EXHIBIT 10.5
TRANSACTION SYSTEMS ARCHITECTS, INC.
Nonqualified Stock Option Agreement - Non-Employee Director
(2005 Equity and Performance Incentive Plan)
This Stock Option Agreement (the "Option Agreement") is made as of __________,
by and between Transaction Systems Architects, Inc., a Delaware corporation (the
"Corporation"), and [_____________], a Non-Employee Director of the Corporation
or its Subsidiaries (the "Optionee").
WHEREAS, the Board of Directors of the Corporation has duly adopted, and the
stockholders of the Corporation have approved, the 2005 Equity and Performance
Incentive 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 (reclassified as Common Stock) (the "Stock"); and
WHEREAS, the Corporation has determined that it is desirable and in the best
interests of the Corporation and its stockholders to grant the Optionee 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 this Option Agreement,
[_____________] shares of Stock (the "Option Shares"). The Date of Grant of this
Option is _____________. 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 has been delivered
to the Optionee. 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 a 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 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. Capitalized terms used herein that are not otherwise defined
shall have the meaning ascribed to them in the Plan.
3. EXERCISE PRICE
The exercise price for the shares of Stock subject to the Option granted by
this Option Agreement is $_______ per share (the "Exercise Price").
4. EXERCISE OF OPTION
Subject to the provisions of the Plan and subject to the earlier expiration or
termination of this Option in accordance with its terms, the Option granted
pursuant to this Option Agreement shall be exercisable only as follows:
4.1. Time of Exercise of Option
4.1.1. The Option shall become exercisable with respect to 100% of
the Option Shares on the earlier to occur of (i) the date
which is one year following the Date of Grant and (ii) the day
immediately prior to the date of the next annual meeting of
the stockholders of the Corporation occurring following the
Date of Grant.
4.1.2. Notwithstanding Section 4.1.1 above, in accordance with the
provisions of the Plan, the Option granted under this Option
Agreement shall become immediately exercisable upon the
occurrence of a Change in Control (as defined in Section 9
below) if the Optionee holding such Option is a Non-Employee
Director of the Corporation or a Subsidiary of the
Corporation on the date of the consummation of such Change
in Control.
4.1.3 Notwithstanding Section 4.1.1 above, in accordance with the
provisions of the Plan, if the Optionee ceases to be a
Non-Employee Director of the Corporation or a Subsidiary of
the Corporation by reason of Disability (as defined in
Section 4.3.2 below), the unexercised portion of any Option
held by such Optionee at that time will become immediately
vested and will be exercisable until terminated in
accordance with Section 4.3 below.
4.1.4 Notwithstanding Section 4.1.1 above, in accordance with the
provisions of the Plan, if the Optionee dies while serving
as a Non-Employee Director of the Corporation or a
Subsidiary of the Corporation (or dies within a period of
one month after termination of his service as a Non-Employee
Director for any reason other than Disability or within a
period of one year after termination of his service as
Non-Employee Director 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 until terminated in accordance with Section 4.3
below.
4.2. Limitations
The portion of the Option that has not become exercisable as of the date of the
Optionee's termination of service as a Non-Employee Director of the Corporation
or any of its Subsidiaries for any reason shall automatically terminate as of
the date of the Optionee's termination of service as a Non-Employee Director of
the Corporation or its Subsidiaries and shall not become exercisable after such
termination. To the extent the Option is exercisable, it may be exercised, in
whole or in part; 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.
4.3. Termination of Option
This Agreement and the Option granted hereby shall terminate automatically and
without further notice on the earliest of the following dates:
4.3.1. 90 calendar days from the date of the Optionee's termination
of service as a Non-Employee Director of the Corporation or a
Subsidiary of the Corporation for any reason other than death
or Disability (as defined below);
4.3.2. one year after the Optionee's permanent and total disability
as defined in Section 22(e)(3) of the Code ("Disability");
4.3.3. one year after the Optionee's death, if such death occurs
(i) while the Optionee is serving as a Non-Employee Director
of the Corporation or a Subsidiary of the Corporation, (ii)
within the 90-day period following the Optionee's termination
of service as a Non-Employee Director for any reason other
than Disability; or (iii) within the one-year period following
the Optionee's termination of service as a Non-Employee
Director by reason of the Optionee's Disability; or
4.3.4. ten years from the Date of Grant.
The Corporation shall have the authority to determine the date an Optionee
ceases to serve as a Non-Employee Director by reason of Disability. In the case
of death, the 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.
4.4. Limitations on Exercise of Option
In no event may the Option be exercised, in whole or in part, after the
occurrence of an event which results in termination of the Option, as set forth
in Section 4.3 above. 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 Corporation's policies
and procedures.
4.5. Method of Exercise of Option
4.5.1. To the extent then exercisable, the Option may be exercised in
whole or in part by written notice to the Corporation stating
the number of shares for which the Option is being exercised
and the intended manner of payment. The date of such notice
shall be the exercise date. Payment equal to the aggregate
Exercise Price of the shares shall be payable (i) in cash in
the form of currency or check or other cash equivalent
acceptable to the Corporation, (ii) by actual or
constructive transfer to the Corporation of nonforfeitable,
outstanding shares of Stock that have been owned by the
Optionee for at least six months prior to the date of
exercise, (iii) by any combination of the foregoing methods
of payment, or (iv) in accordance with such other method or
manner as set forth below.
(A) Cash Exercise (to exercise and retain the Option
Shares): Subject to the terms and conditions of this Option
Agreement and the Plan, the Option may be exercised by
delivering written notice of exercise to the Corporation, at
its principal office, addressed to the attention of Stock Plan
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.
(B) Same-Day-Sale Exercise (to exercise and
immediately sell all the Option Shares): Subject to the terms
and conditions of this Option Agreement and the Plan, 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.
(C) Sell-to-Cover Exercise (to exercise and
immediately sell a portion of the Option Shares): Subject to
the terms and conditions of this Option Agreement and the
Plan, 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.
4.5.2. As soon as practicable upon the Corporation's receipt of the
Optionee's notice of exercise and payment, the Corporation
shall direct the due issuance of the shares so purchased.
4.5.3. As a further condition precedent to the exercise of this
Option in whole or in part, the Optionee shall comply with all
regulations and the requirements of any regulatory authority
having control of, or supervision over, the issuance of the
shares of Stock and in connection therewith shall execute any
documents which the Board shall in its sole discretion deem
necessary or advisable.
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. COMPLIANCE WITH LAW
The Corporation shall make reasonable efforts to comply with all applicable
federal and state securities laws; provided, however, that notwithstanding any
other provision of this Option Agreement, the Option shall not be exercisable if
the exercise thereof would result in a violation of any such law.
7. 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 of record on the books of the Corporation.
8. DISCLAIMER OF RIGHTS
No provision in this Option Agreement shall be construed to confer upon the
Optionee the right to be employed by or to serve as a Non-Employee Director of
the Corporation, or to interfere in any way with the right and authority of the
Corporation either to increase or decrease the compensation or other benefits of
the Optionee at any time, or to terminate any relationship between the Optionee
and the Corporation.
9. CHANGE IN CONTROL
For purposes of this Option Agreement, "Change in Control" means:
(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 Corporation (the
"Outstanding Corporation Common Stock") or (ii) the combined voting power of the
then-outstanding voting securities of the Corporation entitled to vote generally
in the election of directors (the "Outstanding Corporation Voting Securities");
provided, however, that the following acquisitions shall not constitute a Change
in Control: (A) any acquisition directly from the Corporation (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 Corporation or any corporation controlled by the Corporation
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 9 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 Corporation's stockholders, was approved by a vote of at least
two-thirds of the directors then constituting the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of either an actual or threatened election contest
subject to Rule 14a-11 of Regulation 14A promulgated under the Exchange Act or
other actual or threatened solicitation of proxies or consents by or on behalf
of a Person other than the Board; or
(c) consummation of a reorganization, merger or consolidation, unless
following such reorganization, merger or consolidation (i) more than 60% of,
respectively, the then-outstanding shares of common stock of the corporation
resulting from such reorganization, merger or consolidation and the combined
voting power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the individuals
and entities who were the beneficial owners, respectively, of the Outstanding
Corporation Common Stock and Outstanding Corporation 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 Corporation Common
Stock and Outstanding Corporation 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 Corporation'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 Corporation),
(ii) no Person (excluding the Corporation, any employee benefit plan (or related
trust) of the Corporation, 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
Corporation Common Stock or Outstanding Corporation 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 Corporation of a complete
liquidation or dissolution of the Corporation 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 Corporation, or
(B) the approval by the stockholders of the Corporation 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 Corporation Common Stock and Outstanding Corporation 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 Corporation Common Stock and Outstanding
Corporation 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 Corporation'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 Corporation), (2) no Person
(excluding the Corporation and any employee benefit plan (or related trust) of
the Corporation, 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
Corporation Common Stock or Outstanding Corporation 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 Corporation.
10. 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.
11. COMPLIANCE WITH SECTION 409A OF THE CODE.
To the extent applicable, it is intended that this Option Agreement and the Plan
comply with the provisions of Section 409A of the Code, so that the income
inclusion provisions of Section 409A(a)(1) do not apply to Optionee. This Option
Agreement and the Plan shall be administered in a manner consistent with this
intent, and any provision that would cause the Option Agreement or the Plan to
fail to satisfy Section 409A of the Code shall have no force and effect until
amended to comply with Section 409A of the Code (which amendment may be
retroactive to the extent permitted by Section 409A of the Code and may be made
by the Corporation without the consent of the Optionee).
12. 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).
13. 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.
14. 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.
15. SEVERABILITY
If one or more of the provisions of this Option Agreement is invalidated for any
reason by a court of competent jurisdiction, any provision so invalidated shall
be deemed to be separable from the other provisions hereof, and the remaining
provisions hereof shall continue to be valid and fully enforceable.
16. ENTIRE AGREEMENT; ELIGIBILITY
This Option Agreement and the Plan together constitute the entire agreement and
supersedes all prior understandings and agreements, written or oral, 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. In the event that it
is determined that the Optionee was not eligible to receive this Option, the
Option and this Option Agreement shall be null and void and of no further
effect.
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have duly executed this Option Agreement,
or caused this 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:
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[_________________________] [_________________________]
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
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After completing this page, please make a copy for your records and return it
to Stock Plan Administration, Transaction Systems Architects, Inc., 330 S. 108
Avenue, Omaha, NE 68154
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2005 Equity and Performance Incentive Plan - US Plan
_________ Options $________/Share Exercise Price _______ Date