UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K/A
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date
of Report: December 21, 2005
(Date
of earliest event reported)
_________________________
TRANSACTION
SYSTEMS ARCHITECTS, INC.
(Exact
name of registrant as specified in its charter)
|
Delaware
|
0-25346
|
47-0772104
|
|
(State
or other jurisdiction
of
incorporation
|
(Commission
File
Number)
|
(I.R.S.
Employer
Identification
No.)
|
224
South 108th Avenue,
Omaha,
Nebraska 68154
(Address
of principal executive offices, including zip code)
(402)
334-5101
(Registrant’s
telephone number, including area code)
_________________________
Check
the appropriate box below if the Form 8-K/A filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
r
Written
communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
r
Soliciting
material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
r
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
r
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
1.01. Entry into a Material Definitive Agreement.
On
December 21, 2005, the Company entered into a Fifth Amended and Restated
Employment Agreement (the “Employment Agreement”) with Gregory D. Derkacht. The
Employment Agreement amends and restates the Fourth Amended and Restated
Employment Agreement dated August 5, 2005 (the “Original Agreement”). Pursuant
to the Employment Agreement, the Company will pay Mr. Derkacht a base salary
at
the rate of $360,000 per year through December 31, 2005. Thereafter, through
the
remaining term of the Employment Agreement, the Company shall have no obligation
to pay Mr. Derkacht a base salary. The term of the Employment Agreement expires
February 28, 2006. All other terms of the Employment Agreement and exhibits
thereto are substantially the same as set forth in the Original Agreement.
Item
5.03. Amendment to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
On
December 21, 2005, the Company amended its Amended and Restated Bylaws to
add provisions providing the following:
(a)
that
the stockholders of the Company may take corporate action without a meeting
if a
written consent(s) signed by holders of outstanding stock of the Company having
not less than the minimum number of votes that would be necessary to authorize
or take such corporate action at a meeting of the stockholders is delivered
to
the Company;
(b) no
corporate action taken by written consent without a meeting shall be effective
until the inspector(s) of election appointed by the Company’s Board of Directors
certifies that the written consent(s) delivered to the Company represent the
minimum number of votes that would be necessary to authorize or take such
corporate action at a meeting; and
(c) any
stockholder seeking to act by written consent shall submit to the Company a
written request for the Board of Directors to fix a record date in order for
the
Company to determine the stockholders entitled to consent to such corporate
action without a meeting, and that the Board of Directors must adopt a
resolution fixing the record date within 10 days of the date on which the
request is received.
A
copy of the Company’s Amended and Restated Bylaws is being filed as Exhibit 3.1
to this Current Report on Form 8-K/A and is incorporated herein by reference
in
its entirety.
Item
9.01. Financial Statements and Exhibits.
|
Exhibit
No.
|
Description
|
|
|
3.1
|
Amended
and Restated Bylaws of the Company, as amended December 21, 2005
|
|
|
10.1
|
Fifth
Amended and Restated Employment Agreement dated as of December 21,
2005
between Transaction Systems Architects, Inc. and Gregory D. Derkacht
(with
exhibits)
|
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
|
TRANSACTION
SYSTEMS ARCHITECTS, INC.
|
||
|
Date:
December
22,
2005
|
By:
|
/s/
Dennis P. Byrnes
|
|
Dennis
P. Byrnes
Senior
Vice President
|
||
EXHIBIT
INDEX
|
Exhibit
No.
|
Description
|
|
|
3.1
|
Amended
and Restated Bylaws of the Company, as amended December 21, 2005
|
|
|
10.1
|
Fifth
Amended and Restated Employment Agreement dated as of December 21,
2005
between Transaction Systems Architects, Inc. and Gregory D. Derkacht
(with
exhibits)
|
Exhibit
3.1
TRANSACTION
SYSTEMS ARCHITECTS, INC.
AMENDED
AND RESTATED BYLAWS
As
Adopted and in
Effect
on December
21, 2005
TABLE
OF CONTENTS
PAGE
1.
Time
and Place of
Meetings..........................................................................................................................................................................1
2.
Annual
Meeting............................................................................................................................................................................................1
3.
Special
Meetings..........................................................................................................................................................................................1
4.
Notice
of
Meetings.......................................................................................................................................................................................1
5.
Inspectors for
Stockholder
Meetings............................................................................................................................................................2
6.
Quorum.......................................................................................................................................................................................................2
7.
Voting;
Proxies............................................................................................................................................................................................2
8.
Order
of
Business........................................................................................................................................................................................3
CONSENTS
OF
STOCKHOLDERS.........................................................................................................................................................................5
9.
Consent
of Stockholders in Lieu of
Meeting.................................................................................................................................................5
10.
Inspectors
for Consent of Stockholders in Lieu of
Meeting.........................................................................................................................5
DIRECTORS..............................................................................................................................................................................................................6
11.
Function....................................................................................................................................................................................................6
12.
Number,
Election and
Terms.....................................................................................................................................................................6
13.
Vacancies
and Newly Created
Directorships.............................................................................................................................................6
14.
Nominations
of Directors;
Election............................................................................................................................................................6
15.
Resignation..............................................................................................................................................................................................8
16.
Regular
Meetings.....................................................................................................................................................................................8
17.
Special
Meetings.....................................................................................................................................................................................8
18.
Quorum..................................................................................................................................................................................................8
19.
Participation
in Meetings by Remote
Communications..............................................................................................................................8
20.
Committees............................................................................................................................................................................................9
21.
Compensation........................................................................................................................................................................................9
22.
Rules....................................................................................................................................................................................................10
NOTICES..............................................................................................................................................................................................................10
23.
Generally..............................................................................................................................................................................................10
24.
Waivers...............................................................................................................................................................................................10
OFFICERS10
25.
Generally.............................................................................................................................................................................................10
26.
Compensation......................................................................................................................................................................................11
TABLE
OF CONTENTS
(continued)
0;
PAGE
27.
Succession..............................................................................................................................................................................................11
28.
Authority
and
Duties................................................................................................................................................................................11
STOCK....................................................................................................................................................................................................................11
29.
Certificates.............................................................................................................................................................................................11
30.
Classes
of
Stock.....................................................................................................................................................................................11
31.
Lost,
Stolen or Destroyed
Certificates.....................................................................................................................................................11
32.
Record
Dates.........................................................................................................................................................................................12
GENERAL...............................................................................................................................................................................................................13
33.
Contracts,
Checks,
Etc..........................................................................................................................................................................13
34.
Fiscal
Year............................................................................................................................................................................................13
35.
Seal.......................................................................................................................................................................................................13
36.
Reliance
Upon Books, Reports and
Records..........................................................................................................................................13
37.
Time
Periods.........................................................................................................................................................................................13
38.
Amendments.........................................................................................................................................................................................14
39.
Insurance..............................................................................................................................................................................................14
40.
Certificate
of Incorporation and Applicable
Law....................................................................................................................................14
(ii)
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STOCKHOLDERS
MEETINGS
|
| 1. |
Time
and Place of Meetings.
All meetings of the stockholders for the election of the members
of the
Board of Directors (the “Directors”)
or for any other purpose will be held at such time and place, within
or
without the State of Delaware, as may be designated by the Board
of
Directors of the Company (the “Board”)
or, in the absence of a designation by the Board, the Chairman of
the
Board (the “Chairman”),
the Chief Executive Officer, the President or the Secretary, and
stated in
the notice of meeting. Notwithstanding the foregoing, the Board may,
in
its sole discretion, determine that meetings of the stockholders
shall not
be held at any place, but may instead be held by means of remote
communications, subject to such guidelines and procedures as the
Board may
adopt from time to time. The Board may postpone and reschedule any
previously scheduled annual or special meeting of the
stockholders.
|
| 2. |
Annual
Meeting.
An annual meeting of the stockholders will be held at such date and
time
as may be designated from time to time by the Board, at which meeting
the
stockholders will elect by a plurality vote the Directors, and will
transact such other business as may properly be brought before the
meeting
in accordance with Bylaw 8.
|
| 3. |
Special
Meetings.
Special meetings of the stockholders may be called only by (i) the
Chairman, (ii) the President or (iii) the Secretary within 10 calendar
days after receipt of the written request of a majority of the total
number of Directors that the Company would have if there were no
vacancies
(the “Whole
Board”).
Any such request by a majority of the Whole Board must be sent to
the
Chairman and the Secretary and must state the purpose or purposes
of the
proposed meeting. Special meetings of holders of the outstanding
Preferred
Stock of the Company (the “Preferred
Stock”),
if any, may be called in the manner and for the purposes provided
in the
applicable Preferred Stock Designation (as defined in the certificate
of
incorporation of the Company, as amended from time to time (the
“Certificate
of Incorporation”)).
|
| 4. |
Notice
of Meetings.
Written notice of every meeting of the stockholders, stating the
place, if
any, date and time thereof, the means of remote communications, if
any, by
which stockholders and proxy holders may be deemed to be present
in person
and vote at such meeting, and, in the case of a special meeting,
the
purpose or purposes for which the meeting is called, will be given
not
less than 10 nor more than 60 calendar days before the date of the
meeting
to each stockholder of record entitled to vote at such meeting, except
as
otherwise provided herein or by law. When a meeting is adjourned
to
another place, date, or time, written notice need not be given of
the
adjourned meeting if the place, if any, date and time thereof, and
the
means of remote communications, if any, by which stockholders and
proxy
holders may be deemed to be present in person and vote at such adjourned
meeting are announced at the meeting at which the adjournment is
taken;
provided,
however,
that if the adjournment is for more than 30 calendar days, or if
after the
adjournment a new record date is fixed for the adjourned
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1
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meeting,
written notice of the place, if any, date and time thereof, and the
means
of remote communications, if any, by which stockholders and proxy
holders
may be deemed to be present in person and vote at such adjourned
meeting
must be given in conformity herewith. At any adjourned meeting, any
business may be transacted which properly could have been transacted
at
the original meeting.
|
| 5. |
Inspectors
for Stockholder Meetings.
The Board may appoint one or more inspectors of election to act as
judges
of the voting and to determine those entitled to vote at any meeting
of
the stockholders, or any adjournment thereof, in advance of such
meeting.
The Board may designate one or more persons as alternate inspectors
to
replace any inspector who fails to act. If no inspector or alternate
is
able to act at a meeting of stockholders, the presiding officer of
the
meeting may appoint one or more substitute
inspectors.
|
| 6. |
Quorum.
Except as otherwise provided by law or in a Preferred Stock Designation,
the holders of a majority of the stock issued and outstanding and
entitled
to vote thereat, present in person or represented by proxy, will
constitute a quorum at all meetings of the stockholders for the
transaction of business thereat. If, however, such quorum is not
present
or represented at any meeting of the stockholders, the stockholders
entitled to vote thereat, present in person or represented by proxy,
will
have the power to adjourn the meeting from time to time, without
notice
other than announcement at the meeting, until a quorum is present
or
represented.
|
| 7. |
Voting;
Proxies.
Except as otherwise provided by law, by the Company’s Certificate of
Incorporation, or in a Preferred Stock Designation, each stockholder
will
be entitled at every meeting of the stockholders to one vote for
each
share of stock having voting power standing in the name of such
stockholder on the books of the Company on the record date for the
meeting
and such votes may be cast either in person or by proxy. Every proxy
must
be authorized in a manner permitted by Section 212 of the Delaware
General
Corporation Law (or any successor provision). Without affecting any
vote
previously taken, a stockholder may revoke any proxy that is not
irrevocable by attending the meeting and voting in person, by revoking
the
proxy by giving notice to the Secretary of the Company, or by a later
appointment of a proxy. The vote upon any question brought before
a
meeting of the stockholders may be by voice vote, unless otherwise
required by the Certificate of Incorporation or these Bylaws or unless
the
Chairman or the holders of a majority of the outstanding shares of
all
classes of stock entitled to vote thereon present in person or by
proxy at
such meeting otherwise determine. Every vote taken by written ballot
will
be counted by the inspectors of election. When a quorum is present
at any
meeting, the affirmative vote of the holders of a majority of the
stock
present in person or represented by proxy at the meeting and entitled
to
vote on the subject matter and which has actually been voted (the
“Voting
Stock”)
will be the act of the stockholders, except in the election of Directors
or as otherwise provided in these Bylaws, the Certificate of
Incorporation, a Preferred Stock Designation, or by
law.
|
2
| 8. |
Order
of Business.
|
|
(a)
|
The
Chairman, or such other officer of the Company designated by a majority
of
the Whole Board, will call meetings of the stockholders to order
and will
act as presiding officer thereof. Unless otherwise determined by
the Board
prior to the meeting, the presiding officer of the meeting of the
stockholders will also determine the order of business and have the
authority in his or her sole discretion to regulate the conduct of
any
such meeting, including without limitation by imposing restrictions
on the
persons (other than stockholders of the Company or their duly appointed
proxies) that may attend any such stockholders’ meeting, by ascertaining
whether any stockholder or his proxy may be excluded from any meeting
of
the stockholders based upon any determination by the presiding officer,
in
his sole discretion, that any such person has disrupted or is likely
to
disrupt the proceedings thereat, and by determining the circumstances
in
which any person may make a statement or ask questions at any meeting
of
the stockholders.
|
| (b) |
At
an annual meeting of the stockholders, only such business will be
conducted or considered as is properly brought before the annual
meeting.
To be properly brought before an annual meeting, business must be
(i)
specified in the notice of the annual meeting (or any supplement
thereto)
given by or at the direction of the Board in accordance with Bylaw
4,
(ii) otherwise properly brought before the annual meeting by the
presiding
officer or by or at the direction of a majority of the Whole Board,
or
(iii) otherwise properly requested to be brought before the annual
meeting
by a stockholder of the Company in accordance with Bylaw
8(c).
|
| (c) |
For
business to be properly requested by a stockholder to be brought
before an
annual meeting, (i) the stockholder must be a stockholder of the
Company
of record at the time of the giving of the notice for such annual
meeting
provided for in these Bylaws, (ii) the stockholder must be entitled
to
vote at such meeting, (iii) the stockholder must have given timely
notice
thereof in writing to the Secretary and (iv) if the stockholder,
or the
beneficial owner on whose behalf any business is brought before the
meeting, has provided the Company with a Proposal Solicitation Notice,
as
that term is defined in this Bylaw
8(c),
such stockholder or beneficial owner must have delivered a proxy
statement
and form of proxy to the holders of at the least the percentage of
shares
of the Company entitled to vote required to approve such business
that the
stockholder proposes to bring before the annual meeting and included
in
such materials. To be timely, a stockholder’s notice must be delivered to
or mailed and received at the principal executive offices of the
Company
not less than 60 nor more than 90 calendar days prior to the first
anniversary of the date on which the Company first mailed its proxy
materials for the preceding year’s annual meeting of stockholders;
provided,
however,
that if the date of the annual meeting is advanced more than 30 calendar
days prior to or
|
3
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delayed
by more than 30 calendar days after the anniversary of the preceding
year’s annual meeting, notice by the stockholder to be timely must be
so
delivered not later than the close of business on the later of the
90th
calendar day prior to such annual meeting or the 10th calendar day
following the day on which public disclosure of the date of such
meeting
is first made. In no event shall the public disclosure of an adjournment
of an annual meeting commence a new time period for the giving of
a
stockholder’s notice as described above. A stockholder’s notice to the
Secretary must set forth as to each matter the stockholder proposes
to
bring before the annual meeting (A) a description in reasonable detail
of
the business desired to brought before the annual meeting and the
reasons
for conducting such business at the annual meeting, (B) the name
and
address, as they appear on the Company’s books, of the stockholder
proposing such business and the beneficial owner, if any, on whose
behalf
the proposal is made, (C) the class and series and number of shares
of
capital stock of the Company that are owned beneficially and of record
by
the stockholder proposing such business and by the beneficial owner,
if
any, on whose behalf the proposal is made, (D) a description of all
arrangements or understandings among such stockholder and any other
person
or persons (including their names) in connection with the proposal
of such
business by such stockholder and any material interest of such stockholder
in such business, (E) whether either such stockholder or beneficial
owner
intends to deliver a proxy statement and form of proxy to holders
of at
least the percentage of shares of the Company entitled to vote required
to
approve the proposal (an affirmative statement of such intent, a
“Proposal
Solicitation Notice”),
and (F) a representation that such stockholder intends to appear
in person
or by proxy at the annual meeting to bring such business before the
annual
meeting. Notwithstanding the foregoing provisions of this Bylaw
8(c),
a stockholder must also comply with all applicable requirements of
the
Securities Exchange Act of 1934 and the rules and regulations thereunder
(the “Exchange
Act”)
with respect to matters set forth in this Bylaw
8(c).
For purposes of this Bylaw
8
and Bylaw 14,“public
disclosure”
means disclosure in a press release reported by the Dow Jones News
Service, Associated Press or comparable national news service or
in a
document filed by the Company with the Securities and Exchange Commission
pursuant to the Exchange Act or furnished by the Company to stockholders.
Nothing in this Bylaw
8(c)
will be deemed to affect any rights of stockholders to request inclusion
of proposals in the Company’s proxy statement pursuant to Rule 14a-8 under
the Exchange Act.
|
| (d) |
At
a special meeting of stockholders, only such business may be conducted
or
considered as is properly brought before the meeting. To be properly
brought before a special meeting, business must be (i) specified
in the
notice of the meeting (or any supplement thereto) given by or at
the
direction of the Chairman, the President or a majority of the Whole
Board
in accordance with Bylaw 4
or (ii) otherwise properly brought before the
|
4
|
meeting
by the presiding officer or by or at the direction of a majority
of the
Whole Board.
|
| (e) |
The
determination of whether any business sought to be brought before
any
annual or special meeting of the stockholders is properly brought
before
such meeting in accordance with this Bylaw 8
will be made by the presiding officer of such meeting. If the presiding
officer determines that any business is not properly brought before
such
meeting, he or she will so declare to the meeting and any such business
will not be conducted or
considered.
|
|
CONSENTS
OF STOCKHOLDERS
|
| 9. |
Consent
of Stockholders in Lieu of Meeting.
Subject to the requirements of Bylaw 32 and unless otherwise provided
in the Certificate of Incorporation, any corporate action required
to be
taken at a meeting of the stockholders, or any other corporate action
which may be taken at a meeting of the stockholders, may be taken
without
a meeting, if a consent or consents in writing setting forth the
corporate
action to be so taken shall be signed by the holders of outstanding
stock
having not less than the minimum number of votes that would be necessary
to authorize or take such corporate action at a meeting at which
all
shares entitled to vote thereon were present and voted, and delivered
to
the Company’s registered office in the State of Delaware, to its principal
place of business or to any officer or agent of the Company having
custody
of the book in which proceedings of stockholders meetings are recorded,
in
each case addressed to the attention of the Secretary. Delivery shall
be
by hand or by certified or registered mail, return receipt requested.
The
Company shall give prompt notice of the taking of corporate action
without
a meeting by less than unanimous written consent to stockholders
who have
not consented in writing and who, if the corporate action had been
taken
at a meeting, would have been entitled to notice of the meeting if
the
record date for such meeting had been the date that written consents
signed by a sufficient number of stockholders to take the corporate
action
were delivered to the Company in the manner provided herein and in
the
Delaware General Corporation Law.
|
| 10. |
Inspectors
for Consent of Stockholders in Lieu of Meeting.
The Board may appoint one or more inspectors of elections to perform
a
ministerial review, or act as judges, of the validity of written
consents
delivered in accordance with Bylaw 9 and any revocations thereof. No
corporate action by written consent without a meeting shall be effective
until such date as the inspectors certify to the Company that the
signed
written consents delivered to the Company in accordance with Bylaw 9
represent at least the minimum number of votes that would be necessary
to
authorize or take such corporate action at a meeting at which all
shares
entitled to vote thereon were present and
voted.
|
5
|
DIRECTORS
|
| 11. |
Function.
The business and affairs of the Company will be managed under the
direction of its Board.
|
| 12. |
Number,
Election and Terms.
Subject to the rights, if any, of any series of Preferred Stock to
elect
additional Directors under circumstances specified in a Preferred
Stock
Designation, and to any minimum and maximum number of authorized
Directors
provided in the Certificate of Incorporation, the authorized number
of
Directors may be determined from time to time only by a vote of a
majority
of the Whole Board, but such number shall be no fewer than three
nor more
than nine.
|
| 13. |
Vacancies
and Newly Created Directorships.
Subject to the rights, if any, of the holders of any series of Preferred
Stock to elect additional Directors under circumstances specified
in a
Preferred Stock Designation, newly created directorships resulting
from
any increase in the number of Directors and any vacancies on the
Board
resulting from death, resignation, disqualification, removal, or
other
cause will be filled solely by the affirmative vote of a majority
of the
remaining Directors then in office, even though less than a quorum
of the
Board, or by a sole remaining Director. Any Director elected in accordance
with the preceding sentence will hold office for the remainder of
the full
term of the class of Directors in which the new directorship was
created
or the vacancy occurred and until such Director’s successor is elected and
qualified. No decrease in the number of Directors constituting the
Board
will shorten the term of an incumbent
Director.
|
| 14. |
Nominations
of Directors; Election.
|
|
(a)
|
Subject
to the rights, if any, of the holders of any series of Preferred
Stock to
elect additional Directors under circumstances specified
in a Preferred Stock Designation, only persons who are nominated
in
accordance with this Bylaw 14
will be eligible for election at a meeting of stockholders as Directors
of
the Company.
|
| (b) |
Nominations
of persons for election as Directors of the Company may be made only
at an
annual meeting of stockholders (i) by or at the direction of the
Board or
a committee thereof or (ii) by any stockholder that is a stockholder
of
record at the time of giving of notice provided for in this Bylaw 14,
who is entitled to vote for the election of Directors at such annual
meeting, and who complies with the procedures set forth in this
Bylaw 14.
If a stockholder, or a beneficial owner on whose behalf any such
nomination is made, has provided the Company with a Nomination
Solicitation Notice, as that term is defined in this Bylaw
14
below, such stockholder or beneficial owner must have delivered a
proxy
statement and form of proxy to the holders of at least the percentage
of
shares of the Company entitled to vote required to approve such nomination
and
|
6
|
included
in such materials the Nomination Solicitation Notice. All nominations
by
stockholders must be made pursuant to timely notice in proper written
form
to the Secretary.
|
| (c) |
To
be timely, a stockholder’s notice must be delivered to or mailed and
received at the principal executive offices of the Company not less
than
60 nor more than 90 calendar days prior to the first anniversary
of the
date on which the Company first mailed its proxy materials for the
preceding year’s annual meeting of stockholders; provided,
however,
that if the date of the annual meeting is advanced more than 30 calendar
days prior to or delayed by more than 30 calendar days after the
anniversary of the preceding year’s annual meeting, notice by the
stockholder to be timely must be so delivered not later than the
close of
business on the later of the 90th calendar day prior to such annual
meeting or the 10th calendar day following the day on which public
disclosure of the date of such meeting is first made. In no event
shall
the public disclosure of an adjournment of an annual meeting commence
a
new time period for the giving of a stockholder’s notice as described
above. To be in proper written form, such stockholder’s notice must set
forth or include (i) the
name and address, as they appear on the Company’s books, of the
stockholder giving the notice and of the beneficial owner, if any,
on
whose behalf the nomination is made; (ii) a
representation that the stockholder giving the notice is a holder
of
record of stock of the Company entitled to vote at such annual meeting
and
intends to appear in person or by proxy at the annual meeting to
nominate
the person or persons specified in the notice; (iii) the
class and number of shares of stock of the Company owned beneficially
and
of record by the stockholder giving the notice and by the beneficial
owner, if any, on whose behalf the nomination is made; (iv)
a
description of all arrangements or understandings between or among
any of
(A) the
stockholder giving the notice, (B) the
beneficial owner on whose behalf the notice is given, (C)
each
nominee, and (D) any
other person or persons (naming such person or persons) pursuant
to which
the nomination or nominations are to be made by the stockholder giving
the
notice; (v) such
other information regarding each nominee proposed by the stockholder
giving the notice as would be required to be included in a proxy
statement
filed pursuant to the proxy rules of the Securities and Exchange
Commission had the nominee been nominated, or intended to be nominated,
by
the Board; (vi) the
signed consent of each nominee to serve as a Director of the Company
if so
elected; (vii) whether
either such stockholder or beneficial owner intends to deliver a
proxy
statement and form of proxy to holders of at least the percentage
of
shares of the Company entitled to vote required to elect such nominee
or
nominees (an affirmative statement of such intent, a “Nomination
Solicitation Notice”);
and (viii) a
representation that such stockholder intends to appear in person
or by
proxy at the meeting to nominate the persons named in the notice.
At the
request of the Board, any person nominated by the Board for election
as a
Director must furnish to the Secretary that information
|
7
|
required
to be set forth in a stockholder’s notice of nomination that pertains to
the nominee. The presiding officer of any annual meeting will, if
the
facts warrant, determine that a nomination was not made in accordance
with
the procedures prescribed by this Bylaw
14,
and if he or she should so determine, he or she will so declare to
the
meeting and the defective nomination will be disregarded. Notwithstanding
the foregoing provisions of this Bylaw
14,
a stockholder must also comply with all applicable requirements of
the
Exchange Act with respect to the matters set forth in this
Bylaw 14.
|
| 15. |
Resignation.
Any Director may resign at any time by giving notice in writing or
by
electronic transmission of his or her resignation to the Chairman
or the
Secretary. Any resignation will be effective upon actual receipt
by any
such person or, if later, as of the date and time specified in such
written notice.
|
| 16. |
Regular
Meetings.
Regular meetings of the Board may be held immediately after the annual
meeting of the stockholders and at such other time and place either
within
or without the State of Delaware as may from time to time be determined
by
the Board. Notice of regular meetings of the Board need not be
given.
|
| 17. |
Special
Meetings.
Special meetings of the Board may be called by the Chairman or the
President on one day’s notice to each Director by whom such notice is not
waived, given either personally or by mail, courier, telephone, facsimile,
or similar medium of communication, and will be called by the Chairman
or
the President, in like manner and on like notice, on the written
request
of a majority of the Whole Board. Special meetings of the Board may
be
held at such time and place either within or without the State of
Delaware
as is determined by the Board or specified in the notice of any such
meeting.
|
| 18. |
Quorum.
At all meetings of the Board, a majority of the Whole Board will
constitute a quorum for the transaction of business. Except for the
designation of committees as hereinafter provided and except for
actions
required by these Bylaws or the Certificate of Incorporation to be
taken
by a majority of the Whole Board, the act of a majority of the Directors
present at any meeting at which there is a quorum will be the act
of the
Board. If a quorum is not present at any meeting of the Board, the
Directors present thereat may adjourn the meeting from time to time
to
another place, time, or date, without notice other than announcement
at
the meeting, until a quorum is
present.
|
| 19. |
Participation
in Meetings by Remote Communications.
Members of the Board or any committee designated by the Board may
participate in a meeting of the Board or any such committee, as the
case
may be, by means of telephone conference or other means by which
all
persons participating in the meeting can hear each other, and such
participation in a meeting will constitute presence in person at
the
meeting.
|
8
| 20. |
Committees.
|
|
(a)
|
The
Board, by resolution passed by a majority of the Whole Board, may
designate one or more committees. Each such committee will consist
of one
or more Directors and will have such lawfully delegable powers and
duties
as the Board may confer; provided,
however,
that no committee shall exercise any power or duty expressly required
by
the Delaware General Corporation Law, as it may be amended from time
to
time, to be acted upon by the Board. Any such committee designated
by the
Board will have such name as may be determined from time to time
by
resolution adopted by the Board.
|
| (b) |
The
members of each committee of the Board will serve in such capacity
at the
pleasure of the Board or as may be specified in any resolution from
time
to time adopted by the Board. The Board may designate one or more
Directors as alternate members of any such committee, who may replace
any
absent or disqualified member at any meeting of such committee. In
lieu of
such designation by the Board, in the absence or disqualification
of any
member of a committee of the Board, the members thereof present at
any
such meeting of such committee and not disqualified from voting,
whether
or not they constitute a quorum, may unanimously appoint another
member of
the Board to act at the meeting in the place of any such absent or
disqualified member.
|
| (c) |
Except
as otherwise provided in these Bylaws, by law or in any resolution
from
time to time adopted by the Board, any committee of the Board will
have
and may exercise all the powers and authority of the Board in the
direction of the management of the business and affairs of the Company.
Any such committee designated by the Board will have such name as
may be
determined from time to time by resolution adopted by the Board.
Unless
otherwise prescribed by the Board, meetings of any committee of the
Board
may be held in the same manner as provided in Bylaw
19
or by unanimous written consent in lieu of a meeting, a majority
of the
members of any such committee will constitute a quorum for the transaction
of business, and the act of a majority of the members present at
a meeting
at which there is a quorum will be the act of such committee. Each
committee of the Board may prescribe its own rules for calling and
holding
meetings and its method of procedure, subject to any rules prescribed
by
the Board, will keep minutes of its proceedings and all actions taken
by
it, and will report its proceedings to the Board when required or
when
requested by a Director to do so.
|
| 21. |
Compensation.
The Board may establish the compensation for, and reimbursement of
the
expenses of, Directors for membership on the Board and on committees
of
the Board, attendance at meetings of the Board or committees of the
Board,
and for other services by Directors to the Company or any of its
majority-owned subsidiaries.
|
9
| 22. |
Rules.
The Board may adopt rules and regulations for the conduct of meetings
and
the oversight of the management of the affairs of the
Company.
|
|
NOTICES
|
| 23. |
Generally.
Except as otherwise provided by law, these Bylaws, or the Certificate
of
Incorporation, whenever by law or under the provisions of the Certificate
of Incorporation or these Bylaws notice is required to be given to
any
Director or stockholder, it will not be construed to require personal
notice, but such notice may be given in writing, by mail or courier
service, addressed to such Director or stockholder, at the address
of such
Director or stockholder as it appears on the records of the Company,
with
postage thereon prepaid, and such notice will be deemed to be given
at the
time when the same is deposited in the United States mail. Notice
to
Directors may also be given by telephone, facsimile, electronic
transmission or similar medium of communication or as otherwise may
be
permitted by these Bylaws.
|
| 24. |
Waivers.
Whenever any notice is required to be given by law or under the provisions
of the Certificate of Incorporation or these Bylaws, a waiver thereof
in
writing, signed by the person or persons entitled to such notice,
or a
waiver by electronic transmission by the person or persons entitled
to
such notice, whether before or after the time of the event for which
notice is to be given, will be deemed equivalent to such notice.
Attendance of a person at a meeting will constitute a waiver of notice
of
such meeting, except when the person attends a meeting for the express
purpose of objecting, at the beginning of the meeting, to the transaction
of any business because the meeting is not lawfully called or
convened.
|
|
OFFICERS
|
| 25. |
Generally.
The officers of the Company will be elected by the Board and will
consist
of a Chairman, a President, a Secretary and a Treasurer. The Board
may
also choose any or all of the following: one or more Vice Chairmen,
one or
more Assistants to the Chairman, one or more Vice Presidents (who
may be
given particular designations with respect to authority, function,
or
seniority), one or more Assistant Secretaries, one or more Assistant
Treasurers and such other officers as the Board may from time to
time
determine. Notwithstanding the foregoing, by specific action the
Board may
authorize the Chairman to appoint any person to any office
other than Chairman, Chief Executive Officer, President, Secretary
or
Treasurer. Any number of offices may be held by the same person.
Any of
the offices may be left vacant from time to time as the Board may
determine. In the case of the absence or disability of any officer
of the
Company or for any other reason deemed sufficient by a majority of
the
Board, the Board may delegate the absent or disabled officer’s powers or
duties to any other officer or to any
Director.
|
10
| 26. |
Compensation.
The compensation of all officers and agents of the Company who are
also
Directors of the Company will be fixed by the Board or by a committee
of
the Board. The Board may fix, or delegate the power to fix, the
compensation of other officers and agents of the Company to an officer
of
the Company.
|
| 27. |
Succession.
The officers of the Company will hold office until their successors
are
elected and qualified. Any officer may be removed at any time by
the
affirmative vote of a majority of the Whole Board. Any vacancy occurring
in any office of the Company may be filled by the Board or by the
Chairman
as provided in Bylaw
23.
|
| 28. |
Authority
and Duties.
Each of the officers of the Company will have such authority and
will
perform such duties as are customarily incident to their respective
offices or as may be specified from time to time by the
Board.
|
|
STOCK
|
| 29. |
Certificates.
Certificates representing shares of stock of the Company will be
in such
form as is determined by the Board, subject to applicable legal
requirements. Each such certificate will be numbered and its issuance
recorded in the books of the Company, and such certificate will exhibit
the holder’s name and the number of shares and will be mechanically signed
with a facsimile of the signature of the President or a Vice President,
and a facsimile of the signature of the Secretary or an Assistant
Secretary, and shall also be signed by, or bear the facsimile signature
of, a duly authorized officer or agent of any properly designated
transfer
agent of the Company. Any or all of the signatures and the seal of
the
Company, if any, upon such certificates may be facsimiles, engraved,
or
printed. Such certificates may be issued and delivered notwithstanding
that the person whose facsimile signature appears thereon may have
ceased
to be such officer at the time the certificates are issued and
delivered.
|
| 30. |
Classes
of Stock.
The designations, powers, preferences and relative participating,
optional
or other special rights of the various classes of stock or series
thereof,
and the qualifications, limitations or restrictions thereof, will
be set
forth in full or summarized on the face or back of the certificates
which
the Company issues to represent its stock or, in lieu thereof, such
certificates will set forth the office of the Company from which
the
holders of certificates may obtain a copy of such information at
no
charge.
|
| 31. |
Lost,
Stolen or Destroyed Certificates.
An executive officer or the Secretary may direct a new certificate
or
certificates to be issued in place of any certificate or certificates
theretofore issued by the Company alleged to have been lost, stolen
or
destroyed, upon the making of an affidavit of that fact, satisfactory
to
such executive officer or the Secretary, by the person claiming
the
certificate of stock to be lost, stolen or destroyed. As a condition
precedent to the issuance of a new certificate or certificates,
such
executive officer or the Secretary may require
the owners of such lost, stolen or destroyed certificate or certificates
to advertise the
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11
|
alleged
loss, theft or destruction in such a manner as such executive officer
or
the Secretary may require, and/or to give the Company a bond in such
sum
and with such surety or sureties as such executive officer or the
Secretary may direct as indemnity against any claims that may be
made
against the Company with respect to the certificate alleged to have
been
lost, stolen or destroyed or the issuance of the new
certificate.
|
| 32. |
Record
Dates.
|
| (a) |
In
order that the Company may determine the stockholders entitled to
notice
of or to vote at any meeting of stockholders or any adjournment thereof,
the Board may fix a record date, which will not be more than 60 nor
less
than 10 calendar days before the date of such meeting. If no record
date
is fixed by the Board, the record date for determining stockholders
entitled to notice of or to vote at a meeting of stockholders will
be at
the close of business on the calendar day next preceding the day
on which
notice is given, or, if notice is waived, at the close of business
on the
calendar day next preceding the day on which
the meeting is held. A determination of stockholders of record entitled
to
notice of or to vote at a meeting of the stockholders will apply
to any
adjournment of the meeting; provided, however, that the Board may
fix a
new record date for the adjourned
meeting.
|
| (b) |
In
order that the Company may determine the stockholders entitled to
consent
to corporate action in writing without a meeting, the Board may fix
a
record date, which record date shall not precede the date upon which
the
resolution fixing the record date is adopted by the Board, and which
date
shall not be more than 10 days after the date upon which the resolution
fixing the record date is adopted by the Board. Any stockholder of
record
seeking to have the stockholders authorize or take corporate action
by
written consent shall, by written notice to the Company, request
that the
Board fix a record date. Any such written notice shall be delivered
to the
Company in the same manner as signed written consents are required
to be
delivered pursuant to Bylaw 9. The Board shall promptly, but in all
events within 10 days after the date on which such a request is received,
adopt a resolution fixing the record date. If no record date has
been
fixed by the Board within 10 days of the date on which such a request
is
received, the record date for determining stockholders entitled to
consent
to corporate action in writing without a meeting, when no prior action
by
the Board is required by applicable law, shall be the first date
on which
a signed written consent setting forth the action taken or proposed
to be
taken is delivered to the Company in accordance with Bylaw 9. If no
record date has been fixed by the Board and prior action by the Board
is
required by applicable law, the record date for determining stockholders
entitled to consent to corporate action in writing without a meeting
shall
be at the close of business on the date on which the Board adopts
the
resolution taking such prior
action.
|
12
| (c) |
In
order that the Company may determine the stockholders entitled to
receive
payment of any dividend or other distribution or allotment of any
rights
or the stockholders entitled to exercise any rights in respect of
any
change, conversion or exchange of stock, or for the purpose of any
other
lawful action, the Board may fix a record date, which record date
will not
be more than 60 calendar days prior to such action. If no record
date is
fixed, the record date for determining stockholders for any such
purpose
will be at the close of business on the calendar day on which the
Board
adopts the resolution relating
thereto.
|
| (d) |
The
Company will be entitled to treat the person in whose name any share
of
its stock is registered as the owner thereof for all purposes, and
will
not be bound to recognize any equitable or other claim to, or interest
in,
such share on the part of any other person, whether or not the Company
has
notice thereof, except as expressly provided by applicable law. In
addition, subject to applicable legal requirements, the Company may
(by
action of the Whole Board) establish procedures for the verification
that
depositary or other holders of shares beneficially owned by others
have
been properly instructed with respect to the voting of such shares
and in
respect of the effect of changes in beneficial ownership on the validity
of proxies or consents.
|
|
GENERAL
|
| 33. |
Contracts,
Checks, Etc.
All contracts, agreements, checks, drafts, notes, bonds, bills of
exchange
and orders for the payment of money shall be signed or endorsed by
the
persons whom the Board of Directors prescribes
therefor.
|
| 34. |
Fiscal
Year.
The fiscal year of the Company shall commence on October 1 of each
year
and shall end the following September
30.
|
| 35. |
Seal.
The Board may adopt a corporate seal and use the same by causing
it or a
facsimile thereof to be impressed or affixed or reproduced or
otherwise.
|
| 36. |
Reliance
Upon Books, Reports and Records.
Each Director, each member of a committee designated by the Board,
and
each officer of the Company will, in the performance of his or her
duties,
be fully protected in relying in good faith upon the records of the
Company and upon such information, opinions, reports, or statements
presented to the Company by any of the Company’s officers or employees, or
committees of the Board, or by any other person or entity as
to matters the Director, committee member, or officer believes are
within
such other person’s professional or expert competence and who has been
selected with reasonable care by or on behalf of the
Company.
|
| 37. |
Time
Periods.
In applying any provision of these Bylaws that requires that an
act be
performed or not be performed a specified number of days prior
to an event
or that an act be performed during a period of a specified number
of days
prior to an
|
13
|
an
event, calendar days will be used unless otherwise specified, the
day of
the doing of the act will be excluded, and the day of the event will
be
included.
|
| 38. |
Amendments.
Except as otherwise provided by law or by the Certificate of Incorporation
or these Bylaws, these Bylaws or any of them may be amended in any
respect
or repealed at any time, either (i) at
any meeting of stockholders, provided that any amendment or supplement
proposed to be acted upon at any such meeting has been described
or
referred to in the notice of such meeting, or (ii) at
any meeting of the Board, provided that no amendment adopted by the
Board
may vary or conflict with any amendment adopted by the stockholders
in
accordance with the Certificate of Incorporation and these Bylaws.
Notwithstanding the foregoing and anything contained in these Bylaws
to
the contrary, Bylaws 1,
3,
8, 9,
10,
12,
13,
14,
32(b)
and 38
may not be amended or repealed by the stockholders, and no provision
inconsistent therewith may be adopted by the stockholders, without
the
affirmative vote of the holders of at least a majority of all classes
of
voting stock issued and
outstanding.
|
| 39. |
Insurance.
The Company shall purchase and maintain insurance on behalf of any
person
who is a director or officer of the Company, or is a director or
officer
of the Company serving at the request of the Company as a director,
officer, employee
or agent of another company or of a partnership, joint venture, trust
or
other enterprise, against any expense, liability and loss asserted
against
and incurred or suffered by such person or on such person’s behalf in any
such capacity, or arising out of such person’s status as such, whether or
not the Company would have the power to indemnify such against such
liability under the provisions of the Certificate of Incorporation
or
applicable law, provided that such insurance is available on reasonably
acceptable terms as determined by (i) the executive officer(s) responsible
for purchasing or maintaining such insurance; or (ii) a vote of a
majority
of the Whole Board.
|
| 40. |
Certificate
of Incorporation and Applicable Law.
These Bylaws are subject to the provisions of the Certificate of
Incorporation and applicable law.
|
14
Exhibit
10.1
FIFTH
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This
Fifth Amended and Restated Employment Agreement ("Agreement")
is made as of December 21, 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, September 28, 2004 and August 5, 2005 (as amended and
restated, the “Fourth
Amended and Restated Employment Agreement”).
B.
Employer
and Employee desire to amend and restate the Fourth 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 December 21, 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.
4.
Compensation.
(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, for
a period of time commencing on the start of the Term and ending December
31,
2005.
Thereafter, for the remainder of the Term, Employer shall have no obligation
to
pay Employee the Base Salary. 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;
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.
5.
Additional
Benefits.
(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.
6.
Termination.
(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.
9.
Developments.
(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.
10.
Remedies.
(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 108th
Avenue
Omaha,
NE 68154
with
a copy to:
Transaction
Systems Architects, Inc.
Attn:
General Counsel
224
South 108th Avenue
Omaha,
Nebraska 68154
If
to Employee:
Gregory
D. Derkacht
Regency
Lakeside Apartments
10530
Pacific Street, Apt. 303
Omaha,
NE 68144
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.
("Employer")
By:_____________________________________
Its:_____________________________________
Gregory
D. Derkacht
("Employee")
_______________________________________
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.
Cause
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
Page
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”).
2.
TERMS
OF PLAN
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.
3.
EXERCISE
PRICE
The
Exercise Price for the shares of Stock subject to the Option granted by this
Option Agreement is $11.86 per share.
4.
EXERCISE
OF OPTION
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.
6.
RIGHTS
AS STOCKHOLDER
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.
7.
WITHHOLDING
OF TAXES
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.
8.
DISCLAIMER
OF RIGHTS
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.
10.
GOVERNING
LAW
This
Option Agreement shall be governed by the laws of the State of Delaware (but
not
including the choice of law rules thereof).
11.
BINDING
EFFECT
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.
12.
NOTICE
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.
13.
ENTIRE
AGREEMENT
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:
____________________________________________
Number
Street
Apt.
____________________________________________
City
State
Zip
Code
____________________________________________
SS#
Hire
Date
DESIGNATED
BENEFICIARY:
____________________________________________
Please
Print Last Name, First Name
MI
____________________________________________
Beneficiary’s
Street Address
____________________________________________
City
State
Zip
Code
____________________________________________
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.
____________________________________________
SIGNATURE DATE
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
Page
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”).
2.
TERMS
OF PLAN
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.
3.
EXERCISE
PRICE
The
Exercise Price for the shares of Stock subject to the Option granted by this
Option Agreement is $9.80 per share.
4.
EXERCISE
OF OPTION
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.
6.
RIGHTS
AS STOCKHOLDER
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.
7.
WITHHOLDING
OF TAXES
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.
8.
DISCLAIMER
OF RIGHTS
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.
10.
GOVERNING
LAW
This
Option Agreement shall be governed by the laws of the State of Delaware (but
not
including the choice of law rules thereof).
11.
BINDING
EFFECT
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.
12.
NOTICE
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.
13.
ENTIRE
AGREEMENT
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 February 19, 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:
____________________________________________
Number
Street
Apt.
____________________________________________
City
State
Zip
Code
____________________________________________
SS#
Hire
Date
DESIGNATED
BENEFICIARY:
____________________________________________
Please
Print Last Name, First Name
MI
____________________________________________
Beneficiary’s
Street Address
____________________________________________
City
State
Zip
Code
____________________________________________
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.
____________________________________________
SIGNATURE DATE
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
200,000
Options $9.80/Share
Exercise Price February
19, 2002
EXHIBIT
D
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
Page
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..................................6
4.5 Limitations
on Exercise of Option............................................6
4.6 Method
of Exercise of Option
Cash
Exercise.......................................................................6
Same-Day-Sale
Exercise....................................................7
Sell-to-Cover
Exercise.........................................................7
4.7 Parachute
Limitations................................................................8
5. TRANSFERABILITY
OF OPTIONS........................................................8
6. RIGHTS
AS
STOCKHOLDER................................................................9
7. WITHHOLDING
OF
TAXES....................................................................9
8. DISCLAIMER
OF
RIGHTS......................................................................9
9. INTERPRETATION
OF THIS OPTION AGREEMENT.........................9
10. GOVERNING
LAW..............................................................................10
11. BINDING
EFFECT...............................................................................10
12. NOTICE.................................................................................................10
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”).
2.
TERMS
OF PLAN
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.
3.
EXERCISE
PRICE
The
Exercise Price for the shares of Stock subject to the Option granted by this
Option Agreement is $9.80 per share.
4.
EXERCISE
OF OPTION
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) |
Provided
that those shares subject to this Option, or any portion thereof,
do not
first become exercisable pursuant to the terms and conditions of
Subsections 4.1(ii), 4.1(iii) or 4.1(iv) herein, or Section 4.2,
those
shares subject to this Option shall become exercisable as follows:
no
Option may be exercised during the first year from the Original
Date of
Grant; after one year from the Original Date of Grant, the Option
shall be
exercisable in respect of 25 percent of the number of shares subject
to
this Option; after the expiration of each of the second, third,
and fourth
years from the Original Date of Grant, the Option shall be exercisable
in
respect of an additional 25 percent of number of the shares subject
to
this Option.
|
| (ii) |
100,000
of those shares subject to this Option shall become exercisable
on and
after November 15, 2002; provided however that the Company’s Revenues,
Cash Flow, and Contribution Margin for fiscal year ended September
30,
2002 either meet or exceed $320,000,000, $42,800,000, and $25,000,000,
respectively, and the Ending Backlog as of fiscal year ended
September 30,
2002 or exceeds $218,000,000.
|
| (iii) |
100,000
of those shares subject to this Option shall become exercisable
on and
after November 15, 2003; provided however that the Company’s Revenues,
Cash Flow, Contribution Margin, and Ending Backlog for/at fiscal
year
ended September 30, 2003 either meet or exceed the respective Revenue,
Cash-flow, Contribution Margin, and Ending Backlog targets established
by
the Board of Directors for the fiscal year ended September 30,
2003.
|
| (iv) |
If,
within 4 years of the Original Date of Grant, the average closing
bid
price of the Company’s stock is greater than $30 for any consecutive
60-day period (calendar days), all shares subject to this Option
will
become exercisable on and after the end of such 60-day
period.
|
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.
6.
RIGHTS
AS STOCKHOLDER
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.
7.
WITHHOLDING
OF TAXES
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.
8.
DISCLAIMER
OF RIGHTS
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.
10.
GOVERNING
LAW
This
Option Agreement shall be governed by the laws of the State of Delaware (but
not
including the choice of law rules thereof).
11.
BINDING
EFFECT
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.
12.
NOTICE
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.
13.
ENTIRE
AGREEMENT
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 February 19, 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:
____________________________________________
Number
Street
Apt.
____________________________________________
City
State
Zip
Code
____________________________________________
SS#
Hire
Date
DESIGNATED
BENEFICIARY:
____________________________________________
Please
Print Last Name, First Name
MI
____________________________________________
Beneficiary’s
Street Address
____________________________________________
City
State
Zip
Code
____________________________________________
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.
____________________________________________
SIGNATURE DATE
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
200,000
Shares $
9.80/Share Exercise Price February
19, 2002
EXHIBIT
E
AMENDED
AND RESTATED
SEVERANCE
COMPENSATION AGREEMENT
SEVERANCE
COMPENSATION AGREEMENT dated as of September 28, 2004 between Transaction
Systems Architects, Inc., a Delaware corporation (the “Company”), and Gregory D.
Derkacht (the “Executive”).
WHEREAS,
the Company’s Board of Directors has determined that it is appropriate to
reinforce and encourage the continued attention and dedication of the Executive
to his assigned duties without distraction in potentially disturbing
circumstances arising from the possibility of a change in control of the
Company;
WHEREAS,
the Company and the Executive entered into a severance compensation agreement
dated as of April 28, 2003 (the “Severance Agreement”); and
WHEREAS,
the Company and the Executive have entered into that third amended and restated
employment agreement of even date herewith (as amended, the “Employment
Agreement”) and wish to amend and restate the Severance Agreement in connection
therewith.
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
appointment of a successor CEO as provided in the Employment Agreement; (ii)
the
termination of Executive’s employment for any reason prior to a Change in
Control; and (iii) three 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) approval
by the stockholders of the Company 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) 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 contemplated under
the Employment Agreement.
(b) If,
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, the Company may terminate the
Executive’s employment for “Disability”. If there is a Change in Control of the
Company while the Executive is still an employee and if the Executive’s
employment with the Company is terminated for Disability within two years
after
the Change in Control, the Executive shall be entitled to receive in a lump
sum
cash payment within five days after his Date of Termination (as defined in
section 3(g) below) the following:
(i) one
times the Base Amount (as defined in Section 4(b)(i)) determined with respect
to
the Base Period (as defined in Section 4(b)(ii)); plus
(ii) his
earned but unpaid base salary through his Date of Termination; plus
(iii) a
quarterly incentive award for the current fiscal quarter prorated through
the
Date of Termination equal to the greater of (A) the quarterly incentive award
(whether paid or payable in cash or in securities of the Company) awarded
to the
Executive with respect to the Company’s most recent fiscal quarter ending prior
to the Date of Termination or (B) the average quarterly incentive award (whether
paid or payable in cash or in securities of the Company) made to the Executive
with respect to the Company’s most recent three fiscal years ending prior to the
Date of Termination; plus
(iv) interest
on the amounts payable pursuant to clauses (i), (ii) and (iii) above calculated
from the Date of Termination until paid at a rate equal to the prime rate
as
published in The Wall Street Journal on the Date of Termination plus three
percentage points.
(c) 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) For
purposes of this Agreement only, “Cause” shall mean: (i) the Executive’s
conviction of a felony involving moral turpitude; (ii) the Executive’s serious,
willful gross misconduct or willful gross neglect of duties (other than any
such
neglect resulting from the Executive’s incapacity due to physical or mental
illness or any such neglect after the issuance of a Notice of Termination
by the
Executive for Good Reason, as such terms are defined in subsections (e) and
(f)
below), which, in either case, has resulted, or in all probability is likely
to
result, in material economic damage to the Company; provided no act or failure
to act by the Executive will constitute Cause under this clause (ii) if the
Executive believed in good faith that such act or failure to act was in the
best
interest of the Company; or (iii) the Executive’s violation of any provision of
the Company’s Code of Business Conduct and Ethics or the Company’ 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 only, 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 of Directors of the Company (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 (ii) of the second sentence of this
subsection (d), the Executive 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 the Executive 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. The Executive shall not be terminated for Cause if,
within 30 days after the date of the Executive’s hearing before the Board (or if
the Executive 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
the
Company 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 the Company. 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
the
Executive 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 the
Executive’s employment by the Company for Cause based upon the conviction of the
Executive for a felony involving moral turpitude such conviction is finally
overturned on appeal, the Executive shall be entitled to the compensation
provided in Sections 4(a) and 4(c). In lieu of the interest provided in clause
(iv) of the first sentence of Section 4(a) and the interest provided in the
second sentence of Section 4(c), however, the compensation provided in Sections
4(a) and 4(c) shall be increased by a ten percent rate of interest, compounded
annually, calculated from the date such compensation would have been paid
if the
Executive’s employment had been terminated without Cause.
(e)
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)
a
significant diminution in the Executive’s duties and responsibilities, or the
assignment to the Executive by the Company of duties inconsistent with the
Executive’s position, duties, responsibilities or status with the Company
immediately prior to a Change in Control of the Company, or a change in the
Executive’s titles or offices as in effect immediately prior to a Change in
Control of the Company, or any removal of the Executive from or any failure
to
re-elect the Executive to
any of such positions, except in connection with the termination of his
employment for Disability, Retirement or Cause or as a result of the Executive’s
death or by the Executive other than for Good Reason;
(ii)
a
reduction by the Company in the Executive’s annual rate of base salary as in
effect on the date
hereof or as the same may be increased from time to time during the term
of this
Agreement or the Company’s failure to increase (within 12 months of the
Executive’s last increase in his annual rate of base salary) the Executive’s
annual rate of base salary after a Change in Control of the Company in an
amount
which at least equals, on a percentage basis,
the greater of (A) the average percentage increase in
the annual rate of base salary for all officers of the Company effected in
the
preceding 12 months; or (B) the Consumer Price Index as published by the
United
States Government (or, in the event such index is discontinued, any similar
index published by the United States Government as designated in good faith
by
the Executive);
(iii)
(A)
any
failure by the Company to continue in effect any benefit plan or arrangement
(including, without limitation, the life insurance, medical, dental, accident
and disability plans) in which the Executive is participating at the time
of a
Change in Control of the Company, or any other plan or arrangement providing
the
Executive with benefits that are no less favorable (hereinafter referred
to as
“Benefit Plans”), (B) the taking of any action by the Company which would
adversely affect the Executive’s participation in or materially reduce the
Executive’s benefits under any such Benefit Plan or deprive the Executive of any
material fringe benefit or perquisite of office enjoyed by the Executive
at the
time of a Change in Control of the Company, unless in the case of either
sub-clause (A) or (B) above, there is substituted a comparable plan or program
that is economically equivalent or superior, in terms of the benefit offered
to
the Executive, to the Benefit Plan being altered, reduced, affected or
ended;
(iv) (A)
any
failure by the Company to continue in effect any incentive plan or arrangement
(including, without limitation, the Company’s bonus arrangements, the
Transaction Systems Architects, Inc-. 401(k) Plan, the sales incentive plans,
and the management incentive plans) in which the Executive is participating
at
the time of a Change in Control of the Company, or any other plans or
arrangements providing him with substantially similar benefits, (hereinafter
referred to as “Incentive Plans”), (B) the taking of any action by the Company
which would adversely affect the Executive’s participation in any such Incentive
Plan or reduce the Executive’s benefits under any such Incentive Plan, unless in
the case of either sub-clause (A) or (B) above, there is substituted a
comparable plan or program that is economically equivalent or superior, in
terms
of the benefit offered to the Executive, to the Incentive Plan being altered,
reduced, affected or ended, or (C) any failure by the Company with respect
to
any fiscal year to make an award to the Executive pursuant to each such
Incentive Plan or such substituted comparable plan or program equal to or
greater than the greater of (1) the award (whether paid or payable in cash
or in
securities of the Company) made to the Executive pursuant to such Incentive
Plan
or such substituted comparable plan or program with respect to the immediately
preceding fiscal year or (2) the average annual award (whether paid or payable
in cash or in securities of the Company) made to the Executive pursuant to
such
Incentive Plan or such substituted comparable plan with respect to the prior
three fiscal years (or such lesser number of prior fiscal years that the
Executive was employed by the Company or that the Incentive Plan (together
with
any substituted comparable plan) was maintained);
(v) (A)
any
failure by the Company to continue in effect any plan or arrangement to receive
securities of the Company in which the Executive is participating at the
time of
a Change in Control of the Company, or any other plan or arrangement providing
him with substantially similar benefits, (hereinafter
referred to as “Securities Plans”), (B) the taking of any action by the Company
which would adversely affect the Executive’s participation in or materially
reduce the Executive’s benefits under any such Securities Plan, unless in the
case of either sub-clause (A) or (B) above, there is substituted a comparable
plan or program that is economically equivalent or superior, in terms of
the
benefit offered to the Executive, to the Securities Plan being altered, reduced,
affected or ended, or (C) any failure by the Company in any fiscal year to
grant
stock options, stock appreciation rights or securities awards to the Executive
pursuant to such Securities Plans with respect to an aggregate number of
securities of the Company of each kind that is equal to or greater than
the greater of (1) the aggregate number
of securities of the Company of that kind covered by
stock options, stock appreciation rights, or securities awards granted to
the
Executive pursuant to such Securities Plans in the immediately preceding
fiscal
year; or (2) the average annual aggregate number of securities of the Company
of
that kind covered by stock options, stock appreciation rights, or securities
awards granted to the Executive pursuant to such Securities Plans in the
prior
three fiscal years; and provided further the material terms and conditions
of
such stock options, stock appreciation rights, and securities awards granted
to
the Executive after the Change in Control (including, but not limited to,
the
exercise price, vesting schedule, period and methods of exercise, expiration
date, forfeiture provisions and other restrictions) are substantially similar
to
the material terms and conditions of the stock options, stock appreciation
rights, and securities awards granted to the Executive under the Securities
Plans immediately prior to the Change in Control of the Company;
(vi)
the
Executive’s relocation, at the request of the Company, more than 50 miles from
the location at which the Executive performed the Executive’s duties prior to a
Change in Control of the Company, except for required travel by the Executive
on
the Company’s business to an extent substantially consistent with the
Executive’s business travel obligations at the time of a Change in Control of
the Company;
(vii)
any
failure by the Company to provide the Executive with the number of annual
paid
vacation days to which the Executive is entitled for the year in which a
Change
in Control of the Company occurs;
(viii)
any
material breach by the Company of any provision of this Agreement;
(ix)
any
failure by the Company to obtain the assumption of this Agreement by any
successor or assign of the Company prior to such succession or
assignment;
(x)
any
failure by the Company or its successor to enter into an agreement with
the Executive that is substantially similar to this Agreement with respect
to a
Change in Control of the Company or its successor occurring thereafter;
or
(xi)
any
purported termination of the Executive’s employment by the Company pursuant to
Section 3(b), 3(c) or 3(d) above which is not effected pursuant to a Notice
of
Termination satisfying the requirements of Section 3(f) below (and, if
applicable, Section 3(d) above), and for purposes of this Agreement, no such
purported termination shall be effective.
For
purposes of this subsection (e), an isolated, immaterial, and inadvertent
action
not taken in bad faith by the Company in violation of clause (ii), (iii),
(iv),
(v) or (vii) of this subsection that is remedied by the Company promptly
after
receipt of notice thereof given by the Executive shall not be considered
Good
Reason for the Executive’s termination of employment with the Company. In the
event the Executive terminates his employment for Good Reason hereunder,
then
notwithstanding that the Executive may also retire for purposes of the Benefit
Plans, Incentive Plans or Securities Plans, the Executive shall be deemed
to
have terminated his employment for Good Reason for purposes of this
Agreement.
(f)
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” 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)
If
pursuant to Section 3(a) above the Executive is entitled to the compensation
provided in this Section 4, then the Company shall pay to the Executive in
a
lump sum cash payment within five days after the Date of Termination the
following:
(i)
the
Severance Amount as defined in Section 4(b) below; plus
(ii)
his
earned but unpaid base salary through his Date of Termination; plus
(iii)
a
quarterly incentive award for the current fiscal quarter prorated through
the
Date of Termination equal to the greater of (A) the quarterly incentive award
(whether paid or payable in cash or in securities of the Company) awarded
to the
Executive with respect to the Company’s most recent fiscal quarter ending prior
to the Date of Termination or (B) the average quarterly incentive award (whether
paid or payable in cash or in securities of the Company) made to the Executive
with respect to the Company’s most recent three fiscal years ending prior to the
Date of Termination; plus
(iv)
interest
on the amounts payable pursuant to clauses (i), (ii) and (iii) above calculated
from the Date of Termination until paid at a rate equal to the prime rate
as
published in The Wall Street Journal on the Date of Termination plus three
percentage points, compounded annually.
(b)
“Severance
Amount” shall mean an amount equal to one times the Base Amount (as defined
below) determined with respect to the Base Period (as defined below); provided,
however, in no event shall the Severance Amount be less than two times the
Executive’s annual rate of base salary at the higher of the annual rate in
effect (i) immediately prior to the Date of Termination or (ii) on the date
six
months prior to the Date of Termination. For purposes of this subsection
(b):
(i) “Base
Amount” means the Executive’s average fiscal-year Compensation (as defined
below) for fiscal years of the Company in the Base Period. Such average shall
be
computed by dividing the total of the Executive’s Compensation for the Base
Period by the number of fiscal years in the Base Period. If the Executive’s Base
Period includes a portion of a fiscal year during which he was not an
employee of
the Company (or a predecessor entity or a related entity, as such terms are
defined in clause (iii) below), the Executive’s Compensation for such fiscal
year shall be annualized before determining the average fiscal-year Compensation
for the Base Period. In annualizing Compensation, the frequency with which
payments are expected to be made over a fiscal year shall be taken into account;
thus, any amount of Compensation that represents a payment that will not
be made
more often than once per fiscal year is not annualized. Set forth on Appendix
A,
which is attached hereto and made a part hereof, are three examples illustrating
the calculation of the Base Amount.
(ii) “Base
Period” means the most recent two consecutive fiscal years of the Company ending
prior to the Date of Termination. However, if the Executive was not an employee
of the Company (or a predecessor entity or a related entity, as such terms
are
defined in clause (iii) below) at any time during one of such two fiscal
years,
the Executive’s Base Period is the one fiscal year of such two-fiscal-year
period during which the Executive performed personal services for the Company
or
a predecessor entity or a related entity.
(iii) “Compensation”
means the compensation which was payable by the Company, by a predecessor
entity, or by a related entity and which was includible in the gross income
of
the Executive (or either was excludible from such gross income as “foreign
earned income” within the meaning of Section 911 of the Internal Revenue Code of
1986, as amended (the “Code”), or would have been includible in such gross
income if the Executive had been a United States citizen or resident), but
excluding the following: (A) amounts realized from the exercise of a
non-qualified stock option; and (B) amounts realized from the sale, exchange
or
other disposition of stock acquired under an incentive stock option described
in
Code Section 422 (b) or under an employee stock purchase plan described in
code
Section 423 (b). Notwithstanding the preceding sentence, Compensation shall
be
determined without regard to any compensation deferral election under any
plan,
program or arrangement, qualified or non-qualified, maintained or contributed
to
by the Company, a predecessor entity or a related entity, including but not
limited to a cash-or-deferred arrangement described in Code Section 401(k),
a
cafeteria plan described in Code Section 125 or a non-qualified deferred
compensation plan. A “predecessor entity” is any entity which, as a result of a
merger, consolidation, purchase or acquisition of property or stock, corporate
separation, or other similar business transaction transfers some or all of
its
employees to the Company or to a related entity or to a predecessor entity
of
the Company. The term “related entity” includes any entity treated as a single
employer with the Company in accordance with subsections (b), (c), (m) and
(o)
of Code Section 414.
(c) If
pursuant to Section 3(a) above the Executive is entitled to the compensation
provided in this Section 4, then the Executive will be entitled to continued
participation in all employee benefit plans or programs available to Company
employees generally in which the Executive was participating on the Date
of
Termination, such continued participation to be at Company cost and otherwise
on
the same basis as Company employees generally, until the earlier of (i) the
date, or dates, he receives equivalent 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 (ii) two years
from
the Date of Termination; provided (A) if the Executive is precluded from
continuing his participation in any employee benefit plan or program as provided
in this 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 employee
benefit plan or program, the after-tax economic equivalent of the benefits
provided under the plan or program in which he is unable to participate for
the
period specified in this sentence, and (B) the economic equivalent of any
benefit foregone shall he deemed to be the lowest cost that would be incurred
by
the Executive in obtaining such benefit for himself (including family or
dependent coverage, if applicable) on an individual basis. The Executive
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 the Company’s group
health plan under this subsection (c).
| 5. |
NO
OBLIGATION TO MITIGATE DAMAGES; NO EFFECT ON OTHER CONTRACTUAL
RIGHTS.
|
(a) The
Executive shall not be required to mitigate damages or the amount of any
payment
provided for under this Agreement by seeking other employment or otherwise,
nor
shall the amount of any payment provided for under this Agreement be reduced
by
any compensation earned by the Executive as the result of employment by another
employer after the Date of Termination or otherwise.
(b) The
provisions of this Agreement, and any payment provided for hereunder, shall
not
reduce any amounts otherwise payable, or in any way diminish the Executive’s
existing rights,
or rights which would accrue solely as a result of the passage of time,
under any
Benefit Plan, Incentive Plan or Securities Plan, employment agreement or
other
contract, plan or agreement with or of the Company.
| 6. |
INCENTIVE
AWARDS.
|
In
the event of a Change in Control of the Company, then notwithstanding the
terms
and conditions of any Incentive Plan, the Company agrees (i) to immediately
and
fully vest all unvested awards, units, and benefits (other than options to
acquire securities of the Company or awards of securities of the Company)
which
have been awarded or allocated to the Executive under the Incentive Plans;
and
(ii) upon the exercise of such awards or units or the distribution of such
benefits, to pay all amounts due under the Incentive Plans
solely in cash.
| 7. |
CERTAIN
ADDITIONAL PAYMENTS BY THE COMPANY.
|
(a) Anything
in this Agreement to the contrary notwithstanding, in the event it shall
be
determined that any payment or distribution by the Company to or for the
benefit
of the Executive (whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise, but determined without
regard to any additional payments required under this Section 7) (a “Payment”)
would be subject to the excise tax imposed by Section 4999 of the Code or
any
interest or penalties are incurred by the Executive with respect to such
excise
tax (such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the “Excise Tax”), then the Executive
shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an
amount such that after payment by the Executive of all taxes (including any
interest or penalties imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties imposed with
respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the Executive
retains an amount of the Gross-Up Payment equal to the Excise Tax imposed
upon
the Payments.
(b) All
determinations required to be made under this Section 7, including whether
and
when a Gross-Up Payment is required and the amount of such Gross-Up Payment
and
the assumptions to be utilized in arriving at such determination, shall be
made
by the Accounting Firm which shall provide detailed supporting calculations
both
to the Company and the Executive within 15 business days after the receipt
of
notice from the Executive that there has been a Payment, or such
earlier time
as is requested by the Company. The determination of tax liability made by
the
Accounting Firm shall be subject to review by the Executive’s tax advisor, and,
if the Executive’s tax advisor does not agree with
the determination reached by the Accounting Firm, then the Accounting Firm
and
the Executive’s tax advisor shall jointly designate a nationally recognized
public accounting firm which shall make the determination. All fees and expenses
of the accountants and tax advisors retained by both the Executive and the
Company shall be borne solely by the Company. Any Gross-Up Payment, as
determined pursuant to this Section 7, shall be paid by the Company to the
Executive within five days after the receipt of the determination. Any
determination by such jointly designated public accounting firm shall be
binding
upon the Company and the Executive. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the initial determination
hereunder, it is possible that Gross-Up Payments will not have been made
by the
Company that should have been made (“Underpayment”), consistent with the
calculations required to be made hereunder. In the event that the Executive
hereafter is required to make a payment of any Excise Tax, any such underpayment
shall be promptly paid by the Company to or for the benefit of the Executive.
Upon notice by the Executive of any audit or other proceeding that may result
in
a liability to the Company hereunder, the Executive shall promptly notify
the
Company of such audit or other proceeding; and the Company may, at its option,
but solely with respect to the item or items that relate to such potential
liability, choose to assume the defense of such audit or other proceeding
at its
own cost, provided that (i) the Executive shall cooperate with the Company
in
such defense and (ii) the Company will not settle such audit or other proceeding
without the consent of the Executive (such consent not to be unreasonably
withheld). The highest effective marginal tax rate (determined by taking
into
account any reduction in itemized deductions and/or exemptions attributable
to
the inclusion of the additional amounts payable under this Section 7 in the
Executive’s adjusted gross or taxable income) based upon the state and locality
where the Executive is resident at the time of payment of such amounts will
be
used for purposes of determining the federal and state income and other taxes
with respect thereto.
8. INDEMNIFICATION.
(a)
The
Company agrees to indemnify the Executive to the fullest extent permitted
by law
if the Executive is a party or threatened to be made a party to any Proceeding
(as defined below).
(b)
If
requested by the Executive, the Company shall advance (within two business
days
of such request) any and all Expenses, as defined below, relating to a
Proceeding to the Executive (an “Expense Advance”), upon the receipt of a
written undertaking by or on behalf of the Executive to repay such Expense
Advance if a judgment or other final adjudication adverse to the Executive
(as
to which all rights of appeal therefrom have been exhausted or lapsed)
establishes that the Executive is not entitled to indemnification by the
Company. Expenses shall include attorney’s fees and all other costs, charges and
expenses paid or incurred in connection with investigating, defending, being
a
witness in or participating in (including on appeal), or preparing to defend,
be
a witness in or participate in any Proceeding.
(c)
The
Company agrees to obtain a directors’ and officers’ liability insurance policy
covering the Executive and to continue and maintain such policy. The amount
of
coverage shall be reasonable in relation to the Executive’s position and
responsibilities during his employment by the Company.
(d)
This
Section 8 is a supplement to and in furtherance of the Certificate of
Incorporation and Bylaws of the Company and shall not be deemed a substitute
therefor, or diminish or abrogate any rights of the Executive
thereunder.
(e)
For
purposes of Section 8(a), the meaning of the phrase “to the fullest extent
permitted by law” shall include but not be limited to:
(i)
to
the fullest extent permitted by the provision of the Delaware General
Corporation Law (“DGCL”) that authorizes or contemplates additional
indemnification by agreement, or the corresponding provision of any amendment
to
or replacement of the DGCL, and
(ii)
to
the fullest extent authorized or permitted by any amendments to or replacements
of the DGCL adopted after the date of this Agreement that increase the extent
to
which a corporation may indemnify its officers and directors.
(f)
For
purposes of Sections 8(a) and 8(b), “Proceeding” shall mean any threatened,
pending or completed action, suit, arbitration, alternate dispute resolution
mechanism, investigation, inquiry, administrative hearing or any other actual,
threatened or completed proceeding, whether brought in the right of the Company
or otherwise and whether of a civil, criminal, administrative or investigative
nature, in which the Executive was, is or will be involved as a party or
otherwise by reason of the fact that the Executive is or was a director or
officer of the Company, by reason of any action taken by him or of any action
on
his part while acting as director or officer of the Company, or by reason
of the
fact that he is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, in each case whether or not serving in such capacity
at the time any liability or expense is incurred for which indemnification,
reimbursement, or advancement of expenses can be provided under this
Agreement.
9. SUCCESSORS.
(a)
The
Company will require any successor or assign (whether direct or indirect,
by
purchase, merger, consolidation or otherwise) to all or substantially all
of the
business and/or assets of the Company, by agreement in form and substance
satisfactory to the Executive, expressly, absolutely and unconditionally
to
assume and agree to perform this Agreement in the same manner and to the
same
extent that the Company would be required to perform it if no such succession
or
assignment had taken place. Any failure of the Company to obtain such agreement
prior to the effectiveness of any such succession or assignment shall be
a
material breach of this Agreement and shall entitle the Executive to terminate
the Executive’s employment for Good Reason and receive the compensation provided
for in Section 4 hereof. As used in this Agreement, “Company” shall mean the
Company as hereinbefore defined and any successor or assign to its business
and/or assets as aforesaid which executes and delivers the agreement provided
for in this Section 9 or which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law.
(b)
This
Agreement shall inure to the benefit of and be enforceable by the Executive’s
personal and legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees. If the Executive should die while
any amounts are still payable to him hereunder, all such amounts, unless
otherwise provided herein, shall he paid in accordance with the terms of
this
Agreement to the Executive’s devisee, legatee or other designee or, if there be
no such designee, to the Executive’s estate.
10.
NOTICE.
For
purposes of this Agreement, notices and all other communications provided
for in
this Agreement shall be in writing and shall be deemed to have been duly
given
when delivered or mailed by United States registered mail, return receipt
requested, postage prepaid, as follows:
If
to the Company:
Transaction
Systems Architects, Inc.
224
South 108th Avenue
Omaha,
NE 68154
Attn:
General Counsel
If
to the Executive:
Gregory
D. Derkacht
Regency
Lakeside Apartments
10530
Pacific St. Apt 303
Omaha,
NE 68144
or
to such other address as either party may have furnished to the other in
writing
in accordance herewith, except that notices of change of address shall be
effective only
upon receipt.
11. MISCELLANEOUS.
No
provisions of this Agreement may be modified, waived or discharged unless
such
waiver, modification or discharge is agreed to in writing signed by the
Executive and the Company. No waiver by either party hereto at any time of
any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be
deemed
a waiver of similar or dissimilar provisions or conditions at the same time
or
at any prior or subsequent time. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof
have
been made by either party which are not set forth expressly in this Agreement
or
the Employment Agreement. This Agreement shall be governed by and construed
in
accordance with the laws of the State of Nebraska, without giving effect
to any
principles of conflicts of law.
12. CONFLICT
IN BENEFITS.
Except
as otherwise provided in the preceding sentences or the Employment Agreement,
this Agreement is not intended to and shall not limit or terminate any other
agreement or arrangement between the Executive and the Company presently
in
effect or hereafter entered into.
13. VALIDITY.
The
invalidity or unenforceability of any provisions of this Agreement shall
not
affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect.
14. SURVIVORSHIP.
The
respective rights and obligations of the parties hereunder shall survive
any
termination of this Agreement to the extent necessary to the intended
preservation of such rights and obligations and to the extent that any
performance is required following termination of this Agreement. Without
limiting the foregoing, Sections 7, 8 and 15 shall expressly survive the
termination of this Agreement.
15. LEGAL
FEES AND EXPENSES.
If
a claim or dispute arises concerning the rights of the Executive under this
Agreement, regardless of the party by whom such claim or dispute is initiated,
the Company shall, upon presentation of appropriate vouchers, pay all legal
expenses, including reasonable attorneys’ fees, court costs and ordinary and
necessary out-of-pocket costs of attorneys, billed to and payable by the
Executive or by anyone claiming under or through the Executive, in connection
with the bringing, prosecuting, arbitrating, defending, litigating, negotiating,
or settling such claim or dispute. In no event shall the Executive be required
to reimburse the Company for any of the costs of expenses incurred by the
Company relating to arbitration or litigation. Pending the outcome or resolution
of any claim or dispute, the Company shall continue payment of all amounts
due
the Executive without regard to any dispute.
16. EFFECTIVE
DATE.
This
Agreement shall become effective upon execution.
17. COUNTERPARTS.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed to be an original but all of which together will constitute one and
the
same instrument.
18. NO
GUARANTEE OF EMPLOYMENT.
Neither
this Agreement nor any action taken hereunder shall be construed as giving
the
Executive the right to be retained in employment with the Company, nor shall
it
interfere with either the Company’s right to terminate the employment of the
Executive at any time or the Executive’s right to terminate his employment at
any time.
19. NO
ASSIGNMENT BY EXECUTIVE.
Except
as otherwise provided in Section 9(b), the Executive’s rights and interests
under this Agreement shall not be assignable (in law or in equity) or subject
to
any manner of alienation, sale, transfer, claims of creditors, pledge,
attachment, garnishment, levy, execution or encumbrances of any
kind.
20. WAIVER.
The
Executive’s or the Company’s failure to insist upon strict compliance with any
provision of this Agreement shall not he deemed a waiver of such provision
or
any other provision of this Agreement. Any waiver of any provision of this
Agreement shall not be deemed to be a waiver of any other provision, and
any
waiver of default in any provision of this Agreement shall not be deemed
to be a
waiver of any later default thereof or of any other provision.
21. WITHHOLDING.
All
amounts paid pursuant to this Agreement shall be subject to withholding for
taxes (federal, state,
local or otherwise) to the extent required by applicable law.
22. HEADINGS.
The
headings of this Agreement have been inserted for convenience of reference
only
and are to be ignored in the construction of the provisions hereof.
23. NUMBERS
AND GENDER.
The
use of the singular shall be interpreted to include the plural and the plural
the singular, as the context requires. The use of the masculine, feminine
or
neuter shall be interpreted to include the masculine, feminine or neuter
as the
context shall require.
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year
first above written.
TRANSACTION
SYSTEMS
ARCHITECTS, INC.
By:
________________________________________
Title:
_______________________________________
EXECUTIVE:
___________________________________________
Gregory
D.
Derkacht
APPENDIX
A
EXAMPLE
1 - Executive was employed by the Company for 1-1/3 fiscal years preceding
the
fiscal year in which a Change in Control of the Company occurs. The Executive’s
Compensation from the Company was $30,000 for the 4-month period and $120,000
for the full fiscal year. The Executive’s Base Amount is $105,000.
Year
1: 3
x $30,000 = $90,000
Year
2: $120,000
[90,000
+ 120,000] DIVIDED BY 2 = $105,000
$105,000
is the average fiscal-year Compensation for the Base Period.
EXAMPLE
2 - Assume the same facts as in Example 1, except that the Executive also
received a $70,000 sign-on bonus when his employment with the Company commenced
at the beginning of the 4-month period. The Executive’s Base Amount is
$140,000
Year
1: [3
X $30,000] + $70,000 = $160,000
Year
2: $120,000
[160,000
+ 120,000] DIVIDED BY 2 = $140,000
Since
the sign-on bonus will not be paid more often than once per fiscal year,
the
amount of the bonus is not increased in annualizing the Executive’s Compensation
for the 4-month period.
EXAMPLE
3 - Executive was employed by the Company for the last 4 months of the fiscal
year preceding the fiscal year in which a Change in Control of the Company
occurs. The Executive’s Compensation from the Company was $30,000 for the
4-month period. The Executive’s Base Amount is $90,000.
Year
1: 3
x $30,000 = $90,000
$90,000
DIVIDED BY 1 = $90,000
$90,000
is the average fiscal-year Compensation for the Base Period.
EXHIBIT
F
GENERAL
RELEASE
This
General Release of All Claims (this “Release”)
is made and entered into as of __________, ____, by and between Transaction
Systems Architects, Inc., a Delaware corporation (“Employer”),
and Gregory D. Derkacht (“Employee”).
As used in this Release, the term “Employer”
will include Employer, and Employer’s predecessors, parents, subsidiaries,
divisions, affiliates, officers, directors, managers, stockholders, members,
employees, successors, assigns, representatives, agents, accountants, and
counsel, unless the context clearly requires otherwise.
In
consideration of the promises set forth in this Release, and for other good
and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Employee and Employer agree as follows:
1. Effectiveness
of Release.
This Release will be effective on the eighth (8th)
day after it is executed by Employee, provided that Employee has not revoked
Employee’s release as provided in Section
5(c)
below.
2. Employment
Agreement.
Employee’s employment relationship with Employer is governed by the terms and
conditions of that Fifth Amended and Restated Employment Agreement, dated as
of
December 21, 2005 (the “Agreement”),
by and between Employer and Employee, which Agreement contemplates Employee
entering into this Release as a condition to receiving certain compensation
under the Agreement or Severance Compensation Agreement (as defined in the
Agreement).
3. Compensation.
In consideration of the promises contained herein, Employer will pay to Employee
the payments set forth in, and in accordance with the terms of, Section 4(c)(i),
(ii) or (iii); 6(c) or 6(d) of the Agreement, as the case may be. Such
compensation will be in full and complete satisfaction of Employer’s obligations
under the applicable sections of the Agreement.
4. Compensation
and Benefits.
Any additional compensation and benefits described by the Agreement will be
provided to Employee in accordance with the terms of the Agreement.
5. Release.
(a) In
accordance with Section
7(c)
of the Agreement, in consideration for the promises contained herein, Employee
hereby releases and forever discharges Employer from any and all charges,
complaints, liabilities, claims, promises, agreements, controversies, damages,
causes of action, suits, or expenses of any kind or nature whatsoever, known
or
unknown, foreseen or unforeseen to the date upon which Employee executes this
Release (collectively, “Claims”),
including (but not limited to) claims arising in any way from Employee’s
employment with Employer, Employee’s service as an officer and manager of
Employer, Employee’s status as a stockholder of Employer, or Employee’s
agreements to resign Employee’s employment and other positions as provided in
the Agreement, including, without limitation, any and all alleged discrimination
or acts of discrimination that occurred or may have occurred on or before the
date upon which Employee executes this Release based upon race, color, sex,
creed, national origin, age, disability, or any other violation of any equal
employment opportunity law, ordinance, rule, regulation or order (including,
but
not limited to, Title VII of the Civil Rights Act of 1964, as amended
(“Title
VII”);
the Civil Rights Act of 1991; the Age Discrimination in Employment Act of 1967,
as amended (“ADEA”)
(as further described in Section
5(c)
below); the Americans with Disabilities Act (“ADA”);
Claims under the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”);
or any other federal, state, or local laws or regulations regarding employment
discrimination or termination of employment) and any Claims for wrongful
discharge, fraud, or misrepresentation under any statute, rule, regulation,
or
under the common law.
(b) Employee
expressly waives all rights to any and all termination, severance, and
separation compensation and benefits except as may be provided in this Release
and the Agreement.
(c) Employee
acknowledges that Employer encouraged Employee to consult with an attorney
of
Employee’s choosing prior to executing this Release, and through this Release
encourages Employee to consult with Employee’s attorney with respect to possible
Claims under the ADEA and that Employee understands that the ADEA is a federal
statute that prohibits discrimination, on the basis of age, in employment,
benefits, and benefit plans. Employee wishes to waive any and all Claims under
the ADEA that Employee may have, as of the date upon which Employee executes
this Release, against Employer, and hereby waives such Claims. Employee further
understands that by signing this Release, Employee is in fact waiving, releasing
and forever giving up any Claim under the ADEA that may have existed on or
prior
to the date upon which Employee executes this Release. Employee acknowledges
that Employee is receiving consideration for Employee’s waiver of any and all
Claims under the ADEA in addition to anything of value to which Employee is
already entitled. Employee also acknowledges that he has been given a period
of
twenty-one (21) days to consider this Release, and, if executed prior to the
expiration of such 21-day period, Employee does hereby knowingly and voluntarily
waive all or part of said 21-day period. Employee also understands that Employee
has seven (7) days following the date upon which Employee executes this Release
within which to revoke the release contained in this Section 5(c)
(the “Revocation
Period”),
by providing a written notice of Employee’s revocation of the release and waiver
contained in this Section
5(c)
to Employer. The release of Claims under the ADEA contained in this Section
5(c)
does not become effective or enforceable until the Revocation Period has
expired.
(d) Notwithstanding
the foregoing, Employee does not, and will not, release, discharge or waive
any
rights to indemnification that Employee may have under the Articles of
Incorporation, Bylaws or similar constituent documents of Employer, the laws
of
the State of Delaware, any indemnification agreement between Employee and
Employer or any insurance coverage maintained by or on behalf of Employer,
nor
will Employer take any action, directly or indirectly, to encumber or adversely
affect Employee’s rights under any such indemnification arrangement. Further,
the release contained in this Section 5
will not affect any rights granted to Employee, or obligations of Employer,
under the terms of this Release, except to the extent such rights have
previously been satisfied or are satisfied pursuant to this Release, under
the
terms of the Agreement.
(e) Nothing
contained in this Release will be deemed or construed as an admission of
wrongdoing or liability on the part of Employee.
6. Miscellaneous
Provisions.
(a) Binding
on Successors; Assignment.
This Release will be binding upon and inure to the benefit of Employer and
Employee and each of their respective successors, assigns, personal and legal
representatives, executors, administrators, heirs, distributees, devisees,
and
legatees, as applicable; provided,
however,
that neither this Release nor any rights or obligations hereunder will be
assignable or otherwise subject to hypothecation by Employee (except by will
or
by operation of the laws of intestate succession) or by Employer, except that
Employer may assign this Release to any successor (whether by merger, purchase,
or otherwise) to all or substantially all of the stock, assets, or businesses
of
Employer, if such successor expressly agrees to assume the obligations of
Employer hereunder.
(b) Governing
Law.
This Release will be governed, construed, interpreted, and enforced in
accordance with the substantive laws of the State of Nebraska, without regard
to
conflicts of law principles.
(c) Severability.
Whenever possible, each provision of this Release shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Release is held to be invalid, illegal, or unenforceable in any respect
under any applicable law or rule in any jurisdiction, such invalidity,
illegality, or unenforceability shall not affect any other provision or any
other jurisdiction, but this Release shall be reformed, construed and enforced
in such jurisdiction as if such invalid, illegal, or unenforceable provision
had
never been contained herein.
(d) Notices.
All communications and notices provided for in this Release will be given in
accordance with Section
19
of the Agreement.
(e) Counterparts.
This Release may be executed in several counterparts, each of which will be
deemed to be an original, but all of which together will constitute one and
the
same Release. Facsimile signatures to this Release shall have the same legal
effect as manual signatures.
(f) Entire
Agreement.
The terms of this Release and the Agreement are intended by the parties to
be
the final expression of their agreement with respect to the matters addressed
herein and therein and may not be contradicted by evidence of any prior or
contemporaneous agreement. The parties further intend that this Release and
the
Agreement will constitute the complete and exclusive statement of their terms
and that no extrinsic evidence whatsoever may be introduced in any judicial,
administrative, or other legal proceeding to vary the terms of this Release
or
the Agreement.
(g) Amendments;
Waivers.
This Release may not be modified, amended, or terminated except by an instrument
in writing, signed by Employee and Employer. Failure on the part of either
party
to complain of any action or omission, breach, or default on the part of the
other party, no matter how long the same may continue, will never be deemed
to
be a waiver of any rights or remedies hereunder, at law or in equity. Employee
or Employer may waive compliance by the other party with any provision of this
Release that such other party was or is obligated to comply with or perform
only
through an executed writing; provided,
however,
that such waiver will not operate as a waiver of, or estoppel with respect
to,
any other or subsequent failure.
(h) No
Inconsistent Actions; Enforcement.
The Employer and Employee will not voluntarily undertake or fail to undertake
any action or course of action that is inconsistent with the provisions or
essential intent of this Release. Furthermore, it is the intent of the parties
hereto to act in a fair and reasonable manner with respect to the interpretation
and application of the provisions of this Release. Employee acknowledges and
agrees that the remedy at law available to Employer for breach of any of
Employee’s obligations under Section 5
would be inadequate and that damages flowing from such a breach may not readily
be susceptible to being measured in monetary terms.
(i) Headings
and Section References.
The headings used in this Release are intended for convenience of reference
only
and will not in any manner amplify, limit, modify, or otherwise be used in
the
construction or interpretation of any provision of this Release. All section
references are to sections of this Release, unless otherwise noted.
(j) Authority.
The Employer represents and warrants that it and its signatory hereto are duly
authorized and empowered to execute and enter into this Release without any
further action or approval.
EXCEPT
AS OTHERWISE EXPRESSLY PROVIDED HEREIN, THIS RELEASE INCLUDES A COMPLETE AND
PERMANENT RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS. EMPLOYEE ACKNOWLEDGES THAT
EMPLOYEE HAS READ THIS RELEASE AND THAT EMPLOYEE FULLY KNOWS, UNDERSTANDS,
AND
APPRECIATES ITS CONTENTS, AND THAT EMPLOYEE HEREBY EXECUTES THE SAME AND MAKES
THIS RELEASE AND THE AGREEMENTS PROVIDED
FOR
HEREIN VOLUNTARILY AND OF EMPLOYEE’S OWN FREE WILL.
IN
WITNESS WHEREOF,
the parties have executed and delivered this Release as of the date first set
forth above.
EMPLOYER EMPLOYEE
By:________________________________ ______________________________
Gregory
D. Derkacht
Name:_____________________________
Title:_______________________________