Exhibit 10.28
JACK HENRY & ASSOCIATES, INC.
2005 NON-QUALIFIED STOCK OPTION PLAN
Adopted by the Stockholders November 1, 2005
Jack Henry & Associates, Inc. (the "Company"), a Delaware corporation,
hereby formulates and adopts the following 2005 Non-Qualified Stock Option
Plan (the "Plan") for non-employee directors of the Company.
1. Purpose. The purpose of the Plan is to obtain for the Company the
benefits of the additional incentive inherent in the ownership of Common
Stock, $.01 par value per share, of the Company ("Common Stock"), by
selected non-employee directors of the Company who are important to the
success and the growth of the business of the Company, to help the Company
retain the services of such persons, and to compensate such persons for
their service on the Board of Directors.
2. Stock Option Committee. The Board of Directors of the Company
shall appoint from among its members a Non-Qualified Stock Option Committee
(the "Committee"), consisting of no fewer than two directors, none of whom
shall be eligible to participate under the Plan. The Committee shall select
one of its members as Chairman and shall adopt such rules and regulations as
it shall deem appropriate concerning the holding of its meetings and the
transaction of its business. A majority of the whole Committee shall
constitute a quorum, and the act of a majority of the members of the
Committee shall be the act of the Committee. Any member of the Committee
may be removed at any time either with or without cause by resolution
adopted by the Board of Directors of the Company; and any vacancy on the
Committee may at any time be filled by resolution adopted by the Board of
Directors.
3. Stock Subject to Options. Subject to the provisions of paragraph
13, the number of shares of Common Stock subject at any one time to options
granted under the Plan plus the number of such shares then outstanding
pursuant to exercises of options granted under the Plan shall not exceed an
aggregate of 700,000 shares. If and to the extent that options granted
under the Plan terminate or expire in accordance with paragraph 8 without
having been exercised, new options may be granted with respect to the shares
covered by such terminated or expired options, provided that the granting
and terms of such new options shall in all respects comply with the
provisions of the Plan.
There shall be reserved at all times for sale under the Plan a number
of shares of Common Stock (either authorized and unissued shares or shares
held in the Company's treasury, or both) equal to the maximum number of
shares which may be purchased pursuant to options granted or that may be
granted under the Plan.
Shares transferred by the Company upon the exercise of any option
granted under the Plan may be shares of authorized and unissued Common
Stock, shares of issued Common Stock held in the Company's treasury, or
both.
4. Administration. The Committee shall have the authority and
responsibility, within the limitations of the Plan, as amended or modified
from time to time, to calculate the "fair market value" of shares subject to
grant in accordance with paragraph 7, the terms and provisions of the
respective Option Agreements (which need not be identical), and to make all
other determinations necessary or advisable for administering the Plan.
Any or all powers and functions of the Committee may at any time
and from time to time be exercised by the Board of Directors or the
Executive Committee thereof; provided, however, that such powers and
functions of the Committee may be exercised by the Board of Directors or the
Executive Committee, as the case may be, only if, at the time of such
exercise, a majority of the members of the entire Board of Directors or the
Executive Committee, as the case may be, and a majority of the directors
acting in the particular matter, are not eligible to participate under the
Plan.
5. Eligible Participants. Options may be granted under the Plan only
to non-employee directors of the Company. A "non-employee director" shall
mean a director who is not at the time of the grant to him of any option
under the Plan, or at any time within one year prior thereto, an employee of
the Company or its subsidiaries. A non-employee director receiving any
option under the Plan is hereinafter referred to as an "Optionee".
6. Grant of Options.
(a) Annual Grants. On the third business day following the day
of each annual meeting of the stockholders of the Company, each non-
employee director shall automatically and without further action of the
Board or the Committee be granted a non-statutory stock option (a stock
option which does not qualify under Sections 422 or 423 of the Internal
Revenue Code of 1986) to purchase 10,000 shares of Common Stock,
subject to adjustment and substitution as set forth below. If the
number of shares then remaining available for the grant of stock
options under the Plan is not sufficient for each non-employee director
to be granted an option for 10,000 shares (or the number of adjusted or
substituted shares), then each non-employee director shall be granted
an option for a number of whole shares equal to the number of shares
then remaining available divided by the number of non-employee
directors, disregarding any fractions of a share.
(b) Grant Limitation. Notwithstanding any other provision of
this Plan, no non-employee director may be granted options to purchase
more than 100,000 shares of Common Stock pursuant to the Plan.
7. Price.
(a) The option price of each share of Common Stock purchasable
under any option granted under the Plan shall be 100% of the "fair
market value" thereof at the time the option is granted.
(b) The option price shall become immediately due upon exercise
of the option and shall be payable in one of the alternative forms
specified below: (1) full payment by certified check payable to the
Company; (2) full payment in shares of Common Stock having a fair
market value on the Exercise Date (as such term is defined below) equal
to the option price, which shares shall have been held for more than
six months by the individual; or (3) any combination of certified check
payable to the Company and/or shares of Common Stock valued at fair
market value on the Exercise Date, equal in the aggregate to the option
price. For purposes of this subsection (b), the Exercise Date shall be
the date on which written notice of the exercise of the option is
delivered to the Company, together with payment of the option price for
the purchased shares.
(c) The "fair market value" of a share on a particular date shall
be: (1) if shares of Common Stock are listed on such date on one or
more national securities exchanges or the Nasdaq Stock Market, the last
reported sale price of a share on such date as recorded on the
composite tape system or on the Nasdaq Stock Market, or if no sale of
Common Stock took place on such date, the last reported sale price of a
share on the most recent day on which a sale of a share took place as
recorded by on such exchange or the Nasdaq Stock Market, as the case
may be; or (2) if Common Stock is not listed on such date on any
national securities exchange or the Nasdaq Stock Market, the mean
between the last closing bid and asked quotations of a share of Common
Stock on such date (or if none, on the most recent date on which there
were bid and asked quotations of a share), as reported by the Nasdaq
Stock Market, the National Quotation Bureau, Incorporated, or other
similar service selected by the Board of Directors or the Committee.
8. Exercisability, Vesting and Duration of Options. No option
granted under the Plan shall be exercisable until six months after the date
of grant. Subject to the foregoing, all options granted under the Plan
shall be fully vested and exercisable after the fourth anniversary of the
date of the director's first election or appointment to the Board of
Directors of the Company (the "Initial Service Date"). For directors who
have served less than four continuous years, and subject to the first
sentence of this paragraph 8, options granted under the Plan shall vest and
become exercisable as follows:
(a) with respect to 25% of the shares subject to option, after
the expiration of one year from the Initial Service Date;
(b) with respect to 50% of the shares subject to option, after
the expiration of two years from the Initial Service Date;
(c) with respect to 75% of the shares subject to option, after
the expiration of three years from the Initial Service Date.
Provided, however, that any option granted under the Plan shall become
exercisable in its entirety upon the Optionee's death, illness, disability
or retirement as determined by the Committee; and provided further that no
portion of any option not theretofore exercisable shall become exercisable
following the removal or termination of the Optionee as a director of the
Company, for any reason other than his or her death, illness, disability or
retirement as determined by the Committee.
The unexercised portion of any vested option granted under the Plan
shall automatically and without notice terminate and become null and void at
the time of the earliest to occur of the following: (i) the expiration of
ten years from the date on which such option was granted; (ii) the
expiration of one year following the issuance of letters testamentary or
letters of administration to the executor or administrator of a deceased
Optionee or Permitted Transferee (as defined in paragraph 10); or (iii) the
surrender by the Optionee or Permitted Transferee to the Company of any such
option (whether or not in exchange for any other option).
9. Exercise of Options. Options granted under the Plan shall be
exercised by the Optionee (or by his executors or administrators, or
Permitted Transferee, as provided in paragraph 10) as to all or part of the
shares covered thereby, by the giving of written notice of the exercise
thereof to the Company at its principal business office, specifying the
number of shares to be purchased, specifying a business day, not less than
10 days nor more than 15 days from the date such notice is given, for the
payment of the purchase price against delivery of the shares being purchased
and specifying the method of payment of such purchase price.
Subject to the provisions of paragraph 17, the Company shall cause
certificates for the shares so purchased to be delivered to the Optionee or
his executors or administrators or Permitted Transferee at its principal
business office, against payment of the full purchase price, on the date
specified in the notice of exercise.
10. Non-Transferability of Options. For the first six months after the
date of grant, no option granted under the Plan shall be transferable by
the Optionee other than by will, or if the Optionee dies intestate by the
laws of descent and distribution. In the event of the Optionee's death,
options held by him at death shall thereafter be exercisable, as provided in
subparagraph 8(ii), by such person(s) entitled to do so under the will of
the Optionee or, if the Optionee shall fail to make testamentary disposition
of the stock option or shall die intestate, by the legal representative of
the Optionee.
Options may be transferred, following the first six months after the
date of grant and during the lifetime of an Optionee, to any "Permitted
Transferee". Any such options shall remain subject to all of the terms and
conditions of this Plan, including but not limited to the provisions on
vesting and exercisability set forth in paragraph 8. "Permitted Transferee"
shall include members of the immediate family of the Optionee, any trust
established for the benefit of the Optionee or the Optionee's immediate
family members, or any charity qualified under S501(c)(3) of the Internal
Revenue Code. For this purpose, "immediate family member" shall mean the
Optionee's spouse, children, step-children, grandchildren and step-
grandchildren, and any partnership, corporation, limited liability company
or other entity, all the beneficial interests in which are held by the
Optionee or immediate family members. Permitted Transferees may only
transfer options to other Permitted Transferees of the Optionee. The
Company may disregard any transfer of an option which has not been properly
registered with the Company or its agents. In the event of the death of a
Permitted Transferee who held options at death, such options shall
thereafter be exercisable, as provided in subparagraph 8(ii), by such
person(s) entitled to do so under the will of the Permitted Transferee, or
if such holder shall fail to make testamentary disposition of the stock
option or shall die intestate, by the legal representative of the Permitted
Transferee.
11. Rights of Optionee. Neither the Optionee nor his Permitted
Transferees, executors or administrators shall have any of the rights of a
stockholder of the Company with respect to the shares subject to an option
granted under the Plan until certificates for such shares shall have been
issued upon the exercise of such option.
12. Right to Terminate. Nothing in the Plan or in any option granted
under the Plan shall confer upon any Optionee the right to continue as a
director of the Company or affect the right of the stockholders of the
Company to terminate the Optionee as a director at any time, or the right of
the Board of Directors to elect or remove directors, subject, however, to
the provisions of Delaware law.
13. Adjustment of Shares. If any change is made in the shares subject
to the Plan or subject to any option granted under the Plan (through merger,
consolidation, reorganization, recapitalization, stock dividend, split-up,
combination of shares, exchange of shares, issuance of rights to subscribe,
or change in capital structure), appropriate adjustments or substitutions
shall be made by the Committee in or for such shares (including adjustments
in the maximum number of shares subject to the Plan and the number of such
shares and price per share subject to the Plan and the number of such shares
and price per shares subject to outstanding options) as the Committee in its
sole discretion shall deem equitable to prevent dilution or enlargement of
option rights; provided, however, that in the case of any transaction (or
series of transactions carried out within a period of twelve consecutive
months) in which the Company is consolidated or merged with another
corporation (other than a subsidiary or other affiliated company of the
Company), or in which substantially all of the properties or assets of the
Company are acquired by another person, firm or corporation (other than one
or more subsidiaries or other affiliated companies of the Company), and in
which the stockholders of the Company receive, either directly or
indirectly, as consideration, cash and/or non-equity securities or a package
which does not include an amount of equity securities (as defined in Section
3(a)(11) of the Exchange Act) equal to more than 20% of the aggregate value
of such package as conclusively determined by the Committee, the Committee
shall, alternatively, have the right to terminate all then outstanding
options (in which event such options shall not be subject to the above
described adjustments) by causing written notice of such termination to be
given to each Optionee not less than 30 days prior to the date on which such
consolidation, merger or acquisition is expected to become effective and, if
applicable, the date as of which it is expected that holders of Common Stock
of record shall be entitled to exchange their shares of Common Stock for
securities or other property deliverable upon such consolidation, merger or
acquisition. In providing such notice, the Board of Directors may, in its
discretion, with respect to options, waive the restrictions on exercise
pursuant to paragraph 8 and permit such option or options to become
immediately exercisable. Such notice shall be deemed duly given when
delivered personally, or mailed first-class postage prepaid, to each
Optionee at his address appearing in the records of the Company, and failure
to give such notice to any Optionee, or any defect therein, shall not affect
the termination of an option held by any other Optionee.
14. Amendment of the Plan. The Board may, from time to time, amend or
modify the Plan in all respects, except that without stockholder approval no
such amendment or modification may (a) increase the total number of shares
reserved for options thereunder (other than an increase merely reflecting an
adjustment as described in paragraph 13), (b) change the option price from
100% of the "fair market value" on the date of grant, (c) change the class
of non-employee directors eligible to receive options, or (d) extend the
period of exercise beyond ten years from the date of grant. Rights and
obligations under any option previously granted under the Plan may not be
altered or impaired by any such amendment or modification of the Plan except
upon consent of the person to whom such option was granted.
15. Termination or Suspension of the Plan. The Board of Directors may
at any time suspend or terminate the Plan. The Plan, unless sooner
terminated, shall terminate at the close of business on November 30, 2015.
An option may not be granted while the Plan is suspended or after it is
terminated. Rights and obligations under any option granted while the Plan
is in effect shall not be altered or impaired by suspension or termination
of the Plan, except upon the consent of the person to whom such option and
right were granted.
16. Form of Agreements with Optionees. Subject to the limitations of
the Plan as amended or modified from time to time, every option granted
under the Plan shall be in such form and shall contain such terms and
conditions (which need not be identical) as the Committee, in its
discretion, may determine. The rights and obligations under any such form
of option granted under the Plan shall not be altered or impaired, except
upon consent of the person to whom such option and right were granted.
17. Purchase for Investment. If the Committee in its discretion
determines that as a matter of law such procedure is or may be desirable, it
may require the Optionee, upon any exercise of an option granted hereunder
or any portion thereof and as a condition to the Company's obligation to
deliver certificates representing the shares subject to exercise, to execute
and deliver to the Company a written statement, in form satisfactory to
legal counsel for the Company, representing and warranting that his purchase
or receipt of shares of Common Stock upon exercise thereof shall be for his
own account, for investment and not with a view to the resale or
distribution thereof and that any subsequent offer for sale or sale of any
such shares shall be made either pursuant to (a) a Registration Statement on
an appropriate form under the Securities Act of 1933, as amended (the
"Securities Act"), which Registration Statement has become effective and is
current with respect to the shares being offered and sold or (b) a specific
exemption from the registration requirements of the Securities Act, but in
claiming such exemption the Optionee shall, prior to any offer for sale or
sale of such shares, obtain a favorable written opinion from counsel for or
approved by the Company as to the availability of such exemption.
The Company may endorse an appropriate legend referring to the
foregoing restriction upon the certificate or certificates representing any
shares issued or transferred to the Optionee upon exercise of any option
granted under the Plan and may issue "stop transfer" instructions to its
transfer agent in respect of such shares.
18. Listing of Shares and Related Matters. If at any time the Board
of Directors shall determine, in its sole discretion, that the listing,
registration or qualification of the shares covered by the Plan upon any
national securities exchange or market system or under any state or federal
law, or the consent or approval of any governmental regulatory body, is
necessary or desirable as a condition of, or in connection with, the sale or
purchase of shares under the plan, no shares will be delivered unless and
until such listing, registration, qualification, consent or approval shall
have been effected or obtained, or otherwise provided for, free of any
conditions not acceptable to the Board of Directors.
19. Governing Law. The Plan and all options which may be granted
under the Plan shall be governed by, and construed in accordance with, the
laws of the State of Delaware from time to time obtaining, without regard to
the principles of conflicts of laws which might otherwise apply.
20. Gender. Unless the context of the Plan otherwise requires, the
masculine, feminine or neuter gender each shall include the other genders
and the singular shall include the plural.
21. Effective Date of Plan. The Plan shall become effective upon
approval by the affirmative vote of the holders of a majority of the Common
Stock present in person or by proxy and entitled to vote at a duly called
and convened meeting of such holders.