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Exhibit
10.6
FORM OF STOCK OPTION
AGREEMENT
THIS AGREEMENT, dated as of
(the “ Grant Date ”) is made by and between New
Omaha Holdings Corporation, a Delaware corporation (hereinafter
referred to as the “ Company ”), and the
individual whose name is set forth on the signature page hereof,
who is an employee of the Company or a Subsidiary or Affiliate of
the Company (hereinafter referred to as the “ Optionee
”). Any capitalized terms herein not otherwise defined in
Article I shall have the meaning set forth in the 2007 Stock
Incentive Plan for Key Employees of First Data Corporation and its
Affiliates (the “ Plan ”).
WHEREAS, the Company wishes
to carry out the Plan, the terms of which are hereby incorporated
by reference and made a part of this Agreement; and
WHEREAS, the Compensation
Committee of the Board of the Company (or, if no such committee is
appointed, the Board) (the “ Committee ”) has
determined that it would be to the advantage and best interest of
the Company and its shareholders to grant the Option provided for
herein to the Optionee as an incentive for increased efforts during
his term of office with the Company or its Subsidiaries or
Affiliates, and has advised the Company thereof and instructed the
undersigned officers to issue said Option;
NOW, THEREFORE, in
consideration of the mutual covenants herein contained and other
good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as
follows:
ARTICLE I
DEFINITIONS
Whenever the following terms
are used in this Agreement, they shall have the meaning specified
below unless the context clearly indicates to the
contrary.
Section 1.1. Base
Price
“Base Price”
shall mean $
.
Section 1.2.
Cause
“Cause” shall
have the meaning ascribed to it in any employment, severance or
change in control agreement between the Optionee and the Company or
any of its Affiliates, or, if there is no such agreement,
“Cause” shall mean (a) the Optionee’s
continued failure substantially to perform the Optionee’s
duties with the Company or any Subsidiary or Affiliate thereof
(other than as a result of total or partial incapacity due to
physical or mental illness) for a period of 10 days following
written notice by the Company to the Optionee of such failure,
(b) the Optionee’s conviction of, or plea of nolo
contendere to a crime constituting (x) a
felony
under the laws of the United States or
any state thereof or (y) a misdemeanor involving moral
turpitude, (c) the Optionee’s willful malfeasance or
willful misconduct in connection with the Optionee’s duties
with the Company or any of its Subsidiaries or Affiliates or any
willful misrepresentation, willful act or willful omission which is
injurious to the financial condition or business reputation of the
Company or its Affiliates or (d) the Optionee’s material
breach of the provisions of Section 23 of the Management
Stockholder’s Agreement. For purposes hereof, no act, or
failure to act, by the Optionee will be deemed
“willful” unless done, or omitted to be done, by the
Optionee not in good faith and without reasonable belief the
Optionee’s act, or failure to act, was in the best interest
of the Company, and under no circumstances will the failure to meet
performance targets, after a good faith attempt to do so, in and of
itself constitute Cause.
Section 1.3. Closing
Date
“Closing Date”
shall have the same meaning as that term is defined in the Merger
Agreement.
Section 1.4. Time
Option
“Time Option”
shall mean the right and option to purchase, on the terms and
conditions set forth herein, all or any part of an aggregate of the
number of shares of Common Stock set forth on the signature page
hereof opposite the term Time Option, having a per share exercise
price equal to the Base Price.
Section 1.5.
Disability
“Disability”
shall have the meaning ascribed to it in any employment agreement
between Optionee and the Company or any of its Subsidiaries, or, if
there is no such employment agreement, “Disability” as
defined in the long-term disability plan of the Company.
Section 1.6. Family
Transferees
“Family
Transferees” shall mean (i) an Optionee’s spouse
or children (collectively, “relatives”) and (ii) a
trust of which there are no beneficiaries other than such Optionee
and the relatives of such Optionee.
Section 1.7. Fiscal
Year
“Fiscal Year”
shall mean each of the 2008, 2009, 2010, 2011 and 2012 fiscal years
of the Company.
Section 1.8. Good
Reason
“Good Reason”
shall have the meaning ascribed to it any employment agreement
between the Optionee and the Company or any of its subsidiaries or
Affiliates, or, if there is no such employment agreement,
“Good Reason” shall mean (i) a reduction in the
Optionee’s base salary or the Optionee’s annual
incentive compensation opportunity (other than a general
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reduction in base salary or
annual incentive compensation opportunities that affects all
members of senior management of the Company and its subsidiaries
equally); (ii) a relocation of Optionee’s primary
workplace by more than fifty (50) miles from the current
workplace; or (iii) a substantial reduction in or demotion of
Optionee’s duties, responsibilities or title (other than a
change in title that is the result of a broad restructuring of the
Company’s titling of officers), in each case other than any
isolated, insubstantial and inadvertent failure by the Company that
is not in bad faith and is cured within ten (10) business days
after the Optionee gives the Company notice of such event;
provided that “Good Reason” shall cease to exist
for an event on the 60 th day
following the later of its occurrence or the Optionee’s
knowledge thereof, unless the Optionee has given the Company
written notice thereof prior to such date.
Section 1.9. Liquidity
Event
“Liquidity Event”
shall mean, in one or a series of transactions, a merger,
recapitalization or other sale by the Sponsor or its Affiliates
(including through a Public Offering) of Common Stock or other
voting securities of the Company that results in the Sponsor no
longer owning 90% of the number of shares of Common Stock or other
voting securities of the Company (or any resulting company after a
merger) owned, directly or indirectly, by the Sponsor, determined
by measuring such number of shares as of that point in time that
the Sponsor held its largest number of shares of Common Stock or
other voting securities of the Company (or such resulting company
after a merger).
Section 1.10. Management
Stockholder’s Agreement
“Management
Stockholder’s Agreement” shall mean that certain
Management Stockholder’s Agreement between the Optionee and
the Company.
Section 1.11. Measurement
Date
“Measurement
Date” shall mean any date upon which a Change in Control or a
Liquidity Event occurs.
Section 1.12. Merger
Agreement
“Merger
Agreement” shall mean the Agreement and Plan of Merger by and
among New Omaha Holdings L.P., Omaha Acquisition Corporation and
First Data Corporation, dated April 1, 2007, as the same may
be amended from time to time.
Section 1.13.
Option
“Option” shall
mean the aggregate of the Time Option and the Performance Option
granted under Section 2.1 of this Agreement.
Section 1.14. Performance
Option
“Performance
Option” shall mean the right and option to purchase, on the
terms and conditions set forth herein, all or any part of an
aggregate of the number of shares of Common Stock set forth on the
signature page hereof opposite the term Performance Option, having
a per share exercise price equal to the Base Price.
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Section 1.15.
Secretary
“Secretary” shall
mean the Secretary of the Company.
Section 1.16.
Sponsor
“Sponsor” shall
mean the investment funds affiliated with Kohlberg Kravis
Roberts & Co. L.P.
Section 1.17. Sponsor
IRR
“Sponsor IRR”
shall mean, on any given date, a pretax compounded annual internal
rate of return, based on the passage of time from the Closing Date,
of at least 25% realized, directly or indirectly, by the Sponsor
after the Closing Date on any Shares held by the Sponsor, on a per
Share, fully diluted basis, based on the amount invested by the
Sponsor in the equity securities of the Company. For the avoidance
of doubt, (a) any calculation of Sponsor IRR will for purposes
of Section 3.1(d) be calculated solely with respect to Sponsor
Shares actually sold or otherwise disposed of in the applicable
transaction (but including cash dividends or other cash
distributions paid on Sponsor Shares), and (b) Sponsor IRR
will not be calculated taking into account the receipt by the
Sponsor or any of its affiliates of any management, monitoring,
transaction or other fees payable to such parties by the Company or
any of its Subsidiaries; provided that any management fees
received by such parties in excess of those contemplated in the
management agreement between the Sponsor and the Company (including
any stipulated or specified increases increase mechanisms) shall be
included in Sponsor Return.
Section 1.18. Sponsor
Return
“Sponsor Return”
shall mean, on any given date, all cash proceeds actually received,
directly or indirectly, by the Sponsor after the Closing Date,
including the receipt of any cash dividends or other cash
distributions thereon, on a per Share, fully diluted basis, in an
amount that equals or exceeds the product of 2.5 and the Base
Price. For the avoidance of doubt, (a) any calculation of
Sponsor Return will for purposes of Section 3.1(d) be
calculated solely with respect to Sponsor Shares actually sold or
otherwise disposed of in the applicable transaction, and
(b) Sponsor Return will not be calculated taking into account
the receipt by the Sponsor or any of its affiliates of any
management, monitoring, transaction or other fees payable to such
parties by the Company or any of its Subsidiaries; provided
that any management fees received by such parties in excess of
those contemplated in the management agreement between the Sponsor
and the Company (including any stipulated or specified increases
increase mechanisms) shall be included in Sponsor
Return.
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ARTICLE II
GRANT OF
OPTIONS
Section 2.1. - Grant of
Options
For good and valuable
consideration, on and as of the date hereof the Company irrevocably
grants to the Optionee the following Stock Options: (a) the
Time Option and (b) the Performance Option, in each case on
the terms and conditions set forth in this Agreement.
Section 2.2. - Exercise
Price
Subject to Section 2.4,
the exercise price of the shares of Common Stock covered by the
Option (the “Exercise Price”) shall be equal to the
Base Price.
Section 2.3. - No Guarantee
of Employment
Nothing in this Agreement or
in the Plan shall confer upon the Optionee any right to continue in
the employ of the Company or any Subsidiary or Affiliate or shall
interfere with or restrict in any way the rights of the Company and
its Subsidiaries or Affiliates, which are hereby expressly
reserved, to terminate the employment of the Optionee at any time
for any reason whatsoever, with or without cause, subject to the
applicable provisions of, if any, the Optionee’s employment
agreement with the Company or offer letter provided by the Company
to the Optionee.
Section 2.4. - Adjustments
to Option
The Options shall be subject
to the adjustment provisions of Sections 8 and 9 of the Plan,
provided , however , that in the event of the payment
of an extraordinary dividend by the Company to its stockholders,
then: the Exercise Prices of the Options shall be reduced by the
amount of the dividend paid, but only to the extent the Committee
determines it to be permitted under applicable tax laws and not
have adverse tax consequences to the Optionee under
Section 409A of the Code; and, if such reduction cannot be
fully effected due to such tax laws and it will not have adverse
tax consequences to the Optionee, then the Company shall pay to the
Optionee a cash payment, on a per Share basis, equal to the balance
of the amount of the dividend not permitted to be applied to reduce
the Exercise Price of the applicable Option as follows:
(a) for each Share subject to a vested Option, immediately
upon the date of such dividend payment; and (b), for each Share
subject to an unvested Option, on the date on which such Option
becomes vested and exercisable with respect to such
Share.
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ARTICLE III
PERIOD OF
EXERCISABILITY
Section 3.1. - Commencement
of Exercisability
(a) So long as the Optionee
continues to be employed by the Company or any other Service
Recipients, the Options shall become exercisable pursuant to the
following schedules:
(i) Time Options .
Each of the Time Options shall become vested and exercisable with
respect to 20% of the Shares subject to each such Option on each of
the first five anniversaries of the Closing Date.
(ii) Performance
Optio
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