Option shall continue to be
exercisable in accordance with its terms and the terms of the Plan in
effect immediately prior to such termination.
(f) Participant Rights. No Participant shall have any claim to
be granted any Award under the Plan, and there is no obligation for
uniformity of treatment for Participants. Except as provided specifically
herein, a Participant or a transferee of an Award shall have no rights as
a stockholder with respect to any shares of stock covered by any Award
until the date of the issuance of a certificate to him for such shares.
(g) Unfunded Status of Awards. The Plan is intended to
constitute an "unfunded" plan for incentive and deferred compensation.
With respect to any payments not yet made to a Participant pursuant to an
Award, nothing contained in the Plan or any Award shall give any such
Participant any rights that are greater than those of a general creditor
of PRT.
(h) No Fractional Shares. No fractional shares of Common Stock
shall be issued or delivered pursuant to the Plan or any Award. The
Committee shall determine whether cash, other Awards or other property
shall be issued or paid in lieu of such fractional shares or whether such
fractional shares or any rights thereto shall be forfeited or otherwise
eliminated.
(i) Governing Law. The Plan and all determinations made and
actions taken pursuant hereto shall be governed by the laws of the State
of New York without giving effect to the conflict of laws principles
thereof.
(j) Effective Date. The Plan has been adopted by the Board.
After approval by the stockholders of PRT, the Plan shall become
effective on August 1, 1996, which shall be the Effective Date.
(k) Beneficiary. A Participant may file with the Committee a
written designation of a beneficiary on such form as may be prescribed by
the Committee and may, from time to time, amend or revoke such
designation. If no designated beneficiary survives the Participant, the
executor or administrator of the Participant's estate shall be deemed to
be the grantee's beneficiary.
(l) Interpretation. The Plan is designed and intended to
comply with Rule 16b-3 promulgated under the Exchange Act, and all
provisions hereof shall be construed in a manner to so comply.
Exhibit A
[FORM OF OPTION AGREEMENT]
STOCK OPTION AWARD AGREEMENT
AGREEMENT made on [ ], 19__ (the
"Date of Grant"), by and between PRT Group Inc., a Delaware corporation
(the "Company") and [ ] (the "Executive"["Employee"] ["Consultant"]).
WHEREAS, the Company has adopted the PRT Group
Inc. Amended and Restated 1996 Stock Incentive Plan (the
"Plan"); and
WHEREAS, the Company desires to grant to the
Executive options under the Plan to acquire an aggregate of [ ] shares of
common stock of the Company, par value $.01 per share (the "Stock"), on
the terms set forth herein.
NOW, THEREFORE, the parties hereby agree as
follows:
1. Definitions. Capitalized terms not otherwise
defined herein shall have the meanings set forth in the Plan.
2. Grant of Options. The Executive is hereby
granted options (the "Options") to purchase an aggregate of [ ] shares of
Stock, pursuant to the terms of this Agreement and the provisions of the
Plan. The Options are intended to constitute [Incentive][Nonqualified]
Stock Options.
3. Option Price. The initial exercise price
per share of the Options shall be $_____, subject to
adjustment in accordance with the Plan.
4. Conditions to Exercisability. The Options shall
vest and become exercisable with respect to ____ percent (__%) of the
shares subject thereto on each of the first _______ anniversaries of the
Date of Grant, so long as the Executive continues to be employed by the
Company or any of its subsidiaries on such dates. In the event of death
or permanent disability of the Executive, all Options shall vest
immediately. In the event of approved retirement or partial disability of
the Executive, all Options shall vest upon the earlier of (i) ninety (90)
days or (ii) the regular vesting schedule set forth above. In the event
the Executive's employment is terminated other than as a result of the
death or permanent or partial disability or approved retirement of the
Executive, all unvested Options shall be forfeited.
5. Period of Options. The Options shall expire on
the earliest to occur of:
(a) the tenth anniversary of the Date of
Grant [five years in the case of 10% holders];
(b) the date of the Executive's
termination of employment with the Company or any of its
subsidiaries for Cause;
(c) the first anniversary of the
Executive's death or termination of employment with the Company or any of
its subsidiaries by reason of disability of the Executive or approved
retirement; and
(d) the first anniversary of the
Executive's termination of employment with the Company or
any of its subsidiaries for any other reason;
provided, that if the Options granted hereunder are Incentive Stock
Options, such Options must be exercised within ninety (90) days after any
termination which is not a result of death or disability.
[THE FOLLOWING SECTION 5A MAY BE ADDED TO CERTAIN
INDIVIDUAL AWARD AGREEMENTS AS DETERMINED BY THE
COMMITTEE.]
[5A. Change in Control. Notwithstanding any other
provision of the Plan or this Agreement to the contrary, if, [after an
Initial Public Offering and] while this Award remains outstanding under
the Plan, a Change in Control (as defined below) of PRT shall occur, then
all Options granted under this Award Agreement that are outstanding at
the time of such Change in Control shall become immediately exercisable
in full, without regard to the years that have elapsed from the date of
grant, and, at the option of the Committee, such Options may be cancelled
in exchange for a cash payment or a replacement award of equivalent
value.
For purposes of this Section 5A, a "Change in
Control" of PRT shall occur upon the happening of the earliest to occur
of the following:
(i) any "person," as such term is used in Sections
13(d) and 14(d) of the Exchange Act (other than (1) PRT, (2)
any trustee or other fiduciary holding securities under an
employee benefit plan of PRT or (3) any corporation owned,
directly or indirectly, by the stockholders of PRT in
substantially the same proportions as their ownership of the
common stock of PRT), is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of PRT (not including in the
securities beneficially owned by such person any securities
acquired directly from PRT or its affiliates [or in an Initial
Public Offering]) representing [ ]% or more of the combined
voting power of PRT's then outstanding voting securities;
(ii) during any period of not more than two
consecutive years, individuals who at the beginning of such
period constitute the Board (such board of directors being
referred to herein as the "PRT Board"), and any new director
(other than a director designated by a person who has entered
into an agreement with PRT to effect a transaction described
in clause (i), (iii) or (iv) of this Section 5A) whose
election by the PRT Board or nomination for election by PRT's
stockholders was approved by a vote of at least two-thirds
(2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or
nomination for election was previously so approved (other than
approval given in connection with an actual or threatened
proxy or election contest), cease for any reason to constitute
at least [70]% of such PRT Board;
(iii) the stockholders of PRT approve a merger or
consolidation of PRT with any other corporation, other than
(A) a merger or consolidation which would result in the voting
securities of PRT outstanding immediately prior thereto
continuing to represent (either by remaining outstanding
without conversion or by being converted into voting
securities of the surviving or parent entity) [ ]% or more of
the combined voting power of the voting securities of PRT or
such surviving or parent entity outstanding immediately after
such merger or consolidation or (B) a merger or consolidation
effected to implement a recapitalization of PRT (or similar
transaction) in which no "person" (as hereinabove defined)
acquires [ ]% or more of the combined voting power of PRT's
then outstanding securities; or
(iv) the stockholders of the Company approve a plan
of complete liquidation of the Company or an agreement for the
sale or disposition by the Company of all or substantially all
of the Company's assets (or any transaction having a similar
effect).]
6. Exercise of Options. Options shall be exercised
in the following manner: the Executive shall deliver to the Company
written notice specifying the number of shares of Stock that he elects to
purchase. The Executive must include with such notice full payment of the
exercise price for the Stock being purchased pursuant to such notice. The
exercise price shall be paid in full at the time of exercise. The
exercise price may be paid in cash or by check; by the tender by the
Executive to the Company of shares of Common Stock outstanding prior to
the receipt of the Option Shares (as defined below) by the Executive; or
a combination of any of the foregoing, in an amount having a combined
value equal to such exercise price. The value of any Stock tendered
pursuant to the preceding sentence shall be the Fair Market Value of such
Stock as of the last trading day prior to the date of exercise.
Upon the delivery of shares of Stock acquired
pursuant to the exercise of Options, the Company shall have the right to
require the payment of the amount of any taxes that are required by law
to be withheld with respect to such delivery.
The Executive shall not be deemed to be a holder of
any shares of Stock pursuant to exercise of Options until the date of the
issuance of a stock certificate to him for such shares and until such
shares are paid for in full.
7. Holding Period. The Executive covenants and
agrees to hold and not sell or otherwise dispose of any shares of Company
Common Stock acquired through the exercise of the Options granted hereby
("Option Shares") for a period of not less than six months after the
exercise of the Options under which such Option Shares were acquired;
provided that any Option Shares acquired after an Initial Public Offering
shall be freely transferrable upon receipt of such Option Shares, subject
to applicable law.
8. Right of First Refusal. If the Executive shall
determine to sell any Option Shares after the end of any applicable
holding period, the Company shall have a right of first refusal to
repurchase any such Option Shares at the Fair Market Value of the Option
Shares at the time the Executive so determines to sell such Option
Shares; provided, that the Company shall be under no obligation to
repurchase such Option Shares.
9. Stockholders Agreement. Prior to or upon receipt
of any Option Shares hereunder prior to an Initial Public Offering, the
Executive covenants and agrees to enter into a Stockholders Agreement
relating to such Option Shares in such form and containing such terms and
conditions as the Committee shall from time to time approve, including,
without limiting the forgoing, any restrictions on the transferability of
such Option Shares.
10. Representations. The Company represents and
warrants that this Agreement has been authorized by all necessary
corporate action of the Company and is a valid and binding agreement of
the Company enforceable against them in accordance with its terms.
The Executive represents and warrants that he is not
a party to any agreement or instrument that would prevent him from
entering into or performing his duties in any way under this Agreement.
11. Entire Agreement. This Agreement and the Plan
contain all the understandings between the parties hereto pertaining to
the matters referred to herein, and supersedes all undertakings and
agreements, whether oral or in writing, previously entered into by them
with respect thereto. The Executive represents that, in executing this
Agreement, he does not rely and has not relied upon any representation or
statement not set forth therein made by the Company with regard to the
subject matter, bases or effect of this Agreement or otherwise.
12. Amendment or Modification, Waiver. Except as set
forth in the Plan, no provision of this Agreement may be amended or
waived unless such amendment or waiver is agreed to in writing, signed by
the Executive and by a duly authorized officer of the Company. No waiver
by any party hereto of any breach by another party hereto of any
condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of a similar or dissimilar condition or
provision at the same time, any prior time or any subsequent time.
13. Notices. Any notice to be given hereunder shall
be in writing and shall be deemed given when delivered personally, sent
by courier or telecopy or registered or certified mail, postage prepaid,
return receipt requested, addressed to the party concerned at the address
indicated below or to such other address as such party may subsequently
give notice of hereunder in writing:
To Executive at:
To the Company at:
PRT Group Inc.
342 Madison Avenue
New York, New York 10173
Attn: Corporate Secretary
Any notice delivered personally or by courier under
this Section 13 shall be deemed given on the date delivered and any
notice sent by telecopy or registered or certified mail, postage prepaid,
return receipt requested, shall be deemed given on the date telecopied or
mailed.
14. Severability. If any provision of this Agreement
or the application of any such provision to any party or circumstances
shall be determined by any court of competent jurisdiction to be invalid
and unenforceable to any extent, the remainder of this Agreement or the
application of such provision to such person or circumstances other than
those to which it is so determined to be invalid and unenforceable, shall
not be affected thereby, and each provision hereof shall be validated and
shall be enforced to the fullest extent permitted by law.
15. Survival. The respective rights and obligations
of the parties hereunder shall survive any termination of this Agreement
to the extent necessary to the intended preservation of such rights and
obligations.
16. Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York,
without regard to its conflicts of laws principles.
17. Headings. All descriptive headings of sections
and paragraphs in this Agreement are intended solely for convenience, and
no provision of this Agreement is to be construed by reference to the
heading of any section or paragraph.
18. Construction. This Agreement is made under and
subject to the provisions of the Plan, and all of the provisions of the
Plan are hereby incorporated herein as provisions of this Agreement. If
there is a conflict between the provisions of this Agreement and the
provisions of the Plan, the provisions of the Agreement shall govern. By
signing this Agreement, the Executive confirms that he has received a
copy of the Plan and has had an opportunity to review the contents
thereof.
19. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
20. Confidentiality. The provisions, terms and
conditions of this Agreement shall be held confidential by the parties
hereto.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first above written.
PRT GROUP INC.
By:
Name:
Title:
By:
Name: