OUTSOURCING SOLUTIONS INC.
2000 EQUITY INCENTIVE PLAN
1. Purpose. This plan shall be known as the Outsourcing Solutions Inc. 2000
Equity Incentive Plan (as amended, supplemented or restated from time to time,
the "Plan"). This Plan is intended to promote the long-term growth and
profitability of Outsourcing Solutions Inc., a Delaware corporation, by
providing those persons who are involved in its management and growth an
opportunity to acquire an ownership interest in the Company, thereby encouraging
such persons to contribute to and participate in the success of the Company and
to remain in its employ. The purpose of this Plan is to enable the Company to
compensate and/or provide incentives to Participants in carrying out their
duties or providing services to the Company.
2. Administration of the Plan.
(a) Subject to the provisions hereof, the Board shall have full and
exclusive power and authority to administer this Plan and to take all
actions that are specifically contemplated hereby or are necessary or
appropriate in connection with the administration hereof. The Board shall
also have full and exclusive power to interpret this Plan and to adopt such
rules, regulations and guidelines for carrying out this Plan as it may deem
necessary or proper, all of which powers shall be exercised in the best
interests of the Company and in keeping with the objectives of this Plan.
The Board may, in its discretion, provide for the extension of the
exercisability of an Award, accelerate the vesting or exercisability of an
Award, eliminate or make less restrictive any restrictions contained in an
Award, waive any restriction or other provision of this Plan or an Award or
otherwise amend or modify an Award in any manner that is either (i) not
adverse to the Participant to whom such Award was granted or (ii) consented
to by such Participant. The Board may correct any defect or supply any
omission or reconcile any inconsistency in this Plan or in any Award in the
manner and to the extent the Board deems necessary or desirable to further
the purposes of the Plan. Any decision of the Board in the interpretation
and administration of this Plan shall lie within its sole and absolute
discretion and shall be final, conclusive and binding on all parties
concerned.
(b) The Board may delegate to the President of the Company and to
other senior officers of the Company its duties under this Plan pursuant to
such conditions or limitations as the Board may establish.
(c) No member of the Board or officer of the Company to whom the Board
has delegated authority in accordance with the provisions of Section 2(b)
of this Plan shall be liable for anything done or omitted to be done by him
or her, by any member of the Board or by any officer of the Company in
connection with the performance of any duties under this Plan, except for
his or her own willful misconduct or as expressly provided by statute.
(d) The Board shall determine the Participants to whom, and the time
or times at which, Awards shall be made and the number of shares to be
included in the Awards. Within the limitations of the Plan, the number of
shares for which Awards will be granted from time to time and the periods
for which the Awards will be outstanding will be determined by the Board.
(e) Each Award granted pursuant to the Plan shall be evidenced by an
Option Agreement or Award Agreement (the "Agreement"). The Agreement shall
not be a precondition to the granting of options or stock or other awards;
however, no person shall have any rights under any option or stock or other
awards granted under the Plan unless and until the Participant to whom such
option or stock or other award shall have been granted shall have executed
and delivered to the Company an Agreement. The Board shall prescribe the
form of all Agreements. A fully executed original of the Agreement shall be
provided to both the Company and the Participant.
3. Shares of Stock Subject to the Plan. The total number of shares that may
be optioned or awarded under the Plan is 400,000 shares of the $0.01 par value
voting common stock of the Company (the "Common Stock") except that said number
of shares shall be adjusted as provided in Section 13. No employee shall
receive, over the term of the Plan, awards of restricted stock for more than
250,000 shares of Common Stock or awards in the form of stock appreciation
rights or options to purchase more than 250,000 shares of Common Stock. Any
shares subject to an option which for any reason expires or is terminated
unexercised and any restricted stock which is forfeited may again be optioned or
awarded under the Plan; provided, however, that forfeited shares shall not be
available for further awards if the employee has realized any benefits of
ownership from such shares. Shares subject to the Plan may be either authorized
and unissued shares or issued shares acquired by the Company or its
Subsidiaries.
4. Eligibility. Directors and key salaried employees, including officers,
and consultants of the Company and its Subsidiaries are eligible to receive
Awards under the Plan. The directors, employees and consultants who shall
receive Awards under the Plan shall be selected from time to time by the Board,
in its sole discretion, from among those eligible, which may be based upon
information furnished to the Board by the Company's management, and the Board
shall determine, in its sole discretion, the number of shares to be covered by
the Award or Awards granted to each such person selected. Such key salaried
employees, consultants and directors who are selected to participate in the Plan
shall be referred to collectively herein as "Participants."
5. Duration of the Plan. No Award may be granted under the Plan after more
than ten years from the date the Plan is adopted by the Board or the date the
Plan receives shareholder approval, whichever is earlier, but Awards theretofore
granted may extend beyond that date.
6. Terms and Conditions of Stock Options. Options granted under this Plan
are not intended to be Incentive Stock Options. Each option shall be subject to
all the applicable provisions of the Plan, including the following terms and
conditions, and to such other terms and conditions not inconsistent therewith as
the Board shall determine.
(a) The option price per share shall be determined by the Board.
(b) Each option shall be exercisable pursuant to the attainment of
such performance goals and/or during and over such period ending not later
than ten years from the date it was granted, as may be determined by the
Board and stated in the Agreement. In no event may an option be exercised
more than 10 years from the date the option was granted.
(c) An option shall not be exercisable with respect to a fractional
share of Common Stock or with respect to the lesser of fifty (50) shares or
the full number of shares then subject to the option. No fractional shares
of Common Stock shall be issued upon the exercise of an option. If a
fractional share of Common Stock shall become subject to an option by
reason of a stock dividend or otherwise, the optionee shall not be entitled
to exercise the option with respect to such fractional share.
(d) Each option may be exercised by giving written notice to the
Company specifying the number of shares to be purchased, which shall be
accompanied by payment in full including, if required by applicable law,
applicable taxes, if any. Payment, except as provided in the Agreement,
shall be
(A) in United States dollars by check or bank draft, or
(B) by tendering to the Company Common Stock shares already owned
for at least six months by the person exercising the option, which may
include shares received as the result of a prior exercise of an
option, and having a Fair Market Value on the date on which the option
is exercised equal to the cash exercise price applicable to such
option, or
(C) by a combination of United States dollars and Common Stock
shares as aforesaid.
No optionee shall have any rights to dividends or other rights of a
shareholder with respect to shares of Common Stock subject to his or her
option until he or she has given written notice of exercise of his or her
option and paid in full for such shares.
(e) Notwithstanding the foregoing, the Board may, in its sole
discretion, grant to a grantee of an option the right (hereinafter referred
to as a "stock appreciation right") to elect, in the manner described
below, in lieu of exercising his or her option for all or a portion of the
shares of Common Stock covered by such option, to relinquish his or her
option with respect to any or all of such shares and to receive from the
Company a payment having a value equal to the amount by which (a) the Fair
Market Value of a share of Common Stock on the date of such election,
multiplied by the number of shares as to which the grantee shall have made
such election, exceeds (b) the exercise price for that number of shares of
Common Stock under the terms of such option. A stock appreciation right
shall be exercisable at the time the tandem option is exercisable, and the
"expiration date" for the stock appreciation right shall be the expiration
date for the tandem option. A grantee who makes such an election shall
receive payment in the sole discretion of the Board (i) in cash equal to
such excess; or (ii) in the nearest whole number of shares of Common Stock
of the Company having an aggregate Fair Market Value which is not greater
than the cash amount calculated in (i) above; or (iii) a combination of (i)
and (ii) above. A stock appreciation right may be exercised only when the
amount described in (a) above exceeds the amount described in (b) above. An
election to exercise stock appreciation rights shall be deemed to have been
made on the day written notice of such election, is received by the Company
at Outsourcing Solutions Inc., 390 South Woods Mill Road, Suite 350,
Chesterfield, Missouri 63017, Attention: Chief Financial Officer. An option
or any portion thereof with respect to which a grantee has elected to
exercise the stock appreciation rights described above shall be surrendered
to the Company and such option shall thereafter remain exercisable
according to its terms only with respect to the number of shares as to
which it would otherwise be exercisable, less the number of shares with
respect to which stock appreciation rights have been exercised. The grant
of a stock appreciation right shall be evidenced by such form of agreement
as the Board may prescribe. The agreement evidencing stock appreciation
rights shall be personal and will provide that the stock appreciation
rights will not be transferable by the grantee otherwise than by will or
the laws of descent and distribution and that they will be exercisable,
during the lifetime of the grantee, only by him or her.
(f) Except as provided in the Agreement, an option may be exercised
only if at all times during the period beginning with the date of the
granting of the option and ending on the date of such exercise, the grantee
was an employee of either the Company or of a subsidiary of the Company or
of another corporation referred to in Section 421(a)(2) of the Code. The
Agreement shall provide whether, and if so, to what extent, an option may
be exercised after termination of continuous employment, but any such
exercise shall in no event be later than the termination date of the
option. If the grantee should die, or become permanently disabled as
determined by the Board in accordance with the Agreement, at any time when
the option, or any portion thereof, shall be exercisable by him, the option
will be exercisable within a period provided for in the Agreement, by the
optionee or person or persons to whom his or her rights under the option
shall have passed by will or by the laws of descent and distribution, but
in no event at a date later than the termination of the option. The Board
may require medical evidence of permanent disability, including medical
examinations by physicians selected by it.
(g) The option by its terms shall be personal and shall not be
transferable by the optionee otherwise than by will or by the laws of
descent and distribution as provided in Section 6(f) above. During the
lifetime of an optionee, the option shall be exercisable only by the
optionee. In the event any option is exercised by the executors,
administrators, heirs or distributees of the estate of a deceased optionee
as provided in Section 6(f) above, the Company shall be under no obligation
to issue Common Stock thereunder unless and until the Company is satisfied
that the person or persons exercising the option are the duly appointed
legal representative of the deceased optionee's estate or the proper
legatees or distributees thereof.
(h) The Board may, but need not, require such consideration from an
optionee at the time of granting an option as it shall determine, either in
lieu of, or in addition to, the limitations on exercisability provided in
Section 6(d).
(i) An option and any Common Stock received upon the exercise of an
option shall be subject to such other transfer restrictions and/or
legending requirements that are specified in the Agreement.
7. Terms and Conditions of Restricted Stock Awards. All awards of
restricted stock under the Plan shall be subject to all the applicable
provisions of the Plan, including the following terms and conditions, and to
such other terms and conditions not inconsistent therewith, as the Board shall
determine.
(a) Awards of restricted stock may be in addition to or in lieu of
option grants.
(b) During a period set by, and/or until the attainment of particular
performance goals based upon criteria established by, the Board at the time
of each award of restricted stock (the "restriction period") as specified
in the Agreement, the recipient shall not be permitted to sell, transfer,
pledge, or otherwise encumber the shares of restricted stock; except that
such shares may be used, if the Agreement permits, to pay the option price
of any option granted under the Plan provided an equal number of shares
delivered to the optionee shall carry the same restrictions as the shares
so used.
(c) Shares of restricted stock shall become free of all restrictions
if, during the restriction period, (i) the recipient dies, (ii) the
recipient's employment terminates by reason of permanent disability, as
determined by the Board, (iii) the recipient retires after attaining both
59-1/2 years of age and five years of continuous service with the Company
and/or a subsidiary, or (iv) if provided in the Agreement, there is a
"change in control" of the Company (as defined in such Agreement). The
Board may require medical evidence of permanent disability, including
medical examinations by physicians selected by it. If the Board determines
that any such recipient is not permanently disabled, the restricted stock
held by such recipient shall be forfeited and revert to the Company.
(d) Unless and to the extent otherwise provided in the Agreement,
shares of restricted stock shall be forfeited and revert to the Company
upon the recipient's termination of employment during the restriction
period for any reason other than death, permanent disability, as determined
by the Board, retirement after attaining both 59-1/2 years of age and five
years of continuous service with the Company and/or a subsidiary, or, to
the extent provided in the Agreement, a "change in control" of the Company
(as defined in the Agreement), except to the extent the Board, in its sole
discretion, finds that such forfeiture might not be in the best interest of
the Company and, therefore, waives all or part of the application of this
provision to the restricted stock held by such recipient.
(e) Stock certificates for restricted stock shall be registered in the
name of the recipient but shall be appropriately legended and returned to
the Company by the recipient, together with a stock power, endorsed in
blank by the recipient. The recipient shall be entitled to vote shares of
restricted stock and shall be entitled to all dividends paid thereon,
except that dividends paid in Common Stock or other property shall also be
subject to the same restrictions.
(f) Restricted stock shall become free of the foregoing restrictions
upon expiration of the applicable restriction period and the Company shall
then deliver Common Stock certificates evidencing such stock.
(g) Restricted Stock and any Common Stock received upon the expiration
of the restriction period shall be subject to such other transfer
restrictions and/or legending requirements that are specified in the
Agreement.
8. Bonuses Payable in Stock. In lieu of cash bonuses otherwise payable
under the Company's or applicable subsidiary's compensation practices to
employees eligible to participate in the Plan, the Board, in its sole
discretion, may determine that such bonuses shall be payable in Common Stock or
partly in Common Stock and partly in cash. Such bonuses shall be in
consideration of services previously performed and as an incentive toward future
services and shall consist of shares of Common Stock subject to such terms as
the Board may determine in its sole discretion. The number of shares of Common
Stock payable in lieu of a bonus otherwise payable shall be determined by
dividing such amount by the Fair Market Value of one share of Common Stock on
the date the bonus is payable.
9. Change in Control.
(a) In the event of a change in control of the Company, as defined (if
at all) by the Board in each Agreement, the Board may, in its sole
discretion, provide that any of the following applicable actions be taken
as a result, or in anticipation, of any such event to assure fair and
equitable treatment of Participants:
(i) accelerate time periods for purposes of vesting in, or
realizing gain from, any outstanding option or stock appreciation
right or shares of restricted stock awarded pursuant to this Plan;
(ii) offer to purchase any outstanding option or stock
appreciation right or shares of restricted stock made pursuant to this
Plan from the holder for its equivalent cash value, as determined by
the Board, as of the date of the change in control; or
(iii) make adjustments or modifications to outstanding options or
stock appreciation rights or with respect to restricted stock as the
Board deems appropriate to maintain and protect the rights and
interests of the Participants following such change in control.
(b) In no event, however, may any option be exercised after ten (10)
years from the date it was granted.
10. Transfer, Leave of Absence. For the purpose of the Plan: (a) a transfer
of an employee from the Company to a Subsidiary or affiliate of the Company,
whether or not incorporated, or vice versa, or from one Subsidiary or affiliate
of the Company to another, and (b) a leave of absence, duly authorized in
writing by the Company or a Subsidiary or affiliate of the Company, shall not be
deemed a termination of employment.
11. Rights of Participants.
(a) No person shall have any rights or claims under the Plan except in
accordance with the provisions of the Plan and the Agreement.
(b) Nothing in the Plan shall interfere with or limit in any way the
right of the Company to terminate any Participant's employment or
consultancy at any time (with our without cause), nor confer upon any
Participant any right to continue in the employ of, or perform services
for, the Company for any period of time or to continue his or her present
(or any other) rate of compensation, and except as otherwise provided under
this Plan or by the Board in an Agreement, in the event of any
Participant's termination as an employee, director or consultant
(including, but not limited, the termination by the Company without cause),
any portion of such Participant's Award that was not previously vested
and/or exercisable shall expire and be forfeited as of the date of such
termination. No director, employee or consultant shall have a right to be
selected as a Participant or, having been so selected, to be selected again
as a Participant.
12. Tax Withholding Obligations.
(a) If required by applicable law, the payment of taxes, if any, upon
the exercise of an option pursuant to Section 6(d) or a stock appreciation
right pursuant to Section 6(e), shall be in cash at the time of exercise or
on the applicable tax date under Section 83 of the Code, if earlier;
provided, however, tax withholding obligations may be met by the
withholding of Common Stock otherwise deliverable to the optionee pursuant
to procedures approved by the Board; provided further, however, the amount
of Common Stock so withheld shall not exceed the minimum required
withholding obligation.
(b) If required by applicable law, recipients of restricted stock,
pursuant to Section 7, shall be required to pay taxes to the Company upon
the expiration of restriction periods or such earlier dates as elected
pursuant to Section 83 of the Code; provided, however, tax withholding
obligations may be met by the withholding of Common Stock otherwise
deliverable to the recipient pursuant to procedures approved by the Board.
If tax withholding is required by applicable law, in no event shall Common
Stock be delivered to any awardee until he has paid to the Company in cash
the amount of such tax required to be withheld by the Company or has
elected to have his withholding obligations met by the withholding of
Common Stock in accordance with the procedures approved by the Board or
otherwise entered into an agreement satisfactory to the Company providing
for payment of withholding tax.
(c) The Company shall withhold from any cash bonus described in
Section 8, an amount of cash sufficient to meet its tax withholding
obligations. If the cash portion of such bonus is not sufficient to satisfy
such withholding obligation, the tax withholding obligations shall be paid
in cash by the recipient or may be met by withholding of Common Stock
otherwise deliverable to the recipient pursuant to procedures approved by
the Board.
13. Changes in Capital. Upon changes in the outstanding Common Stock by
reason of a stock dividend, stock split, reverse split, subdivision,
recapitalization, merger, consolidation (whether or not the Company is a
surviving corporation), an extraordinary dividend payable in cash or property,
combination or exchange of shares, separation, reorganization or liquidation,
the aggregate number and class of shares available under the Plan as to which
stock options and restricted stock may be awarded, the number and class of
shares under (i) each option (and related stock appreciation rights, if any) and
the option price per share and (ii) each award of restricted stock shall, in
each case, be correspondingly adjusted by the Board, such adjustments to be made
in the case of outstanding options (and related stock appreciation rights, if
any) without change in the total price applicable to such options (and related
stock appreciation rights, if any).
14. Miscellaneous Provisions.
(a) The Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the issuance of shares or the payment of cash upon
exercise of any option or stock appreciation right under the Plan. Proceeds
from the sale of shares of Common Stock pursuant to options granted under
this Plan shall constitute general funds of the Company. The expenses of
the Plan shall be borne by the Company.
(b) It is understood that the Board may, at any time and from time to
time after the granting of an option or the award of restricted stock or
bonuses payable in Common Stock hereunder, specify such additional terms,
conditions and restrictions with respect to such option or stock as may be
deemed necessary or appropriate to ensure compliance with any and all
applicable laws, including, but not limited to, terms, restrictions and
conditions for compliance with federal and state securities laws and
methods of withholding or providing for the payment of required taxes.
(c) If at any time the Board shall determine, in its discretion, that
the listing, registration or qualification of shares of Common Stock upon
any national securities exchange or under any state or federal law, or the
consent or approval of any governmental regulatory body, is necessary or
desirable as a condition of, or in connection with, the sale or purchase of
shares of Common Stock hereunder, no option or stock appreciation right may
be exercised or restricted stock or stock bonus may be transferred in whole
or in part unless and until such listing, registration, qualification,
consent or approval shall have been effected or obtained, or otherwise
provided for, free of any conditions not acceptable to the Board.
(d) By accepting any benefit under the Plan, each Participant and each
person claiming under or through such Participant shall be conclusively
deemed to have indicated his acceptance and ratification, and consent to,
any action taken under the Plan by the Board or the Company.
(e) The Plan shall be governed by and construed in accordance with the
laws of the State of Delaware.
15. Limits of Liability.
(a) Any liability of the Company or a subsidiary of the Company to any
Participant with respect to any option or award shall be based solely upon
contractual obligations created by the Plan and the Agreement.
(b) Neither the Company nor a Subsidiary of the Company, nor any
member of the Board or the Board, nor any other person participating in any
determination of any question under the Plan, or in the interpretation,
administration or application of the Plan, shall have any liability to any
party for any action taken or not taken in connection with the Plan, except
as may expressly be provided by statute.
16. Amendments and Termination. The Board may, at any time, amend, alter or
discontinue the Plan; provided, however, no amendment, alteration or
discontinuation shall be made which would impair the rights of any holder of an
award of restricted stock or option or stock appreciation rights or stock bonus
theretofore granted, without his or her written consent, or which, without the
approval of the shareholders, would:
(a) except as is provided in Section 13, increase the maximum number
of shares of Common Stock reserved for the purpose of the Plan;
(b) change the class of persons eligible to receive an award of
restricted stock or options or stock appreciation rights under the Plan; or
(c) extend the duration of the Plan.
The Board may amend the terms of any award of restricted stock or option or
stock appreciation rights theretofore granted, retroactively or prospectively,
but no such amendment shall impair the rights of any holder without his or her
written consent.
17. Duration. The Plan shall be adopted by the Board as of the date on
which it is approved by a majority of the Company's stockholders, which approval
must occur within the period ending twelve months after the date the Plan is
adopted. The Plan shall terminate upon the earlier of the following dates or
events to occur:
(a) upon the adoption of a resolution of the Board, terminating the Plan;
or
(b) the date all shares of Common Stock subject to the Plan are purchased
according to the Plan's provisions; or
(c) ten years from the date of adoption of the Plan by the Board.
No such termination of the Plan shall affect the rights of any Participant
hereunder and all options or stock appreciation rights previously granted and
restricted stock and stock bonuses awarded hereunder shall continue in force and
in operation after the termination of the Plan, except as they may be otherwise
terminated in accordance with the terms of the Plan.
18. Definitions.
(a) "Award" means each option or stock or other awards granted
pursuant to the Plan.
(b) "Board" means the Company's Board of Directors or such committee
of two or more persons selected by the Board to administer this Plan to
whom, and to the extent, the Board has delegated its powers hereunder.
(c) "Code" shall mean the Internal Revenue Code of 1986, as it may be
amended from time to time.
(d) "Common Stock" means the Voting Common Stock, par value $.01 per
share, of the Company, and shall include such shares which are substituted
for shares of the Company's Common Stock pursuant to Section 13.
(e) "Company" as applied as of any given time shall mean Outsourcing
Solutions Inc., a Delaware corporation, except that if prior to the given
time any corporation or other entity shall have acquired all or a
substantial part of the assets of the Company (as herein defined), and
shall have agreed to assume the obligations of the Company under this Plan,
then such corporation or other entity shall be deemed to be the Company at
the given time.
(f) "Fair Market Value" means such value as the Board, in good faith,
shall determine on the relevant date (without discount for lack of
marketability or minority interest); provided that if the Common Stock is
publicly traded on an established securities market, fair market value
shall be (i) if shares of Common Stock are listed on a national securities
exchange, the mean between the highest and lowest sales price per share of
Common Stock on the consolidated transaction reporting system for the
principal national securities exchange on which shares of Common Stock are
listed on that date, or, if there shall have been no such sale so reported
on that date, on the last preceding date on which such a sale was so
reported, (ii) if shares of Common Stock are not so listed but are quoted
on the Nasdaq National Market, the mean between the highest and lowest
sales price per share of Common Stock reported by the Nasdaq National
Market on that date, or, if there shall have been no such sale so reported
on that date, on the last preceding date on which such a sale was so
reported or (iii) if shares of Common Stock are not so listed or quoted but
are traded in the over-the-counter market, the mean between the closing bid
and asked price on that date, or, if there are no quotations available for
such date, on the last preceding date on which such quotations shall be
available, as reported by the Nasdaq Stock Market, or, if not reported by
the Nasdaq Stock Market, by the National Quotation Bureau Incorporated.
(g) "Incentive Stock Option" means "incentive stock options" within
the meaning of Section 422 of the Code.
(h) "Participants" shall have the meaning ascribed to such term in
Section 4.
(i) "Subsidiary" means any corporation in which the Company owns,
directly or indirectly, stock possessing 50% or more of the total combined
voting power.