Exhibit 10.1
FOURTH AMENDED AND RESTATED EMPLOYMENT
AGREEMENT
This Fourth Amended
and Restated Employment Agreement (" Agreement ") is made as
of August 5, 2005, by and between Transaction Systems Architects,
Inc., a Delaware corporation, (" Employer ") and Gregory D.
Derkacht (" Employee ").
PRELIMINARY STATEMENTS
A. Employer and
Employee have entered into that certain employment agreement dated
as of December 3, 2001 pertaining to the terms of the employment of
Employee by Employer, which agreement was amended and restated as
of April 28, 2003, December 15, 2003 and September 28, 2004 (as
amended and restated, the “ Third Amended and Restated
Employment Agreement ”).
B. Employer and
Employee desire to amend and restate the Third Amended and Restated
Employment Agreement as provided herein.
AGREEMENT
The parties to this Agreement, intending to be
legally bound, agree as follows:
1.
Employment . Subject to the terms and
conditions of this Agreement, Employer hereby agrees to employ
Employee, and Employee hereby accepts and agrees to such
employment, upon the terms and conditions set forth herein and with
such duties attendant to Employee’s position as a senior
executive officer of Employer and such other duties as shall be
determined by the Board of Directors of Employer (the “
Board ”).
2.
Term . The term of this Agreement,
and Employee’s employment hereunder, shall commence on August
5, 2005 and, unless earlier terminated, continue through February
28, 2006 (the “ Term ”).
3.
Duties . Employee shall, during the
Term:
(a) Execute
Duties . Execute the duties attendant to his position as
executive vice president, or such other position as the Board shall
designate, and such additional duties as shall be determined and
directed by the Board or the Company’s Chief Executive
Officer (“CEO”) from time to time.
(b) Board
Service . Unless otherwise requested by the Board, serve as a
member of the Board, subject to nomination by the Board and
election by Employer’s stockholders.
(c) Full Efforts
and Time . Consistent with the foregoing, Employee shall devote
full business time, energy, and skill to the businesses of
Employer, and to the promotion of Employer's best interests;
provided , however , that this Agreement shall not
preclude Employee from participating in the affairs of any
governmental, educational or other charitable institution, from
engaging in professional speaking and writing activities, and from
serving as a member of the board of directors of other corporations
or entities (subject to the approval by the Chairman of the Board)
so long as such activities do not unreasonably interfere with the
businesses of Employer or conflict with Employee's obligations
under this Agreement.
(a) Base .
Employer shall pay Employee for all services to be performed by
Employee during the Term a base salary (the " Base Salary ")
at the rate of $360,000 per year, payable in substantially equal
semi-monthly payments in accordance with Employer's customary
practice for other employees, as such practice may be determined
from time to time. The Board may increase such Base Salary in its
reasonable business judgment. The Board may decrease such Base
Salary (i) as a result of a pro-rata across-the-board salary
reduction for all executive level management employees of Employer,
or (ii) to a rate of $180,000 per year if the Board or CEO directs
Employee to provide transition services on less than a full-time
basis.
(b) Management
Incentive Compensation. Employee’s participation in
Employer’s annual Management Incentive Compensation
(“MIC”) Program ceased effective as of March 31,
2005.
(c) Transition
Services Bonus . If, in the Board’s and the CEO’s
reasonable judgment, Employee performs the duties contemplated
under this Agreement, Employer will pay Employee a bonus as
provided herein (a “ Transition Bonus ”) and,
except as provided in Section 4(a) and 5(b), Employee shall not be
entitled to any other compensation under this Agreement. The amount
of any Transition Bonus will be determined by the CEO and the Board
in their reasonable business judgment and shall not exceed the
following:
i. $125,000 in
consideration of transition services provided during
Employer’s third fiscal 2005 quarter;
ii. $250,000 in
consideration of transition services provided during
Employer’s fourth fiscal 2005 quarter; and
iii. $125,000 in
consideration of transition services provided during
Employer’s first fiscal 2006 quarter.
Payments under this Section 4(c) shall be made
in accordance with Employer’s payroll practices in effect
from time to time and shall be made on or about the date Employer
customarily pays MIC compensation for the applicable fiscal
quarter.
(d) Business
Expenses . In addition to the Base Salary set forth above,
Employer agrees that during the Term Employee shall be entitled to
reimbursement by Employer for all reasonable and documented
business expenses incurred by him on Employer's behalf in the
course of his employment hereunder in accordance with Employer's
policy concerning the same.
(e) Board
Service . No separate or additional compensation will be paid
to Employee with respect to service on the Board.
(f) Stock
Options . Employee has received three stock option grants from
the Employer's existing stock option plans. The first grant was in
the amount of 100,000 shares and was made on January 2, 2002. The
second and third grants were in the amount of 200,000 shares each
and were made February 19, 2002. The terms and conditions for each
of the grants are set forth in separate stock option agreements.
The stock option agreements for each of the grants are attached
hereto as Exhibits B, C and D, respectively.
(a) Participation
in Benefit Plans . During the Term, Employee and his dependents
shall be entitled to participate in and receive health insurance
and other benefits (" Benefit Plans ") under Employer's
Benefit Plans, whether qualified plans or non-qualified plans,
subject to and on a basis consistent with the terms, conditions,
including eligibility requirements, and overall administration of
such Benefit Plans as provided to similarly situated employees of
Employer, as changed from time to time. Employee shall be entitled
to a minimum of four weeks of paid vacation and holidays in
accordance with Employer's policies in effect from time to time for
its employees.
(b) Continuation
of Certain Benefits . If Employee performs the duties
contemplated under this Agreement through February 28, 2006,
Employee will be entitled to continued participation in
Employer’s group health plan until the earlier of
(A) the date he becomes eligible to receive coverage and
benefits under the health plan of a subsequent employer, or (B)
February 28, 2011; provided (1) if Employee is precluded from
continuing his participation in Employer’s group health plan
as provided herein, he shall be paid, in a lump sum cash payment,
within 30 days following the date it is determined he is unable to
participate in the group health plan, an amount equal to the
after-tax economic equivalent of the benefits (net of
Employee’s contribution) provided under the plan;
(2) the economic equivalent of any benefit foregone shall be
deemed to be an amount equal to (i) the lowest cost that would be
incurred by Employee in obtaining such benefit for himself
(including family or dependent coverage, if applicable) on an
individual basis, minus (ii) the amount Employee would reasonably
have been expected to contribute under Employer’s group
health plan; and (3) in no event shall the lump sum cash payment
contemplated by this Section 5(b) exceed $30,000. Employee shall be
eligible for group health plan continuation coverage under, and in
accordance with, the Consolidated Omnibus Budget Reconciliation Act
of 1965, as amended, when he ceases to be eligible for continued
participation in Employer’s group health plan.
(a) Types of
Termination .
(i) For Cause
by Employer . Any termination of Employee's employment by
Employer for Cause (as defined in Exhibit A attached hereto) shall
be authorized by a vote of at least a majority of the non-employee
members of the Board within 12 months of a majority of such
non-employee members of the Board having actual knowledge of the
event or circumstances providing a basis for such termination. In
the case of clause (4) of the definition of Cause, Employee
shall be given notice by the Board specifying in detail the
particular act or failure to act on which the Board is relying in
proposing to terminate him for Cause and offering Employee an
opportunity, on a date at least 14 days after receipt of such
notice, to have a hearing, with counsel, before a majority of the
non-employee members of the Board, including each
of the members of the Board who authorized the termination for
Cause. Employee shall not be terminated for Cause if, within 30
days after the date of Employee's hearing before the Board (or if
Employee waives a hearing, within 30 days after receiving notice of
the proposed termination), he has corrected the particular act or
failure to act specified in the notice and by so correcting such
act or failure to act he has reduced the economic damage his act or
failure to act has allegedly caused Employer to a level which is no
longer material or has eliminated the probability that such act or
failure to act is likely to result in material economic damage to
Employer. No termination for Cause shall take effect until the
expiration of the correction period described in the preceding
sentence and the determination by a majority of the non-employee
members of the Board that Employee has failed to correct the act or
failure to act in accordance with the terms of the preceding
sentence.
Anything herein to
the contrary notwithstanding, if, following a termination of
Employee's employment by Employer for Cause based upon the
conviction of Employee for a felony involving moral turpitude such
conviction is finally overturned on appeal, Employee shall be
entitled to the compensation provided in Sections 4(a) and 4(c) of
the Severance Compensation Agreement; provided, however ,
that any such compensation shall be reduced dollar for dollar by
the amount of any Transition Bonus paid under this Agreement. In
lieu of the interest provided in clause (iv) of the first
sentence of Section 4(a) of the Severance Compensation Agreement
and the interest provided in the second sentence of
Section 4(c) of the Severance Compensation Agreement, however,
the compensation provided in Sections 4(a) and 4(c) of the
Severance Compensation Agreement shall be increased by a 10% rate
of interest, compounded annually, calculated from the date such
compensation would have been paid if Employee's employment had been
terminated without Cause.
(ii) Death,
Disability or Retirement of Employee . If Employee's
employment is terminated during the Term due to the death,
Disability (as defined below) or Retirement (as defined in Exhibit
A) of Employee, then an amount equal to Employee's Base Salary (at
the rate most recently in effect) shall be paid through the date of
his death, Disability or Retirement, plus an amount in respect of
any accrued but unused vacation days; provided ,
however , that if Employee's employment is terminated due to
death, Disability or Retirement subsequent to a Change in Control,
then the applicable provisions of the Severance Compensation
Agreement shall govern, provided the Severance Compensation
Agreement has not been earlier terminated.
In addition to any
other compensation provided for under this Agreement or the
Severance Compensation Agreement, Employee's beneficiaries shall
also receive any insurance benefits under the Benefit Plans to
which Employee or his beneficiaries are entitled on the date of his
death or Disability. Furthermore, if Employee’s employment is
terminated during the Term due to Disability, then Employee will be
entitled to continued participation in all Benefit Plans or
programs available to Employer’s employees generally, until
the earlier of (A) the date, or dates, he becomes eligible to
receive coverage and benefits under the plans and programs of a
subsequent employer (such coverages and benefits to be determined
on a coverage-by-coverage or benefit-by-benefit basis) or (B) two
years from the Termination Date; provided (1) if Employee is
precluded from continuing his participation in any Benefit Plan or
program as provided in the preceding sentence, he shall be paid, in
a lump sum cash payment, within 30 days following the date it is
determined he is unable to participate in any Benefit Plan or
program, the after-tax economic equivalent of the benefits (net of
Employee’s contribution) provided under the plan or program
in which he is unable to participate for the period specified in
the preceding sentence; and (2) the economic equivalent of any
benefit foregone shall be deemed to be an amount equal to (i) the
lowest cost that would be incurred by Employee in obtaining such
benefit for himself (including family or dependent coverage, if
applicable) on an individual basis, minus (ii) the amount Employee
would reasonably have been expected to contribute under
Employer’s group health plan. Employee shall be eligible for
group health plan continuation coverage under and in accordance
with the Consolidated Omnibus Budget Reconciliation Act of 1965, as
amended, when he ceases to be eligible for continued participation
in Employer’s group health plan under this Section
6(a)(ii).
As used in this
Agreement, the term " Disability " shall mean the inability
of Employee, due to physical or mental illness, with or without a
reasonable accommodation, to perform his duties with Employer on a
full-time basis for six months and, within 30 days after a notice
of termination is thereafter given by Employer, Employee's failure
to return to the full-time performance of Employee's duties as set
forth in Section 3.
In the case of the
Disability or Retirement of Employee, the Noncompetition and
Confidentiality and other provisions of Sections 7 and 8 hereof
shall remain in effect.
(iii) Without
Cause by Employer . Employer may terminate the employment
of Employee at any time without Cause after providing Employee with
30 days' prior written notice setting forth its intention to do
so.
(iv)
Expiration of Term . The expiration of this
Agreement is by its own term, as set forth in Section 2.
(b) Compensation
on Termination . Except as otherwise provided in the Severance
Compensation Agreement, if Employee is terminated for Cause, death,
Disability, Retirement, or voluntarily terminates his employment,
Employee shall not be entitled to any compensation following the
date of termination as defined below (the " Termination Date
"):
(i) for Cause by
Employer - immediately upon the vote of a majority of the
non-employee Board members as provided in Section 6(a)(i);
(ii) for death,
Disability or Retirement - for death or Retirement, immediately
upon the date of such occurrence; for Disability, immediately upon
expiration of the notice period described in Section 6(a)(ii) if
Employee fails to return to the full-time performance of Employee's
duties as set forth in Section 3; and
(iiii) by its own term
- on the date set forth in Section 2.
(c) Compensation
for Termination Without Cause . Subject to the provisions of
this Agreement, in the event Employee's employment is terminated by
Employer without Cause prior to February 28, 2006, Employer shall
pay to Employee an amount equal to $500,000 minus the amount of any
Transition Bonus paid prior to the Termination Date.
(d) Change in
Control Compensation . Subject to the provisions of this
Agreement, including without limitation Section 6(g), Employee
shall be entitled to the compensation provided in the Severance
Compensation Agreement pursuant to the terms stated in such
agreement; provided, however , that any compensation payable
under the Severance Compensation Agreement shall be reduced dollar
for dollar by the amount of any Transition Bonus paid prior to the
date of any payment under the Severance Compensation Agreement.
(e) Expiration of
Term . Subject to the provisions of this Agreement, including
without limitation Sections 4(b), 5(b) and 6(g), if this Agreement
remains in effect through the Term, Employee shall be entitled to
the Transition Bonus and compensation provided under Section
5(b).
(f) Notice of
Termination . Any termination of Employee’s employment by
Employer pursuant to Section 6(a)(i) or 6(a)(iii) above shall be
communicated by a written notice of termination to Employee.
(g) Conflict in
Benefits . To the extent that Employee is entitled to severance
compensation pursuant to the terms of that certain amended and
restated severance compensation agreement (the " Severance
Compensation Agreement ") dated as of September 28, 2004, a
copy of which is attached hereto as Exhibit E, Employee’s
entitlement to any severance compensation (including the Transition
Bonus) shall be determined under the Severance Compensation
Agreement; provided, however , that any compensation payable
under the Severance Compensation Agreement shall be reduced dollar
for dollar by the amount of any portion of the Transition Bonus
paid prior to the date of any payment under the Severance
Compensation Agreement. Without limiting the foregoing, the parties
expressly understand and agree that, if Employee is entitled to
compensation under the Severance Compensation Agreement, Employee
shall in no event be entitled to compensation pursuant to Section
4(c), 5(b) , 6(c) or 6(e) of this Agreement.
7.
Noncompetition, Noninducement, Nonsolicitation,
Release .
(a) Employee hereby
agrees that commencing on the date of this Agreement and continuing
through 180 days after the termination date (the " Non-Compete
Period "), he shall not singly, jointly, or as a member,
employee, or agent of any partnership or as an officer, agent,
employee, director or stockholder, or investor of any other
corporation or entity, or in any other capacity, which is engaged
in a similar business to that of Employer during the period of
non-competition:
(i) solicit, contact
and/or service any person, firm, corporation, partnership, or
entity of any kind whatsoever for purposes which are competitive to
that of Employer, and for purposes similar to those performed by
Employee for Employer, a client of Employer for which Employee
performed service or had personal contact with on behalf of
Employer during the last one year of Employee's employment with
Employer; provided , that Employee shall be able to acquire
and hold up to 1% of the outstanding shares of any publicly traded
stock of any company, and an unlimited percentage of outstanding
shares in the Employer, its parent, affiliates, or subsidiaries;
and
(ii) directly or
indirectly induce or attempt to induce any person who, during the
term of Employee's employment hereunder, was an employee,
representative or agent of Employer or any of its affiliates to
terminate his employment with Employer or any of its affiliates, or
to violate the terms of any agreement between said employee,
representative or agent and Employer or any of its affiliates.
(b) It is understood
and agreed by Employer and Employee that the time periods of the
restrictions set forth in Section 7(a) of this Agreement are
intended by Employer and Employee to be extended by any time period
during which Employee violates the terms and conditions of Section
7(a). Notwithstanding anything which could be construed to the
contrary, this Section 7(b) is not intended to and shall not be
deemed to permit Employee to violate any term or condition of
Section 7(a).
(c) Prior to Employer
providing any compensation under Section 4(c), 5(b) or 6(c) of this
Agreement or under the Severance Compensation Agreement, Employee
shall execute, or re-execute, and deliver to Employer a release and
waiver (the “ Release ”) in substantially the
form attached hereto as Exhibit F, with such changes therein and
modifications thereto as Employer, in the exercise of its
reasonable judgment, may determine to be required by applicable law
or rule in any jurisdiction. Employer’s obligation to provide
any compensation under Section 4(c), 5(b) or 6(c) under this
Agreement, or under the Severance Compensation Agreement is
expressly conditioned on Employee’s prior execution and
delivery of the Release.
(d) In the event any
of the provisions of this Agreement shall be held to be invalid or
unenforceable, the remaining portions thereof shall nevertheless
continue to be valid and enforceable as though the invalid or
unenforceable parts had not been included herein.
(e) Employer and
Employee specifically agree that the provisions of Sections 7,
8, 9 ,10 and 15 shall survive the termination of this
Agreement.
(f) Employer and
Employee agree that the provisions of this Section 7 may be waived
in whole or in part by mutual agreement in writing by Employer and
Employee.
8.
Confidentiality . Without the consent
of Employer, Employee will not, during his Employment or after
termination of this Agreement, (a) disclose any trade secret or
proprietary or confidential knowledge or information of Employer or
any affiliate of Employer to any person or entity (other than to
Employer or stockholders, directors, officers or employees of
Employer or representatives thereof), or (b) otherwise make use of
any such secret, knowledge or information for other than Employers
purposes, unless in the case of (a) or (b) above such secret,
knowledge or information is readily ascertainable from publicly
available information. Employee will hold confidential, on behalf
of Employer as the property of Employer, all memoranda, manuals,
books, papers, letters, documents, computer software and other
similar property obtained during the course of performing duties
under this Agreement, and will return such property to Employer at
any time upon demand by Employer and, in any event, within three
calendar days after termination of his employment under this
Agreement or after the end of the Term.
(a) As used in this
Agreement, the term " Employee Developments " shall mean all
technological, financial, operating and training ideas, processes,
methods and materials, specifically including, but not limited to,
all inventions, discoveries, improvements, devices, apparatus,
designs, practices, processes, methods, formulas, know-how,
products, enhancements and all software, computer programs
(including source code, object code, documentation and programmer's
notes) and other works of authorship, whether or not patentable or
copyrightable, developed, written, conceived or reduced to practice
during Employee's employment by Employer or within a period of 90
days thereafter (i) which result from any work performed by
Employee for the Employer, or (ii) which relate to the Employer's
business or research or development of the Employer at the time
Employee develops, writes, conceives or reduces to practice any of
the foregoing, alone or with others.
(b) Employee shall
promptly disclose all Employee Developments to the Employer and
make available to the Employer any work papers, drawings, designs,
schematics, specifications, descriptions, models, diskettes,
computer tapes, source codes or other tangible incidents of
Employee Developments. Employee agrees that all Employee
Developments shall be considered work made by Employee for the
Employer and prepared within the scope of Employee's employment and
that all right, title and ownership interest in and to Employee
Developments, including, without limitation, copyright, trade
secret, patent or other intellectual property rights, shall
exclusively vest in and be retained by the Employer, both during
and following the term of employment. Employee agrees to perform
upon request of the Employer any acts that may be necessary or
convenient during his term of employment or thereafter to
establish, perfect, evidence, register, transfer, assign or convey
ownership of Employee Developments in or to the Employer, to the
fullest extent possible, including without limitation, assignment
to the Employer of all ownership, copyright, trade secret, patent
and other intellectual property rights without any further
consideration.
(a) Employer shall
be entitled, if it elects, to enjoin any breach or threatened
breach of, or enforce the specific performance of, the obligations
of Employee under Sections 7 and 8, without showing any actual
damage or that monetary damages would be inadequate. Any such
equitable remedy will not be the sole and exclusive remedy for any
such breach, and Employer may pursue other remedies for such a
breach.
(b) Any court
proceeding to enforce the specific performance provisions of this
Agreement may be commenced in the federal courts located in the
State of Nebraska, or in the absence of federal jurisdiction, the
state courts of Nebraska having jurisdiction. Employer and Employee
submit to the jurisdiction of such courts and waive any objection
which they may have to the pursuit of any such proceeding in any
such court for purposes of specific performance only.
11.
Employer Assignment . Employer may
assign this Agreement, provided , however , that in
the event of such assignment by the Employer, Employer's
obligations hereunder shall be binding legal obligations and shall
inure to the benefit of any successor.
12.
Location . Unless Employee and
Employer otherwise agree, Employee shall reside in Omaha, Nebraska
during the Term.
13.
Benefits
Unfunded . All rights
of Employee and his spouse or other beneficiary under this
Agreement shall at all times be entirely unfunded and no provision
shall at any time be made with respect to segregating any assets of
Employer for payment of any amounts due hereunder. Neither Employee
nor his spouse or other beneficiary shall have any interest in or
rights against any specific assets of Employer.
14.
Waiver . No waiver by any party at
any time of any breach by any other party of, or compliance with,
any condition or provision of this Agreement to be performed by any
other party shall be deemed a waiver of any other provisions or
conditions at the same time or at any prior or subsequent time.
15.
Applicable Law . This Agreement shall
be construed and interpreted pursuant to the laws of the State of
Nebraska without giving effect to the conflict of laws provisions
thereof.
16.
Entire Agreement . This Agreement and
the Severance Compensation Agreement contain the entire agreement
between Employer and Employee and supersede any and all previous
agreements, written or oral, between the parties relating to the
subject matter hereof and thereof including, without limitation,
the Second Amended and Restated Employment Agreement. In the event
of a conflict between the provisions of this Agreement and the
provisions contained in the Severance Compensation Agreement, the
provisions of this Agreement shall govern. No amendment or
modification of the terms of this Agreement shall be binding upon
the parties hereto unless reduced to writing and signed by Employer
and Employee.
17.
Counterparts . This Agreement may be
executed in counterparts and by facsimile signatures, each of which
shall be deemed an original, and all of which taken together shall
constitute one instrument.
18.
Severability . In the event any
provision of this Agreement is held illegal or invalid, the
remaining provisions of this Agreement shall not be affected
thereby.
19.
Notice . Notices under this Agreement
shall be in writing and sent by registered mail, return receipt
requested, to the following addresses or to such other addresses as
the party being notified may have previously furnished to the
others by written notice.
If to Employer or its Board of Directors:
Transaction Systems
Architects, Inc.
Attn: Chairman of the
Board
224 South 108
th Avenue
with a copy to:
Transaction Systems
Architects, Inc.
Attn: General
Counsel
If to Employee:
Regency Lakeside
Apartments
10530 Pacific Street,
Apt. 303
Such notices shall be deemed received three
business days after they are so sent.
IN WITNESS
WHEREOF , the parties have executed this Agreement, on the
day and year first above written.
Transaction
Systems Architects, Inc.
By:_____________________________________
Its:_____________________________________
_______________________________________
Exhibit A - Certain Definitions
Exhibit B - Stock Option Agreement (January 2,
2002)
Exhibit C - Stock Option Agreement (February
19, 2002)
Exhibit D - Stock Option Agreement (February
19, 2002)
Exhibit E - Severance Compensation
Agreement
Exhibit F - General Release
EXHIBIT
A
CERTAIN DEFINITIONS
Change in Control
For purposes of this Agreement, “Change
in Control” shall have the meaning ascribed to that term in
the Severance Compensation Agreement.
Retirement
For purposes of this Agreement,
“Retirement” shall mean termination by Employer or
Employee of Employee’s employment based on Employee’s
having reached age 65 or such other age as shall have been fixed in
any arrangement established pursuant to this Agreement with
Employee’s consent with respect to Employee.
For purposes of this Agreement,
“Cause” shall mean: (1) Employee’s
conviction of a felony involving moral turpitude; (2)
Employee’s breach of this Agreement; (3) Employees breach of
Employer’s Code of Business Conduct and Ethics or Code of
Ethics for the Chief Executive Officer and Senior Financial
Officers, as the same may be amended from time to time; or
(4) Employee’s serious, willful gross misconduct or
willful gross neglect of duties ( other than any such neglect resulting
from Employee’s incapacity due to physical or mental illness)
which has resulted, or in all probability is likely to result, in
material economic damage to the Employer. Notwithstanding the
foregoing, no act or failure to act by Employee will constitute
“Cause” under clause (4) of this definition if Employee
reasonably believed in good faith that such act or failure to act
was in the best interest of the Employer.
EXHIBIT
B
AMENDED
AND RESTATED
STOCK
OPTION AGREEMENT
UNDER
TRANSACTION SYSTEMS
ARCHITECTS, INC.
1999 STOCK
OPTION PLAN
as amended
by
the Stockholders on
February 22, 2000,
the Board of Directors on
May 5, 2000,
the Stockholders on
February 20, 2001, and
the Stockholders on
February 19, 2002
US
MASTER
GREGORY D. DERKACHT
TABLE OF CONTENTS
1. GRANT OF NON-QUALIFIED STOCK
OPTION...................................1
2. TERMS OF
PLAN.....................................................................................1
3. EXERCISE
PRICE...................................................................................2
4. EXERCISE OF
OPTION..........................................................................2
4.1 Time of Exercise of
Option........................................................2
4.2 Acceleration of
Option................................................................3
4.3 Termination of
Option.................................................................5
4.4 Effect of Optionee’s Disability or
Death...................................5
4.5 Limitations on Exercise of
Option.............................................6
4.6 Method of Exercise of Option
Cash
Exercise.......................................................................6
Same-Day-Sale
Exercise....................................................6
Sell-to-Cover
Exercise.........................................................7
4.7 Parachute
Limitations................................................................7
5. TRANSFERABILITY OF
OPTIONS........................................................8
6. RIGHTS AS
STOCKHOLDER................................................................8
7. WITHHOLDING OF
TAXES....................................................................8
8. DISCLAIMER OF
RIGHTS......................................................................9
9. INTERPRETATION OF THIS OPTION
AGREEMENT.........................9
10. GOVERNING
LAW................................................................................9
11. BINDING
EFFECT.................................................................................9
12. NOTICE...................................................................................................9
13. ENTIRE
AGREEMENT.......................................................................10
SIGNATURE PAGE (TO BE COMPLETED AND
RETURNED)
AMENDED AND
RESTATED
STOCK OPTION
AGREEMENT
TRANSACTION SYSTEMS
ARCHITECTS, INC.
1999 STOCK OPTION
PLAN
as amended
by
the Stockholders on
February 22, 2000,
the Board of Directors on
May 5, 2000,
the Stockholders on
February 20, 2001, and
the Stockholders on
February 19, 2002
This Stock Option Agreement (the
"Option Agreement"), which was originally made as of January 2,
2002 (the "Original Date of Grant"), by and between Transaction
Systems Architects, Inc., (“TSA”) a Delaware
corporation (the "Corporation") and GREGORY D. DERKACHT, an
employee of the Corporation or its subsidiaries (the "Optionee"),
is amended and restated effective as of February 26,
2004.
WHEREAS, the Board of Directors of
the Corporation has duly adopted and approved the 1999 Stock Option
Plan (the "Plan"), which Plan authorizes the Corporation to grant
to eligible individuals options for the purchase of shares of the
Corporation's Class A Common Stock (the "Stock"); and
WHEREAS, the Corporation has
determined that it is desirable and in its best interests to grant
the Optionee, pursuant to the Plan, an option to purchase a certain
number of shares of Stock, in order to provide the Optionee with an
incentive to advance the interests of the Corporation, all
according to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of
the mutual promises and covenants contained herein, the parties
hereto do hereby agree as follows:
1.
GRANT OF NON-QUALIFIED
STOCK OPTION
Subject to the terms of the Plan,
the Corporation hereby grants to the Optionee the right and option
(the "Option") to purchase from the Corporation, on the terms and
subject to the conditions set forth in the Plan and in this
Agreement, 100,000 (one hundred thousand) shares of Class A Common
Stock. This Option shall
not constitute an incentive stock option within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the
“Code”).
The Option granted pursuant to this
Option Agreement is granted subject to the terms and conditions set
forth in the Plan, a copy of which is attached to this Option
Agreement. All terms and conditions of the Plan, as may be amended
from time to time, are hereby incorporated into this Option
Agreement by reference and shall be deemed to be part of this
Option Agreement, without regard to whether such terms and
conditions (including, for example, provisions relating to certain
changes in capitalization of the Corporation) are not otherwise set
forth in this Option Agreement. In the event that there is any
inconsistency between the provisions of this Option Agreement and
of the Plan, the provisions of the Plan shall govern.
The Exercise Price for the shares
of Stock subject to the Option granted by this Option Agreement is
$11.86 per share.
Except as otherwise provided
herein, and subject to the provisions of the Plan (including
restrictions on the transferability of the Option and special
provisions relating to exercise or termination of the Option
following the Optionee's termination of employment, disability,
death or retirement or certain changes in capitalization of the
Corporation), the Option granted pursuant to this Option Agreement
shall be subject to exercise as follows:
4.1
Time of Exercise of
Option
The Optionee may exercise the
Option (subject to the limitations on exercise set forth in this
Agreement and in the Plan), in installments as follows:
(i) Subject to Section 4.2, no Option may be
exercised during the first year from the Original Date of
Grant;
(ii) Subject to Section 4.2, after one year from the
Original Date of Grant, the Option shall be exercisable in respect
of 33 and 1/3 percent of the number of shares specified in Section
1 above; and
(iii) Subject to Section 4.2, after the expiration of
each of the second, and third years from the Original Date of
Grant, the Option shall be exercisable in respect of an additional
33 and 1/3 percent of such shares specified in Section 1
above.
The foregoing installments, to the
extent not exercised, shall accumulate and be exercisable, in whole
or in part, at any time and from time to time, after becoming
exercisable and prior to the termination of the Option;
provided , that no single exercise of the Option shall be
for less than 100 shares, unless at the time of the exercise, the
maximum number of shares available for purchase under this Option
is less than 100 shares. In no event shall the Option be exercised
for a fractional share.
4.2
Acceleration of
Option.
Notwithstanding any other provision
of this Agreement to the contrary, the Option granted hereby shall
become immediately exercisable upon the occurrence of a Change in
Control (as hereinafter defined) of the Corporation if Optionee is
an employee of the Corporation or any of its subsidiaries on the
date of the consummation of such Change in Control.
For purposes of this Section 4.2, a "Change in
Control" means the occurrence of any of the following
events:
(i) any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a
"Person") is or becomes the beneficial owner (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
the combined voting power of the then-outstanding Voting Stock of
the Corporation; provided, however, that:
(1) for purposes of this paragraph (i), the
following acquisitions shall not constitute a Change in Control:
(A) any acquisition of Voting Stock of the Corporation directly
from the Corporation that is approved by a majority of the
Incumbent Directors, (B) any acquisition of Voting Stock of the
Corporation by the Corporation or any subsidiary of the
Corporation, (C) any acquisition of Voting Stock of the Corporation
by the trustee or other fiduciary holding securities under any
employee benefit plan (or related trust) sponsored or maintained by
the Corporation or any subsidiary of the Corporation, and (D) any
acquisition of Voting Stock of the Corporation by any Person
pursuant to a Business Transaction that complies with clauses (A),
(B) and (C) of subparagraph (i)(3) below;
(2) if any Person is or becomes the beneficial
owner of 20% or more of combined voting power of the
then-outstanding Voting Stock of the Corporation as a result of a
transaction described in clause (A) of subparagraph (i)(1) above
and such Person thereafter becomes the beneficial owner of any
additional shares of Voting Stock of the Corporation representing
1% or more of the then-outstanding Voting Stock of the Corporation,
other than in an acquisition directly from the Corporation that is
approved by a majority of the Incumbent Directors or other than as
a result of a stock dividend, stock split or similar transaction
effected by the Corporation in which all holders of Voting Stock
are treated equally, such subsequent acquisition shall be treated
as a Change in Control;
(3) a Change in Control will not be deemed to
have occurred if a Person is or becomes the beneficial owner of 20%
or more of the Voting Stock of the Corporation as a result of a
reduction in the number of shares of Voting Stock of the
Corporation outstanding pursuant to a transaction or series of
transactions that is approved by a majority of the Incumbent
Directors unless and until such Person thereafter becomes the
beneficial owner of any additional shares of Voting Stock of the
Corporation representing 1% or more of the then-outstanding Voting
Stock of the Corporation, other than as a result of a stock
dividend, stock split or similar transaction effected by the
Corporation in which all holders of Voting Stock are treated
equally; and
(4) if at least a majority of the Incumbent
Directors determine in good faith that a Person has acquired
beneficial ownership of 20% or more of the Voting Stock of the
Corporation inadvertently, and such Person divests as promptly as
practicable but no later than the date, if any, set by the
Incumbent Board a sufficient number of shares so that such Person
beneficially owns less than 20% of the Voting Stock of the
Corporation, then no Change in Control shall have occurred as a
result of such Person’s acquisition; or
(ii) a majority of the Board ceases to be
comprised of Incumbent Directors; or
(iii) the consummation of a reorganization,
merger or consolidation, or sale or other disposition of all or
substantially all of the assets of the Corporation or the
acquisition of the stock or assets of another corporation, or other
transaction (each, a "Business Transaction"), unless, in each case,
immediately following such Business Transaction (A) the Voting
Stock of the Corporation outstanding immediately prior to such
Business Transaction continues to represent (either by remaining
outstanding or by being converted into Voting Stock of the
surviving entity or any parent thereof), more than 60% of the
combined voting power of the then outstanding shares of Voting
Stock of the entity resulting from such Business Transaction
(including, without limitation, an entity which as a result of such
transaction owns the Corporation or all or substantially all of the
Corporation’s assets either directly or through one or more
subsidiaries), (B) no Person (other than the Corporation, such
entity resulting from such Business Transaction, or any employee
benefit plan (or related trust) sponsored or maintained by the
Corporation, any subsidiary of the Corporation or such entity
resulting from such Business Transaction) beneficially owns,
directly or indirectly, 20% or more of the combined voting power of
the then outstanding shares of Voting Stock of the entity resulting
from such Business Transaction, and (C) at least a majority of the
members of the Board of Directors of the entity resulting from such
Business Transaction were Incumbent Directors at the time of the
execution of the initial agreement or of the action of the Board
providing for such Business Transaction; or
(iv) approval by the shareholders of the
Corporation of a complete liquidation or dissolution of the
Corporation, except pursuant to a Business Transaction that
complies with clauses (A), (B) and (C) of paragraph
(iii).
For purposes of this Section 4.2,
the term "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
For purposes of this Section 4.2,
the term "Incumbent Directors" means the individuals who, as of the
date hereof, are Directors of the Corporation and any individual
becoming a Director subsequent to the date hereof whose election,
nomination for election by the Corporation’s shareholders, or
appointment, was approved by a vote of at least two-thirds of the
then Incumbent Directors (either by a specific vote or by approval
of the proxy statement of the Corporation in which such person is
named as a nominee for director, without objection to such
nomination); provided , however , that an individual
shall not be an Incumbent Director if such individual’s
election or appointment to the Board occurs as a result of an
actual or threatened election contest (as described in Rule
14a-12(c) of the Exchange Act) 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.
For purposes of this Section 4.2,
the term "Voting Stock" means securities entitled to vote generally
in the election of directors.
4.3
Termination of
Option
The Option shall terminate upon the
earlier of the expiration of a period of (i) ten years from the
Original Date of Grant, or (ii) one month from the date of the
Optionee's termination of employment with the Corporation or a
subsidiary; provided, however , that if such termination of
employment falls within the scope of one of the provisions of the
Plan providing for an extended exercise period in excess of one
month, the Option shall terminate upon the expiration of the
extended period, as specified in such provision, after the
Optionee's termination of employment with the Corporation or a
subsidiary within which the Option is exercisable.
4.4
Effect of Optionee’s
Disability or Death
If the Optionee ceases to be an
Employee of the Corporation or a Subsidiary of the Corporation by
reason of Disability, the unexercised portion of any Option held by
such Optionee at that time will become immediately vested and will
be exercisable for the shorter of one year from the date on which
the Optionee ceased to be so employed or the remaining Option term.
If the Optionee does not exercise the Option within the time
specified, such Option shall terminate. The Corporation shall have
the authority to determine the date an Optionee ceases to be an
Employee by reason of Disability.
If the Optionee dies while employed
by the Corporation or a Subsidiary of the Corporation (or dies
within a period of one month after ceasing to be an Employee for
any reason other than Disability or within a period of one year
after ceasing to be an Employee by reason of Disability), the
unexercised portion of any Option held by such Optionee at the time
of death will become immediately vested and will be exercisable for
the shorter of one year from the date of such Optionee’s
death, or the remaining Option term. Such Option may be exercised
by the executor or administrator of the Optionee’s estate or
by any person or persons who shall have acquired the Option
directly from the Optionee by bequest or inheritance. If the Option
is not exercised within the time specified, such Option shall
terminate.
4.5
Limitations on Exercise of
Option
Notwithstanding the foregoing
Subsections, in no event may the Option be exercised, in whole or
in part, after ten years following the Original Date of Grant, or
after the occurrence of an event which results in termination of
the Option under the Plan.
4.6
Method of Exercise of
Option
Cash Exercise (to exercise and
retain the Shares): Subject to the terms and conditions of this
Option Agreement, the Option may be exercised by delivering written
notice of exercise to the Corporation, at its principal office,
addressed to the attention of Stock Option Administration, or to
the agent/broker designated by the Corporation, which notice shall
specify the number of shares for which the Option is being
exercised, and shall be accompanied by payment in full of the
Exercise Price of the shares for which the Option is being
exercised plus the full amount of all applicable withholding taxes
due on the Option exercise. Payment of the Exercise Price for the
shares of Stock purchased pursuant to the exercise of the Option
shall be made either in cash or by certified check payable to the
order of the Corporation. If the person exercising the Option is
not the Optionee, such person shall also deliver with the notice of
exercise appropriate proof of his or her right to exercise the
Option, as the Corporation may require in its sole discretion.
Promptly after exercise of the Option as provided for above, the
Corporation shall deliver to the person exercising the Option a
certificate or certificates for the shares of Stock being
purchased.
Same-Day-Sale Exercise (to
exercise and immediately sell all the Shares):
Subject to the terms and conditions
of this Option Agreement, the Option may be exercised by delivering
written notice of exercise to the agent/broker designated by the
Corporation, which notice shall specify the number of shares for
which the Option is being exercised and irrevocable instructions to
promptly (1) sell all of the shares of Stock to be issued upon
exercise and (2) remit to the Corporation the portion of the sale
proceeds sufficient to pay the Exercise Price for the shares of
Stock purchased pursuant to the exercise of the Option and all
applicable taxes due on the Option exercise. The agent/broker shall
request issuance of the shares and immediately and concurrently
sell the shares on the Optionee’s behalf. Payment of the
Exercise Price for the shares of Stock purchased pursuant to the
exercise of the Option, any brokerage fees, transfer fees, and all
applicable taxes due on the Option exercise, shall be deducted from
the proceeds of the sale of the shares. If the person exercising
the Option is not the Optionee, such person shall also deliver with
the notice of exercise appropriate proof of his or her right to
exercise the Option, as the Corporation may require in its sole
discretion. Promptly after exercise of the Option as provided for
above, the agent/broker shall deliver to the person exercising the
Option the net proceeds from the sale of the shares of Stock being
exercised and sold.
Sell-to-Cover Exercise (to
exercise and immediately sell a portion of the Shares):
Subject to the terms and conditions
of this Option Agreement, the Option may be exercised by delivering
written notice of exercise to the agent/broker designated by the
Corporation, which notice shall specify the number of shares for
which the Option is being exercised and irrevocable instructions to
promptly (1) sell the portion (which must be a whole number) of the
shares of Stock to be issued upon exercise sufficient to generate
proceeds to pay the Exercise Price for the shares of Stock
purchased pursuant to the exercise of the Option, any brokerage or
transfer fees, and all applicable taxes due on the Option exercise
(collectively the “Exercise Costs”) and (2) remit to
the Corporation a sufficient portion of the sale proceeds to pay
the Exercise Price for the shares of Stock purchased pursuant to
the exercise of the Option and all applicable taxes due on the
Option exercise. The agent/broker shall request issuance of the
shares and immediately and concurrently sell on the
Optionee’s behalf only such number of the Shares as is
required to generate proceeds sufficient to pay the Exercise Costs.
Promptly after exercise of the Option as provided for above, the
Corporation shall deliver to the person exercising the Option a
certificate for the shares of Stock issued upon exercise which are
not sold to pay the Exercise Costs. Promptly after exercise of the
Option as provided for above, the agent/broker shall deliver to the
person exercising the Option any net proceeds from the sale of the
Shares in excess of the Exercise Costs. If the person exercising
the Option is not the Optionee, such person shall also deliver with
the notice of exercise appropriate proof of his or her right to
exercise the Option, as the Corporation may require in its sole
discretion.
The Option shall not be exercisable
if and to the extent the Corporation determines such exercise or
method of exercise would violate applicable securities laws, the
rules and regulations of any securities exchange or quotation
system on which the Stock is listed, or the Company’s
policies and procedures. An attempt to exercise the Option granted
hereunder other than as set forth above shall be invalid and of no
force and effect.
4.7
Parachute
Limitations
Notwithstanding any other provision
of this Option Agreement or the Plan or any other agreement,
contract or understanding heretofore or hereafter entered into by
the Optionee with the Corporation (or any subsidiary or affiliate
thereof), except an agreement, contract or understanding hereafter
entered into that expressly modifies or excludes application of
this Subsection (the "Other Agreements"), and notwithstanding any
formal or informal plan or other arrangements heretofore or
hereafter adopted by the Corporation (or any such subsidiary or
affiliate) for the direct or indirect compensation of the Optionee
(including groups or classes of participants or beneficiaries of
which the Optionee is a member), whether or not such compensation
is deferred, is in cash, or is in the form of a benefit to or for
the Optionee (an "Other Benefit Plan"), the Optionee shall not have
any right to exercise an Option or receive any payment or other
benefit under this Option Agreement, any Other Agreement, or any
Other Benefit Plan if such right to exercise, payment or benefit,
taking into account all other rights, payments or benefits to or
for the Optionee under this Option Agreement, all Other Agreements
and all Other Benefit Plans, would cause any right, payment or
benefit to the Optionee under this Option Agreement to be
considered a "parachute payment" within the meaning of Section
280G(b)(2) of the Code as then in effect (a "Parachute Payment").
In the event that the receipt of any such right to exercise or any
other payment or benefit under this Option Agreement, any Other
Agreement or any Other Benefit Plan would cause the Optionee to be
considered to have received a Parachute Payment under this
Agreement, then the Optionee shall have the right, in the
Optionee's sole discretion, to designate those rights, payments or
benefits under this Option Agreement, any Other Agreements, and/or
any Other Benefit Plans, which should be reduced or eliminated so
as to avoid having the right, payment or benefit to the Optionee
under this Option Agreement be deemed to be a Parachute
Payment.
5.
TRANSFERABILITY OF
OPTIONS
During the lifetime of an Optionee,
only such Optionee (or, in the event of legal incapacity or
incompetency, the Optionee's guardian or legal representative) may
exercise the Option. No Option shall be assignable or transferable
by the Optionee to whom it is granted, other than by will or the
laws of descent and distribution.
Neither the Optionee nor any
executor, administrator, distributee or legatee of the Optionee's
estate shall be, or have any of the rights or privileges of, a
stockholder of the Corporation in respect of any shares of Stock
issuable hereunder unless and until such shares have been fully
paid and certificates representing such shares have been endorsed,
transferred and delivered, and the name of the Optionee (or of such
personal representative, administrator, distributee or legatee of
the Optionee's estate) has been entered as the stockholder or
record on the books of the Corporation.
The parties hereto recognize that
the Corporation or a subsidiary may be obligated to withhold
federal, state and/or local income taxes and Social Security taxes
to the extent that the Optionee realizes ordinary income in
connection with the exercise of the Option or in connection with a
disposition of any shares of Stock acquired by exercise of the
Option. The Optionee agrees that the Corporation or a subsidiary
may withhold amounts needed to cover such taxes from payments
otherwise due and owing to the Optionee, and also agrees that upon
demand the Optionee will promptly pay to the Corporation or a
subsidiary having such obligation any additional amounts as may be
necessary to satisfy such withholding tax obligation. Such payment
shall be made in cash or by check payable to the order of the
Corporation or a subsidiary.
No provision in this Option
Agreement shall be construed to confer upon the Optionee the right
to be employed by the Corporation or any subsidiary, or to
interfere in any way with the right and authority of the
Corporation or any subsidiary either to increase or decrease the
compensation of the Optionee at any time, or to terminate any
employment or other relationship between the Optionee and the
Corporation or any subsidiary.
9.
INTERPRETATION OF THIS
OPTION AGREEMENT
All decisions and interpretations
made by the Board or the Compensation Committee thereof with regard
to any question arising under the Plan or this Option Agreement
shall be binding and conclusive on the Corporation and the Optionee
and any other person entitled to exercise the Option as provided
for herein.
This Option Agreement shall be
governed by the laws of the State of Delaware (but not including
the choice of law rules thereof).
Subject to all restrictions
provided for in this Option Agreement, the Plan, and by applicable
law relating to assignment and transfer of this Option Agreement
and the option provided for herein, this Option Agreement shall be
binding upon and inure to the benefit of the parties hereto and
their respective heirs, executors, administrators, successors and
assigns.
Any notice hereunder by the
Optionee to the Corporation shall be in writing and shall be deemed
duly given if mailed or delivered to the Corporation at its
principal office, addressed to the attention of Stock Plan
Administration or if so mailed or delivered to such other address
as the Corporation may hereafter designate by notice to the
Optionee. Any notice hereunder by the Corporation to the Optionee
shall be in writing and shall be deemed duly given if mailed or
delivered to the Optionee at the address specified below by the
Optionee for such purpose, or if so mailed or delivered to such
other address as the Optionee may hereafter designate by written
notice given to the Corporation.
This Option Agreement and the Plan
together constitute the entire agreement and supersede all prior
understandings and agreements, written or oral (including, without
limitation, the Stock Option Agreement between the Corporation and
Optionee dated January 2, 2002), of the parties hereto with respect
to the subject matter hereof. Except for amendments to the Plan
incorporated into this Option Agreement by reference pursuant to
Section 2 above, neither this Option Agreement nor any term hereof
may be amended, waived, discharged or terminated except by a
written instrument signed by the Corporation and the Optionee;
provided, however , that the Corporation unilaterally may
waive any provision hereof in writing to the extent that such
waiver does not adversely affect the interests of the Optionee
hereunder, but no such waiver shall operate as or be construed to
be a subsequent waiver of the same provision or a waiver of any
other provision hereof.
SIGNATURE
PAGE
IN WITNESS WHEREOF, the parties
hereto have duly executed this Amended and Restated Option
Agreement, or caused this Amended and Restated Option Agreement to
be duly executed on their behalf, as of the day and year first
above written.
Transaction Systems Architects, Inc.
Optionee:
By:
_________________________________________
By:
_________________________________________
Dennis P.
Byrnes, Secretary
Gregory D. Derkacht
ADDRESS FOR
NOTICE TO OPTIONEE:
____________________________________________
____________________________________________
____________________________________________
____________________________________________
Please Print
Last Name, First Name MI
____________________________________________
Beneficiary’s Street Address
____________________________________________
____________________________________________
Beneficiary’s Social Security Number
I understand
that in the event of my death, the above named beneficiary will
have control of any unexercised options remaining in my account at
that time. If no beneficiary is designated or if the named
beneficiary does not survive me, the options will become part of my
estate. This beneficiary designation does NOT apply to stock
acquired by the exercise of options prior to my death.
____________________________________________
After
completing this page, please make a copy for your records and
return it to
Stock Plan
Administration, Transaction Systems Architects, Inc., 224 S. 108
Avenue, Omaha, NE 68154
1999 Stock Option Plan - US
Plan
100,000 Shares
$11.86/Share Exercise Price
January 2, 2002
EXHIBIT
C
AMENDED
AND RESTATED
STOCK
OPTION AGREEMENT
UNDER
TRANSACTION SYSTEMS
ARCHITECTS, INC.
1999 STOCK
OPTION PLAN
as amended
by
the Stockholders on
February 22, 2000,
the Board of Directors on
May 5, 2000,
the Stockholders on
February 20, 2001, and
the Stockholders on
February 19, 2002
US
MASTER
GREGORY D. DERKACHT
TABLE OF CONTENTS
1. GRANT OF NON-QUALIFIED STOCK
OPTION..................................1
2. TERMS OF
PLAN....................................................................................2
3. EXERCISE
PRICE..................................................................................2
4. EXERCISE OF
OPTION.........................................................................2
4.1 Time of Exercise of
Option.......................................................2
4.2 Acceleration of
Option...............................................................3
4.3 Termination of
Option................................................................5
4.4 Effect of Optionee’s Disability or
Death..................................5
4.5 Limitations on Exercise of
Option............................................6
4.6 Method of Exercise of Option
Cash
Exercise......................................................................6
Same-Day-Sale
Exercise...................................................6
Sell-to-Cover
Exercise........................................................7
4.7 Parachute
Limitations...............................................................7
5. TRANSFERABILITY OF
OPTIONS.......................................................8
6. RIGHTS AS
STOCKHOLDER...............................................................8
7. WITHHOLDING OF
TAXES...................................................................8
8. DISCLAIMER OF
RIGHTS.....................................................................9
9. INTERPRETATION OF THIS OPTION
AGREEMENT........................9
10. GOVERNING
LAW...............................................................................9
11. BINDING
EFFECT...............................................................................9
12. NOTICE.................................................................................................9
13. ENTIRE
AGREEMENT.....................................................................10
SIGNATURE PAGE (TO BE COMPLETED AND
RETURNED)
AMENDED AND
RESTATED
STOCK OPTION
AGREEMENT
TRANSACTION SYSTEMS
ARCHITECTS, INC.
1999 STOCK OPTION
PLAN
as amended
by
the Stockholders on
February 22, 2000,
the Board of Directors on
May 5, 2000,
the Stockholders on
February 20, 2001, and
the Stockholders on
February 19, 2002
This Stock Option Agreement (the
"Option Agreement"), which was originally made as of February 19,
2002 (the “Original Date of Grant”), by and between
Transaction Systems Architects, Inc., (“TSA”) a
Delaware corporation (the "Corporation") and GREGORY D. DERKACHT,
an employee of the Corporation or its subsidiaries (the
"Optionee"), is amended and restated effective as of February 26,
2004.
WHEREAS, the Board of Directors of
the Corporation has duly adopted and approved the 1999 Stock Option
Plan (the "Plan"), which Plan authorizes the Corporation to grant
to eligible individuals options for the purchase of shares of the
Corporation's Class A Common Stock (the "Stock"); and
WHEREAS, the Corporation has
determined that it is desirable and in its best interests to grant
the Optionee, pursuant to the Plan, an option to purchase a certain
number of shares of Stock, in order to provide the Optionee with an
incentive to advance the interests of the Corporation, all
according to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of
the mutual promises and covenants contained herein, the parties
hereto do hereby agree as follows:
1.
GRANT OF NON-QUALIFIED
STOCK OPTION
Subject to the terms of the Plan,
the Corporation hereby grants to the Optionee the right and option
(the "Option") to purchase from the Corporation, on the terms and
subject to the conditions set forth in the Plan and in this
Agreement, 200,000 shares of Class A Common Stock.
This Option shall not
constitute an incentive stock option within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended (the
“Code”).
The Option granted pursuant to this
Option Agreement is granted subject to the terms and conditions set
forth in the Plan, a copy of which is attached to this Option
Agreement. All terms and conditions of the Plan, as may be amended
from time to time, are hereby incorporated into this Option
Agreement by reference and shall be deemed to be part of this
Option Agreement, without regard to whether such terms and
conditions (including, for example, provisions relating to certain
changes in capitalization of the Corporation) are not otherwise set
forth in this Option Agreement. In the event that there is any
inconsistency between the provisions of this Option Agreement and
of the Plan, the provisions of the Plan shall govern.
The Exercise Price for the shares
of Stock subject to the Option granted by this Option Agreement is
$9.80 per share.
Except as otherwise provided
herein, and subject to the provisions of the Plan (including
restrictions on the transferability of the Option and special
provisions relating to exercise or termination of the Option
following the Optionee's termination of employment, disability,
death or retirement or certain changes in capitalization of the
Corporation), the Option granted pursuant to this Option Agreement
shall be subject to exercise as follows:
4.1
Time of Exercise of
Option
The Optionee may exercise the
Option (subject to the limitations on exercise set forth in this
Agreement and in the Plan), in installments as follows:
(i) Subject to Section 4.2, no Option may be
exercised during the first year from the Original Date of
Grant;
(ii) Subject to Section 4.2, after one year from the
Original Date of Grant, the Option shall be exercisable in respect
of 33 and 1/3 percent of the number of shares specified in Section
1 above; and
(iii) Subject to Section 4.2, after the expiration of
each of the second, and third years from the Original Date of
Grant, the Option shall be exercisable in respect of an additional
33 and 1/3 percent of such shares specified in Section 1
above.
The foregoing installments, to the
extent not exercised, shall accumulate and be exercisable, in whole
or in part, at any time and from time to time, after becoming
exercisable and prior to the termination of the Option;
provided , that no single exercise of the Option shall be
for less than 100 shares, unless at the time of the exercise, the
maximum number of shares available for purchase under this Option
is less than 100 shares. In no event shall the Option be exercised
for a fractional share.
4.2
Acceleration of
Option.
Notwithstanding any other provision
of this Agreement to the contrary, the Option granted hereby shall
become immediately exercisable upon the occurrence of a Change in
Control (as hereinafter defined) of the Corporation if Optionee is
an employee of the Corporation or any of its subsidiaries on the
date of the consummation of such Change in Control.
For purposes of this Section 4.2, a
“Change in Control” means the occurrence of any of the
following events:
(i) any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a
“Person”) is or becomes the beneficial owner (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of
20% or more of the combined voting power of the then-outstanding
Voting Stock of the Corporation; provided, however,
that:
(1) for purposes of this paragraph (i), the
following acquisitions shall not constitute a Change in Control:
(A) any acquisition of Voting Stock of the Corporation directly
from the Corporation that is approved by a majority of the
Incumbent Directors, (B) any acquisition of Voting Stock of the
Corporation by the Corporation or any subsidiary of the
Corporation, (C) any acquisition of Voting Stock of the Corporation
by the trustee or other fiduciary holding securities under any
employee benefit plan (or related trust) sponsored or maintained by
the Corporation or any subsidiary of the Corporation, and (D) any
acquisition of Voting Stock of the Corporation by any Person
pursuant to a Business Transaction that complies with clauses (A),
(B) and (C) of subparagraph (i)(3) below;
(2) if any Person is or becomes the beneficial
owner of 20% or more of combined voting power of the
then-outstanding Voting Stock of the Corporation as a result of a
transaction described in clause (A) of subparagraph (i)(1) above
and such Person thereafter becomes the beneficial owner of any
additional shares of Voting Stock of the Corporation representing
1% or more of the then-outstanding Voting Stock of the Corporation,
other than in an acquisition directly from the Corporation that is
approved by a majority of the Incumbent Directors or other than as
a result of a stock dividend, stock split or similar transaction
effected by the Corporation in which all holders of Voting Stock
are treated equally, such subsequent acquisition shall be treated
as a Change in Control;
(3) a Change in Control will not be deemed to
have occurred if a Person is or becomes the beneficial owner of 20%
or more of the Voting Stock of the Corporation as a result of a
reduction in the number of shares of Voting Stock of the
Corporation outstanding pursuant to a transaction or series of
transactions that is approved by a majority of the Incumbent
Directors unless and until such Person thereafter becomes the
beneficial owner of any additional shares of Voting Stock of the
Corporation representing 1% or more of the then-outstanding Voting
Stock of the Corporation, other than as a result of a stock
dividend, stock split or similar transaction effected by the
Corporation in which all holders of Voting Stock are treated
equally; and
(4) if at least a majority of the Incumbent
Directors determine in good faith that a Person has acquired
beneficial ownership of 20% or more of the Voting Stock of the
Corporation inadvertently, and such Person divests as promptly as
practicable but no later than the date, if any, set by the
Incumbent Board a sufficient number of shares so that such Person
beneficially owns less than 20% of the Voting Stock of the
Corporation, then no Change in Control shall have occurred as a
result of such Person’s acquisition; or
(ii) a majority of the Board ceases to be
comprised of Incumbent Directors; or
(iii) the consummation of a reorganization,
merger or consolidation, or sale or other disposition of all or
substantially all of the assets of the Corporation or the
acquisition of the stock or assets of another corporation, or other
transaction (each, a “Business Transaction”), unless,
in each case, immediately following such Business Transaction (A)
the Voting Stock of the Corporation outstanding immediately prior
to such Business Transaction continues to represent (either by
remaining outstanding or by being converted into Voting Stock of
the surviving entity or any parent thereof), more than 60% of the
combined voting power of the then outstanding shares of Voting
Stock of the entity resulting from such Business Transaction
(including, without limitation, an entity which as a result of such
transaction owns the Corporation or all or substantially all of the
Corporation’s assets either directly or through one or more
subsidiaries), (B) no Person (other than the Corporation, such
entity resulting from such Business Transaction, or any employee
benefit plan (or related trust) sponsored or maintained by the
Corporation, any subsidiary of the Corporation or such entity
resulting from such Business Transaction) beneficially owns,
directly or indirectly, 20% or more of the combined voting power of
the then outstanding shares of Voting Stock of the entity resulting
from such Business Transaction, and (C) at least a majority of the
members of the Board of Directors of the entity resulting from such
Business Transaction were Incumbent Directors at the time of the
execution of the initial agreement or of the action of the Board
providing for such Business Transaction; or
(iv) approval by the shareholders of the
Corporation of a complete liquidation or dissolution of the
Corporation, except pursuant to a Business Transaction that
complies with clauses (A), (B) and (C) of paragraph
(iii).
For purposes of this Section 4.2,
the term “Exchange Act” means the Securities Exchange
Act of 1934, as amended.
For purposes of this Section 4.2,
the term “Incumbent Directors” means the individuals
who, as of the date hereof, are Directors of the Corporation and
any individual becoming a Director subsequent to the date hereof
whose election, nomination for election by the Corporation’s
shareholders, or appointment, was approved by a vote of at least
two-thirds of the then Incumbent Directors (either by a specific
vote or by approval of the proxy statement of the Corporation in
which such person is named as a nominee for director, without
objection to such nomination); provided , however ,
that an individual shall not be an Incumbent Director if such
individual’s election or appointment to the Board occurs as a
result of an actual or threatened election contest (as described in
Rule 14a-12(c) of the Exchange Act) 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.
For purposes of this Section 4.2,
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