Exhibit 10.2
CHANGE IN CONTROL
EMPLOYMENT AGREEMENT
AGREEMENT, dated
as of the [ ]
day of
[ ]
(this “Agreement”), by and between Transaction Systems
Architects, Inc., a Delaware corporation (the
“Company”), and
[ ]
(the “Executive”).
WHEREAS, the Board
of Directors of the Company (the “Board”), has
determined that it is in the best interests of the Company and its
stockholders to assure that the Company will have the continued
dedication of the Executive, notwithstanding the possibility,
threat or occurrence of a Change in Control (as defined
herein). The Board believes it is imperative to diminish the
inevitable distraction of the Executive by virtue of the personal
uncertainties and risks created by a pending or threatened Change
in Control and to encourage the Executive’s full attention
and dedication to the Company in the event of any threatened or
pending Change in Control, and to provide the Executive with
compensation and benefits arrangements upon a Change in Control
that ensure that the compensation and benefits expectations of the
Executive will be satisfied and that provide the Executive with
compensation and benefits arrangements that are competitive with
those of other corporations. Therefore, in order to
accomplish these objectives, the Board has caused the Company to
enter into this Agreement.
NOW, THEREFORE, IT
IS HEREBY AGREED AS FOLLOWS:
Section 1.
Certain Definitions . (a) “Effective
Date” means the first date during the Change in Control
Period (as defined herein) on which a Change in Control
occurs. Notwithstanding anything in this Agreement to the
contrary, if a Change in Control occurs and if the
Executive’s employment with the Company is terminated within
six months prior to the date on which the Change in Control occurs,
and if it is reasonably demonstrated by the Executive that such
termination of employment (1) was at the request of a third party
that has taken steps reasonably calculated to effect a Change in
Control or (2) otherwise arose in connection with or anticipation
of a Change in Control, then “Effective Date” means the
date immediately prior to the date of such termination of
employment.
(b)
“Change in Control Period” means the period commencing
on the date hereof and ending on the second anniversary of the date
hereof; provided , however , that, commencing on the
date one year after the date hereof, and on each annual anniversary
of such date (such date and each annual anniversary thereof, the
“Renewal Date”), unless previously terminated, the
Change in Control Period shall be automatically extended so as to
terminate two years from such Renewal Date, unless, at least 60
days prior to the Renewal Date, the Company shall give notice to
the Executive that the Change in Control Period shall not be so
extended.
(c)
“Affiliated Company” means any company controlled by,
controlling or under common control with the Company.
(d)
“Change in Control” means:
(1)
Any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)) (a “Person”)
becomes the beneficial owner (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 20% or more of either (A)
the then-outstanding shares of common stock of the
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Company (the “Outstanding Company Common
Stock”) or (B) the combined voting power of the
then-outstanding voting securities of the Company entitled to vote
generally in the election of directors (the “Outstanding
Company Voting Securities”); provided , however
, that, for purposes of this Section 1(d), the following
acquisitions shall not constitute a Change in Control: (i)
any acquisition directly from the Company, (ii) any acquisition by
the Company, (iii) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any
Affiliated Company or (iv) any acquisition by any corporation
pursuant to a transaction that complies with Sections 1(d)(3)(A),
1(d)(3)(B) and 1(d)(3)(C);
(2)
Any time at which individuals who, as of the date hereof,
constitute the Board (the “Incumbent Board”) cease for
any reason to constitute at least a majority of the Board;
provided , however , that any individual becoming a
director subsequent to the date hereof whose election, or
nomination for election by the Company’s stockholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or
other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board;
(3)
Consummation of a reorganization, merger, statutory share exchange
or consolidation or similar transaction involving the Company or
any of its subsidiaries, a sale or other disposition of all or
substantially all of the assets of the Company, or the acquisition
of assets or stock of another entity by the Company or any of its
subsidiaries (each, a “Business Combination”), in each
case unless, following such Business Combination, (A) all or
substantially all of the individuals and entities that were the
beneficial owners of the Outstanding Company Common Stock and the
Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more
than 50% of the then-outstanding shares of common stock (or, for a
non-corporate entity, equivalent securities) and the combined
voting power of the then-outstanding voting securities entitled to
vote generally in the election of directors (or, for a
non-corporate entity, equivalent governing body), as the case may
be, of the entity resulting from such Business Combination
(including, without limitation, an entity that, as a result of such
transaction, owns the Company or all or substantially all of the
Company’s assets either directly or through one or more
subsidiaries) in substantially the same proportions as their
ownership immediately prior to such Business Combination of the
Outstanding Company Common Stock and the Outstanding Company Voting
Securities, as the case may be, (B) no Person (excluding any
corporation resulting from such Business Combination or any
employee benefit plan (or related trust) of the Company or such
corporation resulting from such Business Combination) beneficially
owns, directly or indirectly, 20% or more of, respectively, the
then-outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting
power of the then-outstanding voting securities of such
corporation, except to the extent that such ownership existed prior
to the Business Combination, and (C) at least a majority of the
members of the board of directors (or, for a non-corporate entity,
equivalent governing body) of the entity resulting from such
Business Combination were members of the Incumbent Board at the
time of the execution of the initial agreement or of the action of
the Board providing for such Business Combination; or
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(4)
Approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
Section 2.
Employment Period . The Company hereby agrees to
continue the Executive in its employ, subject to the terms and
conditions of this Agreement, for the period commencing on the
Effective Date and ending on the second anniversary of the
Effective Date (the “Employment Period”). The
Employment Period shall terminate upon the Executive’s
termination of employment for any reason.
Section 3.
Terms of Employment . (a) Position and Duties . (1)
During the Employment Period, (A) the Executive’s position
(including status, offices, titles and reporting requirements),
authority, duties and responsibilities shall be at least
commensurate in all material respects with the most significant of
those held, exercised and assigned at any time during the 120-day
period immediately preceding the Effective Date and (B) the
Executive’s services shall be performed at the office where
the Executive was employed immediately preceding the Effective Date
or at any other location less than 50 miles from such office.
(2)
During the Employment Period, and excluding any periods of vacation
and sick leave to which the Executive is entitled, the Executive
agrees to devote reasonable attention and time during normal
business hours to the business and affairs of the Company and, to
the extent necessary to discharge the responsibilities assigned to
the Executive hereunder, to use the Executive’s reasonable
best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period, it shall not
be a violation of this Agreement for the Executive to (A) serve on
corporate, civic or charitable boards or committees, (B) deliver
lectures, fulfill speaking engagements or teach at educational
institutions and (C) manage personal investments, so long as such
activities do not significantly interfere with the performance of
the Executive’s responsibilities as an employee of the
Company in accordance with this Agreement. It is expressly
understood and agreed that, to the extent that any such activities
have been conducted by the Executive prior to the Effective Date,
the continued conduct of such activities (or the conduct of
activities similar in nature and scope thereto) subsequent to the
Effective Date shall not thereafter be deemed to interfere with the
performance of the Executive’s responsibilities to the
Company.
(b)
Compensation .
(1) Base Salary
. During the Employment Period, the Executive shall
receive an annual base salary (the “Annual Base
Salary”) at an annual rate at least equal to the highest
annual rate of base salary paid or payable, including any base
salary that has been earned but deferred, to the Executive by the
Company and the Affiliated Companies in respect of the 12-month
period immediately preceding the month in which the Effective Date
occurs. The Annual Base Salary shall be paid at such
intervals as the Company pays executive salaries generally.
During the Employment Period, the Annual Base Salary shall be
reviewed at least annually, beginning no more than 12 months after
the last salary increase awarded to the Executive prior to the
Effective Date. Any increase in the Annual Base Salary shall
not serve to limit or reduce any other obligation to the Executive
under this Agreement. The Annual Base Salary shall not be
reduced after any such increase and the term “Annual Base
Salary” shall refer to the Annual Base Salary as so
increased.
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(2)
Annual Bonus . In
addition to the Annual Base Salary, the Executive shall be awarded,
for each fiscal year ending during the Employment Period, total
annual and quarterly bonus opportunities in cash at least equal to
the aggregate of the Executive’s target annual and quarterly
bonus opportunities for the year in which the Effective Date occurs
(the “Target Annual Bonus”) (if the Executive has not
been eligible to earn such a bonus for any period prior to the
Effective Date or no such Target Annual Bonus has been established
for the fiscal year or quarters (as applicable) in which the
Effective Date occurs, the “Target Annual Bonus” shall
mean the Executive’s most recent target annual and quarterly
bonus opportunities as in effect for the year prior to the year in
which the Effective Date occurs); provided, however, that (i) the
performance measures applicable to such target bonus opportunities
shall be comparable in terms of difficulty of achievement to the
measures in effect with respect to the Target Annual Bonus prior to
the Effective Date and (ii) in the determination of such bonuses,
the Executive shall be treated as favorably as similarly situated
executives of any acquiror of the Company. Each such annual
bonus shall be paid no later than two and a half months after the
end of the fiscal year for which the annual bonus is awarded,
unless the Executive shall elect to defer the receipt of such
annual bonus pursuant to an arrangement that meets the requirements
of Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”).
(3)
Incentive, Savings and Retirement
Plans . During the Employment Period, the Executive
shall be entitled to participate in all cash incentive, equity
incentive, savings and retirement plans, practices, policies, and
programs applicable generally to other peer executives of the
Company and the Affiliated Companies, but in no event shall such
plans, practices, policies and programs provide the Executive with
incentive opportunities (measured with respect to both regular and
special incentive opportunities, to the extent, if any, that such
distinction is applicable), savings opportunities and retirement
benefit opportunities, in each case, less favorable, in the
aggregate, than the most favorable of those provided by the Company
and the Affiliated Companies for the Executive under such plans,
practices, policies and programs as in effect at any time during
the 120-day period immediately preceding the Effective Date or, if
more favorable to the Executive, those provided generally at any
time after the Effective Date to other peer executives of the
Company and the Affiliated Companies.
(4)
Welfare Benefit Plans
. During the Employment Period, the Executive and/or the
Executive’s family, as the case may be, shall be eligible for
participation in and shall receive all benefits under welfare
benefit plans, practices, policies and programs provided by the
Company and the Affiliated Companies (including, without
limitation, medical, prescription, dental, disability, employee
life, group life, accidental death and travel accident insurance
plans and programs) to the extent applicable generally to other
peer executives of the Company and the Affiliated Companies, but in
no event shall such plans, practices, policies and programs provide
the Executive with benefits that are less favorable, in the
aggregate, than the most favorable of such plans, practices,
policies and programs in effect for the Executive at any time
during the 120-day period immediately preceding the Effective Date
or, if more favorable to the Executive, those provided generally at
any time after the Effective Date to other peer executives of the
Company and the Affiliated Companies.
(5)
Expenses . During the
Employment Period, the Executive shall be entitled to receive
prompt reimbursement for all reasonable expenses incurred by the
Executive in accor-
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dance with the most favorable policies,
practices and procedures of the Company and the Affiliated
Companies in effect for the Executive at any time during the
120-day period immediately preceding the Effective Date or, if more
favorable to the Executive, as in effect generally at any time
thereafter with respect to other peer executives of the Company and
the Affiliated Companies.
(6)
Office and Support Staff
. During the Employment Period, the Executive shall be
entitled to an office or offices of a size and with furnishings and
other appointments, and to exclusive personal secretarial and other
assistance, at least equal to the most favorable of the foregoing
provided to the Executive by the Company and the Affiliated
Companies at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the
Executive, as provided generally at any time thereafter with
respect to other peer executives of the Company and the Affiliated
Companies.
(7)
Vacation . During the
Employment Period, the Executive shall be entitled to paid vacation
in accordance with the most favorable plans, policies, programs and
practices of the Company and the Affiliated Companies as in effect
for the Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the
Executive, as in effect generally at any time thereafter with
respect to other peer executives of the Company and the Affiliated
Companies.
Section 4.
Termination of Employment . (a)
Death or Disability .
The Executive’s employment shall terminate
automatically if the Executive dies during the Employment
Period. If the Company determines in good faith that the
Disability (as defined herein) of the Executive has occurred during
the Employment Period (pursuant to the definition of
“Disability”), it may give to the Executive written
notice in accordance with Section 11(b) of its intention to
terminate the Executive’s employment. In such event,
the Executive’s employment with the Company shall terminate
effective on the 30th day after receipt of such notice by the
Executive (the “Disability Effective Date”),
provided that, within the 30 days after such receipt, the
Executive shall not have returned to full-time performance of the
Executive’s duties. “Disability” means the
absence of the Executive from the Executive’s duties with the
Company on a full-time basis for 180 consecutive business days as a
result of incapacity due to mental or physical illness that is
determined to be total and permanent by a physician selected by the
Company or its insurers and acceptable to the Executive or the
Executive’s legal representative.
(b)
Cause . The Company
may terminate the Executive’s employment during the
Employment Period with or without Cause. “Cause”
means:
(1)
the Executive’s conviction of, or entry of a plea of guilty
or no contest to, a felony or any lesser crime of which fraud or
dishonesty is an element,
(2)
the Executive’s willful misconduct or willful omission of
duties (other than any such misconduct or omission resulting from
the Executive’s incapacity due to physical or mental illness
or following the Executive’s delivery of a Notice of
Termination for Good Reason) that is or could reasonably be
expected to be injurious to the Company other than in an immaterial
manner, or
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(3)
the Executive’s violation of any provision of (A) the
Company’s Code of Business Conduct and Ethics, as the same
may be amended from time to time, or (B) the Company’s Code
of Ethics for the Chief Executive Officer and Senior Financial
Officers, as the same may be amended from time to time (the
“Code of Ethics”) that is, in each case, materially and
demonstrably injurious to the Company. For purposes of the
foregoing sentence, the Executive shall be deemed to be subject to
the provisions of the Code of Ethics regardless of whether the
Executive is a Senior Officer as defined in the Code of Ethics or
otherwise subject to the Code of Ethics.
For purposes of this
Section 4(b), no act, or failure to act, on the part of the
Executive shall be considered “willful” unless it is
done, or omitted to be done, by the Executive in bad faith or
without reasonable belief that the Executive’s action or
omission was in the best interests of the Company. Any act,
or failure to act, based upon authority (A) given pursuant to a
resolution duly adopted by the Board, or if the Company is not the
ultimate parent corporation of the Affiliated Companies and is not
publicly-traded, the board of directors of the ultimate parent of
the Company (the “Applicable Board”), (B) upon the
instructions of the Chief Executive Officer of the Company ,
or (C) based upon the advice of counsel for the Company shall be
conclusively presumed to be done, or omitted to be done, by the
Executive in good faith and in the best interests of the
Company. The cessation of employment of the Executive shall
not be deemed to be for Cause unless and until there shall have
been delivered to the Executive a copy of a resolution duly adopted
by the affirmative vote of not less than three-quarters of the
entire membership of the Applicable Board (excluding the Executive,
if the Executive is a member of the Applicable Board) at a meeting
of the Applicable Board called and held for such purpose (after
reasonable notice is provided to the Executive and the Executive is
given an opportunity, together with counsel for the Executive, to
be heard before the Applicable Board), finding that, in the good
faith opinion of the board, the Executive is guilty of the conduct
described in Section 4(b)(1), 4(b)(2) or 4(b)(3), and specifying
the particulars thereof in detail.
(c)
Good Reason . The
Executive’s employment may be terminated by the Executive for
Good Reason or by the Executive voluntarily without Good
Reason. “Good Reason” means:
(1)
the assignment to the Executive of any duties inconsistent in any
respect with the Executive’s position (including status,
offices, titles and reporting requirements), authority, duties or
responsibilities as contemplated by Section 3(a), or any other
diminution in such position, authority, duties or responsibilities,
excluding for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith and that is remedied by
the Company promptly after receipt of notice thereof given by the
Executive;
(2)
any failure by the Company to comply with any of the provisions of
Section 3(b), other than an isolated, insubstantial and inadvertent
failure not occurring in bad faith and that is remedied by the
Company promptly after receipt of notice thereof given by the
Executive;
(3)
the Company’s requiring the Executive (i) to be based at any
office or location other than as provided in Section 3(a)(1)(B),
(ii) to be based at a location other than the principal executive
offices of the Company if the Executive was employed at
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such location immediately preceding the
Effective Date, or (iii) to travel on Company business to a
substantially greater extent than required immediately prior to the
Effective Date;
(4)
any purported termination by the Company of the Executive’s
employment otherwise than as expressly permitted by this Agreement;
or
(5)
any failure by the Company to comply with and satisfy Section
10(c).
The
Executive’s mental or physical incapacity following the
occurrence of an event described above in clauses (1) through (5)
shall not affect the Executive’s ability to terminate
employment for Good Reason. A termination by the Executive
with Good Reason shall be effective only if, within 180 days of the
Executive’s first becoming aware of the circumstances giving
rise to Good Reason, the Executive delivers a Notice of Termination
for Good Reason by Executive to the Company, and, to the extent
such circumstances are curable, the Company within 30 days
following its receipt of such notification has failed to cure the
circumstances giving rise to Good Reason.
(d)
Notice of Termination
. Any termination by the Company for Cause, or by the
Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with
Section 11(b). “Notice of Termination” means a
written notice that (1) indicates the specific termination
provision in this Agreement relied upon, (2) to the extent
applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Executive’s employment under the provision so indicated, and
(3) if the Date of Termination (as defined herein) is other than
the date of receipt of such notice, specifies the Date of
Termination (which Date of Termination shall be not more than 30
days after the giving of such notice). The failure by the
Executive or the Company to set forth in the Notice of Termination
any fact or circumstance that contributes to a showing of Good
Reason or Cause shall not waive any right of the Executive or the
Company, respectively, hereunder or preclude the Executive or the
Company, respectively, from asserting such fact or circumstance in
enforcing the Executive’s or the Company’s respective
rights hereunder.
(e)
Date of Termination .
“Date of Termination” means (1) if the
Executive’s employment is terminated by the Company for
Cause, or by the Executive for Good Reason, the date of receipt of
the Notice of Termination or any later date specified in the Notice
of Termination, (which date shall not be more than 30 days after
the giving of such notice), as the case may be, (2) if the
Executive’s employment is terminated by the Company other
than for Cause or Disability, the date on which the Company
notifies the Executive of such termination, (3)
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