As filed with the Securities and Exchange Commission on December 12, 1997
Registration No. 333-____________
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
THE A CONSULTING TEAM, INC.
--------------------------------------------------
(Exact name of issuer as specified in its charter)
New York 13-3169913
-------- ----------
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
200 Park Avenue South,
New York, New York 10003
(Address of principal executive offices)
THE A CONSULTING TEAM, INC.
1997 STOCK OPTION AND AWARD PLAN
(Full title of the plan)
Shmuel BenTov
Chief Executive Officer
The A Consulting Team, Inc.
200 Park Avenue South
New York, NY 10003
(212) 979-8228
(Name, address and telephone number of agent for service)
Copies to:
Lawrence B. Fisher, Esq.
Orrick, Herrington & Sutcliffe LLP
666 Fifth Avenue
New York, NY 10103
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===============================================================================================================
Title of Proposed Maximum Proposed Maximum Amount of
Securities Amount to be Offering Price Per Aggregate Registration
to be Registered Registered Share* Offering Price* Fee
- ---------------------- ---------------- -------------------- ------------------ ------------
<S> <C> <C> <C> <C>
Common Stock and 600,000 shares $10.625 $6,375,000 $1,931.80
Options to Purchase
Common Stock
===============================================================================================================
</TABLE>
* Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(h). The price per share is estimated to be $10.625,
based on the average of the high and low prices for the Common Stock on
December 11, 1997 as reported on the NASDAQ National Market.
===============================================================================
<PAGE>
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents are incorporated by reference in this
registration statement: (i) the latest prospectus (dated August 8, 1997) of The
A Consulting Team, Inc. (the "Company") filed pursuant to the Securities Act of
1933, as amended; (ii) all reports filed by the Company pursuant to Sections
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") since the date of such prospectus; and (iii) the description of the
Company's common stock set forth in the Company's Registration Statement on Form
8-A relating thereto, including any amendment or report filed for the purpose of
updating such description. All documents filed by the Company after the date of
this registration statement pursuant to Sections 13(a), 13(c), 14, and 15(d) of
the Exchange Act, prior to the filing of a post-effective amendment (that
indicates all securities offered have been sold or deregisters all securities
then remaining unsold), shall be deemed to be incorporated by reference in this
registration statement and to be a part hereof from the date of filing of such
documents.
ITEM 4. DESCRIPTION OF SECURITIES
Inapplicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Inapplicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
In accordance with Article Seventh of the Company's Certificate of
Incorporation and Article VI of the Company's By-Laws, the Company shall
indemnify any officer or director (including officers and directors serving
another corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise in any capacity at the Company's request) made, or threatened
to be made, a party to an action or proceeding (whether civil, criminal,
administrative or investigative) by reason of the fact that he or she was
serving in any of those capacities against judgements, fines, amounts paid in
settlement and reasonable expenses (including attorneys' fees) incurred as a
result of such action or proceeding. These provisions are intended to allow the
Company's directors and officers the benefit of all applicable sections of the
New York Business Corporation Law which permit a New York corporation to
indemnify its directors or officers against any judgement, fines and amounts
paid in settlement and reasonable expenses if such person acted in good faith,
for a purpose he or she reasonably believed to be in, or, in the case of service
for another entity, not opposed to, the best interests of the Company.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Inapplicable.
<PAGE>
ITEM 8. EXHIBITS
4.1 The A Consulting Team 1997 Stock Option and Award Plan.
4.2 Form of Non-Qualified Stock Option Agreement.
5.1 Opinion of Orrick, Herrington & Sutcliffe LLP.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Orrick, Herrington & Sutcliffe LLP is contained in
Exhibit 5.1 to this Registration Statement.
ITEM 9. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement:
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933 each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of the Plan's annual
report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
<PAGE>
(d) The undersigned registrant hereby undertakes to deliver or cause to
be delivered with the prospectus, to each person to whom the prospectus is sent
or given, the latest annual report, to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
<PAGE>
SIGNATURES
THE REGISTRANT
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York on the 12th of November
1997.
THE A CONSULTING TEAM, INC.
/s/ Shmuel BenTov
- -------------------------------------
Shmuel BenTov
Chief Executive Officer and President
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
Director, Chief Executive
/s/ Shmuel BenTov Officer and President
-------------------------------- (Principal Executive
Shmuel BenTov Officer) November 12, 1997
Director, Treasurer, Chief
/s/ Frank T. Thoelen Financial Officer (Principal
-------------------------------- Financial and Accounting Officer)
Frank T. Thoelen and Corporate Secretary November 12, 1997
/s/ Reuven Battat
--------------------------------
Reuven Battat Director November 12, 1997
/s/ Joseph E. Imholz
---------------------------------
Joseph E. Imholz Director November 12, 1997
/s/ Steven S. Mukamal
-------------------------------
Steven S. Mukamal Director November 12, 1997
</TABLE>
<PAGE>
EXHIBIT INDEX
4.1 The A Consulting Team, Inc. 1997 Stock Option and Award Plan.
4.2 Form of Nonqualified Stock Option Agreement.
5.1 Opinion of Orrick, Herrington & Sutcliffe.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Orrick, Herrington & Sutcliffe is contained in Exhibit 5.1
to this Registration Statement.
EXHIBIT 4.1
THE A CONSULTING TEAM, INC.
1997 STOCK OPTION AND AWARD PLAN
As Amended on November 12, 1997
<PAGE>
<TABLE>
<S> <C> <C> <C>
SECTION 1 BACKGROUND, PURPOSE AND DURATION.............................................................1
1.1 Background and Effective Date..................................................................1
1.2 Purpose of the Plan............................................................................1
SECTION 2 DEFINITIONS...................................................................................1
2.1 "1934 Act".....................................................................................1
2.2 "Affiliate"....................................................................................1
2.3 "Affiliated SAR"...............................................................................1
2.4 "Award"........................................................................................2
2.5 "Award Agreement"..............................................................................2
2.6 "Board"........................................................................................2
2.7 "Code".........................................................................................2
2.8 "Committee"....................................................................................2
2.9 "Company"......................................................................................2
2.10 "Consultant"...................................................................................2
2.11 "Director".....................................................................................2
2.12 "Disability"...................................................................................2
2.13 "Employee".....................................................................................2
2.14 "Exercise Price"...............................................................................2
2.15 "Fair Market Value"............................................................................2
2.16 "Freestanding SAR".............................................................................2
2.17 "Grant Date"...................................................................................3
2.18 "Incentive Stock Option".......................................................................3
2.19 "Nonemployee Director".........................................................................3
2.20 "Nonqualified Stock Option"....................................................................3
2.21 "Option".......................................................................................3
2.22 "Participant"..................................................................................3
2.23 "Performance Share"............................................................................3
2.24 "Performance Unit".............................................................................3
2.25 "Period of Restriction"........................................................................3
2.26 "Plan".........................................................................................3
2.27 "Restricted Stock".............................................................................3
2.28 "Rule 16b-3"...................................................................................3
2.29 "Section 16 Person"............................................................................3
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
2.30 "Shares".......................................................................................3
2.31 "Stock Appreciation Right".....................................................................3
2.32 "Subsidiary"...................................................................................3
2.32 "Tandem SAR"...................................................................................4
2.33 "Termination of Service".......................................................................4
SECTION 3 ADMINISTRATION...............................................................................4
3.1 The Committee..................................................................................4
3.2 Authority of the Committee.....................................................................4
3.3 Delegation by the Committee....................................................................4
3.4 Nonemployee Directors..........................................................................4
3.5 Decisions Binding..............................................................................5
SECTION 4 SHARES SUBJECT TO THE PLAN...................................................................5
4.1 Number of Shares...............................................................................5
4.2 Lapsed Awards..................................................................................5
4.3 Adjustments in Awards and Authorized Shares....................................................5
SECTION 5 STOCK OPTIONS................................................................................5
5.1 Grant of Options...............................................................................5
5.2 Award Agreement................................................................................5
5.3 Exercise Price.................................................................................5
5.3.1 Nonqualified Stock Options............................................................6
5.3.2 Incentive Stock Options...............................................................6
5.3.3 Substitute Options....................................................................6
5.4 Expiration of Options..........................................................................6
5.4.1 Expiration Dates......................................................................6
5.4.2 Death of Participant..................................................................6
5.4.3 Committee Discretion..................................................................6
5.5 Exercisability of Options......................................................................6
5.6 Payment........................................................................................7
5.7 Restrictions on Share Transferability..........................................................7
5.8 Certain Additional Provisions for Incentive Stock Options......................................7
5.8.1 Exercisability........................................................................7
5.8.2 Termination of Service................................................................7
5.8.3 Company and Subsidiaries Only.........................................................7
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
5.8.4 Expiration............................................................................7
5.9 Grant of Reload Options........................................................................8
SECTION 6 STOCK APPRECIATION RIGHTS.....................................................................8
6.1 Grant of SARs..................................................................................8
6.1.1 Exercise Price and Other Terms........................................................8
6.2 Exercise of Tandem SARs........................................................................8
6.3 Exercise of Freestanding SARs..................................................................8
6.4 SAR Agreement..................................................................................8
6.5 Expiration of SARs.............................................................................9
6.6 Payment of SAR Amount..........................................................................9
SECTION 7 RESTRICTED STOCK.............................................................................9
7.1 Grant of Restricted Stock......................................................................9
7.2 Restricted Stock Agreement.....................................................................9
7.3 Transferability................................................................................9
7.4 Other Restrictions.............................................................................9
7.5 Removal of Restrictions........................................................................9
7.6 Voting Rights.................................................................................10
7.7 Dividends and Other Distributions.............................................................10
7.8 Return of Restricted Stock to Company.........................................................10
SECTION 8 PERFORMANCE UNITS AND PERFORMANCE SHARES.....................................................10
8.1 Grant of Performance Units/Shares.............................................................10
8.2 Initial Value.................................................................................10
8.3 Performance Objectives and Other Terms........................................................10
8.4 Earning of Performance Units and Performance Shares...........................................10
8.5 Form and Timing of Payment....................................................................11
8.6 Cancellation..................................................................................11
SECTION 9 NONEMPLOYEE DIRECTORS.......................................................................11
9.1 Granting of Options...........................................................................11
9.1.1 New Nonemployee Directors............................................................11
9.1.2 Continuing Nonemployee Directors.....................................................11
9.2 Terms of Options..............................................................................11
9.2.1 Option Agreement.....................................................................11
9.2.2 Exercise Price.......................................................................11
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
9.2.3 Exercisability.......................................................................11
9.2.4 Expiration of Options................................................................11
9.2.5 Death of Director....................................................................12
9.2.6 Not Incentive Stock Options..........................................................12
9.2.7 Other Terms..........................................................................12
SECTION 10 MISCELLANEOUS...............................................................................12
10.1 No Effect on Employment or Service............................................................12
10.2 Participation.................................................................................12
10.3 Indemnification...............................................................................12
10.4 Successors....................................................................................13
10.5 Beneficiary Designations......................................................................13
10.6 Nontransferability of Awards..................................................................13
10.7 No Rights as Stockholder......................................................................13
10.8 Withholding Requirements......................................................................13
10.9 Withholding Arrangements......................................................................13
10.10 Deferrals.....................................................................................13
SECTION AMENDMENT, TERMINATION, AND DURATION 11........................................................14
11.1 Amendment, Suspension, or Termination.........................................................14
11.2 Duration of the Plan..........................................................................14
SECTION 12 LEGAL CONSTRUCTION..........................................................................14
12.1 Gender and Number.............................................................................14
12.2 Severability..................................................................................14
12.3 Requirements of Law...........................................................................14
12.4 Compliance with Rule 16b-3....................................................................14
12.5 Governing Law.................................................................................14
12.6 Captions......................................................................................14
</TABLE>
<PAGE>
THE A CONSULTING TEAM, INC.
1997 STOCK OPTION AND AWARD PLAN
As Amended on November 12, 1997
THE A CONSULTING TEAM, INC., hereby adopts The A Consulting Team, Inc. 1997
Stock Option and Award Plan, as follows:
SECTION 1
BACKGROUND, PURPOSE AND DURATION
1.1 Background and Effective Date. The Plan permits the grant of
Nonqualified Stock Options, Incentive Stock Options, SARs, Restricted Stock,
Performance Units, and Performance Shares. The Plan is effective as of June 11,
1997.
1.2 Purpose of the Plan. The Plan is intended to increase incentive and
to encourage Share ownership on the part of (1) employees of the Company and its
Affiliates, (2) consultants who provide significant services to the Company and
its Affiliates, and (3) directors of the Company who are employees of neither
the Company nor any Affiliate. The Plan also is intended to further the growth
and profitability of the Company.
SECTION 2
DEFINITIONS
The following words and phrases shall have the following meanings
unless a different meaning is plainly required by the context:
2.1 "1934 Act" means the Securities Exchange Act of 1934, as amended.
Reference to a specific section of the 1934 Act or regulation thereunder shall
include such section or regulation, any valid regulation promulgated under such
section, and any comparable provision of any future legislation or regulation
amending, supplementing or superseding such section or regulation.
2.2 "Affiliate" means any corporation or any other entity (including,
but not limited to, partnerships and joint ventures) controlling, controlled by,
or under common control with the Company.
2.3 "Affiliate SAR" means a SAR that is granted in connection with a
related Option, and which automatically will be deemed to be exercised at the
same time that the related Option is exercised. The deemed exercise of an
Affiliated SAR shall not necessitate a reduction in the number of Shares subject
to the related Option.
<PAGE>
2.4 "Award" means, individually or collectively, a grant under the Plan
of Nonqualified Stock Options, Incentive Stock Options, SARs, Restricted Stock,
Performance Units, or Performance Shares.
2.5 "Award Agreement" means the written agreement setting forth the
terms and provisions applicable to each Award granted under the Plan.
2.6 "Board" means the Board of Directors of the Company.
2.7 "Code" means the Internal Revenue Code of 1986, as amended.
Reference to a specific section of the Code or regulation thereunder shall
include such section or regulation, any valid regulation promulgated under such
section, and any comparable provision of any future legislation or regulation
amending, supplementing or superseding such section or regulation.
2.8 "Committee" means the committee appointed by the Board (pursuant to
Section 3.1) to administer the Plan.
2.9 "Company" means The A Consulting Team, a New York corporation, or
any successor thereto.
2.10 "Consultant" means any consultant, independent contractor, or
other person who provides significant services to the Company or its Affiliates,
but who is neither an Employee nor a Director.
2.11 "Director" means any individual who is a member of the Board.
2.12 "Disability" means a permanent and total disability within the
meaning of Code Section 22(e)(3), provided that in the case of Awards other than
Incentive Stock Options, the Committee in its discretion may determine whether a
permanent and total disability exists in accordance with uniform and
non-discriminatory standards adopted by the Committee from time to time.
2.13 "Employee" means any employee of the Company or of an Affiliate,
whether such employee is so employed at the time the Plan is adopted or becomes
so employed subsequent to the adoption of the Plan.
2.14 "Exercise Price" means the price at which a Share may be purchased
by a Participant pursuant to the exercise of an Option.
2.15 "Fair Market Value" means the last quoted per share selling price
for Shares on the relevant date, or if there were no sales on such date, the
arithmetic mean of the highest and lowest quoted selling prices on the nearest
day after the relevant date, as determined by the Committee. Notwithstanding the
preceding, with respect to Options granted on the date of the initial public
offering of Shares, fair market value means the price at which each Share is
sold in such offering, as determined by the Committee.
2.16 "Freestanding SAR" means a SAR that is granted independently of
any Option.
<PAGE>
2.17 "Grant Date" means, with respect to an Award, the date that the
Award was granted.
2.18 "Incentive Stock Option" means an Option to purchase Shares which
is designated as an Incentive Stock Option and is intended to meet the
requirements of Section 422 of the Code.
2.19 "Nonemployee Director" means a Director who is an employee of
neither the Company nor of any Affiliate.
2.20 "Nonqualified Stock Option" means an option to purchase Shares
which is not intended to be an Incentive Stock Option.
2.21 "Option" means an Incentive Stock Option or a Nonqualified Stock
Option.
2.22 "Participant" means an Employee, Consultant, or Nonemployee
Director who has an outstanding Award.
2.23 "Performance Share" means a Performance Share granted to a
Participant pursuant to Section 8.
2.24 "Performance Unit" means a Performance Unit granted to a
Participant pursuant to Section 8.
2.25 "Period of Restriction" means the period during which shares of
Restricted Stock are subject to forfeiture and/or restrictions on
transferability.
2.26 "Plan" means The A Consulting Team, Inc. 1997 Stock Option and
Award Plan, as set forth in this instrument and as hereafter amended from time
to time.
2.27 "Restricted Stock" means an Award granted to a Participant
pursuant to Section 7.
2.28 "Rule 16b-3" means Rule 16b-3 promulgated under the 1934 Act, as
amended, and any future regulation amending, supplementing or superseding such
regulation.
2.29 "Section 16 Person" means a person who, with respect to the
Shares, is subject to Section 16 of the 1934 Act.
2.30 "Shares" means the shares of the Company's common stock, $0.01 par
value.
2.31 "Stock Appreciation Right" or "SAR" means an Award, granted alone
or in connection with a related Option, that pursuant to Section 6 is designated
as a SAR.
2.32 "Subsidiary" means any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain.
<PAGE>
2.33 "Tandem SAR" means a SAR that is granted in connection with a
related Option, the exercise of which shall require forfeiture of the right to
purchase an equal number of Shares under the related Option (and when a Share is
purchased under the Option, the SAR shall be canceled to the same extent).
2.34 "Termination of Service" means (a) in the case of an Employee, a
cessation of the employee-employer relationship between an Employee and the
Company or an Affiliate for any reason, including, but not by way of limitation,
a termination by resignation, discharge, death, Disability, retirement, or the
disaffiliation of an Affiliate, but excluding any such termination where there
is a simultaneous reemployment by the Company or an Affiliate; (b) in the case
of a Consultant, a cessation of the service relationship between a Consultant
and the Company or an Affiliate for any reason, including, but not by way of
limitation, a termination by resignation, discharge, death, Disability, or the
disaffiliation of an Affiliate, but excluding any such termination where there
is a simultaneous re-engagement of the Consultant by the Company or an
Affiliate; and (c) in the case of a Nonemployee Director, a cessation of the
Nonemployee Director's service on the Board for any reason.
SECTION 3
ADMINISTRATION
3.1 The Committee. The Plan shall be administered by the Committee. The
members of the Committee shall be appointed from time to time by, and shall
serve at the pleasure of, the Board.
3.2 Authority of the Committee. It shall be the duty of the Committee
to administer the Plan in accordance with the Plan's provisions. The Committee
shall have all powers and discretion necessary or appropriate to administer the
Plan and to control its operation, including, but not limited to, the power to
(a) determine which Employees and Consultants shall be granted Awards, (b)
prescribe the terms and conditions of the Awards (other than the Options granted
to Nonemployee Directors pursuant to Section 9), (c) interpret the Plan and the
Awards, (d) adopt rules for the administration, interpretation and application
of the Plan as are consistent therewith, and (e) interpret, amend or revoke any
such rules.
3.3 Delegation by the Committee. The Committee, in its sole discretion
and on such terms and conditions as it may provide, may delegate all or any part
of its authority and powers under the Plan to one or more directors or officers
of the Company; provided, however, that unless otherwise determined by the
Board, the Committee may not delegate its authority and powers in any way which
would jeopardize the Plan's qualifications under Rule 16b-3.
3.4 Nonemployee Directors. Notwithstanding any contrary provision of
this Section 3, the Board shall administer Section 9 of the Plan, and the
Committee shall exercise no discretion with respect to Section 9. In the Board's
administration of Section 9 and the Options and any Shares granted to
Nonemployee Directors, the Board shall have all of the authority and discretion
otherwise granted to the Committee with respect to the administration of the
Plan.
<PAGE>
3.5 Decisions Binding. All determinations and decisions made by the
Committee, the Board, and any delegate of the Committee pursuant to the
provisions of the Plan shall be final, conclusive, and binding on all persons,
and shall be given the maximum deference permitted by law.
SECTION 4
SHARES SUBJECT TO THE PLAN
4.1 Number of Shares. Subject to adjustment as provided in Section 4.3,
the total number of Shares available for grant under the Plan shall not exceed
600,000. Shares granted under the Plan may be either authorized but unissued
Shares or treasury Shares.
4.2 Lapsed Awards. If an Award terminates, expires, or lapses for any
reason, any Shares subject to such Award again shall be available to be the
subject of an Award.
4.3 Adjustments in Awards and Authorized Shares. In the event of any
merger, reorganization, consolidation, recapitalization, separation,
liquidation, stock dividend, split-up, Share combination, or other change in the
corporate structure of the Company affecting the Shares, the Committee shall
adjust the number and class of Shares which may be delivered under the Plan, the
number, class, and price of Shares subject to outstanding Awards, and the
numerical limit of Section 5.1 in such manner as the Committee (in its sole
discretion) shall determine to be appropriate to prevent the dilution or
diminution of such Awards. In the case of Options granted to Nonemployee
Directors pursuant to Section 9, the foregoing adjustments shall be made by the
Board, and any such adjustments also shall apply to the future grants provided
by Section 9. Notwithstanding the preceding, the number of Shares subject to any
Award always shall be a whole number.
SECTION 5
STOCK OPTIONS
5.1 Grant of Options. Subject to the terms and provisions of the Plan,
Options may be granted to Employees and Consultants at any time and from time to
time as determined by the Committee in its sole discretion. The Committee, in
its sole discretion, shall determine the number of Shares subject to each
Option. The Committee may grant Incentive Stock Options, Nonqualified Stock
Options, or a combination thereof.
5.2 Award Agreement. Each Option shall be evidenced by an Award
Agreement that shall specify the Exercise Price, the expiration date of the
Option, the number of Shares to which the Option pertains, any conditions to
exercise of the Option, and such other terms and conditions as the Committee, in
its discretion, shall determine. The Award Agreement shall specify whether the
Option is intended to be an Incentive Stock Option or a Nonqualified Stock
Option.
5.3 Exercise Price. Subject to the provisions of this Section 5.3, the
Exercise Price for each Option shall be determined by the Committee in its sole
discretion.
<PAGE>
5.3.1 Nonqualified Stock Options. In the case of a Nonqualified
Stock Option, the Exercise Price shall be not less than one hundred percent
(100%) of the Fair Market Value of a Share on the Grant Date.
5.3.2 Incentive Stock Options. In the case of an Incentive Stock
Option, the Exercise Price shall be not less than one hundred percent (100%) of
the Fair Market Value of a Share on the Grant Date; provided, however, that if
on the Grant Date, the Employee (together with persons whose stock ownership is
attributed to the Employee pursuant to Section 424(d) of the Code) owns stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company or any of its Subsidiaries, the Exercise Price shall be not
less than one hundred and ten percent (110%) of the Fair Market Value of a Share
on the Grant Date.
5.3.3 Substitute Options. Notwithstanding the provisions of
Sections 5.3.1 and 5.3.2, in the event that the Company or an Affiliate
consummates a transaction described in Section 424(a) of the Code (e.g., the
acquisition of property or stock from an unrelated corporation), persons who
become Employees or Consultants on account of such transaction may be granted
Options in substitution for options granted by their former employer. If such
substitute Options are granted, the Committee, in its sole discretion and
consistent with Section 424(a) of the Code, shall determine the exercise price
of such substitute Options.
5.4 Expiration of Options.
5.4.1 Expiration Dates. Each Option shall terminate no later than
the first to occur of the following events:
(a) The date for termination of the Option set forth in the
written Award Agreement; or
(b) The expiration of ten (10) years from the Grant Date; or
(c) The expiration of three (3) months from the date of the
Participant's Termination of Service for a reason other than the Participant's
death or Disability; or
(d) The expiration of one (1) year from the date of the
Participant's Termination of Service by reason of Disability.
5.4.2 Death of Participant. Notwithstanding Section 5.4.1, if a
Participant dies prior to the expiration of his or her options, the Committee,
in its discretion, may provide that his or her options shall be exercisable for
up to one (1) year after the date of death.
5.4.3 Committee Discretion. Subject to the limits of Sections 5.4.1
and 5.4.2, the Committee, in its sole discretion, (a) shall provide in each
Award Agreement when each Option expires and becomes unexercisable, and (b) may,
after an Option is granted, extend the maximum term of the Option (subject to
Section 5.8.4 regarding Incentive Stock Options).
5.5 Exercisability of Options. Options granted under the Plan shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall determine in its sole discretion. After an Option is
granted, the Committee, in its sole discretion, may accelerate the
exercisability of the Option.
<PAGE>
5.6 Payment. Options shall be exercised by the Participant's delivery
of a written notice of exercise to the Secretary of the Company (or its
designee), setting forth the number of Shares with respect to which the Option
is to be exercised, accompanied by full payment for the Shares.
Upon the exercise of any Option, the Exercise Price shall be payable to
the Company in full in cash or its equivalent. The Committee, in its sole
discretion, also may permit exercise (a) by tendering previously acquired Shares
having an aggregate Fair Market Value at the time of exercise equal to the total
Exercise Price, or (b) by any other means which the Committee, in its sole
discretion, determines to both provide legal consideration for the Shares, and
to be consistent with the purposes of the Plan.
As soon as practicable after receipt of a written notification of
exercise and full payment for the Shares purchased, the Company shall deliver to
the Participant (or the Participant's designated broker), Share certificates
(which may be in book entry form) representing such Shares.
5.7 Restrictions on Share Transferability. The Committee may impose
such restrictions on any Shares acquired pursuant to the exercise of an Option
as it may deem advisable, including, but not limited to, restrictions related to
applicable Federal securities laws, the requirements of any national securities
exchange or system upon which Shares are then listed or traded, or any blue sky
or state securities laws.
5.8 Certain Additional Provisions for Incentive Stock Options.
5.8.1 Exercisability. The aggregate Fair Market Value (determined
on the Grant Date(s)) of the Shares with respect to which Incentive Stock
Options are exercisable for the first time by any Employee during any calendar
year (under all plans of the Company and its Subsidiaries) shall not exceed
$100,000.
5.8.2 Termination of Service. No Incentive Stock Option may be
exercised more than three (3) months after the Participant's Termination of
Service for any reason other than Disability or death, unless (a) the
Participant dies during such three-month period, and (b) the Award Agreement or
the Committee permits later exercise.
5.8.3 Company and Subsidiaries Only. Incentive Stock Options may be
granted only to persons who are employees of the Company or a Subsidiary on the
Grant Date.
5.8.4 Expiration. No Incentive Stock Option may be exercised after
the expiration of ten (10) years from the Grant Date; provided, however, that if
the Option is granted to an Employee who, together with persons whose stock
ownership is attributed to the Employee pursuant to Section 424(d) of the Code,
owns stock possessing more than 10% of the total combined voting power of all
classes of the stock of the Company or any of its Subsidiaries, the Option may
not be exercised after the expiration of five (5) years from the Grant Date.
<PAGE>
5.9 Grant of Reload Options. The Committee may provide in an Award
Agreement that a Participant who exercises all or part of an Option by payment
of the Exercise Price with already-owned Shares, shall be granted an additional
option (a "Reload Option") for a number of shares of stock equal to the number
of Shares tendered to exercise the previously granted Option plus, if the
Committee so determines, any Shares withheld or delivered in satisfaction of any
tax withholding requirements. As determined by the Committee, each Reload Option
shall: (a) have a Grant Date which is the date as of which the previously
granted Option is exercised, and (b) be exercisable on the same terms and
conditions as the previously granted Option, except that the Exercise Price
shall be determined as of the Grant Date.
SECTION 6
STOCK APPRECIATION RIGHTS
6.1 Grant of SARs. Subject to the terms and conditions of the Plan, a
SAR may be granted to Employees and Consultants at any time and from time to
time as shall be determined by the Committee, in its sole discretion. The
Committee may grant Affiliated SARs, Freestanding SARs, Tandem SARs, or any
combination thereof. The Committee shall have complete discretion to determine
the number of SARs granted to any Participant.
6.1.1 Exercise Price and Other Terms. The Committee, subject to the
provisions of the Plan, shall have complete discretion to determine the terms
and conditions of SARs granted under the Plan. However, the exercise price of a
Freestanding SAR shall be not less than one hundred percent (100%) of the Fair
Market Value of a Share on the Grant Date. The exercise price of Tandem or
Affiliated SARs shall equal the Exercise Price of the related Option.
6.2 Exercise of Tandem SARs. Tandem SARs may be exercised for all or
part of the Shares subject to the related Option upon the surrender of the right
to exercise the equivalent portion of the related Option. A Tandem SAR may be
exercised only with respect to the Shares for which its related Option is then
exercisable. With respect to a Tandem SAR granted in connection with an
Incentive Stock Option: (a) the Tandem SAR shall expire no later than the
expiration of the underlying Incentive Stock Option; (b) the value of the pay
out with respect to the Tandem SAR shall be for no more than one hundred percent
(100%) of the difference between the Exercise Price of the underlying Incentive
Stock Option and the Fair Market Value of the Shares subject to the underlying
Incentive Stock Option at the time the Tandem SAR is exercised; and (c) the
Tandem SAR shall be exercisable only when the Fair Market Value of the Shares
subject to the Incentive Stock Option exceeds the Exercise Price of the
Incentive Stock Option.
6.3 Exercise of Freestanding SARs. Freestanding SARs shall be
exercisable on such terms and conditions as the Committee, in its sole
discretion, shall determine.
6.4 SAR Agreement. Each SAR grant shall be evidenced by an Award
Agreement that shall specify the exercise price, the term of the SAR, the
conditions of exercise, and such other terms and conditions as the Committee, in
its sole discretion, shall determine.
<PAGE>
6.5 Expiration of SARs. A SAR granted under the Plan shall expire upon
the date determined by the Committee, in its sole discretion, and set forth in
the Award Agreement. Notwithstanding the foregoing, the rules of Section 5.4
also shall apply to SARs.
6.6 Payment of SAR Amount. Upon exercise of a SAR, a Participant shall
be entitled to receive payment from the Company in an amount determined by
multiplying:
(a) The difference between the Fair Market Value of a Share
on the date of exercise over the exercise price; times
(b) The number of Shares with respect to which the SAR is
exercised. At the discretion of the Committee, payment for a SAR may be in cash,
Shares or a combination thereof.
SECTION 7
RESTRICTED STOCK
7.1 Grant of Restricted Stock. Subject to the terms and provisions of
the Plan, the Committee, at any time and from time to time, may grant Shares of
Restricted Stock to Employees and Consultants in such amounts as the Committee,
in its sole discretion, shall determine. The Committee, in its sole discretion,
shall determine the number of Shares to be granted to each Participant.
7.2 Restricted Stock Agreement. Each Award of Restricted Stock shall be
evidenced by an Award Agreement that shall specify the Period of Restriction,
the number of Shares granted, any price to be paid for the Shares, and such
other terms and conditions as the Committee, in its sole discretion, shall
determine. Unless the Committee determines otherwise, Shares of Restricted Stock
shall be held by the Company as escrow agent until the restrictions on such
Shares have lapsed.
7.3 Transferability. Shares of Restricted Stock may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated until the
end of the applicable Period of Restriction. In no event may the restrictions on
Restricted Stock granted to a Section 16 Person lapse prior to six (6) months
following the Grant Date.
7.4 Other Restrictions. The Committee, in its sole discretion, may
impose such other restrictions on Shares of Restricted Stock as it may deem
advisable or appropriate, in accordance with this Section 7.4. For example, the
Committee may set restrictions based upon the achievement of specific
performance objectives (Company-wide, divisional, or individual), applicable
Federal or state securities laws, or any other basis determined by the Committee
in its discretion. The Committee, in its discretion, may legend the certificates
representing Restricted Stock to give appropriate notice of the restrictions
applicable to such Shares.
7.5 Removal of Restrictions. Shares of Restricted Stock covered by each
Restricted Stock grant made under the Plan shall be released from escrow as soon
as practicable after the last day of the Period of Restriction. The Committee,
in its discretion, may accelerate the time at which any restrictions shall
lapse, and remove any restrictions. After the restrictions have lapsed, the
Participant shall be entitled to have any legend or legends under Section 7.4
removed from his or her Share certificate, and the Shares shall be freely
transferable by the Participant.
<PAGE>
7.6 Voting Rights. During the Period of Restriction, Participants
holding Shares of Restricted Stock granted hereunder may exercise full voting
rights with respect to those Shares, unless otherwise provided in the Award
Agreement.
7.7 Dividends and Other Distributions. During the Period of
Restriction, Participants holding Shares of Restricted Stock shall be entitled
to receive all dividends and other distributions paid with respect to such
Shares unless otherwise provided in the Award Agreement. If any such dividends
or distributions are paid in Shares, the Shares shall be subject to the same
restrictions on transferability and forfeitability as the Shares of Restricted
Stock with respect to which they were paid.
7.8 Return of Restricted Stock to Company. On the date set forth in the
Award Agreement, the Restricted Stock for which restrictions have not lapsed
shall revert to the Company and again shall become available for grant under the
Plan.
SECTION 8
PERFORMANCE UNITS AND PERFORMANCE SHARES
8.1 Grant of Performance Units/Shares. Performance Units and
Performance Shares may be granted to Employees and Consultants at any time and
from time to time, as shall be determined by the Committee, in its sole
discretion. The Committee shall have complete discretion in determining the
number of Performance Units and Performance Shares granted to any Participant.
8.2 Initial Value. Each Performance Unit shall have an initial value
that is established by the Committee on or before the Grant Date. Each
Performance Share shall have an initial value equal to the Fair Market Value of
a Share on the Grant Date.
8.3 Performance Objectives and Other Terms. The Committee shall set
performance objectives in its discretion which, depending on the extent to which
they are met, will determine the number or value of Performance Units or Shares
that will be paid out to the Participants. The Committee may set performance
objectives based upon the achievement of Company-wide, divisional, or individual
goals, or any other basis determined by the Committee in its discretion. The
time period during which the performance objectives must be met shall be called
the "Performance Period". Each Award of Performance Units/Shares shall be
evidenced by an Award Agreement that shall specify the Performance Period, and
such other terms and conditions as the Committee, in its sole discretion, shall
determine.
8.4 Earning of Performance Units and Performance Shares. After the
applicable Performance Period has ended, the Participant shall be entitled to
receive a pay out of the number of Performance Units or Shares earned during the
Performance Period, depending upon the extent to which the applicable
performance objectives have been achieved. After the grant of a Performance Unit
or Share, the Committee, in its sole discretion, may reduce or waive any
performance objectives for Award; provided that Performance Periods of Awards
granted to Section 16 Persons shall not be less than six (6) months (or such
shorter period as may be permissible while maintaining compliance with Rule
16b-3).
<PAGE>
8.5 Form and Timing of Payment. Payment of earned Performance Units or
Performance Shares shall be made as soon as practicable after the expiration of
the applicable Performance Period. The Committee, in its sole discretion, may
pay earned such Awards in cash, Shares or a combination thereof.
8.6 Cancellation. On the date set forth in the Award Agreement, all
unearned or unvested Performance Units or Performance Shares shall be forfeited
to the Company, and again shall be available for grant under the Plan.
SECTION 9
NONEMPLOYEE DIRECTORS
9.1 Granting of Options.
9.1.1 New Nonemployee Directors. Each Nonemployee Director who
first becomes a Nonemployee Director on or after the effective date of the Plan
automatically shall be granted, as of the date that the individual first is
appointed or elected as a Nonemployee Director, an Option to purchase 1,000
Shares.
9.1.2 Continuing Nonemployee Directors. Each Nonemployee Director
who is re-elected to serve as a Nonemployee Director automatically shall be
granted, as of the date that the individual is re-elected as a Nonemployee
Director, an Option to purchase 1,000 Shares.
9.2 Terms of Options.
9.2.1 Option Agreement. Each Option granted pursuant to this
Section 9 shall be evidenced by a written stock option agreement which shall be
executed by the Participant and the Company.
9.2.2 Exercise Price. The Exercise Price for the Shares subject to
each Option granted pursuant to this Section 9 shall be 100% of the Fair Market
Value of such Shares on the Grant Date.
9.2.3 Exercisability. Each Option granted pursuant to this Section
9 shall become exercisable in full on the first anniversary of the Grant Date.
Notwithstanding the preceding, once an Optionee ceases to be a Director, his or
her Options which are not exercisable shall not become exercisable.
9.2.4 Expiration of Options. Each Option shall terminate upon the
first to occur of the following events:
(a) The expiration of five (5) years from the Grant Date; or
<PAGE>
(b) The expiration of three (3) months from the date of the
Participant's Termination of Service for a reason other the Participant's death
or Disability; or
(c) The expiration of one (1) year from the date of the
Participant's Termination of Service by reason of Disability.
9.2.5 Death of Director. Notwithstanding Section 9.2.4, if a
Director dies prior to the expiration of his or her options in accordance with
Section 9.2.4, his or her options shall terminate one (1) year after the date of
death.
9.2.6 Not Incentive Stock Options. Options granted pursuant to this
Section 9 shall not be designated as Incentive Stock Options.
9.2.7 Other Terms. All provisions of the Plan not inconsistent with
this Section 9 shall apply to Options granted to Nonemployee Directors;
provided, however, that Section 5.2 (relating to the Committee's discretion to
set the terms and conditions of Options) shall be inapplicable with respect to
Nonemployee Directors.
SECTION 10
MISCELLANEOUS
10.1 No Effect on Employment or Service. Nothing in the Plan shall
interfere with or limit in any way the right of the Company to terminate any
Participant's employment or service at any time, with or without cause. For
purposes of the Plan, transfer of employment of a Participant between the
Company and any one of its Affiliates (or between Affiliates) shall not be
deemed a Termination of Service. Employment with the Company and its Affiliates
is on an at-will basis only.
10.2 Participation. No Employee or Consultant shall have the right
to be selected to receive an Award under this Plan, or, having been so selected,
to be selected to receive a future Award.
10.3 Indemnification. Each person who is or shall have been a
member of the Committee, or of the Board, shall be indemnified and held harmless
by the Company against and from (a) any loss, cost, liability, or expense that
may be imposed upon or reasonably incurred by him or her in connection with or
resulting from any claim, action, suit, or proceeding to which he or she may be
a party or in which he or she may be involved by reason of any action taken or
failure to act under the Plan or any Award Agreement, and (b) from any and all
amounts paid by him or her in settlement thereof, with the Company's approval,
or paid by him or her in satisfaction of any judgment in any such claim, action,
suit, or proceeding against him or her, provided he or she shall give the
Company an opportunity, at its own expense, to handle and defend the same before
he or she undertakes to handle and defend it on his or her own behalf. The
foregoing right of indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the Company's
Certificate of Incorporation or Bylaws, by contract, as a matter of law, or
otherwise, or under any power that the Company may have to indemnify them or
hold them harmless.
<PAGE>
10.4 Successors. All obligations of the Company under the Plan,
with respect to Awards granted hereunder, shall be binding on any successor to
the Company, whether the existence of such successor is the result of a direct
or indirect purchase, merger, consolidation, or otherwise, of all or
substantially all of the business or assets of the Company.
10.5 Beneficiary Designations. If permitted by the Committee, a
Participant under the Plan may name a beneficiary or beneficiaries to whom any
vested but unpaid Award shall be paid in the event of the Participant's death.
Each such designation shall revoke all prior designations by the Participant and
shall be effective only if given in a form and manner acceptable to the
Committee. In the absence of any such designation, any vested benefits remaining
unpaid at the Participant's death shall be paid to the Participant's estate and,
subject to the terms of the Plan and of the applicable Award Agreement, any
unexercised vested Award may be exercised by the administrator or executor of
the Participant's estate.
10.6 Nontransferability of Awards. No Award granted under the Plan
may be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will, by the laws of descent and distribution, or to
the limited extent provided in Section 10.5. All rights with respect to an Award
granted to a Participant shall be available during his or her lifetime only to
the Participant.
10.7 No Rights as Stockholder. Except to the limited extent
provided in Sections 7.6 and 7.7, no Participant (nor any beneficiary) shall
have any of the rights or privileges of a stockholder of the Company with
respect to any Shares issuable pursuant to an Award (or exercise thereof),
unless and until certificates representing such Shares shall have been issued,
recorded on the records of the Company or its transfer agents or registrars, and
delivered to the Participant (or beneficiary).
10.8 Withholding Requirements. Prior to the delivery of any Shares
or cash pursuant to an Award (or exercise thereof), the Company shall have the
power and the right to deduct or withhold, or require a Participant to remit to
the Company, an amount sufficient to satisfy Federal, state, and local taxes
(including the Participant's FICA obligation) required to be withheld with
respect to such Award (or exercise thereof).
10.9 Withholding Arrangements. The Committee, in its sole
discretion and pursuant to such procedures as it may specify from time to time,
may permit or require a Participant to satisfy all or part of the tax
withholding obligations in connection with an Award by (a) having the Company
withhold otherwise deliverable Shares, or (b) delivering to the Company
already-owned Shares having a Fair Market Value equal to the amount required to
be withheld. The amount of the withholding requirement shall be deemed to
include any amount which the Committee determines, not to exceed the amount
determined by using the maximum federal, state or local marginal income tax
rates applicable to the Participant with respect to the Award on the date that
the amount of tax to be withheld is to be determined. The Fair Market Value of
the Shares to be withheld or delivered shall be determined as of the date that
the taxes are required to be withheld.
10.10 Deferrals. The Committee, in its sole discretion, may permit
a Participant to defer receipt of the payment of cash or the delivery of Shares
that would otherwise be delivered to a Participant under the Plan. Any such
deferral elections shall be subject to such rules and procedures as shall be
determined by the Committee in its sole discretion.
<PAGE>
SECTION 11
AMENDMENT, TERMINATION, AND DURATION
11.1 Amendment, Suspension, or Termination. The Board, in its sole
discretion, may amend or terminate the Plan, or any part thereof, at any time
and for any reason. The amendment, suspension, or termination of the Plan shall
not, without the consent of the Participant, alter or impair any rights or
obligations under any Award theretofore granted to such Participant. No Award
may be granted during any period of suspension or after termination of the Plan.
11.2 Duration of the Plan. The Plan shall commence on the date
specified herein, and subject to Section 11.1 (regarding the Board's right to
amend or terminate the Plan), shall remain in effect thereafter. However,
without further stockholder approval, no Incentive Stock Option may be granted
under the Plan after June 11, 2007.
SECTION 12
LEGAL CONSTRUCTION
12.1 Gender and Number. Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine; the
plural shall include the singular and the singular shall include the plural.
12.2 Severability. In the event any provision of the Plan shall be
held illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.
12.3 Requirements of Law. The granting of Awards and the issuance
of Shares under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.
12.4 Compliance with Rule 16b-3. Transactions under this Plan with
respect to Section 16 Persons are intended to comply with all applicable
conditions of Rule 16b-3. To the extent any provision of the Plan, Award
Agreement or action by the Committee fails to so comply, it shall be deemed null
and void, to the extent permitted by law and deemed advisable by the Committee.
Notwithstanding any contrary provision of the Plan, if the Committee
specifically determines that compliance with Rule 16b-3 no longer is required,
all references in the Plan to Rule 16b-3 shall be null and void.
12.5 Governing Law. The Plan and all Award Agreements shall be
construed in accordance with and governed by the laws of the State of New York.
12.6 Captions. Captions are provided herein for convenience only,
and shall not serve as a basis for interpretation or construction of the Plan.
<PAGE>
EXECUTION
IN WITNESS WHEREOF, The A Consulting Team, Inc., by its duly authorized
officer, has executed the Plan on the date indicated below.
THE A CONSULTING TEAM, INC.
Dated as of: June 11, 1997 By: /s/ Shmuel BenTov
-----------------------
Chief Executive Officer
---------------------------
Title
EXHIBIT 4.2
THE A CONSULTING TEAM, INC.
1997 STOCK OPTION AND AWARD PLAN
FORM OF NONQUALIFIED STOCK OPTION AGREEMENT
1. Grant of Option. The A Consulting Team, Inc. (the "Company")hereby
grants to (the "Participant") under The A Consulting Team, Inc. 1997 Stock
Option and Award Plan (the "Plan"), as a separate incentive in connection with
his or her employment or service with the Company or a Subsidiary and not in
lieu of any fees or other compensation for his or her services, a nonqualified
stock option to purchase, on the terms and conditions set forth in this
Agreement and the Plan, all or any part of an aggregate of _________ shares of
authorized but unissued or treasury shares of the Company's common stock, $ 0.01
par value ("Shares"), at the purchase price set forth in Paragraph 2 of this
Agreement. The option granted hereby is not intended to be an incentive stock
option (within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended).
2. Option Price. The purchase price per Share for this option (the
"Option Price") shall be $_______, which is one hundred percent (100%) of the
Fair Market Value per Share on _________________, the effective date of this
Agreement (the "Grant Date").
3. Number of Shares. The number and class of Shares specified in
Paragraph 1 of this Agreement, and/or the Option Price, are subject to
appropriate adjustment by the Committee in the event of any merger,
reorganization, consolidation, recapitalization, separation, liquidation, stock
dividend, split-up, Share combination or other change in the corporate structure
of the Company affecting the Shares; provided, however, that the number of
Shares subject to this option shall always be a whole number. Subject to any
required action of the stockholders of the Company, if the Company is the
surviving corporation in any merger or consolidation, this option (to the extent
that it is still outstanding) shall pertain to and apply to the securities to
which a holder of the same number of Shares that are then subject to the option
would have been entitled.
4. Vesting Schedule. The right to exercise this option shall accrue as
to one hundred percent (100%) of the Shares subject thereto on the first
anniversary date of the Grant Date, provided that the right to exercise this
option shall occur only if the Participant has not incurred a Termination of
Service between the Grant Date and such anniversary date.
5. Expiration of Option. In the event of the Participant's Termination
of Service for any reason other than death or Disability, the Participant may,
within three (3) months after the date of the Termination, or within ten (10)
years from the Grant Date, whichever shall first occur, exercise any vested but
unexercised portion of this option. In the event of the Participant's
Termination of Service due to Disability, the Participant may, within one (1)
year after the date of the Termination, or within ten (10) years from the Grant
Date, whichever shall first occur, exercise any vested but unexercised portion
of this option.
<PAGE>
6. Death of the Participant. In the event that the Participant dies
while intake employ or service of the Company or a Subsidiary, or during the
three (3)month or one (1) year periods referred to in Paragraph 5 of this
Agreement, the Participant's designated beneficiary or beneficiaries, or if no
beneficiary survives the Participant, the administrator or executor of the
Participant's estate, may, within one (1) year after the date of the
Participant's death, exercise any vested but unexercised portion of this option.
Any such transferee must furnish the Company (a) written notice of his or her
status as a transferee, (b) evidence satisfactory to the Company to establish
the validity of the transfer of this option and compliance with any laws or
regulations pertaining to such transfer, and (c) written acceptance of the terms
and conditions of this option as set forth in this Agreement.
7. Persons Eligible to Exercise. This option shall be exercisable
during the Participant's lifetime only by the Participant. This option is not
transferable, except that the Participant may transfer this option (a) by a
valid beneficiary designation made in a form and manner acceptable to the
Committee, or (b) by will or the applicable laws of descent and distribution.
8. Exercise of Option. This option may be exercised by the person then
entitled to do so as to any Shares which may then be purchased (a) by giving
written notice of exercise to the Secretary of the Company (or his or her
designee), specifying the number of full Shares to be purchased and accompanied
by full payment of the Option Price thereof (and the amount of any income tax
the Company is required by law to withhold by reason of such exercise), and (b)
by giving satisfactory assurances in writing if requested by the Company, signed
by the person exercising the option, that the Shares to be purchased upon such
exercise are being purchased for investment and not with a view to the
distribution thereof. The Option Price shall be payable in the legal tender of
the United States or, in the discretion of the Committee, in Shares or in a
combination of such legal tender or Shares.
9. Suspension of Exercisability. If at any time the Committee shall
determine, in its discretion, that (a) the listing, registration or
qualification of the Shares upon any securities exchange or under any domestic
or foreign law, or (b)the consent or approval of any governmental regulatory
authority, is necessary or desirable as a condition of the purchase of Shares
hereunder, this option may not be exercised, in whole or in part, unless and
until such listing, registration, qualification, consent or approval shall have
been effected or obtained free of any conditions not acceptable to the
Committee. The Company shall make reasonable efforts to meet the requirements of
any such domestic or foreign law or securities exchange and to obtain any such
consent or approval of any such governmental authority.
10. No Rights of Stockholder. Neither the Participant nor any person
claiming under or through the Participant shall be or have any of the rights or
privileges of a stockholder of the Company in respect of any of the Shares
issuable pursuant to the exercise of this option, unless and until certificates
representing such Shares shall have been issued, recorded on the records of the
Company or its transfer agents or registrars, and delivered to the
Participant(or such other person).
11. No Effect on Employment or Service. Nothing in this Agreement or
the Plan shall interfere with or limit in any way the right of the Company or
any Subsidiary to terminate the Participant's employment or service at any time,
with or without cause.
<PAGE>
12. Withholding. Whenever Shares are to be issued to the Participant
(or any transferee) in satisfaction of the rights conferred hereby, the Company
shall have the right to require the Participant (or transferee) to remit to the
Company an amount sufficient to satisfy applicable federal, state and local
withholding tax requirements prior to the delivery of any certificate or
certificates for such Shares.
13. Addresses for Notices. Any notice to be given to the Company under
the terms of this Agreement shall be addressed to the Company, in care of its
Secretary, at 200 Park Avenue South, New York, New York, 10003, or at such other
address as the Company may hereafter designate in writing. Any notice to be
given to the Participant shall be addressed to the Participant at the address
set forth beneath the Participant's signature hereto, or at such other address
as the Participant may hereafter designate in writing.
14. Option is Not Transferable. Except as otherwise provided herein,
this option and the rights and privileges conferred hereby shall not be
transferred, assigned, pledged or hypothecated in any way (whether by operation
of law or otherwise) and shall not be subject to sale under execution,
attachment or similar process. Upon any attempt to transfer, assign, pledge,
hypothecate or otherwise dispose of this option, or of any right or privilege
conferred hereby, or upon any attempted sale under any execution, attachment or
similar process, this option and the rights and privileges conferred hereby
immediately shall become null and void.
15. Maximum Term of Option. Notwithstanding any contrary provision of
this Agreement, except Paragraph 6 above relating to the death of the
Participant (in which case this option is exercisable to the extent set forth
therein), this option is not exercisable after the expiration of ten (10) years
from the Grant Date.
16. Binding Agreement. Subject to the limitation on the transferability
of this option contained herein, this Agreement shall be binding upon and inure
to the benefit of the heirs, legatees, legal representatives, successors
undersigns of the parties hereto.
17. Plan Governs. This Agreement is subject to all of the terms and
provisions the Plan. In the event of a conflict between one or more provisions
of this Agreement and one or more provisions of the Plan, the provisions of the
Plan shall govern. Capitalized terms and phrases used and not defined in this
Agreement shall have the meaning set forth in the Plan.
18. Committee Authority. The Committee shall have the power to
interpret the Plan and this Agreement and to adopt such rules for the
administration, interpretation and application of the Plan as are consistent
therewith. All actions taken and all interpretations and determinations made by
the Committee in such connection shall be final and binding upon the
Participant, the Company and all other interested persons, and shall be given
the maximum deference permitted by law. No member of the Committee shall be
personally liable for any action, determination or interpretation made in good
faith with respect to the Plan or this Agreement.
19. Captions. The captions provided herein are for convenience only and
are not to serve as a basis for interpretation or construction of this
Agreement.
<PAGE>
20. Agreement Severable. In the event that any provision in this
Agreement shall be held invalid or unenforceable, such provision shall be
severable from, and such invalidity or unenforceability shall not be construed
to have any effect on, the remaining provisions of this Agreement.
21. Modifications to the Agreement. This Agreement constitutes the
entire understanding of the parties on the subjects covered. The Participant
expressly warrants that he or she is not executing this Agreement in reliance on
any promises, representations, or inducements other than those contained herein.
Modifications to this Agreement or the Plan can be made only in an express
written contract executed by a duly authorized officer of the Company.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, in
duplicate, effective as of the Grant Date.
THE A CONSULTING TEAM, INC.
By ----------------------
Title:
---------------------------
Participant Signature
---------------------------
---------------------------
Address
---------------------------
Social Security Number
EXHIBIT 5.1
OPINION OF ORRICK, HERRINGTON & SUTCLIFFE LLP
<PAGE>
December 8, 1997
The A Consulting Team, Inc.
200 Park Avenue South
New York, NY 10003
Re: The A Consulting Team, Inc.
Registration Statement on Form S-8
----------------------------------
Ladies and Gentlemen:
At your request, we are rendering this opinion in connection
with the proposed issuance pursuant to The A Consulting Team, Inc. 1997 Stock
Option and Award Plan (the "Plan"), of up to 600,000 shares of common stock,
$.01 par value ("Common Stock"), of The A Consulting Team, Inc., a New York
corporation (the "Company").
We have examined instruments, documents, and records which we
deemed relevant and necessary for the basis of our opinion hereinafter
expressed. In such examination, we have assumed the following: (a) the
authenticity of original documents and the genuineness of all signatures; (b)
the conformity to the originals of all documents submitted to us as copies; and
(c) the truth, accuracy, and completeness of the information, representations,
and warranties contained in the records, documents, instruments, and
certificates we have reviewed.
Based on such examination, we are of the opinion that the
600,000 shares of Common Stock to be issued by the Company pursuant to the Plan
are validly authorized shares of Common Stock, and, when issued in accordance
with the provisions of the Plan, will be legally issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as an exhibit
to this Registration Statement on Form S-8 and to the use of our name wherever
it appears in said Registration Statement. In giving such consent, we do not
consider that we are "experts" within the meaning of such term as used in the
Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission issued thereunder with respect to any part of
the Registration Statement, including this opinion, as an exhibit or otherwise.
Very truly yours,
/s/ ORRICK, HERRINGTON & SUTCLIFFE LLP
ORRICK, HERRINGTON & SUTCLIFFE LLP
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP
<PAGE>
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8) pertaining to The A Consulting Team, Inc. 1997 Stock Option and Award Plan
of our report dated January 31, 1997, except for Note 1, as to which the date is
August 4, 1997, with respect to the financial statements of The A Consulting
Team, Inc. included in the Prospectus (dated August 8, 1997) of The A Consulting
Team, Inc. for the registration of 1,800,000 shares of its common stock, filed
with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
New York, New York
December 11, 1997
