EXHIBIT 10(iii)7
THE IT GROUP, INC.
RESTRICTED STOCK AND ESCROW AGRREMENT
1996 STOCK INCENTIVE PLAN
This RESTRICTED STOCK AND ESCROW AGREEMENT (This "Agreement") is
entered into as of _____________ by and between a Delaware corporation (the
"Company"), and ________________ ("Employee"). Capitalized terms used and not
otherwise defined herein shall have the meanings ascribed to them in the Plan
(as such term is hereinafter defined).
RECITALS
The Compensation Committee of the Board of Directors, which administers
the Company's 1996 Stock Incentive Plan (the "Plan"), has granted to Employee on
___________, as a separate inducement in connection with his or her employment
with the Company, and not in lieu of any salary or other compensation for his or
her services, an award (the "Restricted Stock Award") to purchase restricted
shares of Common Stock, $.01 par value, of the Company (the "Common Stock") on
the terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants set forth herein and other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties hereto hereby agree as
follows:
1. Grant Restricted Stock
----------------------
The Company hereby grants to Employee, and Employee hereby acquires
from the Company ________shares of restricted Common Stock (the
"Shares").
2. Deposit of Certificate
----------------------
Concurrently with the execution hereof, Employee consents to the
delivery to the Company, to be held in escrow by the Company, of
the certificate or certificates evidencing the Shares and agrees to
execute and deliver to the Company undated stock powers and other
instruments of transfer duly executed in favor of the Company by
Employee. Employee acknowledges that the certificates evidencing
the Shares will have affixed a legend in the form of Exhibit A
hereto.
3. Vesting
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Subject to earlier vesting pursuant to Paragraph 4(c) or Paragraph
11 hereof, the Shares shall be subject to the restrictions set
forth in Paragraph 4 hereof until the Shares fully vest.
Twenty-five (25%) percent of the
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Shares awarded shall vest and the restrictions thereon shall
terminate January 1 each year through ____, commencing January 1,
____.
The period during which some or all of the Shares are subject to
such restrictions is referred to as the "Restricted Term."
4. Restrictions on Transfer; Repurchase of Restricted Stock
--------------------------------------------------------
(a) During the Restricted Term, the Shares may not be sold,
assigned, transferred, hypothecated or otherwise disposed of
or encumbered, other than by will or by the laws of descent
and distribution, and are subject to forfeiture to the
Company as set forth herein.
(b) In the event of the termination of the employment of
Employee with the Company or any subsidiary of the Company
for any reason other than those contemplated by Paragraph
4(c), unless the Restricted Term has expired prior to such
termination of employment, the Shares shall be forfeited to
the Company for consideration and Employee shall
automatically cease to have any rights in and to the Shares.
(c) If Employee (i) ceases to be an employee of the Company due
to his retirement in accordance with the Company's then
applicable retirement policy and practices or (ii) shall
have a Permanent Disability or die while an employee of the
Company, the conditions imposed on the Shares related to
continuous employment of the Employee set forth in Paragraph
3 shall be deemed to have been satisfied. Any unvested
Shares shall thereafter vest and the restrictions thereon
shall terminate. "Permanent Disability" shall mean the
inability in engage in any substantial gainful activity by
reason of any medically determinable physical or mental
impairment which can be expected to result in death or which
has lasted or can be expected to last for a continuous
period of not less than twelve (12) months. Employee shall
not be deemed to have a Permanent Disability until proof of
the existence thereof shall have been furnished to the
Committee (as such term is defined in Paragraph 7
hereinafter) in such form and manner, and at such times, as
the Committee may require. Any determination by the
Committee that Employee does or does not have a Permanent
Disability shall be final and binding upon the Company and
Employee.
5. Voting and Other Rights
-----------------------
During the Restricted Term, Employee shall, except as otherwise
provided herein, have all the rights of a stockholder with respect
to all of the Shares, including, without limitation, the right to
vote such Shares and the right to
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receive all dividends or other distributions, if any, with respect
to such Shares.
6. Delivery of Certificates
------------------------
Upon the termination of the Restricted Term, the Company shall
deliver to Employee all stock certificates and related instruments
of transfer evidencing the Shares vested pursuant to Paragraph 3
and all restrictions set forth in Paragraph 4 hereof with respect
to such Shares shall terminate.
7. Administration of Plan
----------------------
This Plan shall be administered by the Compensation Committee of
the Board of Directors of the Company (the "Committee"). Subject to
the provisions of this Plan, the Committee shall be authorized and
empowered to do all things necessary or desirable in connection
with the administration of this Plan, including, without
limitation, the following:
(i) adopt, amend and rescind rules and regulations relating to
the Plan;
(ii) determine which persons are eligible to receive Restricted
Stock Awards and to which of such persons, if any,
Restricted Stock Awards shall be granted;
(iii) grant Restricted Stock Awards to Employees and determine the
terms and conditions thereof, including the number of
restricted shares issuable pursuant thereto;
(iv) determine whether, and the extent to which, adjustments are
required pursuant to Paragraph 9 hereof; and
(v) interpret and construe the Plan and the terms and conditions
of all Awards granted under the Plan.
8. Effect on Participant's Continued Employment
--------------------------------------------
Employee's right, if any, to continue to serve the Company and its
subsidiaries as an officer or employee shall not be enlarged or
otherwise affected by the Restricted Stock Award, nor shall such
grant in any way restrict the right of the Company or any of its
subsidiaries to terminate Employee's employment at any time.
9. Adjustments in Stock
--------------------
If the outstanding securities of the class then subject to the Plan
are increased, decreased or exchanged for or converted into cash,
property or a different number or kind of securities, or if cash,
property or securities are distributed in respect of such
outstanding securities, in either case as a result of a
reorganization, merger, consolidation, recapitalization,
restructuring, reclassification, dividend (other than a regular,
quarterly cash dividend) or other distribution, stock split,
reverse stock split, spin-off or the like, subject to other
provisions of the Agreement, or if substantially all of the
property and assets of the Company are sold, then, unless the terms
of such transaction shall provide otherwise, the
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Committee shall make appropriate and proportionate adjustments in
(a) the number and type of shares or other securities or cash or
other property that may be acquired pursuant to Restricted Stock
Awards theretofore granted under this Plan, and (b) the maximum
number and type of shares or other securities that may be issued
pursuant to Restricted Stock Awards thereafter granted under this
Plan.
10. Payment of Withholding Taxes
----------------------------
If the Company becomes obligated to withhold an amount (the
"Withholding Amount") on account of any federal, state or local tax
imposed as a result of the grant of the Shares to Employee pursuant
to this Agreement or the expiration of the Restricted Term,
including, without limitation, any federal, state or other income
tax, or any F.I.C.A., state disability insurance tax or other
employment tax, then, (a) if employee is not subject to the
reporting requirements of Section 16 of the Securities Exchange Act
of 1934 (the "Exchange Act"), then at the election of Employee,
Employee shall either (i) deliver to the Company Shares necessary
to equal the Withholding Amount when valued at the closing market
price on the New York Stock Exchange ("NYSE) on the trading day
preceding the withholding date (or if the Shares are not listed on
NYSE, the closing market price on a national securities exchange on
which Common Stock of the Company is listed on the trading day
preceding the withholding date) rather than at the Formula Price,
or (ii) pay the Withholding Amount to the Company in cash or by
cashier's or certified bank check payable to the Company. If
Employee is required to file reports pursuant to Section 16(a) of
the Exchange Act and the rules and regulations promulgated
thereunder, then the Withholding Amount shall be required to be
satisfied by the method set forth in clause (i) of this Paragraph
10, and the use of such method shall be deemed to have been
approved by the Committee without any specific action or election
by Employee.
11. Change of Control and Other Terminating Events
----------------------------------------------
(a) All restrictions upon the Shares hereunder shall terminate
immediately prior to a Change of Control (as hereinafter
defined), provided that no such termination shall occur (i)
in the case of Change of Control of the type described in
Paragraphs 11(b)(ii) or 11(b)(iii) below, if a two-thirds
majority of the Company's Board of Directors affirmatively
recommends such Change of Control to the Company's
stockholders, or (ii) in the case of Change in Control of
the type described in Paragraph 11(b)(i) or 11(b)(v) below,
if a two-thirds majority of the Company's Board of Directors
approves such Change in Control.
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(b) "Change in Control" shall mean the first to occur of the
following events:
(i) the Directors of the Company who were nominated by
the Board of Directors for election as Directors
cease to constitute a majority of the Directors of
the Company;
(ii) a reorganization, merger or consolidation of the
Company, the consummation of which results in the
outstanding securities of any class then subject to
this Agreement being exchanged for or converted into
cash, property or securities not issued by the
Company;
(iii) the acquisition of substantially all of the property
and assets of the Company by any person or entity;
(iv) the dissolution or liquidation of the Company; or
(v) the first public announcement that any person or
entity, together with all Affiliates and Associates
(as such terms are defined in Rule 12b-2 promulgated
under the Exchange Act) of such person or entity,
shall have become the Beneficial Owner (as defined in
Rule 13d-3 promulgated under the Exchange Act) of
voting securities of the Company representing 35% or
more of the voting power of the Company; provided,
however, that the terms "person" and "entity," as
used in this subsection (v), shall not include (x)
the Company, any of its subsidiaries, or The Carlyle
Group or its affiliates, (y) any employee benefit
plan of the Company or any of its subsidiaries or (z)
any entity holding voting securities of the Company
for or pursuant to the terms of any such plan.
12. Notice
------
Any notice to be given to the Company shall be addressed to the
Company in care of its Secretary at its principal office, or such
other address as the Company may hereinafter designate in writing
to Employee, and any notice to be given to the Employee shall be
addressed to him or her at the address given beneath his or her
signature hereto, or at such other address as Employee may
hereafter designate in writing to the Company. Any such notice
shall have been duly given when enclosed as aforesaid, registered
or certified, and deposited, postage and registration or
certification fee prepaid, in a post office or branch post office
regularly maintained by the United States Government.
13. Stock Incentive Plan
--------------------
This Agreement and the Shares are subject to all of the terms and
conditions of the Plan as the same shall be amended from time to
time in accordance with the terms thereof, but no such amendment
shall adversely affect the Employee's rights under this Agreement.
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14. Laws Applicable to Construction
-------------------------------
This Agreement has been executed and delivered the day and year
first above written at Pittsburgh, Pennsylvania, and this Agreement
shall be construed and enforced in accordance with the laws of the
State of Delaware.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
duly authorized representative, and the Employee has hereunto set his or her
hand on the day and year first above written.
THE IT GROUP, INC. EMPLOYEE:
By:___________________________________ ___________________________________
Title: _______________________________
___________________________________
The undersigned spouse of the Employee
Hereby consents to the terms and
provisions of this Restricted Stock ___________________________________
Agreement as of the day and year first
above written.
______________________________________ ___________________________________
(Spouse)
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EXHIBIT A
The securities represented by this Certificate are subject to the
terms and provisions, including certain restrictions on transfer and
encumbrance, of that certain Restricted Stock and Escrow Agreement dated as of
____________, by and between The IT Group, Inc., a Delaware corporation (the
"Company"), and the holder of the shares of common stock represented by this
Certificate, a copy of which is available for inspection at the executive
offices of the Company.
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