Conversion Agreement between The Princeton Review, Inc. and Peter Taylor

Summary

This agreement is between The Princeton Review, Inc. and Peter Taylor regarding the conversion of Peter Taylor's phantom stock units (PSUs) and stock appreciation rights (SARs). Under the agreement, Peter Taylor will receive a cash payment for his PSUs, with the option to purchase shares of Series B Common Stock in a new parent company, and will also receive shares (or cash equivalent) of Student Advantage, Inc. stock. In exchange, Peter Taylor waives all rights to his existing and future PSUs and SARs. The agreement is subject to certain tax withholdings and participation in related stockholder agreements.

EX-10.33 40 ex10-33.txt CONVERSION AGREEMENT 1 Exhibit 10.33 CONVERSION AGREEMENT THE PRINCETON REVIEW, INC. This Conversion Agreement is between Peter Taylor ("you") and The Princeton Review, Inc. ("TPR" or "we"), and is subject to the terms of any Employment Agreement between us. It concerns your rights to phantom stock units ("PSUs") held pursuant to The Princeton Review Companies Phantom Stock Plan (the "PSU Plan") and stock appreciation rights ("SARs") pursuant to The Princeton Review Companies Stock Appreciation Rights Plan (the "SAR Plan"). Cash or TPR Stock for PSUs You own some vested and/or unvested PSUs. TPR is buying back these PSUs for $52,072.92 this payment is subject to regular withholding taxes (which are about 40%). Under our conversion plan, we are granting you the right to buy up to 8,332 shares, at a price of $6.25 each, of Series B Common Stock of The Princeton Review, Inc. ('New TPR'), a company that will be formed as the parent of TPR, subject to the Stockholders Agreement dated as of April 1, 2000. Please check one of the three boxes below: [ ] You Want Cash! We will distribute cash for your PSUs as soon as administratively practicable after April 7, 2000. (Note: If you do not sign this Conversion Agreement by April 7, 2000, we will cash out of all of your vested PSUs in this way.) [ ] You Want As Much Stock as You Can Get Without Putting in Cash. If you choose this option, we will issue you stock at $6.25 per share. The value of this stock will equal $52,072.92 minus taxes withheld from it. [X] You Want 7900 Shares of Stock (subject to the share limit above): We will either pay you (or bill you) the difference between the after-tax amount we are paying you and the cost of the shares you want, as soon as administratively practicable after April 7, 2000. Student Advantage Stock. In addition to the payment above, we will distribute 196 shares of stock of Student Advantage, Inc. to you, as soon as administratively practicable following March 31, 2000. This stock is currently trading around $11.00; sale is restricted through April 7, 2001. You may elect to pay the withholding on this stock, or have us withhold some shares and pay the tax. Since you are schedule to receive fewer than 200 shares of Student Advantage stock, we are simply going to pay you roughly $1,962.00 instead (depending on today's closing price). 2 Waiver of PSU and SAR Rights: You hereby irrevocably waive and relinquish (a) all rights you may have as of the date hereof to any outstanding vested or unvested PSUs you held; (b) all rights you would have had to receive additional PSUs after the date hereof pursuant to the PSU Plan; and (c) all rights you may have as of the date hereof to any SARs. Homework: By signing below, you acknowledge that you obtained the following documents through TPR's email system, and agree to the terms of, and join, the Stockholders Agreement: 1. Risk Factors Applicable to an Investment in The Princeton Review; 2. The Princeton Review, Inc. 2000 Stock Incentive Plan; 3. A summary of the material terms of The Princeton Review, Inc. 2000 Stock Incentive Plan; 4. A summary of the material terms of the Princeton Review, Inc. Conversion Agreement; 5. A sample of the Stock Option Grant letter for issuances of stock options under The Princeton Review, Inc. 2000 Stock Incentive Plan; 6. A balance sheet of The Princeton Review, Inc. dated as of December 31, 1999; 7. Statements of income, cash flows and stockholders' equity of The Princeton Review, Inc. for each of 1999 and 1998 Agreed to this 4/18/00 /s/ John Katzman /s/ Peter Taylor - ---------------- ---------------- Chief Executive Officer Peter Taylor