Exhibit 10.38
FTI C ONSULTING , I NC .
2004 L ONG
-T ERM I NCENTIVE P LAN
I NCENTIVE S TOCK O PTION A GREEMENT
To John MacColl (“
Optionee ”):
FTI Consulting, Inc. (the “
Company ”) has granted (the “
Award ”) you an option (the “
Option ”) under the FTI Consulting, Inc. 2004
Long-Term Incentive Plan, as amended from time to time (the “
Plan ”), to purchase 50,000 shares of the
common stock, $0.01 par value (“ Common Stock
”) of the Company (the “ Shares ”),
at $28.09 (Twenty-Eight Dollars and .09 Cents) per share
(the “ Exercise Price ”). The effective
Date of Grant will be January 9, 2006, subject
to your signing and promptly returning a copy of this Agreement (as
defined below) to the Company.
This agreement (the “
Agreement ”) evidences the grant of the Option.
The Award is subject in all respects to and incorporates by
reference the terms and conditions of the Plan and any terms and
conditions relating to the Option or this Award contained in the
written offer letter dated as of January 9, 2006 (the “
Employment Agreement ”), between you and the
Company, and specifies other applicable terms and conditions of
your Option. A copy of the Plan and the Prospectus for the Plan, as
amended from time to time (the “ Prospectus
”), is attached. By executing this Agreement, you acknowledge
that you have received a copy of the Plan and the Prospectus for
the Plan, as amended from time to time (the “
Prospectus ”). You may request additional
copies of the Plan or Prospectus by contacting the Secretary of the
Company at FTI Consulting, Inc., 500 East Pratt Street, Suite 1400,
Baltimore, Maryland 21202 (Phone: (410) 951-4800). You also
may request from the Secretary of the Company copies of the other
documents that make up a part of the Prospectus (described more
fully at the end of the Prospectus), as well as all reports, proxy
statements and other communications distributed to the
Company’s security holders generally. This Agreement and the
Award of the Option for the Shares are made in consideration of
your employment with the Company and in fulfillment of applicable
terms of your Employment Agreement.
All terms not defined by this
Agreement have the meanings given in the Plan. The Option is
intended to be an “incentive stock option” within the
meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the “ Code ”), to the fullest
extent permitted by that Section. The Company, however, does not
warrant any particular tax consequences of the Option. Any portion
of the Option that exceeds the statutory limit under Code
Section 422 will be treated as a nonstatutory stock
option.
In addition to the terms,
conditions, and restrictions set forth in the Plan, the following
terms, conditions, and restrictions apply to the Option:
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(1)
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You may not
exercise the Option before January 9, 2006 , except as
otherwise provided below.
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a.
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Thereafter,
except as provided otherwise in this Agreement, you may exercise
the Option to purchase Shares as follows:
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i.
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Up to One-Half
(1/2) of the Shares on or after January 9,
2006;
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ii.
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Up to One-Third
(1/3) of the Shares on or after January 9,
2007;
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iii.
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Up to
Two-Thirds (2/3) of the Shares on or after January 9,
2008; and
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iv.
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All of the
Shares on or after January 9, 2009, for a total of 50,000
shares.
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b.
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The Option will
expire at 5:00 p.m. Eastern Time on January 9,
2016.
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c.
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The Committee
may, in its sole discretion, accelerate the time at which you may
exercise part or all of the Option.
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d.
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The Option will
become exercisable in full immediately before the occurrence of a
Change in Control, as defined in the Plan.
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e.
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The Option will
become exercisable in full upon your death.
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f.
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If you
terminate employment due to your Total and Permanent Disability (as
hereafter defined), your Option will continue to become exercisable
as provided above for an additional twelve (12) months
following your termination. For purposes of this Agreement, “
Total and Permanent Disability ” has the
meaning ascribed to such term or words of similar import in your
Employment Agreement, if applicable, and, in the absence of an
effective Employment Agreement, means the inability to engage in
any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to
result in your death or which has lasted or can be expected to last
for a continuous period of not less than twelve months. The
Committee may require such proof of Total and Permanent Disability
as the Committee in its sole discretion deems appropriate and the
Committee’s good faith determination as to whether and when
you are totally and permanently disabled will be final and binding
on all parties concerned.
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g.
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You may
exercise the Option only in multiples of whole Shares and may not
exercise the Option as to fewer than one hundred shares (unless the
Option is then exercisable for fewer than one hundred Shares) at
any one time. At the time of exercise, the Company will round down
any fractional shares but will not make any cash or other payments
in settlement of fractional shares eliminated by
rounding.
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(2)
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Subject to this
Agreement and the Plan, you may exercise the Option only by notice
to the Company, in such form and manner as the Committee may
require, on or before the Option’s expiration date or earlier
forfeiture. Each such notice must:
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a.
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state the
election to exercise the Option and the number of Shares with
respect to which it is being exercised;
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b.
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contain such
representations as the Company may require; and
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2
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c.
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be accompanied
by full payment of the Exercise Price payable for the Shares or
properly executed, irrevocable instructions, in such manner and
form as the Committee may require, to effectuate a broker-assisted
cashless exercise through a brokerage firm acceptable to the
Committee. The Exercise Price may be paid to the Company via cash,
check, money order or wire transfer, and subject to such limits as
the Committee may impose from time to time, tender (via actual
delivery or attestation) of other shares of the Company’s
Common Stock previously owned by you.
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For all purposes of the Plan, the
date of exercise will be the date on which you have delivered the
notice and any required payment (or, in the case of a
broker-assisted cashless exercise, irrevocable broker instructions
acceptable to the Committee) to the Company.
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(3)
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You agree to
give prompt notice to the Company if you dispose of any Shares
acquired upon exercise of the Option within one (1) year after
you acquire them or within two (2) years after the Date of
Grant.
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(4)
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You will
forfeit any unexercised portions of the Option upon either your
resignation or the term
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