OUTSOURCING SOLUTIONS INC.
NON-QUALIFIED STOCK OPTION AWARD AGREEMENT [E]
This Non-qualified Stock Option Award Agreement (this "Agreement"),
dated as of , 199 , is made between Outsourcing Solutions Inc.
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(the "Company") and (the "Optionee"). All capitalized terms used herein
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that are not defined herein shall have the respective meanings given to such
terms in the Outsourcing Solutions Inc. (formerly OSI Holdings Corp.) 1995
Stock Option and Stock Award Plan, as amended (the "Plan").
W I T N E S S E T H :
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1. Grant of Option. Pursuant to the provisions of the Plan, the
Company hereby grants to the Optionee, subject to the terms and conditions of
the Plan and subject further to the terms and conditions herein set forth, the
right and option to purchase from the Company all or any part of an aggregate of
shares of the $0.01 par value common stock of the Company (the "Stock"), at a
per share purchase price equal to $ (the "Option"), such Option to be
exercisable as hereinafter provided. The Option shall not be treated as an
"incentive stock option," as defined in Section 422 of the Code.
2. Terms and Conditions. It is understood and agreed that the
Award evidenced hereby is subject to the following terms and conditions:
(a) Expiration Date. The Option shall expire ten (10) years
after the date indicated above.
(b) Exercise of Option. (i) Subject to the other terms of this
Agreement and the Plan, the Option may be exercised on or after the dates
indicated below as to that percentage of the total shares of Stock subject to
the Option as set forth below opposite each such date, plus any shares of Stock
as to which the Option could have been exercised previously, but was not so
exercised.
Date Percentage
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------------------------------------ 25%
------------------------------------ 25%
------------------------------------ 25%
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(ii) Notwithstanding the foregoing provisions of Section
2(b)(i) hereof, but subject to Section 2(a) and 2(d) hereof, immediately prior
to a "Sale of the Business," as defined in and contemplated by Section 2.4 of
the Stockholders Agreement, dated as of September 21, 1995, as amended and
restated on January 10, 1996, and February 16, 1996, and as may be further
amended from time to time, by and among OSI Holdings Corp., the MDC Entities,
APT, the Management Stockholders and the Non-Management Stockholders (all as
defined therein) (the "Stockholders Agreement"), the Option may be exercised
with respect to all or any portion of the total number of shares of Stock
covered by the then unexercised Option.
(iii) Any exercise of all or any part of the Option shall be
accompanied by a written notice to the Company specifying the whole number of
shares of Stock as to which the Option is being exercised. Upon the valid
exercise of all or any part of the Option, a certificate (or certificates) for
the number of shares of Stock with respect to which the Option is exercised
shall be issued in the name of the Optionee, subject to the other terms and
conditions of this Agreement and the Plan. Notation of any partial exercise
shall be made by the Company on Schedule I attached hereto.
(c) Consideration. At the time of any exercise of the Option,
the purchase price of the shares of Stock as to which the Option shall be
exercised shall be paid to the Company (i) in United States dollars by personal
check, bank draft or money order, (ii) if permitted by applicable law and
approved by the Committee in accordance with the Plan, with Stock, duly endorsed
for transfer to the Company, owned by the Optionee (or the Optionee and his
spouse jointly) for at least six (6) months prior to the tender thereof and not
used for another such exercise during such six-month period and having a total
fair market value, as determined in accordance with Paragraph 6(a) of the Plan
("Fair Market Value"), on the date of such exercise of the Option equal to such
purchase price of such shares of Stock, or (iii) a combination of the
consideration provided for in the foregoing clauses (i) and (ii) of this Section
2(c) having a total Fair Market Value on the date of such exercise equal to the
purchase price of such shares of Stock.
(d) Exercise Upon Death, Disability or Termination of
Employment. The Option shall terminate upon the termination, for any reason, of
the Optionee's employment with the Company or a subsidiary of the Company, and
no shares of Stock may thereafter be purchased under the Option, except as
follows:
(i) In the event of the death of the Optionee while an
employee of the Company or a subsidiary of the Company, the Option, to
the extent exercisable in accordance with Section 2(b)(i) or 2(b)(ii)
at the time of his or her death, may be exercised after the Optionee's
death by the legal representative of the Optionee's estate or the
legatee of the Optionee under his last will until the earlier to occur
of the second anniversary of the Optionee's death and the stated
expiration date of the Option.
(ii) If the Optionee's employment with the Company or a
subsidiary of the Company shall terminate by reason of permanent
disability (as defined in the last sentence of this Section 2(d)(ii)),
the Option, to the extent exercisable in accordance with Section 2(b)(i)
or 2(b)(ii) upon such termination of employment, may be exercised after
such termination until the earlier to occur of the first anniversary of
such termination and the stated expiration date of the Option. For
purposes of this Agreement, "permanent disability" shall mean an
inability (as determined by the Committee) to perform duties and
services as an employee of the Company or a subsidiary of the Company by
reason of a medically determinable physical or mental impairment,
supported by medical evidence, which can be expected to last for a
continuous period of not less than eight (8) months.
(iii) If (A) the Company or a subsidiary of the Company
terminates the Optionee's employment with the Company or such subsidiary
and such termination is not "for cause" (as defined in Section 2.5(d) of
the Stockholders Agreement), or (B) the Optionee terminates employment
with the Company or such subsidiary for "good reason" (as defined in
Section 2.5(c) of the Stockholders Agreement), the Option, to the extent
exercisable in accordance with Section 2(b)(i) or 2(b)(ii) upon such
termination of employment, may be exercised after such termination until
the earlier to occur of the first anniversary of such termination and
the stated expiration date of the Option.
(iv) If the Optionee's employment with the Company or a
subsidiary of the Company is terminated by reason of the Optionee's
retirement after attaining both five (5) years of continuous service
with the Company or a subsidiary of the Company and 59 1/2 years of age,
the Option, to the extent exercisable in accordance with Section 2(b)(i)
or 2(b)(ii) upon such retirement, may be exercised after such retirement
until the earlier to occur of the second anniversary of such retirement
and the stated expiration date of the Option.
(v) If the Optionee dies during the one-year or two-year
period following termination of his or her employment specified in
Section 2(d)(ii), 2(d)(iii) or 2(d)(iv), the Option, to the extent the
Option would have been exercisable pursuant to Section 2(d)(ii), 2(d)
(iii) or 2(d)(iv) as of the date of the Optionee's death, may be
exercised after the Optionee's death by the legal representative of his
estate or the legatee of the Optionee under his last will until the
earlier to occur of the second anniversary of the Optionee's death and
the stated expiration date of the Option.
(vi) If the Optionee's employment is terminated by the Company
or a subsidiary of the Company "for cause" (as defined in Section 2.5(d)
of the Stockholders Agreement) or under circumstances not otherwise
described in this Section 2(d), the Option shall automatically, without
any further action required by the Company, terminate on the date of
such termination of employment and shall cease to thereafter be
exercisable with respect to any shares of Stock.
(e) Nontransferability. The Option shall not be transferable
otherwise than by will or the laws of descent and distribution, and are
exercisable, during the lifetime of the Optionee, only by him.
(f) Withholding Taxes. At the time of receipt of Stock upon the
exercise of all or any part of the Option, the Optionee shall be required to pay
to the Company in cash (or make other arrangements, in accordance with Section
12 of the Plan, for the satisfaction of) any taxes of any kind required by law
to be withheld with respect to such Stock; provided, however, tax withholding
obligations may be met, in whole or in part, by the withholding of shares of
Stock otherwise deliverable to the Optionee upon such exercise pursuant to
procedures approved by the Committee; provided further, however, the amount of
shares so withheld may not exceed the amount necessary to satisfy required
Federal, state, local and foreign withholding obligations using the minimum
statutory rate. In no event shall Stock or other property be delivered to the
Optionee until the Optionee has paid to the Company in cash, or made
arrangements satisfactory to the Company regarding the payment of, the amount of
any taxes of any kind required by law to be withheld with respect to the Stock
subject to the Option, and the Company shall have the right to deduct any such
taxes from any payment of any kind otherwise due to the Optionee.
(g) No Rights as Stockholder. The Optionee shall not become
the beneficial owner of the shares of Stock subject to the Option, nor have any
rights to dividends or other rights as a shareholder with respect to any such
shares, until the Optionee has exercised the Option in accordance with the
provisions hereof and of the Plan.
(h) No Right to Continued Employment. The Option shall not
confer upon the Optionee any right to be retained in the service of the Company
or a subsidiary of the Company, nor restrict in any way the right of the Company
or any subsidiary of the Company, which right is hereby expressly reserved, to
terminate his employment at any time with or without cause.
(i) Inconsistency with Plan. Notwithstanding any provision
herein to the contrary, the Option provides the Optionee with no greater rights
or claims than are specifically provided for under the Plan. If and to the
extent that any provision contained in this Agreement is inconsistent with the
Plan, the Plan shall govern.
(j) Compliance with Laws, Regulations, Stockholders Agreement.
The Option and the obligation of the Company to sell and deliver shares of Stock
hereunder shall be subject in all respects to (i) all applicable Federal and
state laws, rules and regulations, (ii) any registration, qualification,
approvals or other requirements imposed by any government or regulatory agency
or body which the Committee shall, in its sole discretion, determine to be
necessary or applicable and (iii) the terms of the Stockholders Agreement in all
respects. Moreover, the Option may not be exercised if its exercise, or the
receipt of shares of Stock pursuant thereto, would be contrary to applicable
law.
3. Investment Representation. If at the time of exercise of all or
part of the Option the Stock is not registered under the Securities Act of 1933,
as amended (the "Securities Act"), and/or there is no current prospectus in
effect under the Securities Act with respect to the Stock, the Optionee shall
execute, prior to the issuance of any shares of Stock to the Optionee by the
Company, an agreement (in such form as the Committee may specify) in which the
Optionee, among other things, represents, warrants and agrees that the Optionee
is purchasing or acquiring the shares acquired under this Agreement for the
Optionee's own account, for investment only and not with a view to the resale or
distribution thereof, that the Optionee has knowledge and experience in
financial and business matters, that the Optionee is capable of evaluating the
merits and risks of owning any shares of Stock purchased or acquired under this
Agreement, that the Optionee is a person who is able to bear the economic risk
of such ownership and that any subsequent offer for sale or distribution of any
of such shares shall be made only pursuant to (i) a registration statement on an
appropriate form under the Securities Act, which registration statement has
become effective and is current with regard to the shares being offered or sold,
or (ii) a specific exemption from the registration requirements of the
Securities Act, it being understood that to the extent any such exemption is
claimed, the Optionee shall, prior to any offer for sale or sale of such shares,
obtain a prior favorable written opinion, in form and substance satisfactory to
the Committee, from counsel for or approved by the Committee, as to the
applicability of such exemption thereto.
4. Disposition of Stock. In addition to the restrictions set forth
in Section 3, no share of Stock received by the Optionee upon exercise of the
Option (or any interest or right in such shares) can be sold, assigned, pledged
or transferred in any manner except as permitted by the Stockholders Agreement
5. Optionee Bound by Plan; Stockholders Agreement. The Optionee
hereby acknowledges receipt of a copy of the Plan and the Stockholders Agreement
and agrees to be bound by all of the terms and provisions of each thereof,
including the terms and provisions adopted after the granting of the Option but
prior to the complete exercise hereof, subject to the last paragraph of Section
16 of the Plan as in effect on the date hereof.
6. Notices. Any notice hereunder to the Company shall be addressed
to
it at 390 South Woods Mill Road, Suite 350, Chesterfield, Missouri 63017,
Attention: Chief Financial Officer, and any notice hereunder to the Optionee,
shall be addressed to him at ,
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Attention: , subject to the right of either party to designate
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at any time hereafter in writing some other address.
7. Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Delaware applicable to contracts executed and to be performed entirely within
such state, without regard to the conflict of law provisions thereof.
8. Severability. If any of the provisions of this Agreement should
bedeemed unenforceable, the remaining provisions shall remain in full force and
effect.
9. Modification. Except as otherwise permitted by the Plan, this
Agreement may not be modified or amended, nor may any provision hereof be
waived, in any way except in writing signed by the party against whom
enforcement thereof is sought.
10. Counterparts. This Agreement has been executed in two
counterparts, each of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, Outsourcing Solutions Inc. has caused this
Agreement to be executed by a duly authorized officer and the Optionee has
executed this Agreement, both as of the day and year first above written.
OUTSOURCING SOLUTIONS INC.
By
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Name: Timothy G. Beffa
Title: President & Chief Executive
Officer
OPTIONEE
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NOTATIONS AS TO PARTIAL EXERCISE
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Date of Number of Shares Balance of Shares Authorized Notation
Exercise of Stock Purchased of Stock on Option Signature Date
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