OUTSOURCING SOLUTIONS INC.
NON-QUALIFIED STOCK OPTION AWARD AGREEMENT [E]
This Non-qualified Stock Option Award Agreement (this "Agreement"),
dated as of _____________, 199x, is made between Outsourcing Solutions Inc. (the
"Company") and ____________ (the "Optionee"). All capitalized terms used herein
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 :
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
-------------- 25%
-------------- 25%
-------------- 25%
-------------- 25%
(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, ______________________ Attention: ______________ ,
subject to the right of either party to designate 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 be
deemed 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
-------------------------
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 of Stock on Signature Date
Purchased Option
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