EXHIBIT 10.3
OFFICIAL PAYMENTS CORPORATION 1999 STOCK INCENTIVE PLAN
FORM OF NON-QUALIFIED STOCK OPTION AGREEMENT
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________________________ ______ ________ ________
Name of Option Recipient Social Security Number
_________________________________________________________________
Street Address
____________________ _____________________ ________________
City State Zip
This Non-Qualified Stock Option Agreement is intended to set forth the
terms and conditions on which a Non-Qualified Stock Option has been granted
under the Official Payments Corporation 1999 Stock Incentive Plan (the
"Plan"). Set forth below in Table I are the specific terms and conditions
applicable to this Non-Qualified Stock Option (this "Option") and attached
hereto as Exhibit A are this Option's general terms and conditions.
TABLE I
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Terms of Non-Qualified Stock Option Grant
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Date of Grant:
Class of Optioned Shares:* Common
No. of Optioned Shares:*
Type of Option: Non-Qualified Stock Option
Exercise Price Per Share:* $____
Earliest Exercise Date:
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Vesting Schedule
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Lapse of Right of Repurchase:
The Right of Repurchase shall lapse, and vesting will occur, on the
respective dates set forth on Schedule I hereto, but only if the option
recipient is employed by Official Payments Corporation on such dates.
Option Expiration Date:*
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*Subject to adjustment as provided in the Plan and Exhibit A hereto.
By signing where indicated below, Official Payments Corporation (the
"Company") confirms the grant of this Non-Qualified Stock Option with
respect to the shares of its common stock, par value $0.01 per share
("Common Stock"), identified above, upon the specified terms and
conditions, and the option recipient acknowledges receipt of a copy of the
Plan and this Non-Qualified Stock Option Agreement (including Exhibit A and
Schedule I) and agrees to observe and be bound by the terms and conditions
set forth therein and herein.
OFFICIAL PAYMENTS CORPORATION OPTION RECIPIENT
By ___________________________________ ______________________________
Name: Thomas R. Evans Name of Recipient
Title: Chairman and Chief Executive
Officer
EXHIBIT A
OFFICIAL PAYMENTS CORPORATION 1999 STOCK INCENTIVE PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT
General Terms and Conditions
Section 1. Incentive Stock Option. The Company does not intend
this Option to be an "incentive stock option" within the meaning of Section
422 of the Internal Revenue Code of 1986 ("Code") and the Plan. This Option
shall be treated for all purposes as a Non-Qualified Stock Option.
Section 2. Option Term. (a) Subject to the Company's "Right of
Repurchase" as defined and provided for in Section 6 hereof, you shall have
the right to exercise all or any portion of this Option at any time during
the period (the "Option Term") commencing on the "Earliest Exercise Date"
specified in Table I on the first page of this Agreement and ending on the
earliest to occur of the "Option Expiration Date" set forth in Table I and
any of the dates specified in clauses (i) though (iv) of Section 6.4(c) of
the Plan.
(b) The following terms shall have the following definitions for
purposes of the Plan and this Agreement:
(i) "Disability" shall mean a mental or physical impairment
or incapacity that renders you substantially unable to perform
your duties for the Company for a period of longer than 120 days
out of any 360 day period of employment with the Company. A
determination of whether you have a Disability shall be made by
the Company in its sole discretion upon (A) its own initiative
after obtaining certification from a duly licensed physician or
(B) your request or the request of a person acting on your behalf.
(ii) "Exercise Price" shall mean the "Exercise Price Per
Share" specified in Table I on the first page of the Agreement.
(iii) "Termination for Cause" shall mean the termination of
your employment with the Company for any of the following reasons:
(A) fraud, misappropriation, personal dishonesty, willful
misconduct or breach of fiduciary duty, in each such case
materially harmful to the Company's property, personnel or
business operations, or materially damaging to the Company's
relationships with its customers, clients or employees or
materially detrimental to the goodwill of the Company; (B)
intentional failure to perform the duties of your employment, or
any continuing action by you that is materially detrimental to the
goodwill of the Company or materially damaging to the Company's
relationships with its customers, clients or employees; (C) a
guilty plea or a plea of no-contest to, or conviction of, a felony
or a crime involving moral turpitude or fraud; (D)
misappropriation (or attempted misappropriation) of any of the
Company's funds or property or of a business opportunity of the
Company, including attempting to secure or securing any personal
profit in connection with any transaction entered into on behalf
of the Company; (E) conviction of any criminal offense involving
dishonesty or breach of trust or money laundering, or any
agreement by you to enter into a pretrial diversion or similar
program in connection with a prosecution for such offense; (F)
excessive drunkenness, use of illegal drugs or abuse of any
controlled substance; or (G) excessive absenteeism not related to
your illness, which absenteeism remains unremedied for 30 days
after written notice thereof requesting that it be remedied.
Section 3. Exercise Price. During the Option Term and after the
Earliest Exercise Date, you shall have the right to exercise the Option (or
any portion thereof) to purchase the appropriate number of shares of Common
Stock at the Exercise Price.
Section 4. Method of Exercise. You may, at any time during the
Option Term provided by Section 2, exercise your right to purchase all or
any portion of the Common Stock subject to this Option; provided, however,
that the minimum number of shares of Common Stock which may be so purchased
shall be one hundred (100) or, if less, the total number of shares of
Common Stock then available for purchase pursuant to this Option. You may
exercise such right by:
(a) giving written notice to the Committee; and
(b) delivering to the Company full payment of the Exercise Price
for the optioned Common Stock to be purchased.
The date of exercise shall be the earliest date practicable following the
date on which the requirements of this Section 4 have been satisfied, but
in no event more than three (3) days after such date. Payment shall be made
as follows: (i) in United States dollars by certified check, money order or
bank draft made payable to the order of Official Payments Corporation; (ii)
in shares of Common Stock duly endorsed for transfer and with all necessary
stock transfer tax stamps attached, which shares have already been owned by
you for at least six months and have a Fair Market Value equal to the
Exercise Price; (iii) in a broker-assisted cashless exercise effected in
accordance with rules adopted by the Committee; or (iv) in any combination
of the foregoing.
Section 5. Delivery and Registration of Optioned Shares. Subject
to the provisions of Section 6 hereof with respect to shares of Common
Stock subject to a Right of Repurchase (as such term is defined below), as
soon as is practicable following the date on which you have satisfied the
requirements of Section 4, the Committee shall take such action as is
necessary to cause the Company to issue a stock certificate evidencing your
ownership of the Common Stock that has been purchased pursuant to the
exercise of the Option. You shall have no right to vote or to receive
dividends, nor have any other rights of a stockholder with respect to such
Common Stock, prior to the date as of which such Common Stock is
transferred to you on the stock transfer records of the Company, and no
adjustments shall be made for any dividends or other rights for which the
record date is prior to the date as of which such transfer is effected. The
obligation of the Company to deliver Common Stock under this Agreement
shall, if the Committee so requests, be conditioned upon the receipt of a
representation as to the investment intention of you or the person to whom
such Common Stock is to be delivered, in such form as the Committee shall
determine to be necessary or advisable to comply with the provisions of
applicable federal, state or local law. It may be provided that any such
representation shall become inoperative upon a registration of the Common
Stock or upon the occurrence of any other event eliminating the necessity
of such representation. The Company shall not be required to deliver any
Common Stock under this Agreement prior to: (i) the admission of such
Common Stock to listing on any stock exchange on which Common Stock may
then be listed or (ii) the completion of such registration or other
qualification under any state or federal law, rule or regulation as the
Committee shall determine to be necessary or advisable based on the
reasonable advice of counsel.
Section 6. Right Of Repurchase.
(a) Scope of Repurchase Right. Any shares of Common Stock that
have been purchased pursuant to this Agreement but have not vested in
accordance with the terms set forth in Table I on the first page of this
Agreement and Section 6(b) below, shall be subject to a right (but not an
obligation) of repurchase by the Company (hereinafter, the "Right of
Repurchase") and all such unvested shares shall be deemed "Restricted
Stock." Shares of Restricted Stock shall be non-transferable (other than as
provided in Section 6(d) hereof) until the date on which the Company's
Right of Repurchase with respect to such shares has lapsed. The Company's
Right of Repurchase shall be exercisable with respect to the shares of
Restricted Stock during the 30-day period following the end of the Option
Term, unless the Company's Right of Repurchase has earlier lapsed in
accordance with Section 6(b) of this Agreement.
(b) Lapse of Repurchase Right. The Company's Right of Repurchase
shall lapse with respect to the shares of Common Stock acquired pursuant to
this Agreement and all such shares shall cease to be Restricted Stock in
accordance with the vesting schedule set forth in Table I on the first page
of this Agreement; provided, however, such vesting shall be accelerated and
the Company's Right of Repurchase shall lapse fully (i) upon the
termination of your employment with the Company due to your death or
Disability, (ii) upon the occurrence of a Change of Control of the Company,
or (iii) if your employment with the Company has been previously terminated
(other than due to a Termination for Cause), upon the Company entering
into, within 90 days following the date of such termination, a definitive
agreement which, if consummated, would result in a Change of Control of the
Company.
(c) Repurchase Cost. If the Company exercises its Right of
Repurchase, it shall pay to you an amount equal to the Exercise Price set
forth in Table I on the first page of this Agreement for each share of
Restricted Stock being repurchased.
(d) Exercise of Repurchase Right. The Company's Right of
Repurchase shall be exercisable only by written notice delivered to you
prior to the expiration of the 30-day period specified in Section 6(a)
above. The notice shall set forth the date on which the repurchase is to be
effected. Such date shall not be more than 35 days after the end of the
Option Term. The certificate(s) representing the Restricted Stock to be
repurchased shall, prior to the close of business on the date specified for
the repurchase, be delivered to the Company properly endorsed for transfer.
The Company shall, concurrently with the receipt of such certificate(s),
pay you the purchase price determined according to Section 6(c) above.
Payment shall be made in cash or cash equivalents. The Company's Right of
Repurchase shall terminate with respect to any Restricted Stock for which
it has not been timely exercised pursuant to this Section 6(d).
(e) Additional Shares or Substituted Securities. In the event of
the declaration of a stock dividend, the declaration of an extraordinary
dividend payable in a form other than stock, a spin-off, a stock split, an
adjustment in conversion ratio, a recapitalization or a similar transaction
affecting the Company's outstanding securities without receipt of
consideration, any new, substituted or additional securities or other
property (including money paid other than as an ordinary cash dividend)
which are by reason of such transaction distributed with respect to any
Restricted Stock or into which such Restricted Stock thereby become
convertible shall immediately be subject to the Right of Repurchase.
Appropriate adjustments to reflect the distribution of such securities or
property shall be made to the number and/or class of the Restricted Stock.
Appropriate adjustments shall also, after each such transaction, be made to
the price per share to be paid upon the exercise of the Right of Repurchase
in order to reflect any change in the Company's outstanding securities
effected without receipt of consideration therefor; provided, however, that
the aggregate purchase price payable for the Restricted Stock shall remain
the same.
(f) Termination of Rights as Stockholder. If the Company makes
available, at the time and place and in the amount and form provided in
this Agreement, the consideration for the Restricted Stock to be
repurchased in accordance with this Section 6, then after such time, you
shall no longer have any rights as a holder of such Restricted Stock (other
than the right to receive payment of such consideration in accordance with
this Agreement). Such Restricted Stock shall be deemed to have been
repurchased in accordance with the applicable provisions hereof, whether or
not the certificate(s) therefor have been delivered as required by this
Agreement.
(g) Escrow. Upon issuance, the certificates for Restricted Stock
shall be deposited in escrow with the Company to be held in accordance with
the provisions of this Agreement. Any new, substituted or additional
securities or other property described in Section 6(f)above shall
immediately be delivered to the Company to be held in escrow, but only to
the extent the shares are at such time shares of Restricted Stock. All
regular cash dividends on Restricted Stock (or other securities at the time
held in escrow) shall be paid directly to you and shall not be held in
escrow. You shall have the right to direct the manner in which all voting
rights appurtenant to the shares of Restricted Stock held in escrow will be
exercised. Such voting direction shall be given by completing and filing,
with the inspector of elections or such other person as the Committee may
designate, a written direction in the form and manner prescribed by the
Committee. If no voting direction is given, then the voting rights
appurtenant to the shares of Restricted Stock held in escrow will not be
exercised. All shares of Restricted Stock, together with any other assets
or securities held in escrow hereunder, shall be: (i) surrendered to the
Company for repurchase and cancellation upon the Company's exercise of its
Right of Repurchase or (ii) released to you, upon your request, to the
extent the shares of Common Stock are no longer subject to the Company's
Right of Repurchase.
Section 7. Stock Legends. All certificates evidencing shares of
Common Stock purchased under this Agreement and subject to the provisions
of Section 6 hereof, as applicable, shall bear the following legend:
"THE SHARES REPRESENTED HEREBY MAY NOT BE SOLD, ASSIGNED,
TRANSFERRED, ENCUMBERED OR IN ANY MANNER DISPOSED OF, EXCEPT IN
COMPLIANCE WITH THE TERMS OF A WRITTEN AGREEMENT BETWEEN THE COMPANY
AND THE REGISTERED HOLDER OF THE SHARES (OR THE PREDECESSOR IN
INTEREST TO THE SHARES). SUCH AGREEMENT GRANTS TO THE COMPANY CERTAIN
REPURCHASE RIGHTS UPON TERMINATION OF SERVICE WITH THE COMPANY. THE
SECRETARY OF THE COMPANY WILL UPON WRITTEN REQUEST FURNISH A COPY OF
SUCH AGREEMENT TO THE HOLDER HEREOF WITHOUT CHARGE."
All certificates evidencing shares of Common Stock purchased under this
Agreement in an unregistered transaction shall bear the following legend
(and such other restrictive legends as are required or deemed advisable
under the provisions of any applicable law):
"THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER
SUCH ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND
ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED."
Section 8. Removal of Legends. If, in the opinion of the Company
and its counsel, any legend placed on a stock certificate representing
shares of Common Stock purchased under this Agreement is no longer
required, the holder of such certificate shall be entitled to exchange such
certificate for a certificate representing the same number of shares of
Common Stock but without such legend.
Section 9. Adjustments in the Event of Reorganization. In the
event of any merger, reorganization, consolidation, sale of substantially
all the Company's assets, recapitalization, stock dividend, stock split,
spin-off, split-up, split-off distribution of assets or other change in the
Company's corporate structure affecting the shares of the Company's Common
Stock. The number of shares of Common Stock subject to this Option shall be
adjusted in accordance with Section 4.4 of the Plan to account for such
event and the Exercise Price shall be equitably adjusted commensurate
therewith.
Section 10. Taxes. Where any person is entitled to receive shares
pursuant to the exercise of the Option, the Company shall have the right to
require such person to pay to the Company the amount of any tax which the
Company is required to withhold with respect to such shares, or, in lieu
thereof, to retain, or to sell without notice, a sufficient number of
shares to cover the amount required to be withheld.
Section 11. Notices. Any communication required or permitted to be
given under the Plan, including any notice, direction, designation,
comment, instruction, objection or waiver, shall be in writing and shall be
deemed to have been given at such time as it is delivered personally or
five (5) days after mailing if mailed, postage prepaid, by registered or
certified mail, return receipt requested, addressed to such party at the
address listed below, or at such other addresses which such party may, by
written notice, specify to the other party:
(a) If to the Committee:
Official Payments Corporation
Three Landmark Square
Stamford, Connecticut 06901-2501
Attention: Corporate Secretary
(b) If to you, to your address as shown in the Company's personnel
records.
Section 12. Insider Trading Policy. By signing where indicated
below, you acknowledge receipt of and agree to observe and be bound by the
terms and conditions of the Official Payments Corporation Statement of
Policy on Securities Trading by Directors, Officers and Employees, as the
same may be amended from time to time by the Company.
Section 13. Restrictions on Transfer. This Option shall not be
sold, assigned, alienated, pledged, hypothecated or otherwise directly or
indirectly transferred by you, other than by will or by the laws of descent
and distribution.
Section 14. Successors and Assigns. This Agreement shall inure to
the benefit of and shall be binding upon the Company and you and your
respective heirs, successors and assigns.
Section 15. Construction of Language. Whenever appropriate in the
Agreement, words used in the singular may be read in the plural, words used
in the plural may be read in the singular, and words importing the
masculine gender may be read as referring equally to the feminine or the
neuter. Any reference to a Section shall be a reference to a Section of
this Agreement, unless the context clearly indicates otherwise. In the
event that at the time this Option is granted you are a Consultant (rather
than an employee of the Company), references in this Agreement to your
"employment" with the Company (including, without limitation, in the
context of "termination of employment") shall be deemed to refer to your
service to the Company as a Consultant.
Section 16. Governing Law. This Agreement shall be construed,
administered and enforced according to the laws of the State of New York
without giving effect to the conflict of laws principles thereof, except to
the extent that such laws are preempted by the federal law.
Section 17. Amendment. This Agreement may be amended, in whole or
in part and in any manner not inconsistent with the provisions of the Plan,
at any time and from time to time, by written agreement between the Company
and you.
Section 18. No Right to Continued Service. Nothing in this
Agreement nor any action of the Board of Directors or the Committee with
respect to this Agreement shall be held or construed to confer upon you any
right to a continuation of service by the Company. You may be dismissed or
otherwise dealt with as though this Agreement had not been entered into.
Section 19. Incorporation by Reference, Etc. The provisions of the
Plan are hereby incorporated herein by reference. Except as otherwise
expressly set forth herein, this Agreement shall be construed in accordance
with the provisions of the Plan and any capitalized terms not otherwise
defined in this Agreement shall have the definitions set forth in the Plan.
In the event of any conflict between the provisions of the Plan and the
provisions of this Agreement, the provisions of this Agreement shall
prevail. Notwithstanding the foregoing, the Committee shall have final
authority to interpret and construe the Plan and this Agreement and to make
any and all determinations under them, and its decision shall be binding
and conclusive against you and your legal representative in respect of any
questions arising under the Plan or this Agreement.