EXHIBIT 10.17
eONE Global, LP
California Long-Term Incentive Plan
Exercise Notice and Share Repurchase Agreement
eONE Global, LP
c/o First Data Corporation
11718 Nicholas Street
M-10
Omaha, NE 68154
Attention: David Treinen
1. Exercise of Option. Effective as of today, February 1, 2001, the
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undersigned ("Optionee") hereby elects to exercise Optionee's option to purchase
4,221,657 Shares of eONE Global, LP under and pursuant to the eONE Global, LP
California Long-Term Incentive Plan (the "Plan") and the Option Agreement dated
November 16, 2000 (the "Option Agreement").
1.1 Delivery of Payment. Optionee herewith delivers to the Company the
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full purchase price of the Shares, as set forth in the Option Agreement.
1.2 Section 83(b) Election. Optionee acknowledges his or her
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understanding that the Optionee may file with the Internal Revenue Service an
election pursuant to Section 83(b) of the Code (a "Section 83(b) Election"), no
later than 30 days after the date of exercise, to include in his or her gross
income the amount, if any, by which the Fair Market Value of the purchased but
unvested Shares as of the date of exercise exceeds the aggregate purchase price
paid by the Optionee for such Shares. Before filing a Section 83(b) Election
with the Internal Revenue Service, the Optionee shall (i) notify the Company of
such election by delivering to the Company a copy of the fully-executed Section
83(b) Election Form attached hereto as Exhibit D and (ii) pay to the Company an
amount sufficient to satisfy any taxes or other amounts required by any
governmental authority to be withheld or paid over to such authority with
respect to the purchase of the unvested Shares, other otherwise make
arrangements satisfactory to the Company for the payment of such amounts through
withholding or otherwise.
1.3 Treatment of Exercise. Prior to an Incorporation, for federal
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income tax purposes, Optionee agrees to report the exercise of any Option as if
(i) immediately prior to the exercise of the Option the Company transferred to
eONE Global, LLC (as compensation to eONE Global, LLC for management services
performed for the Company) a cash payment equal to the Option's "Spread," which
is the excess, if any, of the Capital Account balance (as determined under the
LP Agreement) attributable to the Shares to be issued upon exercise of the
Option (the "Option Shares") over the Exercise Price under the Option; (ii) eONE
Global, LLC immediately thereafter paid such cash to the Optionee, as
compensation for services rendered by the Optionee as an employee of eONE
Global, LLC; and (iii) the Optionee immediately thereafter contributed such cash
to the capital of the Company and, in exchange for such cash deemed contributed
and the Exercise Price actually contributed by the Optionee, received the Option
Shares; provided, however, that if, upon exercise, the Optionee receives Initial
Option Shares which are not vested, then in lieu of payments equal to the Spread
(under the foregoing
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mechanics) being deemed to have been made at the time of exercise, payments
equal to the excess of the Fair Market Value of such Initial Option Shares over
the Exercise Price under the Option (under the foregoing mechanics) shall be
deemed to be made immediately prior to the time such Initial Option Shares vest;
provided, further, that the foregoing proviso shall only apply in the event such
Optionee does not file a timely election under section 83(b) of the Code with
respect to such Initial Option Shares as of the time the Option is exercised.
1.4 Representations of Optionee. Optionee acknowledges that Optionee has
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received, read and understood this Exercise Notice and Share Repurchase
Agreement (this "Agreement"), the Plan, the Option Agreement and the LP
Agreement and agrees to abide by and be bound by their terms and conditions.
Optionee also agrees that, as a condition to the exercise of the Option, the
Optionee will be required to become a party to the LP Agreement and the Shares
acquired upon the exercise of the Option will be held subject in all respects to
the terms and conditions of the LP Agreement. In addition, if the Shares issued
have not been registered for sale by the Company or Newco to the Optionee (on
Form S-8 or otherwise), the Optionee will be required to become a party to the
Registration Rights Agreements dated as of November 16, 2000 among the Company
and certain security holders referred to therein (the "Registration Rights
Agreement"); provided, however, that the Optionee shall have no registration
rights under the Registration Rights Agreement other than rights to join a
Piggyback Registration pursuant to Sections 3.1-3.5 of the Registration Rights
Agreement; and provided further, that such rights will apply solely in respect
of a registration in which FDC (or the FDC Holders) or IFG (or the Holders of
Registrable Securities Transferred from IFG or its affiliates) will be included
as Selling Holders (as such capitalized terms are used in the Registration
Rights Agreement).
1.5 Rights as Partner or Stockholder. Until the issuance or delivery of
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the Shares, no rights as a partner or stockholder shall exist with respect to
the Shares subject to the Option, notwithstanding any exercise of the Option.
The Shares shall be issued to the Optionee as soon as practicable after the
Option is exercised. No adjustment shall be made for a dividend or other right
prior to the date of issuance except as provided in Section 3.4 of the Option
Agreement.
2. Share Repurchase.
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2.1 Call Option. Upon a Call Event, as hereafter defined, the Company
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shall have the right (but not the obligation) in its sole discretion to
repurchase any or all of the Option Shares. A "Call Event" shall occur if (i)
the Optionee's employment with the General Partner or the Company terminates for
any reason other than by involuntary termination without Cause; (ii) the
Optionee dies; (iii) the Optionee attempts to sell, exchange, transfer or
otherwise dispose of any Option Shares; (iv) the Optionee is declared bankrupt
or insolvent by any court of competent jurisdiction; (v) the Optionee pledges,
hypothecates or otherwise encumbers any of his or her Option Shares for the
purpose of securing any indebtedness; (vi) the Optionee has any of his or her
Option Shares foreclosed against or levied upon for the payment of such
Optionee's debts or obligations; (vii) the Optionee is adjudged to be mentally
incompetent by a court of competent jurisdiction; (viii) the Optionee is
directed to assign any of his or her Option Shares to such Optionee's spouse or
to any other Person under a divorce proceeding; or (ix) the Optionee materially
breaches an employment agreement or restrictive covenant with the Company;
provided, however, that, notwithstanding clause (i) herein, a Call Event shall
occur upon the Optionee's involuntary termination without Cause only with
respect to the Optionee's unvested Option Shares.
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2.2 Exercise of Repurchase Option. If the Company repurchases any Option
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Shares pursuant to this Section 2, it shall pay to the Optionee or his or her
legal representative a purchase price equal to:
(a) in the case of Option Shares purchased by the Optionee during the
Initial Exercise Period ("Initial Option Shares") which are not vested at the
time of repurchase, the lesser of the Exercise Price or the Fair Market Value of
an Option Share as of the date the Company elects to repurchase the Initial
Option Shares; provided, however, that if the Call Event occurs as a result of
the termination of the Optionee's employment by reason of Retirement, the
purchase price per Initial Option Share shall be the greater of the Exercise
Price or the Fair Market Value of such Option Share as of the date the Company
elects to repurchase such Initial Option Shares; and provided further, that if
the Call Event occurs as a result of the termination of the Optionee's
employment with the General Partner or the Company by reason of death or
Disability, the unvested Initial Option Shares shall become vested in accordance
with Section 2.2 of the Agreement and the purchase price per vested Initial
Option Share shall be determined in accordance with the first proviso contained
in Section 2.2(b) hereof; and provided further, that if the Call Event occurs as
a result of involuntary termination of employment for any reason other than
Cause then the purchase price per Initial Option Share shall be equal to the
Exercise Price of such Option Shares;
(b) in the case of Initial Option Shares which are vested at the time of
repurchase, the Fair Market Value of such Option Shares as of the date the
Company elects to repurchase such Initial Option Shares; provided, however, that
if the Call Event occurs as a result of the termination of the Optionee's
employment with the General Partner or the Company by reason of death,
Disability or Retirement, then the purchase price per Initial Option Share shall
be the greater of the Exercise Price or the Fair Market Value of such Option
Share as of the date the Company elects to repurchase such Initial Option
Shares; and provided further, that, if the Call Event occurs as a result of the
termination of the Optionee's employment with the General Partner or the Company
for Cause or as a result of the Optionee having materially breached an
employment agreement or restrictive covenant with the General Partner or the
Company, then the purchase price per Initial Option Share shall be the lesser of
the Exercise Price or the Fair Market Value of such Option Share as of the date
the Company elects to repurchase such Initial Option Shares; and
(c) in the case of Option Shares purchased by the Optionee after the
Initial Exercise Period ("Standard Option Shares"), the Fair Market Value of
such Option Shares as of the date the Company elects to repurchase such Standard
Option Shares; provided, however, that if the Call Event occurs as a result of
the termination of the Optionee's employment with the General Partner or the
Company for Cause or as a result of the Optionee having materially breached an
employment agreement or restrictive covenant with the General Partner or the
Company, then the purchase price per Standard Option Share shall be the lesser
of the Exercise Price or the Fair Market Value of such Option Share as of the
date the Company elects to repurchase such Standard Option Shares.
The Company's right to repurchase Option Shares shall expire one year after the
later of (x) the date the Company receives notice of the Call Event or (y) the
date the Option is exercised. The Company's repurchase rights shall be in
addition to any other rights or remedies that the Company may have under this
Agreement, the LP Agreement or otherwise. If the Company elects to repurchase
any Option Shares pursuant to this Section 2.2, the Company shall deliver to the
Optionee, within the one year period described in this Section, a notice setting
forth the
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number of Option Shares that it has elected to repurchase. If the Company
repurchases any of the Option Shares held by the Optionee pursuant to this
Section, the Optionee shall deliver to the Company a certificate or certificates
or other document or instrument representing the Option Shares being
repurchased, duly endorsed or otherwise in proper form for transfer, against
payment of the required purchase price by cash, check or by cancellation of all
or a portion of any outstanding indebtedness of the Optionee to the Company (or
in the case of repurchase by an assignee, to the assignee).
2.3 Put Options. (a) Subject to the provisions of Section 2.3(e), in
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addition to the other Put Options described in Sections 2.3(b) and 2.3(c), if
iFormation Group Holdings, L.P. ("IFG") or First Data Corporation ("FDC")
exercises its Put/Call Right pursuant to Section 3.3 of the agreement among
Members and Limited Partners dated as of November 16, 2000 between FDC and IFG
(the "Member Agreement") prior to the Optionee's termination of employment,
then, on the first anniversary of the closing of the exercise of such Put/Call
Right, the Optionee may require the Company to repurchase any or all of the
Optionee's vested Option Shares pursuant to this Section 2.3(a) at a purchase
price per Option Share equal to the greater of the price paid by IFG or FDC
pursuant to the exercise of the Put/Call Right pursuant to Section 3.3 of the
Member Agreement for each Common Paired Interest (as defined in the Member
Agreement) or the Fair Market Value of such Option Shares as of such first
anniversary.
(b) Subject to the provisions of Section 2.3(e), in addition to the other
Put Options described in Sections 2.3(a) and 2.3(c), on each of November 16,
2005 and November 16, 2007, the Optionee may require the Company to repurchase
up to 50% of any vested Option Shares held by the Optionee at such time pursuant
to this Section 2.3(b) at a purchase price equal to the Fair Market Value of
such Option Shares as of such dates, respectively.
(c) Upon the Optionee's termination of employment under the circumstances
described in clauses (i), (ii) or (iii) below, in addition to the other Put
Options described in Sections 2.3(a) and 2.3(b), if the Company does not elect
to repurchase any portion of the Optionee's Option Shares pursuant to Section
2.2, the Optionee or the Optionee's executor, administrator, legal
representative, beneficiary or similar person may require the Company to
repurchase any or all of such Option Shares at a purchase price equal to:
(i) in the case of the Optionee's involuntary termination of employment
with the General Partner or the Company for any reason other than Cause or
breach of an employment agreement or restrictive covenant with the General
Partner or the Company, with respect to such Optionee's vested Option Shares,
the greater of the Exercise Price or the Fair Market Value of such Option Shares
as of the date the Company repurchases such Option Shares and, with respect to
such Optionee's unvested Option Shares, the Exercise Price of such Option
Shares;
(ii) in the case of the Optionee's termination of employment with the
General Partner or the Company due to death or Disability,
(A) with respect to Initial Option Shares, the greater of the Exercise
Price or the Fair Market Value of such Option Shares, whether vested or
unvested, as of the date the Company repurchases such Initial Option Shares; and
(B) with respect to Standard Option Shares, the Fair Market Value of such
Option Shares as of the date the Company repurchases such Standard Option
Shares; and
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(iii) in the case of the Optionee's termination of employment with the
General Partner or the Company due to Retirement, with respect to such
Optionee's Option Shares, the Fair Market Value of such Option Shares, whether
vested or unvested, as of the date the Company repurchases such Option Shares.
(d) The Optionee's right to require the Company to repurchase any Option
Shares pursuant to this Section 2.3 shall expire (i) in the case of Section
2.3(a), 30 days after the one-year anniversary of the closing of the exercise of
such Put/Call Right pursuant to Section 3.3 of the Member Agreement; (ii) in the
case of Section 2.3(b), 30 days after November 16, 2005 and November 16, 2007
(as applicable) and (iii) in the case of Section 2.3(c)(i), 30 days after the
effective date of the Optionee's termination of employment and, in the case of
Section 2.3(ii), one year after the effective date of the Optionee's termination
of employment. If the Optionee requires the Company to purchase any Option
Shares pursuant to this Section 2.3, the Optionee shall deliver to the Company,
within the period described in the preceding sentence, a notice setting forth
the number of Option Shares that the Optionee requires the Company to
repurchase. Upon the Company's repurchase of any of the Option Shares held by
the Optionee pursuant to this Section 2.3, the Optionee shall deliver to the
Company a certificate or certificates or other document or instrument
representing the Option Shares being repurchased in the manner described in
Section 2.2.
(e) If the Company repurchases any Option Shares pursuant to Sections
2.3(a) or 2.3(b), the Company shall pay the Optionee an amount in cash for such
Option Shares only to the extent that the amount paid by the Company for such
Option Shares does not exceed 25% of the Company's net cash flow (as determined
in accordance with generally accepted accounting principles) and reflected on
the Company's audited Statement of Cash Flows for the Company's fiscal year
immediately preceding the date of such repurchase, and the balance shall be paid
by issuance of a promissory note.
2.4 Transferees Subject to Agreement. Subject to the LP Agreement, if
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the Call Event giving rise to the repurchase rights of this Section 2 involves
clauses (ii), (iii), (vi) or (viii) of the definition of Call Event, those
Option Shares that have become vested and which have not been purchased by the
Company may be transferred or disposed (A) as provided therein, in the case of
clauses (iii), (vi) and (viii) of the definition, and (B) pursuant to such
Optionee's will, in the case of clause (ii); provided, however, that in each
case any such transferee or heir shall become a party to and bound by this
Agreement and the LP Agreement as the Optionee with respect to such Option
Shares.
3. Termination of Call Option and Put Options.
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3.1 Call Option. The Call Option set forth in Section 2.1 shall
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terminate upon the date of an IPO or Spin-Off; provided, however, that with
respect to an Optionee's Initial Option Shares which are unvested at the time of
repurchase, the Call Option set forth in Section 2.1 shall survive an IPO or
Spin-Off and shall thereafter terminate upon the date such Initial Option Shares
become vested pursuant to the Award Notice.
3.2 Put Options. The Put Options set forth in Section 2.3 shall
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terminate as follows:
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(a) with respect to the Put Option set forth in Section 2.3(a), upon the
earlier of (i) the date of an IPO or Spin-Off or (ii) the Optionee's termination
of employment due to voluntary termination for any reason other than Retirement
or involuntary termination for Cause;
(b) with respect to the Put Option set forth in Section 2.3(b), upon the
earlier of (i) the date of an IPO or Spin-Off or (ii) the Optionee's termination
of employment for any reason; and
(c) with respect to the Put Option set forth in Section 2.3(c), upon the
date of an IPO or Spin-Off.
4. Tax Consultation. The Optionee understands that the Optionee may
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suffer adverse tax consequences as a result of the Optionee's purchase or
disposition of the Shares, or as a result of any Option Shares becoming vested.
The Optionee represents that the Optionee has consulted with any tax consultants
the Optionee deems advisable in connection with the purchase or disposition of
the Shares and that the Optionee is not relying on the Company for any tax
advice.
5. Restrictive Legends and Stop-Transfer Orders.
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5.1 Legends. The Optionee understands and agrees that the Company shall
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cause the legends set forth below or legends substantially equivalent thereto,
to be placed upon any certificate(s) or other document or instrument evidencing
ownership of the Shares together with any other legends that may be required by
the Company or by state or federal securities laws:
THE SHARES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. THESE SHARES MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT THEREOF OR UNLESS THE TRANSFER IS
OTHERWISE EXEMPT FROM REGISTRATION. THE COMPANY MAY REQUIRE A WRITTEN OPINION
OF COUNSEL (FROM COUNSEL ACCEPTABLE TO THE COMPANY) SATISFACTORY TO THE COMPANY,
TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED IN CONNECTION WITH SUCH PROPOSED
SALE, PLEDGE, HYPOTHECATION OR OTHER TRANSFER. THIS INSTRUMENT MUST BE
SURRENDERED TO THE COMPANY OR ITS TRANSFER AGENT AS A CONDITION PRECEDENT TO THE
SALE, PLEDGE, HYPOTHECATION OR OTHER TRANSFER OF ANY INTEREST IN ANY OF THE
SHARES REPRESENTED BY THIS INSTRUMENT
THE SHARES REPRESENTED BY THIS INSTRUMENT ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER AND REPURCHASE OPTIONS HELD BY THE ISSUER OR ITS
ASSIGNEE(S) AS SET FORTH IN THE EXERCISE NOTICE BETWEEN THE ISSUER AND THE
ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE
PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER RESTRICTIONS AND REPURCHASE
OPTIONS ARE BINDING ON TRANSFEREES OF THESE SHARES.
5.2 Stop-Transfer Notices. The Optionee agrees that in order to ensure
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compliance with the restrictions referred to herein, the Company may issue
appropriate "stop
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transfer" instructions to its transfer agent, if any, and that, if the Company
transfers its own securities, it may make appropriate notations to the same
effect in its own records.
5.3 Refusal to Transfer. The Company shall not be required (i) to
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transfer any Shares that purportedly have been sold or otherwise transferred in
violation of any of the provisions of this Agreement or (ii) to treat as owner
of such Shares or to accord the right to vote or pay dividends to any purported
purchaser or other transferee to whom such Shares shall have been so
transferred.
6. Successors and Assigns. The Company may assign any of its rights
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under this Agreement to single or multiple assignees, and this Agreement shall
inure to the benefit of the successors and assigns of the Company. Subject to
the restrictions on transfer herein set forth, this Agreement shall be binding
upon the Optionee and his or her heirs, executors, administrators, successors
and assigns.
7. Interpretation. Any dispute regarding the interpretation of this
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Agreement shall be submitted by the Optionee or by the Company forthwith to the
Committee which shall review such dispute at its next regular meeting. The
resolution of such a dispute by the Committee shall be final and binding on all
parties.
8. Governing Law; Severability. This Agreement shall be governed by
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the laws of the State of Delaware and construed in accordance therewith without
giving effect to principles of conflicts of laws.
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9. Entire Agreement. The Plan, the Option Agreement and the LP
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Agreement are incorporated herein by reference. This Agreement, the Plan, the
Option Agreement, the LP Agreement and the Investment Representation Statement
constitute the entire agreement of the parties with respect to the subject
matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and the Optionee with respect to the subject matter
hereof, and may not be modified adversely to the Optionee's interest except by
means of a writing signed by the Company and the Optionee.
Submitted by: Accepted by:
Optionee: eONE GLOBAL, LP
_____________________________ By: eONE Global, LLC, its General Partner
Signature
By: _____________________________
_____________________________ Name:
Print Name Title:
_______________________
Date Received
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