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EXHIBIT 10.3
CHANGE IN CONTROL
SEVERANCE COMPENSATION AGREEMENT
This CHANGE IN CONTROL SEVERANCE COMPENSATION AGREEMENT (this
"Agreement")
is dated as of March 8, 2005 between Transaction Systems
Architects, Inc., a
Delaware corporation (the "Company"), and Philip G. Heasley (the
"Executive").
WHEREAS, the Company's Board of Directors (the "Board") has
determined
that it is appropriate to reinforce and encourage the continued
attention and
dedication of the Executive to his assigned duties without
distraction arising
from the possibility of a change in control of the Company;
and
WHEREAS, the Company and the Executive have entered into an
employment
agreement dated as of March 8, 2005 (the "Employment
Agreement").
NOW, THEREFORE, this Agreement sets forth the severance
compensation
which the Company agrees it will pay to the Executive if the
Executive's
employment with the Company terminates under certain
circumstances described
herein following a Change in Control (as defined herein) and the
other benefits
the Company will provide the Executive following a Change in
Control.
1. TERM.
This Agreement shall terminate, except to the extent that
any
obligation of the Company hereunder remains unpaid as of such
time, upon the
earlier of (i) the termination of Executive's employment for any
reason prior to
a Change in Control; and (ii) two years after the date of a
Change in Control.
2. CHANGE IN CONTROL.
For purposes of this Agreement, "Change in Control" shall
mean:
(a) the acquisition by 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"), of beneficial
ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 20%
or more of
either (i) the then-outstanding shares of common stock of the
Company (the
"Outstanding Company Common Stock") or (ii) 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 the following acquisitions shall not
constitute a
Change in Control: (A) any acquisition directly from the Company
(excluding an
acquisition by virtue of the exercise of a conversion
privilege), (B) any
acquisition by any employee benefit plan (or related trust)
sponsored or
maintained by the Company or any corporation controlled by the
Company or
(C) any acquisition by any corporation pursuant to a
reorganization, merger or
consolidation, if, following such reorganization, merger or
consolidation, the
conditions described in sub-clauses (i), (ii) and (iii) of
clause (c) of this
Section 2 are satisfied; or
(b) if individuals who, as of the date hereof, constitute the
Board of
Directors (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
two-thirds of the directors then constituting 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 either an actual or threatened
election contest
subject to Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act or
other actual or threatened solicitation of proxies or consents
by or on behalf
of a Person other than the Board; or
(c) consummation of a reorganization, merger or consolidation,
unless
following such reorganization, merger or consolidation (i) more
than 60% of,
respectively, the then-outstanding shares of common stock of the
corporation
resulting from such reorganization, merger or consolidation and
the combined
voting power of the then outstanding voting securities of such
corporation
entitled to vote generally in the election of directors is then
beneficially
owned, directly or indirectly, by all or substantially all of
the individuals
and entities who were the beneficial owners, respectively, of
the Outstanding
Company Common Stock and Outstanding Company Voting Securities
immediately
prior to such reorganization, merger, or consolidation in
substantially the
same proportions as their ownership, immediately prior to such
reorganization,
merger or consolidation, of the Outstanding Company Common Stock
and Outstanding
Company Voting Securities, as the case may be (for purposes of
determining
whether such percentage test is satisfied, there shall be
excluded from the
number of shares and voting securities of the resulting
corporation owned by the
Company's stockholders, but not from the total number of
outstanding shares and
voting securities of the resulting corporation, any shares or
voting securities
received by any such stockholder in respect of any consideration
other than
shares or voting securities of the Company), (ii) no Person
(excluding the
Company, any employee benefit plan (or related trust) of the
Company, any
qualified employee benefit plan of such corporation resulting
from such
reorganization, merger or consolidation and any Person
beneficially owning,
immediately prior to such reorganization, merger or
consolidation, directly or
indirectly, 20% or more of the Outstanding Company Common Stock
or Outstanding
Company Voting Securities, as the case may be) beneficially
owns, directly or
indirectly, 20% or more of, respectively, the then-outstanding
shares of common
stock of the corporation resulting from such reorganization,
merger or
consolidation or the combined voting power of the
then-outstanding voting
securities of such corporation entitled to vote generally in the
election of
directors and (iii) at least a majority of the members of the
board of directors
of the corporation resulting from such reorganization, merger or
consolidation
were members of the Incumbent Board at the time of the execution
of the initial
agreement providing for such reorganization, merger or
consolidation; or
(d) (i) approval by the stockholders of the Company of a
complete
liquidation or dissolution of the Company or (ii) the first to
occur of (A) the
sale or other disposition (in one transaction or a series of
related
transactions) of all or substantially all of the assets of the
Company, or
(B) the approval by the stockholders of the Company of any such
sale or
disposition, other than, in each case, any such sale or
disposition to a
corporation, with respect to which immediately thereafter, (1)
more than 60% of,
respectively, the then-outstanding shares of common stock of
such corporation
and the combined voting power of the then-outstanding voting
securities of such
corporation entitled to vote generally in the election of
directors is then
beneficially owned, directly or indirectly, by all or
substantially all of the
individuals and entities who were the beneficial owners,
respectively, of the
outstanding Company Common Stock and Outstanding Company Voting
Securities
immediately prior to such sale or other disposition in
substantially the same
proportion as their ownership, immediately prior to such sale or
other
disposition, of the Outstanding Company Common Stock and
Outstanding Company
Voting Securities, as the case may be (for purposes of
determining whether such
percentage test is satisfied, there shall be excluded from the
number of shares
and voting securities of the transferee corporation owned by the
Company's
stockholders, but not from the total number of outstanding
shares and voting
securities of the transferee corporation, any shares or voting
securities
received by any such stockholder in respect of any consideration
other than
shares or voting securities of the Company), (2) no Person
(excluding the
Company and any employee benefit plan (or related trust) of the
Company, any
qualified employee benefit plan of such transferee corporation
and any Person
beneficially owning, immediately prior to such sale or other
disposition,
directly or indirectly, 20% or more of the Outstanding Company
Common Stock or
Outstanding Company Voting Securities, as the case may be)
beneficially owns,
directly or indirectly, 20% or more of, respectively, the
then-outstanding
shares of common stock of such transferee corporation and the
combined voting
power of the then-outstanding voting securities of such
transferee corporation
entitled to vote generally in the election of directors and (3)
at least a
majority of the members of the board of directors of such
transferee corporation
were members of the Incumbent Board at the time of the execution
of the initial
agreement or action of the board providing for such sale or
other disposition of
assets of the Company.
3. TERMINATION FOLLOWING A CHANGE IN CONTROL.
(a) Entitlement to Compensation. The Executive shall be entitled
to the
compensation provided in Section 4 of this Agreement if all of
the following
conditions are satisfied:
(i) there is a Change in Control of the Company while the
Executive
is still an employee of the Company;
(ii) the Executive's employment with the Company is terminated
within
two years after the Change in Control;
(iii) the Executive's termination of employment is not a result
of (A)
the Executive's death; (B) the Executive's Disability (as
defined in
section 3(b) below); (C) the Executive's Retirement (as defined
in
section 3(c) below); (D) the Executive's termination by the
Company
for Cause (as defined in Section 3(d) below); or (E) the
Executive's
decision to terminate employment other than for Good Reason
(as
defined in Section 3(e) below); and
(iv) the Executive executes and delivers to the Company the
Release
Agreement contemplated under the Employment Agreement.
(b) Disability. For purposes of this Agreement only,
"Disability" shall
mean that, as a result of the Executive's incapacity due to
physical or mental
illness, the Executive shall have been unable, with or without a
reasonable
accommodation, to perform his duties with the Company on a
full-time basis for
six months and within 30 days after a Notice of Termination (as
defined in
Section 3(f) below) is thereafter given by the Company, the
Executive shall not
have returned to the full-time performance of the Executive's
duties.
(c) Retirement. For purposes of this Agreement only,
"Retirement" shall
mean termination by the Company or the Executive of the
Executive's employment
based on the Executive's having reached age 65 or such other age
as shall have
been fixed in any arrangement established pursuant to this
Agreement with the
Executive's consent with respect to the Executive.
(d) Cause. For purposes of this Agreement only, "Cause" shall
mean the
occurrence of any of the following events: (i) the Executive's
conviction of a
felony involving moral turpitude; (ii) the Executive's serious,
willful gross
misconduct or the Executive's repeated failure or refusal to
perform or observe
the Executive's material duties, responsibilities and
obligations as an employee
or officer of the Company for reasons other than Disability, if
such misconduct,
failure or refusal continues ten days following written notice
thereof by the
Company to the Executive identifying the same and specifying
that the
Executive's employment may be terminated if the same continues;
(iii) the
Executive's breach of any provision of Section 7 of the
Employment Agreement,
which is not cured within three days after written notice
thereof to the
Executive; or (iv) the Executive's violation of any provision of
the Company's
Code of Business Conduct and Ethics or 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.
For purposes of this Agreement, any termination of the
Executive's
employment by the Company for Cause shall be authorized by a
vote of at least a
majority of the non-employee members of the Board. No
termination for Cause
shall take effect until the expiration of the correction period,
if any,
described above and the determination by a majority of the
non-employee members
of the Board that the Executive has failed to correct the act or
failure to act.
(e) Good Reason. For purposes of this Agreement, "Good Reason"
shall mean,
after any Change in Control and without the Executive's express
written consent,
any of the following:
(i) except in connection with the termination of the
Executive's
employment for Disability, Retirement or Cause, the assignment
to the
Executive of any material duties inconsistent with the
Executive's
status or position with the Company, or any other action by
the
Company that results in a substantial diminution in such status
or
position, excluding any isolated, insubstantial, or
inadvertent
action not taken in bad faith and which is remedied by the
Company
promptly after receipt of notice thereof from the Executive;
provided, however, that any change in the Executive's title
or
reporting relationship as a consequence of the Change in
Control
shall not be considered Good Reason, and any determination of
Good
Reason, to the extent such determination relates to Executive's
title
or reporting relationship, shall be made by reference to
Executive's
title or reporting relationship that exists as a consequence of
the
Change in Control;
(ii) a material reduction by the Company in the Executive's
annual
base salary or target incentive in effect immediately prior to
the
Change in Control;
(iii) the failure by the Company to continue to provide the
Executive
with benefits at least as favorable in the aggregate to those
enjoyed
by the Executive under the Company's life insurance, medical,
health
and accident, disability, deferred compensation, or savings
plans in
which Executive was participating at the time of the Change
in
Control, the taking of any action by the Company that would
directly
or indirectly materially reduce any such benefits or deprive
the
Executive of any material fringe benefit enjoyed at the time of
the
Change in Control, or the failure of the Company to provide
the
Executive with the number of paid vacation days to which the
Executive is entitled at the time of the Change in Control,
but
excluding any failure or action by the Company that is not taken
in
bad faith and which is remedied by the Company promptly after
receipt
of notice thereof from the Executive;
(iv) the Company requiring the Executive to relocate to any
place
other than a location within 40 miles of the location at
which
Executive performed his primary duties immediately prior to the
Change
in Control or, if the Executive is based at the Company's
principal
executive offices, the relocation of the Company's principal
executive offices to a location more than 40 miles from its
location
immediately prior to the Change in Control, except for
required
travel on the Company's business to an extent substantially
consistent with the Executive's prior business travel
obligations;
(v) any material breach of this Agreement that is not remedied
by
the Company promptly after receipt of a written notice thereof
from
the Executive; or
(vi) the failure of the Company to obtain agreement from any
successor to assume and agree to perform the Agreement.
(f) Notice of Termination. Any termination of the Executive by
the Company
pursuant to Section 3(b), 3(c) or 3(d) above, or by the
Executive pursuant to
Section 3(e) above, shall be communicated by a Notice of
Termination to the
other party hereof. For purposes of this Agreement, a "Notice of
Termination"
shall mean a written notice which shall indicate those specific
termination
provisions in this Agreement relied upon and which 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.
For purposes
of this Agreement, no such purported termination by the Company
shall be
effective without such Notice of Termination.
(g) Date of Termination. "Date of Termination" shall mean (i) if
the
Executive's employment is terminated by the Company for
Disability, 30 days
after Notice of Termination is given to the Executive (provided
that the
Executive shall not have returned to the performance of the
Executive's duties
on a full-time basis during such 30-day period), (ii) if the
Executive's
employment is terminated by the Executive for Good Reason, the
date specified in
the Notice of Termination, and (iii) if the Executive's
employment is terminated
by the Company for any other reason, the date on which a Notice
of Termination
is given; provided, however, that if within 30 days after any
Notice of
Termination is given to the Executive by the Company, the
Executive notifies the
Company that a dispute exists concerning the termination, the
Date of
Termination shall be the date the dispute is finally determined,
whether by
mutual written agreement of the parties or upon final judgment,
order or decree
of a court of competent jurisdiction (the time for appeal
therefrom having
expired and no appeal having been perfected).
4. SEVERANCE COMPENSATION UPON TERMINATION OF EMPLOYMENT.
(a) Severance Compensation. If pursuant to Section 3(a) above
the
Executive is entitled to the compensation pro
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