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EXHIBIT 4.3
NATIONAL PROCESSING, INC.
NONEMPLOYEE DIRECTORS STOCK OPTION PLAN
1. a) GENERAL PLAN INFORMATION. The purpose of the National Processing,
Inc. Nonemployee Directors Stock Option Plan (the "Plan") is to attract, retain
and compensate highly qualified individuals who are not current employees of
National processing, Inc. (the "Company") as members of the board of Directors
and to enable them to increase their ownership of shares of common stock,
without par value, of the company ("Common Stock") . The Plan will be beneficial
to the Company and its shareholders since it will allow these directors to have
a greater personal financial stake in the Company through the ownership of
Common Stock, in addition to underscoring their common interest and
identification with stockholders in increasing the value of Common Stock.
2. b) SECURITIES TO BE OFFERED. The total number of shares of Common
Stock with respect to which options may be granted under the Plan shall not
exceed 200,000 (as adjusted pursuant to Section 7 hereof). Shares unissued
exercise of options granted under the Plan may be either authorized and unissued
shares, treasury shares, or any combination thereof. In the event that any
option granted under the Plan shall terminate, expire or, with the consent of
the optionee, be cancelled as to any shares of Common Stock, without having
been exercised in full, new options may be granted with respect to such shares
without again being charged against the maximum share limitations set forth
above in this Section 2.
3. ADMINISTRATION. The Plan shall be administered by the Board of
Directors (the "Board") who may from time to time delegate all or any part of
its authority under the Plan to a committee of not less than three Directors
appointed by the Board. To the extent of such delegation, references in the Plan
to the Board shall also refer to tie appropriate committee.
The Board, from time to time, may adopt rules and regulations for
Carrying out the provisions and purposes of the Plan. The interpretation and
construction by the Board of any provisions of and the determinate on of any
questions arising under, the Plan, any such rule or regulation, or any agreement
evidencing options under the Plan, shall be final, binding and conclusive on all
persons interested in the Plan. The Secretary of the Company shall be authorized
to implement the Plan in accordance with its terms and to take such actions of a
ministerial nature as shall be necessary to effectuate the intent and purposes
hereof. The validity, construction and effect of the Plan and any rules and
regulations relating to the Plan shall be determined in accordance with the
laws State of Ohio without regard to its conflicts of law Principles.
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c) EMPLOYEES WHO MAY PARTICIPATE IN THE PLAN. All members of the
Company's Board who are not current employees of the Company, any of its
subsidiaries, or any of its affiliates except for former employees of the
Company at the time of option award ("Nonemployee Directors") are eligible
to participate in the Plan.
d) PURCHASES OF SECURITIES PURSUANT TO THE PLAN AND PAYMENT FOR
SECURITIES OFFERED. TYPES OF OPTIONS. All options granted under the Plan shall
be non-statutory options not intended to qualify under Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"). Each option granted
under the Plan shall provide that such option will not be treated as an
"incentive stock option," as that term is defined in Section 422 of the
Code.
(a) FORMULA AWARDS. Option to purchase 25,000 shares of
Common Stock as adjusted pursuant to Section 7 hereof) shall be
granted to each Nonemployee Director who neither is an employee of
National City Corporation or any of its affiliates nor has been
previously employed by the Company ("Nonaffiliated Director") upon
election to the Company's Board ("Automatic Initial Awards"). Any
Nonaffiliated Director who is so elected Within ten days following
consummation of the Offering will receive Automatic Initial Awards to
purchase Common Stock are the initial public offering price ("IPO
Price"), and Nonaffiliated Directors elected after such ten-day period
will receive such awards at the Fair Market Value (as defined below)
per share of the Common Stock. Options to purchase 2,500 shares of
Common Stock shall be granted automatically to each Nonaffiliated
Director on the first Friday following each of the Company's Annual
meetings of Shareholders ("Automatic Annual Awards"). The Automatic
Initial Awards and the Automatic Annual Awards are collectively
referred to herein as the "Formula Awards." No Nonemployee Director
who previously has been employed by the Company shall be eligible to
receive Formula Awards under the Plan.
(b) DISCRETIONARY AWARDS. The Board, in its sole
discretion, shall determine Nonemployee Directors who previously have
been employed by the Company or any of its subsidiaries to whom
options (other than Formula Awards) shall be granted, the time or
times when they shall be granted and the number of shares to be
covered by each option so granted (hereinafter referred to as
"Discretionary Awards"). No Nonemployee Director who is eligible to
receive Formula Awards shall be eligible to receive Discretionary
Awards under the Plan.
(2) TERMS AND CONDITIONS OF OPTIONS. All options approved by the Board
under the Plan shall be evidenced by stock option agreements in writing
(hereinafter referenced to as "Option Agreements"), in such form as the Board
may from time to time approve, executed on behalf of the Company by the Chairman
of the Board or President of the Company. Each option Agreement shall be subject
to the Plan, and, in addition to such other terms and conditions as the Board
may deem desirable, shall provide in substance as follows:
(a) PURCHASE PRICE. The purchase price per share of Common
Stock for which each option is exercisable shall be equal to 100% of
the fair market value of a share of Common Stock as of the
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date such option is granted ("Fair Market Value"), except for options granted
prior to or within ten days following consummation of the Company's initial
public offering of Common Stock, which will be at an option price per share
equal to the IPO Price. Such Fair Market Value shall be the last sale price of
Common Stock on the date next preceding such date as reported on the New York
Stock Exchange Composite Tape or, in the event that no sale shall have taken
place on the New York Stock Exchange on such next preceding day, the last sale
price of Common Stock on the next preceding day on which there was a sale as
reported on the New York Stock Exchange Composite Tape, or if the Common Stock
is no longer traded on the New York Stock Exchange, the fair market value on
such date as determined by the Board in accordance with applicable law and
regulations. The option price shall be subject to adjustment as provided in
Section 7 hereof.
(b) EXERCISABILITY AND TERM OF OPTIONS. Subject to Section 6(c) hereof,
each option granted under the Plan shall be exercisable to the extent of
one-third of the shares covered thereby on each of the first through third
anniversaries of the date of grant. Each option granted under the Plan shall
expire 10 years from the date of grant and shall be subject to earlier
termination as hereinafter provided. If a Nonemployee Director subsequently
becomes an employee of the Company while remaining a member of the Board, any
options held under the Plan by such individual at the time of such commencement
of employment shall, affected thereby.
(c) MANNER OF EXERCISE. Each Option Agreement shall provide that any
option therein granted shall be exercisable only by giving in each case written
notice of exercise, accompanied by full
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payment of the purchase price either (i) in cash (including check, bank
draft or money order, or wire or other transfer of funds, or advice of credit to
the Company); (ii) in shares of Common Stock with a Fair Market Value equal to
the purchase price of a combination of cash and shares of Common Stock which in
the aggregate are equal value to such purchase price; or (iii) from the proceeds
of a sale through a broker on the date of exercise of some or all of the shares
of Common Stock to which the exercise relates.
(e) Nontransferability. Each Option Agreement shall provide at any
option therein granted is not transferable by the optionee her than by will or
by the laws of descent and distribution and that, during the lifetime of the
optionee, such option may be exercised only by the optionee or such optionee's
legal representative.
(f) Cessation of Services. Except as hereinafter set forth, no shall be
exercisable after the date of cessation of an optionee's service as a director
of the Company. Upon the death of an optionee at any time or upon cessation of
service six months or more after the date of grant, all of the then outstanding
Formula Award options of such optionee shall become immediately exercisable. If
an optionee's service ceases for any reason, such exercisable Formula Award
options may be exercised by the optionee within three months after such
cessation of service. If an optionee shall die within such three-month period,
or if cessation of his or her service shall have been due to such optionee's
death, such Formula Award options may be exercised at any time within one year
after such death by the optionee's executor or administrator or by his or her
distributes to whom such Formula Award options may have been transferred by
will or by the laws of descent and distribution. The effects of cessation of an
optionee's service as a director on the exercisability of a Discretionary Award
option shall be determined by the Board, in its sole discretion, and shall be
set forth in the option agreement evidencing such Discretionary Award option;
provided, however, that the cessation of service terms with respect to any
Discretionary Award option shall be no more favorable than those set forth
herein with respect to Formula Award options. The foregoing provisions shall not
extend the period during which an option may be exercised beyond the date it
expires by its terms.
(3) ADJUSTMENT UPON CHANGES IN STOCK. The Board shall make or provide
adjustments in the option price and in the number of kind of shares or other
securities covered by outstanding options as the Board in its sole discretion,
exercised in good faith, shall determine is equitably required to prevent
dilution or enlargement of rights of optionees that would otherwise result from
(a) any stock dividend, stock split, combination of shares, issuance of rights
or warrants to purchase stock, recapitalization or other changes in the capital
structure of the Company, (b) any merger, consolidation, reorganization or
partial or complete liquidation, or (c) any other corporate transaction or event
having an effect similar to any of the foregoing. The Board also shall make or
provide for such adjustments in the number or kind of shares of the Company's
Common Stock or other securities which may be acquired pursuant to options
granted under this Plan and the number of such securities to be awarded to each
optionee as the Board in its sole discretion, exercised in good Faith, shall
determine is appropriate to reflect any transaction or event described in the
preceding sentence. The determination of the Board as to what adjustments shall
be made, and the extent thereof, shall be final, binding and conclusive.
(4) FRACTIONAL SHARES. No fractional shares shall be issued Pursuant
options granted hereunder, the any fractional share resulting from an adjustment
pursuant to Section 7 hereof shall be eliminated.
(5) GOVERNMENT REGULATIONS. The Plan, the grant and exercise of options
hereunder, and the Company's obligation to sell and deliver shares of Common
Stock pursuant to any such exercise, shall be subject to all applicable federal
and state laws, rules and regulations and to such approvals by any regulatory or
government agency as shall be required. The Company shall not be required to
issue or deliver any certificate or certificates for shares of its Common Stock
prior to the admission of such shares to listing on any stock exchange or
national market system on which the stock shall then be listed or quoted and
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(b) the completion of any registration or other qualification of such shares
under any state or federal law or rulings or regulations of any government body,
which the Company shall, in its sole discretion, determine to be necessary
advisable.
(6) TERM OF THE PLAN. The Plan shall become effective immediately
following approval by the sole shareholder of the Company. The period during
which option grants shall be made under the Plan shall terminate within 10
years from the effective date. Termination of the Plan, however, shall not
affect outstanding options which have been granted prior to such termination,
and all unexpired options shall continue in full force and operation after
termination of the Plan, except as they shall lapse or terminate by their own
terms and conditions and the terms of the Plan shall continue to apply to such
options.
(7) AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN. The Board at any
time and from time to time may suspend or terminate the Plan or revise or amend
the Plan in any respect whatsoever; provided, however, that if and to the extent
required by Rule 16b-3 promulgated under Section 16(b) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") or by any comparable or
successor exemption under which the Board believes it is appropriate for the
Plan to qualify, no amendment shall be effective without the approval of the
shareholders of the Company, that (i) except as described in Section 7
materially increases the number of shares of Common Stock that may be issued
under the Plan, (ii) materially increases the benefits accruing to individuals
pursuant to the Plan, (iii) materially modifies the requirements as to
eligibility for participation in the Plan; and provided, further, however, if
and to the extent required by Rule 16b-3 promulgated under Section 16(b) of the
Exchange Act or by any comparable or successor exemption under which the Board
believes it is appropriate for the Plan to qualify, the provisions of the Plan
may not be amended more than once every six months, other than to comply with
changes in the Code, the Employee Retirement Income Security Act of 1974, as
amended or the rules thereunder. No action may, without consent of a
participant, reduce the participant's rights under any previously granted and
outstanding option.
(8) COMPLIANCE WITH RULE 16b-3. The Plan is initially intended to
comply with Rule 16b-3 as in effect on and after May 1991. Unless otherwise
determined by the Board or otherwise required by applicable law, Rule 16b-3 as
promulgated in Release No. 34-37260 dated May 31, 1996 shall apply to the Plan
on and after August 15, 1996.
(9) NO RIGHT TO CONTINUE AS DIRECTOR. Neither the Plan, nor the
granting of an option nor any other action taken pursuant to the Plan, shall
constitute or be evidence of any agreement or understanding, express or implied,
that a director has a right to continue as a director for any period of time, or
at any particular rate of compensation.
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