Exhibit (d)(5)
FORM OF KPMG CONSULTING, INC. STOCK OPTION AGREEMENT FOR EMPLOYEES,
PURSUANT TO THE KPMG CONSULTING, INC. 2000 LONG-TERM INCENTIVE
PLAN, FOR NON-U.S. PERSONS, INCLUDING FORM OF AWARD NOTICE
KPMG CONSULTING, INC.
STOCK OPTION AGREEMENT
FOR NON-U.S. EMPLOYEES
KPMG Consulting, Inc., a Delaware corporation (the "Company"),
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hereby grants to the individual (the "Optionee") named in the award notice
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attached hereto (the "Award Notice") as of the date set forth in the Award
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Notice (the "Option Date"), pursuant to the provisions of the KPMG Consulting,
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Inc. 2000 Long-Term Incentive Plan (the "Plan"), a non-statutory stock option to
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purchase from the Company the number of shares of its common stock, $0.01 par
value ("Stock"), set forth in the Award Notice (the "Option"), at the price per
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share set forth in the Award Notice, upon and subject to the terms and
conditions set forth below, in the Award Notice and in the Plan. Capitalized
terms not defined herein shall have the meanings specified in the Plan.
1. Option Subject to Acceptance of Agreement. The Option
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shall be null and void unless the Optionee shall accept this Agreement by
executing the Award Notice in the space provided therefore and returning an
original execution copy of the Award Notice to the Company.
2. Time and Manner of Exercise of Option.
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2.1. Maximum Term of Option. In no event may the Option be
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exercised, in whole or in part, after the expiration date set forth in the Award
Notice (the "Expiration Date").
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2.2. Exercise of Option. (a) The Option shall become
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exercisable in accordance with the exercise schedule set forth in the Award
Notice (the "Exercise Schedule").
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(b) If the Optionee's employment with the Employer terminates
by reason of Disability, the Option shall be exercisable only to the extent it
is exercisable on the effective date of the Optionee's termination of employment
and may thereafter be exercised by the Optionee or the Optionee's Legal
Representative until and including the earlier to occur of (i) the date which is
one year after the effective date of the Optionee's termination of employment
and (ii) the Expiration Date.
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(c) If the Optionee's employment with the Employer terminates
by reason of Retirement, the Option shall be exercisable only to the extent it
is exercisable on the effective date of the Optionee's termination of employment
and may thereafter be exercised by the Optionee or the Optionee's Legal
Representative until and including the earlier to occur of (i) the date which is
three months after the effective date of the Optionee's termination of
employment and (ii) the Expiration Date.
(d) If the Optionee's employment with the Employer terminates
by reason of death, the Option shall be exercisable only to the extent it is
exercisable on the date of death and may thereafter be exercised by the
Optionee's Legal Representative or Permitted Transferees, as the case may be,
until and including the earlier to occur of (i) the date which is one year after
the date of death and (ii) the Expiration Date.
(e) If the Optionee's employment with the Employer terminates
for any reason other than Disability, Retirement or death, the Option shall be
exercisable only to the extent it is exercisable on the effective date of the
Optionee's termination of employment and may thereafter be exercised by the
Optionee or the Optionee's Legal Representative until and including the earlier
to occur of (i) the date which is three months after the effective date of the
Optionee's termination of employment and (ii) the Expiration Date.
(f) If the Optionee dies during the period set forth in
Section 2.2(b) following termination of employment by reason of Disability, or
if the Optionee dies during the period set forth in Section 2.2(c) following
termination of employment by reason of Retirement, or if the Optionee dies
during the period set forth in Section 2.2(e) following termination of
employment for any reason other than Disability or Retirement, the Option shall
be exercisable only to the extent it is exercisable on the date of death and may
thereafter be exercised by the Optionee's Legal Representative or Permitted
Transferees, as the case may be, until and including the earlier to occur of (i)
the date which is one year after the date of death and (ii) the Expiration Date.
(g) Notwithstanding Sections 2.1 and 2.4 and the exercise
periods set forth in the Award Notice and in subsections (b), (c), (d), (e) and
(f) of this Section 2.2, in the event the Company is involved in a business
combination, including a business combination which is intended to be treated as
a pooling of interests for financial accounting purposes (a "Pooling
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Transaction"), in connection with which the Optionee receives a substitute
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option to purchase securities of any entity, including an entity directly or
indirectly acquiring the Company:
(1) if the acquisition of the substitute option by the
Optionee may be treated as a purchase for purposes of Section 16(b) of
the Exchange Act and the Optionee's employment with the Employer is
terminated for any reason during the nine-month period beginning three
months prior to the consummation of such business combination, then the
Option (or option in substitution thereof) shall be exercisable to the
extent set forth in the Award Notice and above in this Section 2.2
until and including the latest to occur of (i) the date determined
pursuant to the then applicable subsection (b), (c), (d), (e) or (f) of
this Section 2.2, (ii) the date which is seven months after the
consummation of such business combination and (iii) the Expiration
Date; or
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(2) if the Optionee is restricted from disposing of a security
(or security underlying a security) issued in connection with the
Pooling Transaction and the purpose of such restriction is to ensure
that the Pooling Transaction is accounted for as a pooling of interests
(the "Pooling Restriction") and the Optionee's employment with the
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Employer is terminated for any reason during the nine-month period
beginning three months prior to the consummation of such business
combination, then the Option (or option in substitution thereof) shall
be exercisable to the extent set forth in the Award Notice and above in
this Section 2.2 until and including the latest to occur of (i) the
date determined pursuant to the then applicable subsection (b), (c),
(d), (e) or (f) of this Section 2.2, (ii) the date which is one month
after the date of expiration of the Pooling Restriction and (iii) the
Expiration Date.
2.3. Method of Exercise. Subject to the limitations set forth
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in this Agreement, the Option may be exercised by the Optionee (a) by giving
written notice to the Company specifying the number of whole shares of Stock to
be purchased and by accompanying such notice with payment therefor in full (or
by arranging for such payment to the Company's satisfaction) either (i) in cash,
(ii) by delivery to the Company (either actual delivery or by attestation
procedures established by the Company) of Mature Shares having an aggregate Fair
Market Value, determined as of the date of exercise, equal to the aggregate
purchase price payable pursuant to the Option by reason of such exercise, (iii)
in cash by a broker-dealer acceptable to the Company to whom the Optionee has
submitted an irrevocable notice of exercise or (iv) by a combination of (i) and
(ii), and (b) by executing such documents as the Company may reasonably request.
The Company shall have sole discretion to disapprove of an election pursuant to
any of clauses (ii) - (iv). Any fraction of a share of Stock which would be
required to pay such purchase price shall be disregarded and the remaining
amount due shall be paid in cash by the Optionee. No certificate representing a
share of Stock shall be delivered until the full purchase price therefor and any
withholding taxes thereon, as described in Section 3.3, have been paid.
2.4. Termination of Option. (a) Subject to Section 2.2(g), in
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no event may the Option be exercised after it terminates as set forth in this
Section 2.4. The Option shall terminate, to the extent not earlier terminated
pursuant to Sections 2.2 or 2.5 or exercised pursuant to Section 2.3, on the
Expiration Date.
(b) In the event that rights to purchase all or a portion of
the shares of Stock subject to the Option expire or are exercised, cancelled or
forfeited, the Optionee shall, upon the Company's request, promptly return this
Agreement to the Company for full or partial cancellation, as the case may be;
provided, however, that such cancellation shall be effective regardless of
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whether the Optionee returns this Agreement. If the Optionee continues to have
rights to purchase shares of Stock hereunder, the Company shall, within 10 days
of the Optionee's delivery of this Agreement to the Company, either (i) mark
this Agreement to indicate the extent to which the Option has expired or been
exercised, cancelled or forfeited or (ii) issue to the Optionee a substitute
option agreement applicable to such rights, which agreement shall otherwise be
substantially similar to this Agreement in form and substance.
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2.5. Termination of Option and Forfeiture of Option Gain. (a)
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If the Optionee:
(1) breaches any covenant concerning confidentiality or
intellectual property or concerning noncompetition or nonsolicitation
of clients, prospective clients or personnel of the Company and its
affiliates and/or Employer and its affiliates to which the Optionee is
or may become a party in the future; or
(2) directly or indirectly engages in any activity which is
contrary, inimical or harmful to the interests of the Company and/or
the Employer, including but not limited to (i) violations of Company
and/or Employer policies to the extent then applicable to the Optionee,
including the Company's xxxxxxx xxxxxxx policies, and (ii)
participation in any activity not approved by the Board which could
reasonably be foreseen as contributing to or resulting in a Change in
Control of the Company,
then, in addition to and without in any way limiting any remedies under
any of the covenants described above in this Section 2.5(a) or otherwise and any
other provable damages, the Option shall terminate automatically (if not
previously terminated) on the date the Optionee commits such breach or engages
in such activity and the Optionee shall pay the Company, within five business
days of receipt by the Optionee of a written demand therefor, an amount in cash
determined by multiplying the number of shares of Stock purchased pursuant to
each exercise of the Option occurring within three months prior to the date the
Optionee commits such breach or engages in such activity (without reduction for
any shares of Stock delivered by the Optionee or withheld by the Company
pursuant to Section 2.3 or Section 3.3) by the difference between (i) the Fair
Market Value of a share of Stock on the date of such exercise and (ii) the
purchase price per share of Stock set forth in the Award Notice.
(b) The Optionee may be released from the Optionee's
obligations under Section 2.5(a) only if and to the extent the Committee
determines in its sole discretion that such a release is in the best interests
of the Company.
(c) The Optionee agrees that by executing the Award Notice the
Optionee authorizes the Company and its affiliates and Employer and its
affiliates to deduct any amount or amounts owed by the Optionee pursuant to
Section 2.5(a) from any amounts payable by the Employer or any affiliate to the
Optionee, including, without limitation, any amount payable to the Optionee as
salary, wages, vacation pay or bonus. This right of setoff shall not be an
exclusive remedy and the Company's or an affiliate's or the Employer's or an
affiliate's election not to exercise this right of setoff with respect to any
amount payable to the Optionee shall not constitute a waiver of this right of
setoff with respect to any other amount payable to the Optionee or any other
remedy.
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3. Additional Terms and Conditions of Option.
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3.1. Nontransferability of Option; Restriction on Transfer of
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Stock. (a) The Option may not be transferred by the Optionee other than by will
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or the laws of descent and distribution or pursuant to beneficiary designation
procedures approved by the Company. Except to the extent permitted by the
foregoing sentence, during the Optionee's lifetime the Option is exercisable
only by the Optionee or the Optionee's Legal Representative. Except to the
extent permitted by the second preceding sentence, the Option may not be sold,
transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed
of (whether by operation of law or otherwise) or be subject to execution,
attachment or similar process. Upon any attempt to so sell, transfer, assign,
pledge, hypothecate, encumber or otherwise dispose of the Option, the Option and
all rights hereunder shall immediately become null and void.
(b) The shares of Stock purchased upon exercise of the Option
may not be transferred by the Optionee prior to the termination of the Lock-Up
Period other than by will or the laws of descent and distribution or pursuant to
beneficiary designation procedures approved by the Company. Except to the extent
permitted by the foregoing sentence, prior to the termination of the Lock-Up
Period the shares of Stock purchased upon exercise of the Option may not be
sold, transferred, assigned, pledged, hypothecated, encumbered or otherwise
disposed of (whether by operation of law or otherwise) or be subject to
execution, attachment or similar process.
3.2. Investment Representation. The Optionee hereby represents
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and covenants that (a) any shares of Stock purchased upon exercise of the Option
will be purchased for investment and not with a view to the distribution thereof
within the meaning of the Securities Act unless such purchase has been
registered under the Securities Act and any applicable state securities laws;
(b) any subsequent sale of any such shares shall be made in compliance with
Section 3.1(b) either pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws, or pursuant to an
exemption from registration under the Securities Act and such state securities
laws; and (c) if requested by the Company, the Optionee shall submit a written
statement, in a form satisfactory to the Company, to the effect that such
representation (x) is true and correct as of the date of any purchase of any
shares hereunder or (y) is true and correct as of the date of any sale of any
such shares, as applicable. As a further condition precedent to any exercise of
the Option, the Optionee shall comply with all regulations and requirements of
any regulatory authority having control of or supervision over the issuance or
delivery of the shares and, in connection therewith, shall execute any documents
which the Board or the Committee shall in its sole discretion deem necessary or
advisable.
3.3. Withholding Taxes. (a) As a condition precedent to the
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delivery of Stock upon exercise of the Option, the Optionee shall, upon request
by the Company and/or the Employer, pay to the Company and/or the Employer in
addition to the purchase price of the shares, such amount as the Company and/or
the Employer may be required, under all applicable federal, state, local,
foreign or other laws or regulations, to withhold and pay over as income, social
insurance, payroll or other withholding taxes (the "Required Tax Payments") with
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respect
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to such exercise of the Option. If the Optionee shall fail to advance the
Required Tax Payments after request by the Company and/or the Employer, the
Company and/or the Employer may, in their discretion, deduct any Required Tax
Payments from any amount then or thereafter payable by the Company and/or the
Employer to the Optionee.
(b) The Optionee may elect to satisfy his or her obligation to
advance the Required Tax Payments by any of the following means: (1) a cash
payment to the Company, (2) delivery to the Company (either actual delivery or
by attestation procedures established by the Company) of Mature Shares having an
aggregate Fair Market Value, determined as of the Tax Date, equal to the
Required Tax Payments, (3) authorizing the Company to withhold whole shares of
Stock which would otherwise be delivered to the Optionee upon exercise of the
Option having an aggregate Fair Market Value, determined as of the Tax Date,
equal to the Required Tax Payments, (4) a cash payment by a broker-dealer
acceptable to the Company to whom the Optionee has submitted an irrevocable
notice of exercise or (5) any combination of (1), (2) and (3). The Company shall
have sole discretion to disapprove of an election pursuant to any of clauses (2)
- (5). Shares of Stock to be delivered or withheld may not have a Fair Market
Value in excess of the minimum amount of the Required Tax Payments. Any fraction
of a share of Stock which would be required to satisfy any such obligation shall
be disregarded and the remaining amount due shall be paid in cash by the
Optionee. No certificate representing a share of Stock shall be delivered until
the Required Tax Payments have been satisfied in full.
3.4. TAX REPORTING AND PAYMENT LIABILITY. THE COMPANY AND/OR
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THE EMPLOYER WILL ASSESS THEIR REQUIRED TAX PAYMENTS' WITHHOLDING AND REPORTING
REQUIREMENTS, IN CONNECTION WITH THE OPTION, INCLUDING THE GRANT, VESTING OR
EXERCISE OF THE OPTION OR SALE OF SHARES ACQUIRED PURSUANT TO SUCH EXERCISE.
THESE REQUIREMENTS MAY CHANGE FROM TIME TO TIME AS LAWS OR INTERPRETATIONS
CHANGE. REGARDLESS OF THE COMPANY'S AND/OR THE EMPLOYER'S ACTIONS IN THIS
REGARD, THE OPTIONEE HEREBY ACKNOWLEDGES AND AGREES THAT THE ULTIMATE LIABILITY
FOR ANY AND ALL REQUIRED TAX PAYMENTS IS AND REMAINS HIS OR HER RESPONSIBILITY
AND LIABILITY AND THAT THE COMPANY AND/OR THE EMPLOYER (I) MAKE NO
REPRESENTATIONS NOR UNDERTAKINGS REGARDING TREATMENT OF ANY TAX-RELATED ITEMS IN
CONNECTION WITH ANY ASPECT OF THE OPTION GRANT, INCLUDING THE GRANT, VESTING OR
EXERCISE OF THE OPTION AND THE SUBSEQUENT SALE OF SHARES ACQUIRED PURSUANT TO
SUCH EXERCISE; AND (II) DO NOT COMMIT TO STRUCTURE THE TERMS OF THE GRANT OR ANY
ASPECT OF THE OPTION TO REDUCE OR ELIMINATE THE OPTIONEE'S LIABILITY REGARDING
REQUIRED TAX PAYMENTS.
3.5. Adjustment. In the event of any stock split, reverse
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stock split, stock dividend, recapitalization, reorganization, merger,
consolidation, combination, exchange of
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shares, liquidation, spin-off or other similar change in capitalization or
event, or any distribution to holders of Stock other than a regular cash
dividend, the number and class of securities subject to the Option and the
purchase price per security shall be appropriately adjusted by the Committee
without an increase in the aggregate purchase price. If any adjustment would
result in a fractional security being subject to the Option, the Company shall
pay the Optionee, in connection with the first exercise of the Option occurring
after such adjustment, an amount in cash determined by multiplying (i) the
fraction of such security (rounded to the nearest hundredth) by (ii) the excess,
if any, of (A) the Fair Market Value on the exercise date over (B) the exercise
price of the Option. The decision of the Committee regarding any such adjustment
shall be final, binding and conclusive.
3.6. Compliance with Applicable Law. The Option is subject to
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the condition that if the listing, registration or qualification of the shares
subject to the Option upon any securities exchange or under any law, or the
consent or approval of any governmental body, or the taking of any other action
is necessary or desirable as a condition of, or in connection with, the purchase
or delivery of shares hereunder, the Option may not be exercised, in whole or in
part, and such shares may not be delivered, unless such listing, registration,
qualification, consent, approval or other action shall have been effected or
obtained, free of any conditions not acceptable to the Company. The Company
agrees to use reasonable efforts to effect or obtain any such listing,
registration, qualification, consent, approval or other action.
3.7. Delivery of Certificates. Upon the exercise of the
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Option, in whole or in part, the Company shall deliver or cause to be delivered,
subject to the conditions of this Article 3, one or more certificates
representing the number of shares purchased against full payment therefor. The
Company shall pay all original issue or transfer taxes and all fees and expenses
incident to such delivery, except as otherwise provided in Section 3.3.
3.8. Option Confers No Rights as Stockholder. The Optionee
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shall not be entitled to any privileges of ownership with respect to shares of
Stock subject to the Option unless and until such shares are purchased and
delivered upon the exercise of the Option, in whole or in part, and the Optionee
becomes a stockholder of record with respect to such delivered shares. The
Optionee shall not be considered a stockholder of the Company with respect to
any such shares not so purchased and delivered.
3.9. ACKNOWLEDGEMENT AND WAIVER. BY EXECUTING THE AWARD NOTICE
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AND ACCEPTING THE GRANT OF THE OPTION EVIDENCED HEREBY, THE OPTIONEE
ACKNOWLEDGES THAT: (I) THE PLAN IS DISCRETIONARY IN NATURE AND MAY BE AMENDED,
SUSPENDED OR TERMINATED BY THE COMPANY AT ANY TIME; (II) THE GRANT OF THE OPTION
IS VOLUNTARY AND OCCASIONAL AND DOES NOT CREATE ANY CONTRACTUAL OR OTHER RIGHT
TO RECEIVE FUTURE GRANTS OF OPTIONS, OR BENEFITS IN LIEU OF OPTIONS EVEN IF
OPTIONS HAVE BEEN GRANTED REPEATEDLY IN THE PAST; (III) ALL DECISIONS WITH
RESPECT TO ANY SUCH FUTURE GRANTS, INCLUDING, BUT NOT LIMITED TO, THE
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TIMES WHEN OPTIONS SHALL BE GRANTED, THE NUMBER OF SHARES SUBJECT TO EACH
OPTION, THE OPTION PRICE, AND THE TIME OR TIMES WHEN EACH OPTION SHALL BE
EXERCISABLE, WILL BE AT THE SOLE DISCRETION OF THE COMPANY; (IV) THE OPTIONEE'S
PARTICIPATION IN THE PLAN SHALL NOT CREATE A RIGHT TO FURTHER EMPLOYMENT WITH
THE EMPLOYER AND/OR THE COMPANY AND ITS AFFILIATES AND SHALL NOT INTERFERE WITH
THE ABILITY OF THE EMPLOYER TO TERMINATE THE OPTIONEE'S EMPLOYMENT RELATIONSHIP
AT ANY TIME WITH OR WITHOUT CAUSE; (V) THE OPTIONEE'S PARTICIPATION IN THE PLAN
IS VOLUNTARY; (VI) THE VALUE OF THE OPTION IS AN EXTRAORDINARY ITEM OF
COMPENSATION WHICH IS OUTSIDE THE SCOPE OF THE OPTIONEE'S EMPLOYMENT CONTRACT,
IF ANY; (VII) THE OPTION IS NOT PART OF NORMAL OR EXPECTED COMPENSATION OR
SALARY FOR ANY PURPOSES, INCLUDING BUT NOT LIMITED TO, CALCULATING ANY
SEVERANCE, RESIGNATION, REDUNDANCY, END OF SERVICE PAYMENTS, BONUSES,
LONG-SERVICE AWARDS, PENSION OR RETIREMENT BENEFITS OR SIMILAR PAYMENTS; (VIII)
IN THE EVENT OF INVOLUNTARY TERMINATION OF THE OPTIONEE'S EMPLOYMENT, HIS RIGHT
TO RECEIVE OPTIONS AND VEST IN OPTIONS UNDER THE PLAN, IF ANY, WILL TERMINATE
EFFECTIVE AS OF THE DATE THAT THE OPTIONEE IS NO LONGER ACTIVELY EMPLOYED
REGARDLESS OF ANY REASONABLE NOTICE PERIOD MANDATED UNDER LOCAL LAW;
FURTHERMORE, IN THE EVENT OF INVOLUNTARY TERMINATION OF EMPLOYMENT, THE
OPTIONEE'S RIGHT TO EXERCISE THE OPTION AFTER TERMINATION OF EMPLOYMENT, IF ANY,
WILL BE MEASURED BY THE DATE OF TERMINATION OF THE OPTIONEE'S ACTIVE EMPLOYMENT
AND WILL NOT BE EXTENDED BY ANY REASONABLE NOTICE PERIOD MANDATED UNDER LOCAL
LAW; (IX) THE FUTURE VALUE OF THE UNDERLYING SHARES IS UNKNOWN AND CANNOT BE
PREDICTED WITH CERTAINTY; (X) THE OPTION HAS BEEN GRANTED TO THE OPTIONEE IN THE
OPTIONEE'S STATUS AS AN EMPLOYEE OF HIS OR HER EMPLOYER, AND CAN IN NO EVENT BE
UNDERSTOOD OR INTERPRETED TO MEAN THAT THE COMPANY IS THE OPTIONEE'S EMPLOYER OR
THAT THE OPTIONEE HAS AN EMPLOYMENT RELATIONSHIP WITH THE COMPANY; (XI) IF THE
UNDERLYING SHARES DO NOT INCREASE IN VALUE, THE OPTION WILL HAVE NO VALUE; AND
(XII) NO CLAIM OR ENTITLEMENT TO COMPENSATION OR DAMAGES ARISES FROM TERMINATION
OF THE OPTIONS OR DIMINUTION IN VALUE OF THE OPTION OR SHARES OF STOCK PURCHASED
THROUGH EXERCISE OF THE OPTION AND THE OPTIONEE IRREVOCABLY RELEASES THE
EMPLOYER, THE COMPANY AND ITS AFFILIATES FROM ANY SUCH CLAIM THAT MAY ARISE.
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3.10. DATA PRIVACY CONSENT. AS A CONDITION TO THE GRANT OF THE
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OPTION, THE OPTIONEE EXPLICITLY AND UNAMBIGUOUSLY CONSENTS TO THE COLLECTION,
USE AND TRANSFER OF PERSONAL DATA AS DESCRIBED IN THIS PARAGRAPH BY AND AMONG,
AS APPLICABLE, THE EMPLOYER AND/OR THE COMPANY AND ITS AFFILIATES FOR THE
EXCLUSIVE PURPOSE OF IMPLEMENTING, ADMINISTERING AND MANAGING THE OPTIONEE'S
PARTICIPATION IN THE PLAN. THE OPTIONEE UNDERSTANDS THAT THE EMPLOYER AND/OR THE
COMPANY AND ITS AFFILIATES MAY HOLD CERTAIN PERSONAL INFORMATION ABOUT THE
OPTIONEE, INCLUDING THE OPTIONEE'S NAME, HOME ADDRESS AND TELEPHONE NUMBER, DATE
OF BIRTH, SOCIAL SECURITY NUMBER OR IDENTIFICATION NUMBER, SALARY, NATIONALITY,
JOB TITLE, ANY SHARES OF STOCK OR DIRECTORSHIPS HELD IN THE COMPANY OR AN
AFFILIATE, DETAILS OF ALL OPTIONS OR ANY OTHER ENTITLEMENT TO SHARES OF STOCK
AWARDED, CANCELED, EXERCISED, VESTED, UNVESTED OR OUTSTANDING IN THE OPTIONEE'S
FAVOR, FOR THE PURPOSE OF MANAGING AND ADMINISTERING THE PLAN ("DATA"). THE
OPTIONEE FURTHER UNDERSTANDS THAT THE EMPLOYER AND/OR THE COMPANY AND ITS
AFFILIATES MAY TRANSFER DATA AMONGST THEMSELVES AS NECESSARY FOR THE PURPOSE OF
IMPLEMENTATION, ADMINISTRATION AND MANAGEMENT OF THE OPTIONEE'S PARTICIPATION IN
THE PLAN, AND THAT THE EMPLOYER AND/OR THE COMPANY AND ITS AFFILIATES MAY EACH
FURTHER TRANSFER DATA TO ANY THIRD PARTIES ASSISTING THE COMPANY IN THE
IMPLEMENTATION, ADMINISTRATION AND MANAGEMENT OF THE PLAN. THE OPTIONEE
UNDERSTANDS THAT THESE RECIPIENTS MAY BE LOCATED IN THE EUROPEAN ECONOMIC AREA,
OR ELSEWHERE, SUCH AS THE UNITED STATES OR CANADA. THE OPTIONEE AUTHORIZES THEM
TO RECEIVE, POSSESS, USE, RETAIN AND TRANSFER THE DATA, IN ELECTRONIC OR OTHER
FORM, FOR THE PURPOSES OF IMPLEMENTING, ADMINISTERING AND MANAGING THE
OPTIONEE'S PARTICIPATION IN THE PLAN, INCLUDING ANY REQUISITE TRANSFER TO A
BROKER OR OTHER THIRD PARTY WITH WHOM THE OPTIONEE MAY ELECT TO DEPOSIT ANY
SHARES OF STOCK ACQUIRED UPON EXERCISE OF THE OPTION, OF SUCH DATA AS MAY BE
REQUIRED FOR THE ADMINISTRATION OF THE PLAN AND/OR THE SUBSEQUENT HOLDING OF
SHARES OF STOCK ON HIS OR HER BEHALF. THE OPTIONEE UNDERSTANDS THAT HE OR SHE
MAY, AT ANY TIME, VIEW DATA, REQUIRE ANY NECESSARY AMENDMENTS TO IT OR WITHDRAW
THE CONSENTS HEREIN IN WRITING BY CONTACTING HIS OR HER LOCAL HUMAN RESOURCES
REPRESENTATIVE. WITHDRAWAL OF CONSENT MAY, HOWEVER, AFFECT OPTIONEE'S ABILITY TO
EXERCISE OR REALIZE BENEFITS FROM THE OPTION.
3.11. Decisions of Board or Committee. The Board or the
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Committee shall have the right to resolve all questions which may arise in
connection with the Option or its
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exercise. Any interpretation, determination or other action made or taken by the
Board or the Committee regarding the Plan or this Agreement shall be final,
binding and conclusive.
3.12. Company to Reserve Shares. The Company shall at all
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times prior to the expiration or termination of the Option reserve and keep
available, either in its treasury or out of its authorized but unissued shares
of Stock, the full number of shares of Stock subject to the Option from time to
time.
3.13. Agreement Subject to Plan. This Agreement is subject to
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the provisions of the Plan, including Section 6.8 relating to a Change in
Control, and shall be interpreted in accordance therewith. The Optionee hereby
acknowledges receipt of a copy of the Plan.
4. Miscellaneous Provisions.
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4.1. Designation as Non-Statutory Stock Option. The Option is
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hereby designated as not constituting an Incentive Stock Option. This Agreement
shall be interpreted and treated consistently with such designation.
4.2. Meaning of Certain Terms. (a) As used herein, employment
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by the Company shall include employment by a Subsidiary Company.
(b) As used herein, the following terms shall have the
meanings set forth below:
"Employer" shall mean [name of local KPMG sub], and its
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subsidiaries as may exist from time to time.
"Legal Representative" shall include an executor,
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administrator, legal representative, guardian or similar person.
"Lock-Up Period" shall mean the period required by the
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underwriters of an IPO following an IPO during which individuals holding
shares of Common Stock shall be prohibited from selling, offering,
contracting to sell or otherwise transferring or disposing of such shares
of Common Stock, directly or indirectly.
"Permitted Transferee" shall include any transferee designated
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as the Optionee's beneficiary in the event of the Optionee's death pursuant
to beneficiary designation procedures approved by the Company.
"Securities Act" shall mean the Securities Act of 1933, as
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amended, and the rules and regulations thereunder.
4.3. Successors. This Agreement shall be binding upon and
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inure to the benefit of any successor or successors of the Company and any
person or persons who shall, upon the death of the Optionee, acquire any rights
hereunder in accordance with this Agreement or the Plan.
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4.4. Notices. All notices, requests or other communications
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provided for in this Agreement shall be made, if to the Company, to KPMG
Consulting, Inc., c/o Morgan Xxxxxxx Xxxx Xxxxxx, Stock Plan Administration,
Harborside Financial Center, Plaza Two, 7th Floor, Jersey City, NJ 07311 and if
to the Optionee, to the last known mailing address of the Optionee contained in
the records of the Company. All notices, requests or other communications
provided for in this Agreement shall be made in writing either (a) by personal
delivery, (b) by facsimile with confirmation of receipt, (c) by mailing in the
United States mails or (d) by express courier service. The notice, request or
other communication shall be deemed to be received upon personal delivery, upon
confirmation of receipt of facsimile transmission or upon receipt by the party
entitled thereto if by United States mail or express courier service; provided,
--------
however, that if a notice, request or other communication sent to the Company is
-------
not received during regular business hours, it shall be deemed to be received on
the next succeeding business day of the Company.
4.5. Governing Law. This Agreement, the Option and all
-------------
determinations made and actions taken pursuant hereto and thereto, to the extent
not governed by the Code or the laws of the United States, shall be governed by
the laws of the State of Delaware and construed in accordance therewith without
giving effect to principles of conflicts of laws.
4.6. Counterparts. This Award Notice may be executed in two
------------
counterparts, each of which shall be deemed an original and both of which
together shall constitute one and the same instrument.
4.7. Language. If the Optionee has received this Agreement or
--------
any other document related to the Plan translated into a language other than
English and if the translated version is different than the English version, the
English version will control.
4.8. Severability. The provisions of this Agreement are
------------
severable and if any one or more provisions may be determined to be illegal or
otherwise unenforceable, in whole or in part, the remaining provisions shall
nevertheless be binding and enforceable.
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[insert date]
[name and address of optionee]
Re: Award Notice of Stock Option Grant
----------------------------------
Dear [name of optionee]:
Earlier this year, you surrendered certain stock options that had an
exercise price of $55.50 in return for a commitment from KPMG Consulting, Inc.
(the "Company") to issue replacement options at a later date. We are pleased to
-------
notify you that you have now been awarded an option to purchase shares of common
stock of the Company in fulfillment of the Company's commitment to issue
replacement options. Certain terms of your award follow:
Option: You have been awarded a non-statutory stock option to
------ purchase from the Company [insert number] shares of its
common stock, $0.01 par value, subject to adjustment, as
provided in Section 3.5 of the KPMG Consulting, Inc. Stock
Option Agreement for Non-U.S. Employees (the "Agreement").
---------
Option Date: [insert grant date]
-----------
Exercise Price: [insert price] per share, subject to adjustment as provided
-------------- in Section 3.5 of the Agreement.
Exercise Schedule: Except as otherwise provided in Section 2.2
-------- of the Agreement and in Section 6.8 of the KPMG
Consulting, Inc. 2000 Long-Term Incentive Plan (the
"Plan"), the Option shall become exercisable (i) on
----
the first anniversary of the Option Date with respect
to 33-1/3% of the number of shares subject thereto on
the Option Date, (ii) on the second anniversary of
the Option Date with respect to an additional 33-1/3%
of the number of shares subject thereto on the Option
Date, and (iii) on the third anniversary of the
Option Date with respect to the remaining 33-1/4% of
the number of shares subject thereto on the Option
Date.
Expiration Date: Except to the extent earlier terminated
---------- pursuant to Section 2.2 or 2.5 of the Agreement or
earlier exercised pursuant to Section 2.3 of the
Agreement, the Option shall terminate at 5:00 p.m.,
New York time, on [insert expiration date].
In addition to the terms stated in this Award Notice, the Option shall
be subject to the terms and conditions of the Agreement and the Plan, copies of
which are attached hereto.
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KPMG CONSULTING, INC.
By: ______________________________________
Name: Xxxxxxxx X. Xxxxxx
Title: Chairman and Chief Executive Officer
Acknowledgment, Acceptance and Agreement:
----------------------------------------
By signing below and returning this two-page Award Notice to KPMG
Consulting, Inc., c/o Morgan Xxxxxxx at the address stated herein, I hereby
acknowledge receipt of the Agreement and the Plan, accept the Option granted to
me and agree to be bound by the terms and conditions of this Award Notice, the
Agreement and the Plan.
------------------------------ ----------------------
Signature Date
------------------------------ ----------------------
Print Name Social Security Number
KPMG CONSULTING, INC.
c/o Morgan Xxxxxxx Xxxx Xxxxxx
Stock Plan Administration
Harborside Financial Center
Plaza Two, 7th Floor
Jersey City, NJ 07311
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