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EXHIBIT 4.3
NATIONAL PROCESSING COMPANY
1996 STOCK OPTION PLAN
1. PURPOSES. The purpose of this Stock Option Plan is to provide
employment incentives and to encourage capital accumulation and stock ownership
by Eligible Employees of National Processing, Inc. (the "Company") or of any
of its Subsidiaries, and to provide to designated Optionees under stock options
granted pursuant to any stock option plan of the Company or of any of its
Subsidiaries an alternative method of realizing the benefits provided by such
stock options.
2. DEFINITIONS. As used in this Plan,
(a) "Additional Option" means an Option Right granted to an
Optionee to purchase a number of shares of Common Stock equal to the number of
shares of already owned Common Stock delivered by the Optionee as payment of
the exercise price upon exercise of an Option Right and/or the number of shares
of Common Stock tendered or relinquished as payment of the amount to be withheld
under applicable federal, state and local income tax laws in connection with
the exercise of an option as described in Section 5 of the plan.
(b) "Additional Option Feature" means a feature of an Option
that provides for the automatic grant of an Additional Option in accordance
with the provisions described in Section 5 of the plan.
(c) The term "Appreciation Right" means a right granted
pursuant to Section 6 of the Plan.
(d) The term "Board" means the Board of Directors NPI.
(e) The term "Common Stock" means Common Stock, without par
value, of NPI or any security into which such Common stock may be
changed by reason of any transaction or event of the type described in Section
8 of the Plan.
(f) the term "Eligible Employees" means persons who are at
the time the officers (including officers who are members of the Board) and
other key employees of NPI or of any of its Subsidiaries.
(g) The term "Market Value per Share" means, at any date, the
closing price, per share, of the shares of Common Stock, on the New York Stock
Exchange on that date as reported by the Wall Street Journal (Midwest Edition)
or, if the Common Stock shall be primarily traded in another market, as
determined in a manner specified by the Board using quotations in such other
market, and prior to or within 10 days after the commencement of any such
trading, the fair market value per share of the Common Stock as determined by
the Board in its discretion.
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(h) The term "Optionee" shall mean the optionee named in an
agreement evidencing an Outstanding Option.
(i) The term "Option Right" means the right to purchase a
share of Common Stock upon exercise of an Outstanding Option.
(j) The term "Outstanding Option" means, at any time, an
option to purchase shares of Common Stock granted by NPI or any of its
Subsidiaries pursuant to the Plan or any other stock option plan of NPI or any
such Subsidiary now or hereafter in effect, or pursuant to any stock option plan
of any corporation which is merged into the NPI and where NPI has by action of
its Board, assumed the obligations of such corporation under such stock option
plan, all whether or not such option is at the time exercisable, to the extent
that such option at such time has not been exercised and has not terminated.
(k) The term "Spread" means the excess of the Market Value
per Share of Common Stock on the date when an Appreciation Right is exercised
over the option price provided for in the related Option Right.
(l) The term "Subsidiary" shall mean any corporation in which
at the time NPI owns or controls, directly or indirectly, not less than 50% of
the total combined voting power represented by all classes of stock issued by
such corporation.
(m) The term "Internal Revenue Code" means the Internal
Revenue Code of 1986, as amended from time to time.
(n) The term "Incentive Stock Option" means an Option Right
granted by NPI to an Eligible Employee, which Option Right is intended
to qualify as an "Incentive Stock Option" as that term is used in Section 422 of
the Internal Revenue Code.
3. SHARES AVAILABLE UNDER PLAN.
(a) The shares of Common Stock which may be made the subject
of Option Rights and Appreciation Rights pursuant to this Plan may be treasury
shares or shares of original issue or a combination of the foregoing.
(b) Subject to adjustments in accordance with Section 8 of
this Plan, the maximum number of shares of Common Stock which may be sold upon
the exercise of Option Rights granted pursuant to this Plan shall be 4,000,000
shares of Common Stock which are made available for sale by virtue of this
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plan. For purposes of determining the number of shares that may be sold under
the Plan, such number shall increase by the number of shares surrendered by an
optionee or relinquished to the Company (a) in connection with the exercise of
a Stock Option or (b) in payment of federal, state and local income tax
withholding liabilities upon exercise of an Option Right, provided, however,
that the number of shares of Common Stock actually issued or transferred by the
Company upon the exercise of Incentive Stock Options shall not exceed the
number of shares of Common Stock specified in the first sentence of this
paragraph 3(b), subject to adjustment as herein provided.
(c) Subject to adjustments in accordance with Section 9 of
this Plan, the maximum number of shares of Common Stock which may be delivered
upon the exercise of Appreciation Rights granted pursuant to this Plan shall
not exceed 4,000,000.
(d) Shares covered by Option Rights cancelled upon exercise of
Appreciation Rights shall not be available for the granting of further Option
Rights under this Plan or under any other stock option plan of the Company or of
any of its Subsidiaries, anything in this Plan or such other stock option plan
to the contrary notwithstanding.
4. GRANTS OF OPTION RIGHTS. The Board may, from time to time and upon
such terms and conditions as it may determine, authorize the granting to
Eligible Employees of Option Rights. Each such grant may utilize any or all of
the authorizations, and shall be subject to all of the limitations, contained
in the following provisions:
(a) Each grant shall specify the number of shares of Common
Stock to which it pertains.
(b) Each grant shall specify an option price per share not
less than the Market Value per Share on the date of grant.
(c) Successive grants may be made to the same Eligible
Employee whether or not any Option Rights previously granted to such Eligible
Employee remain unexercised. No Eligible Employee may, however, be granted
under the Plan, in the aggregate, more than 400,000 Option Rights, subject to
adjustment pursuant to Section 8 of the Plan.
(d) Option Rights granted under the Plan may be (i) options
which are intended to qualify under particular provisions of the Internal
Revenue Code, as in effect from time to time, (ii) options which are not
intended so to qualify, or (iii) combinations of the foregoing.
(e) The date of grant of each Option Right shall be the date
of its authorization by the Board, except that the date of grant of an
Additional Option shall be the date of exercise of the underlying Option Right.
No Option Right shall be exercisable more than 10 years from such date of grant.
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(f) Upon exercise of an Option Right, the option price shall
be payable (i) in cash, (ii) by the transfer NPI by the Optionee of shares of
Common Stock with a value (Market Value per Share times the number of shares)
equal to the total option price, (iii) at the discretion of the Board, 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, or (iv) by any
combination of such methods of payment.
(g) Each grant of Option Rights shall be evidenced by an
agreement executed on behalf NPI by any officer designated by the Board for this
purpose and delivered to and accepted by the Eligible Employee and shall contain
such terms and provisions, consistent with the Plan, as the Board may approve.
5. ADDITIONAL OPTION.
(a) The Board may, at or after the date of grant of Option
Rights, grant Additional Options. Additional Options may be granted with respect
to any Outstanding Option.
(b) If an Optionee exercises an Outstanding Option that has
an Additional Option Feature by delivering already owned shares of Common Stock
and/or when shares of Common Stock are tendered or relinquished as payment of
the amount to be withheld under applicable federal, state and local income tax
laws (at withholding rates not to exceed the Optionee's applicable marginal tax
rates) in connection with the exercise of an option, the Optionee shall
automatically be granted an Additional Option. The Additional Option shall be
subject to the following provisions:
(1) The Additional Option shall cover the number of
shares of Common Stock equal to the sum of (A) the number of shares of Common
Stock delivered as consideration upon the exercise of the previously granted
Outstanding Option to which such Additional Option Feature relates and (B) the
number of shares of Common Stock tendered or relinquished as payment of the
amount to be withheld under applicable federal, state and local income tax laws
in connection with the exercise of the option to which such Additional Option
Feature relates;
(2) The Additional Option will not have an Additional
Option Feature unless the Board directs otherwise;
(3) The Additional Option option price shall be 100%
of the Market Value per Share on the date the employee delivers shares of Common
Stock to exercise the Option that has the Additional Option Feature and/or
delivers or forfeits shares of Common Stock in payment of income tax withholding
on the exercise of an Option that has the Additional Option Feature;
(4) The Additional Option shall not be exercised
within the first six months after it is granted; provided that this restriction
shall not apply if the Optionee becomes disabled or dies during the six-month
period; and
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(5) The Additional Option shall have the same termination date
and other termination provisions as the underlying Option that had the
Additional option Feature.
6. GRANTS OF APPRECIATION RIGHTS. The Board may from time to time
authorize the granting of Appreciation Rights in respect of any or all of the
Option Rights under any Outstanding Option (including Options Rights
simultaneously granted) to the Optionee thereunder. An Appreciation Right shall
be a right in the Optionee to receive from NPI an amount which shall be
determined by the Board and shall be expressed as a percentage of the Spread
(not exceeding 100%) at the time of exercise. To the extent such Optionee elects
to exercise such Appreciation Right instead of the related Option Right, the
related Option Right shall be cancelled, and vice versa. Each such grant may
utilize any or all of the authorizations, and shall be subject to all of the
limitations, contained in the following provisions:
(a) Any grant may permit the exercise of an Appreciation Right
with respect to the value of shares of Common Stock covered by the related
option Rights.
(b) Any grant may specify that the amount payable on exercise
of an Appreciation Right may be paid by NPI in cash, in shares of Common
Stock or in any combination thereof, and may either grant to the Optionee or
retain in the Board the right to elect among those alternatives.
(c) Each grant shall provide that the maximum number of shares
of Common Stock deliverable upon exercise of an Appreciation Right may not
exceed the number of shares of Common Stock purchasable upon exercise of the
related Option Rights.
(d) Any grant may specify waiting periods before exercise and
permissible exercise dates or periods. No Appreciation Right shall be
exercisable except at a time when the related Option Right is also exerciseable.
(e) Each grant of an Appreciation Right shall be evidenced
by an agreement executed on behalf of NPI by any officer designated by
the Board for this purpose and delivered to and accepted by the Optionee, which
agreement shall describe such Appreciation Right, identify the related Option
Rights, state that such Appreciation Right is subject to all the terms and
conditions of the Plan, including the right of the Board to amend, suspend or
terminate such Appreciation Right as set forth in Paragraph 11 of the Plan, and
contain such other terms and Provisions, consistent with this Plan, as the
Board may approve.
7. TRANSFERABILITY. No Option Right including any related Appreciation
Right shall be transferable by an Optionee other than by will or the laws of
descent and distribution. Option Rights and Appreciation Rights shall be
exercisable during the Optionee's lifetime only by the Optionee or by the
Optionee's guardian or legal representative.
8. ADJUSTMENTS. The Board may make or provide for such adjustments in
the maximum numbers of shares of Common Stock specified in Paragraphs 3(b) and
(c) and 4(c) of this Plan, in the numbers of shares of Common Stock covered by
Option Rights and Appreciation Rights granted hereunder, and in the prices per
share applicable under such Option Rights and Appreciation Rights, as the Board
in its sole discretion, exercised in good faith, may determine is equitably
required to prevent dilution or enlargement of the rights of Optionees that
otherwise would result from any stock dividend, stock split, combination of
shares, recapitalization or other change in the capital structure of the
Company, merger, consolidation, spin-off, reorganization, partial or complete
liquidation, issuance of rights or warrants to purchase securities, or any other
Corporate transaction or event having an effect similar to any of the foregoing.
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9. FRACTIONAL SHARES. The Company shall not be required to issue any
fractional share of Common Stock pursuant to this Plan. The Board may provide
for the elimination of fractions or for the settlement of fractions in cash.
10. ADMINISTRATION OF THE PLAN.
(a) The Plan shall be administered by 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. Moreover,
except as the Board may otherwise determine, so long as all of the Company's
outstanding shares are owned by National City Corporation, all matters relating
to the award of Option Rights under Paragraphs 4 and 5 of the Plan shall be and
are hereby delegated to the Compensation and Organization Committee of National
City Corporation. To the extent of such delegation, references in the Plan to
the Board shall also refer to the appropriate committee.
(b) The interpretation and construction by the Board of any
provision of this Plan or of any agreement evidencing the grant of Option Rights
or Appreciation Rights and any determination by the Board pursuant to any
provision of this Plan or of any such agreement shall be final and conclusive.
No member of the Board shall be liable for any such action or determination made
in good faith.
11. AMENDMENTS OR TERMINATION OF THE PLAN. The Board may, at any time,
suspend or discontinue the Plan or revise or amend it 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, or by
any comparable or successor exemption under which the Board believes it is
appropriate for the Plan to qualify, if and to the extent required under Section
422 of the Internal Revenue Code (if and to the extent that the Board deems it
appropriate to comply with Section 422) and if and to the extent required to
treat some or all of the Option Right and Appreciation Right grants as
"performance-based compensation" within the meaning of Section 162(m) of the
Internal Revenue Code (if and to the extent that the Board deems it appropriate
to meet such requirements), no amendment shall be effective without the approval
of the shareholders of the Company, that (i) except as provided in Section 8
hereof, increases the number of shares of Common Stock with respect to which
Awards of Option Rights and Appreciation Rights may be issued under the Plan,
(ii) materially increases the benefits accruing to Optionees pursuant to the
Plan or (iii) materially modifies the
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definition of "Eligible Employees". No action under this Section 11 may, without
the consent of the Optionee, reduce an optionee's rights under any previously
granted and outstanding Option Right.
12. ASSUMPTIONS. In the event that a corporation is merged into the
Company, and the Company is the survivor of such merger, the Board may elect, in
its sole discretion, to assume under this Plan any or all outstanding options
granted by such corporation to its officers and employees under any stock option
plan adopted by it prior to such merger. Such assumptions shall be on such terms
and conditions as the Board may determine in its sole discretion, provided,
however, that the options as assumed do not provide or contain any terms,
conditions or rights which an option Right may not provide or contain under
sections 2 through 11 hereunder.
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