Exhibit 10.33
FORM OF
OSI HOLDINGS CORP. NON-QUALIFIED
STOCK OPTION AWARD AGREEMENT [B]
This Agreement (the "Agreement"), dated _____________ is made
between OSI Holdings Corp. (the "Company") and _____________________________
(the "Optionee"). All capitalized terms that are not defined herein shall have
the meaning as defined in the OSI Holdings Corp. 1995 Stock Option and Stock
Award Plan (the "Plan"). References to "he," "him," and "his" shall mean the
feminine form of such terms, when applicable.
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 $0.01 par value common stock of the Company (the "Stock")
at a per share purchase price equal to $12.50 (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 Internal Revenue Code of
1986, as amended.
2. Terms and Conditions. It is understood and agreed that the Option
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. Subject to the other terms of this Agreement
and the Plan, the Option may be exercised on or after the date which is eight
years from the date hereof; provided, however, that such Option shall become
exercisable (i) with respect to fifty percent (50%) of the shares of stock
subject to the Option on or after the satisfaction by the Company of such
reasonable performance targets as are established in good faith by the Committee
or the Board in writing on or before December 31 of each year for the next
succeeding year, as set forth in a resolution of the Committee or the Board (as
applicable), as to that percentage of the total shares of Stock covered by this
Option set forth on Schedule I attached hereto and (ii) with respect to the
remaining fifty percent (50%) of the shares of Stock subject to the Option upon
the occurence of a Liquidation Event, as defined on Schedule I attached hereto,
subject to the achievement by the Company of internal rate of return targets as
set forth on such Schedule I, plus any shares of Stock as to which the Option
could have been exercised prior to satisfaction of such conditions in (i)
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and/or (ii) in a particular year (if any) but was not so exercised.
Notwithstanding the foregoing, the Option shall become fully exercisable as to
those shares of Stock referred to in clause (i) above immediately upon the
occurence of a Change in Control (as defined in Section 3 below).
Any exercise of all or any part of this Option shall be accompanied
by a written notice to the Company specifying the number of shares of Stock as
to which the Option is being exercised. Notation of any partial exercise shall
be made by the Company on Schedule II 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 cash, (ii) with Stock already owned for at
least eight months by the Optionee having a total fair market value, as
determined in accordance with Section 6(a) of the Plan ("Fair Market Value"),
equal to the purchase price of such Stock, or (iii) a combination of cash and
Stock (such Stock having already been owned for at least eight months by the
Optionee) having a total Fair Market Value, as so determined, equal to the
purchase price of such Stock.
(d) Exercise Upon Death, Disability or Termination of Employment.
(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 such Option would be
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exercisable in accordance with Section 2(b) hereof as of the date of his death,
may be immediately exercised after his death by the legal representative of the
Optionee's estate or by the legatee of the Optionee under his last will for a
period of two years from the date of his death or until the expiration of the
stated period of the Option, whichever period is the shorter.
(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)), his Option, to the extent
exercisable in accordance with Section 2(b) hereof as of the date of such
termination, may be immediately exercised after such termination of employment
but may not be exercised after the expiration of the period of one year from the
date of such termination of employment or of the stated period of the Option,
whichever period is the shorter; provided, however, that if the Optionee dies
within a period of one year from the date of such termination of employment, any
unexercised Option, to the extent exercisable in accordance with Section 2(b)
hereof as of the date of such termination, may be exercised after his death by
the legal representative of his estate or by the legatee of the Optionee under
his last will until the expiration of the period of two years from the date of
his death or of the stated period of the Option, whichever
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period is the shorter. 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, dated as of September 21, 1995, as amended and restated on January
10, 1996 and on February 16, 1996 and as may be further amended from time to
time, by and among OSI Holdings Corp., the MDC Entities (as defined therein),
APT (as defined therein), the Management Stockholders (as defined therein) and
the Non-Management Stockholders (as defined therein) (as amended, 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 Optionee's Option, to the extent such Option
would have been exercisable in accordance with Section 2(b) hereof as of the
date of such termination, may thereafter be immediately exercised but may not be
exercised
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after the expiration of the period of one year from the date of such termination
of employment or of the stated period of the Option, whichever period is the
shorter; provided, however, that if the Optionee dies within a period one year
from the date of such termination of employment, any unexercised Option, to the
extent such Option would have been exercisable in accordance with Section 2(b)
hereof as of the date of such termination, may thereafter be exercised by the
legal representative of his estate or by the legatee of the Optionee under his
last will until the expiration of the period of two years from the date of his
death or of the stated period of the Option, whichever period is the shorter.
(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, to the extent exercisable in
accordance with Section 2(b) hereof as of the date of such termination, such
Option may thereafter be immediately exercised but may not be exercised after
the expiration of the period of two (2) years from the date of such termination
of employment or of the stated period of the Option, whichever period is the
shorter; provided, however, that if the Optionee dies within a period of two (2)
years from the date of such termination of employment, any unexercised
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Option, to the extent exercisable in accordance with Section 2(b) hereof as of
the date of such termination, may thereafter be exercised by the legal
representative of his estate or by the legatee of the Optionee under his last
will until the expiration of the period of two years from the date of his death
or of the stated period of the Option, whichever period is the shorter.
(v) 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 if the Optionee's employment is terminated for any
reason not described in this Section 2(d), the Optionee's Option shall terminate
on the date of such termination.
(e) Nontransferability. This Option shall not be transferable other
than by will or by the laws of descent and distribution.
(f) Withholding Taxes. If required by applicable law, the Optionee
shall be required to pay withholding taxes, if any, to the Company in cash at
the time of receipt of Stock upon the exercise of all or any part of this
Option; provided, however, tax withholding obligations may be met by the
withholding of Stock otherwise deliverable to the Optionee pursuant to
procedures approved by the Committee; provided further, however, the amount of
Stock so withheld shall not exceed the minimum required withholding obligation.
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In no event shall Stock be delivered to any Optionee until he has paid to the
Company in cash the amount of tax required to be withheld by the Company under
applicable law, if any, or has elected to have such tax withholding obligations,
if any, met by the withholding of Stock in accordance with procedures approved
by the Committee.
(g) No Rights as Stockholder. The Optionee shall have no dividend
rights or any other rights as a stockholder with respect to any shares of Stock
subject to the Option until he has given written notice of exercise of the
Option and paid in full for such shares.
(h) No Right to Continued Employment. This Option shall not confer
upon the Optionee any right with respect to continuance of employment by the
Company or a subsidiary of the Company, nor shall it interfere in any way with
the right of the Company or such a subsidiary to terminate his employment at any
time.
(i) Inconsistency with Plan. Notwithstanding any provision herein to
the contrary, this 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 herein is inconsistent with the Plan, the Plan shall govern.
(j) Compliance with Laws, Regulations, Stockholders Agreement, Etc.
This Option and the obligation
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of the Company to sell and deliver shares of Stock hereunder, shall be subject
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, this Option may not be
exercised if its exercise, or the receipt of shares of Stock pursuant thereto,
would be contrary to applicable law.
3. Change in Control. For purposes of this Agreement, a "Change in
Control" shall be deemed to have occurred if a "Sale of the Business," as
defined in and contemplated by Section 2.4 of the Stockholders Agreement shall
have occurred.
4. Investment Representation. If at the time of exercise of all or
part of this 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 represents and warrants that the Optionee is purchasing or acquiring
the shares acquired under this
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Agreement for the Optionee's own account, for investment only and not with a
view to the resale or distribution thereof, and represents and agrees that any
subsequent offer for sale or distribution of any of such shares shall be made
only pursuant to either (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, but in
claiming such exemption 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.
5. Disposition of Stock. Any shares of Stock received by the
Optionee upon exercise of this Option (or any interest or right in such shares)
cannot be sold, assigned, pledged or transferred in any manner except as
permitted by the Stockholders Agreement.
6. 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 thereof, including the
terms and provisions adopted after the granting of this Option but
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prior to the complete exercise hereof, subject to the last paragraph of Section
16 of the Plan as in effect on the date hereof.
7. Notices. Any notice hereunder to the Company shall be addressed
to it at c/x XxXxxx De Leeuw & Co., 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Xxxxx Xxxx, and any notice hereunder to the Optionee
shall be addressed to him at ___________________________, subject to the right
of either party to designate at any time hereafter in writing some other
address.
8. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware.
9. Counterparts. This Agreement has been executed in two
counterparts each of which shall constitute one and the same instrument.
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IN WITNESS WHEREOF, OSI Holdings Corp. has caused this Agreement to
be executed by an appropriate officer and the Optionee has executed this
Agreement, both on the day and year first above written.
OSI HOLDINGS CORP.
By:__________________________
Title:_______________________
OPTIONEE
________________________(L.S.)
[____________]
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SCHEDULE I
Subject to paragraph (b) of Section 2 of the Agreement, the Option will vest and
become exercisable in accordance with paragraph (1) below with respect to fifty
percent (50%) of the shares of Stock subject to the Option and the Option will
vest and become exercisable in accordance with paragraph (2) below with respect
to the remaining fifty percent (50%) of the shares of Stock subject to the
Option.
(1) With respect to 50% of the shares of Stock subject to the Option:
Subject to the achievement of annual performance targets established by the
Board of Directors of the Company (the "Board") or the Committee (as defined in
the Agreement) in consultation with management, this portion of the Option will
vest evenly on an annual basis over five (5) years beginning on the date of the
Agreement, i.e., with respect to 20% of the total number of shares subject to
this portion of the Option in each year (the "Annual Option Allocation").
50% of the Annual Option Allocation not vested in any year would be subject to
catch-up vesting in the immediately following year, based upon the achievement
of the performance targets applicable to such immediately following year, and to
the extent such Annual Option Allocation does not vest in such immediately
following year, it shall be forfeited and the Option shall never be exercisable
with respect to the shares covered by such unvested portion of such Annual
Option Allocation; provided, however, that, notwithstanding the foregoing, the
Option may become exercisable with respect to such shares to the extent
otherwise provided in paragraph (b) of Section 2 of the Agreement.
(2) With respect to 50% of the shares of Stock subject to the Option: This
portion of the Option will vest upon the occurrence of a "Liquidation Event" (as
defined below), subject to the achievement by the Company of XxXxxx De Leeuw &
Co. ("MDC") internal rate of return ("IRR") targets according to the schedule
set forth below:
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================================================================================
Year
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1 2 3 4 5
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25.00% 0.00% 0.00% 0.00% 20.00% 40.00%
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30.00% 0.00% 0.00% 20.00% 40.00% 60.00%
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MDC IRR* 35.00% 0.00% 20.00% 40.00% 60.00% 80.00%
----------------------------------------------------------------------
40.00% 20.00% 40.00% 60.00% 80.00% 100.00%
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45.00% 40.00% 60.00% 80.00% 100.00%
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50.00% 60.00% 80.00% 100.00%
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55.00% 60.00% 100.00%
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75.00% 80.00%
----------------------------------------------------------------------
100.00% 100.00%
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*After giving effect to exercise of management options.
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For purposes of this Agreement, "Liquidation Event" shall mean a sale by MDC of
any of its shares of common stock of the Company to an unaffiliated third party
(including, without limitation, in a public offering). Upon a Liquidation Event
in which MDC sells less than all of its shares of common stock of the Company,
this portion of the Option will partially vest and become exercisable, in
accordance with the foregoing schedule, on a ratable basis based upon the
proportion of MDC shares sold in the Liquidation Event relative to the total
number of shares owned by MDC immediately prior to the Liquidation Event.
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