OUTSOURCING SOLUTIONS INC.
DIRECTOR
STOCK OPTION AWARD AGREEMENT [D]
This Agreement (this "Agreement"), dated as of , 199x (the
"Agreement Date"), is made between Outsourcing Solutions Inc. (the "Company")
and _________ (the "Optionee"). All capitalized terms that are not defined
herein shall have the meaning as defined in the Outsourcing Solutions Inc. 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
xxxxx shares of the $0.01 par value common stock of the Company (the "Common
Stock") at a per share purchase price equal to $25.00 (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 Agreement Date.
(b)Exercise of Option.
(i)(1) 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 Common Stock covered by the Option set forth
opposite each such date, plus any shares of Common Stock as to which the Option
could have been exercised previously, but was not so exercised:
Agreement Date and applicable
anniversary of Agreement Date Percentage
Agreement Date 28%
One-year anniversary 24%
Two-year anniversary 24%
Three-year anniversary 24%
(ii)(2)Notwithstanding the foregoing provisions of Section
2(b)(i)(1) hereof, but otherwise subject to the other terms of this Agreement
and the Plan, 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
shall become fully exercisable with respect to the total shares of Common Stock
subject to the Option for which the Option was not previously exercised.
(iii) The Option shall terminate upon the termination, for any
reason, of the Optionee's directorship with the Company, and no shares of Common
Stock may thereafter be purchased under the Option, except, subject to
expiration of the Option pursuant to Section 2(a) hereof, as follows:
(1) Upon retirement of the Optionee as a director of the Company
after five (5) years of service, the Option shall, to the extent
exercisable in accordance with Section 2(b)(i) hereof on the date of
such retirement, remain exercisable, in whole or in part, for a period
of three (3) years following such retirement.
(2) Upon termination of service as a director of the Company by
reason of death, the Option shall, to the extent exercisable in
accordance with Section 2(b)(i) hereof as of the date of such death,
remain exercisable, in whole or in part, for a period of two (2) years
after the date of the Optionee's death, by his heir, the legal
representative of his estate or by the legatee of the Optionee under his
last will.
(3) Upon termination of service as a director of the Company by
reason of disability (as defined in the last sentence of this Section
2(b)(iii)(3)) the Option shall, to the extent exercisable in accordance
with Section 2(b)(i) hereof as of the date of such termination, remain
exercisable, in whole or in part, for a period of one (1) year after
such termination. For purposes of this Agreement, "disability" shall
mean an inability (as determined by the other members of the Board) to
perform duties and services as a director 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.
(4) If the Optionee dies after termination of service as a
director of the Company under paragraph (1) or (3) of this Section
2(b)(iii) above during the three or one year period specified,
respectively, in such paragraphs, the Option shall, to the extent
exercisable in accordance with such applicable paragraph (1) or (3) as
of the date of the Optionee's death, remain exercisable, in whole or in
part, for a period of two (2) years after the date of his death, by the
Optionee's heir, the legal representative of his estate or by the
legatee of the Optionee under his last will.
(iv) Any exercise of all or any part of the Option shall be
accompanied by a written notice to the Company specifying the number of shares
of Common 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 Common Stock with respect to which the Option is
exercised shall be issued in the name of the Optionee or other person entitled
to exercise the Option, 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 1 attached hereto.
(c) Consideration. At the time of any exercise of the Option, the
purchase price of the shares of Common 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, or
(ii) if permitted by applicable law, by tendering to the Company
Common Stock, duly endorsed for transfer to the Company, already owned
for at least six (6) months prior to the tender thereof by the person
exercising the Option, which may include shares received as the result
of a prior exercise of an Option, having a Fair Market Value on the date
of such exercise of the Option equal to the cash exercise price
applicable to such shares of Common Stock, or
(iii) by a combination of the consideration provided for in the
foregoing clauses (i) and (ii) above having a total Fair Market Value on
the date of such exercise of the Option equal to the purchase price of
such shares of Common Stock.
(d) Nontransferability. The Option shall not be transferable
other than by will or by the laws of descent and distribution and shall be
exercisable during the Optionee's lifetime only by him.
(e) Withholding Taxes. At the time of receipt of Common Stock
upon the exercise of all or any part of the Option, the Optionee shall be
required to pay to the Company in cash any taxes of any kind required by law to
be withheld with respect to such Common Stock. In no event shall Common Stock be
delivered to any person exercising the Option until such person 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 Common 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.
(f) No Rights as Shareholder. Neither the Optionee nor any other
person shall become the beneficial owner of the shares of Common 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.
(g) No Right to Continued Directorship. The Option shall not
confer upon the Optionee any right to be retained in the service of the Company
as a director or otherwise.
(h) 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 herein is inconsistent with the Plan, the Plan
shall govern.
(i) Compliance with Laws, Regulations, Stockholders Agreement,
Etc. The Option and the obligation of the Company to sell and deliver shares of
Common Stock hereunder shall be subject in all respects to (A) all applicable
Federal and state laws, rules and regulations, (B) 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 (C) the applicable terms of the
Stockholders Agreement in all respects. Moreover, the Option may not be
exercised if its exercise, or the receipt of shares of Common 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 Common 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 Common Stock,
the Optionee shall execute, prior to the issuance of any shares of Common 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 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.
4. Disposition of Common Stock. Any shares of Common Stock
received by the Optionee upon exercise of the 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.
5. Optionee Bound by Plan and 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 and
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 000 Xxxxx Xxxxx Xxxx Xxxx, Xxxxx 000, Xxxxxxxxxxxx, Xxxxxxxx
00000, Attention: Chief Financial Officer, and any notice hereunder to the
Optionee shall be addressed to him at Commonwealth Holdings, Inc., 000 Xxxxxxx
Xxxxxx, Xxxxx 000, Xxx Xxxx, Xxx Xxxx 00000, 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
said state.
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. This Agreement may not be modified or amended,
nor may any provision hereof be waived, in any way except in writing signed by
the parties hereto.
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 an appropriate officer and the Optionee has executed
this Agreement, both on the day and year first above written.
OUTSOURCING SOLUTIONS INC.
By
---------------------------------
Name:
Title:
_______________________________(L.S.)
Optionee
SCHEDULE 1
NOTATIONS AS TO PARTIAL EXERCISE
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Number of Balance of
Date of Purchased Shares on Authorized Notation
Exercise Shares Option Signature Date
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