CANADIAN NONQUALIFIED STOCK OPTION AGREEMENT UNDER THE ALLIANCE DATA SYSTEMS CORPORATION 2005 LONG TERM INCENTIVE PLAN
Exhibit 10.101
CANADIAN NONQUALIFIED STOCK OPTION AGREEMENT
UNDER THE ALLIANCE DATA SYSTEMS CORPORATION
2005 LONG TERM INCENTIVE PLAN
UNDER THE ALLIANCE DATA SYSTEMS CORPORATION
2005 LONG TERM INCENTIVE PLAN
THIS AGREEMENT, made as of the [Day] day of [Month], YEAR, by and between Alliance Data
Systems Corporation (the “Company”) and [First] [Last] (the “Participant”) who is an employee of
the Company or one of its Affiliates.
W I T N E S S E T H:
WHEREAS, pursuant to the Company’s 2005 Long Term Incentive Plan (the “Plan”), the Company
desires to afford the Participant the opportunity to acquire, or enlarge, his ownership of the
Company’s common stock, $0.01 par value per share (“Stock”), so that he may have a direct
proprietary interest in the Company’s success.
NOW, THEREFORE, in consideration of the covenants and agreements herein contained, the parties
hereto hereby agree as follows:
1. Grant of Option. Subject to the term and conditions set forth herein and in the
Plan, the Company hereby grants to the Participant, during the period commencing on the date of
this Agreement and ending on the close of business on the day of the tenth anniversary of the date
hereof (the “Termination Date”), the right and option (the “Option”) to purchase from the Company,
at a price of [Option Price] per share (the “Option Price”), an aggregate of [# Options] shares of
Stock (the “Option Shares”).
2. Limitation on Exercise of Option. Subject to the terms and conditions set forth
herein and in the Plan, the Option will become exercisable 33% upon the day of the first
anniversary of grant; an additional 33% of the Option will become vested and exercisable on the day
of the second anniversary of the date of grant; and the final 34% of the Option will become vested
and exercisable on the day of the third anniversary of the date of grant provided,
that, the Participant is then employed by the Company or an Affiliate. Notwithstanding the
foregoing, subject to the limitations of the Plan, the Committee may accelerate the vesting and
exercisability of all or part of the Option at any time and for any reason.
3. Termination of Employment. Upon termination of employment, the Option shall remain
exercisable as follows:
(a) From the date of the notice to the Participant of the termination of the Participant’s
employment or service with the Company and its Affiliates, or the date of the notice of resignation
from the Participant, as the case may be, for any reason other than death, Disability, Retirement
or termination by the Company or an Affiliate for Cause, the Participant may exercise a vested
portion of any outstanding Option, but only to the extent the Option was exercisable immediately
prior to the date of such notice, until the earlier of the last day of the Option term or the last
day of the 30-day period following the date of such notice without regard to any statutory or
common law amounts to which the Participant may otherwise be entitled.
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(b) If a Participant terminates employment due to Retirement, the Participant may exercise the
vested portion of any outstanding Option, but only to the extent the Option was exercisable
immediately prior to Retirement, until the earlier of the last day of the Option term or the last
day of the one-year period following Retirement.
(c) Upon termination of the Participant’s employment with the Company and its Affiliates due
to death or Disability, the Participant may exercise the vested portion of any outstanding Option,
but only to the extent the Option was exercisable immediately prior to termination of employment,
until the earlier of the last day of the Option term or the last day of the one-year period
following termination of employment or other service.
(d) Upon termination of a Participant’s employment or other service with the Company and its
Affiliates due to Cause, the entire Option shall immediately be forfeited and no longer
exercisable.
4. Time and Method of Exercising Option. The Option, to the extent vested, may be
exercised, in whole or in part, by giving written notice of exercise to the Company specifying the
number of whole shares of Stock to be purchased. Such notice shall be accompanied by the payment
in full of the Option Price. Such payment shall be made either: (i) in cash at the time of
purchase; (ii) through such “cashless exercise” procedure that is acceptable to the Committee in
its full discretion, to the extent that such procedure does not violate the Xxxxxxxx-Xxxxx Act of
2002, or any other applicable law, or (iii) subject to applicable law, in any other form of legal
consideration that may be acceptable to the Committee in its discretion. Notwithstanding the
provision herein or in the Plan, once granted, neither the exercise period nor the term of any
Option may be extended if such extension would cause the Option to be subject to excise tax under
Section 409A of the Internal Revenue Code (“409A of the Code”). In addition, the timing of any
payment shall also comply with 409A of the Code.
5. Issuance of Shares. Except as otherwise provided in the Plan, and subject to
applicable law, as promptly as practical after receipt of such written notification of exercise and
full payment of the Option Price and any required income tax withholding, the Company shall issue
or transfer to the Participant the number of Option Shares with respect to which Options have been
so exercised (less shares withheld in satisfaction of tax withholding obligations, if any), and
shall deliver to the Participant a certificate or certificates thereof, registered in the
Participant’s name.
6. Company; Participant.
(a) The term “Company” as used in this Agreement with reference to employment shall include
the Company and its Affiliates, as appropriate.
(b) Whenever the word “Participant” is used in any provision of this Agreement under
circumstances where the provision should logically be construed to apply to the beneficiaries, the
executors, the administrators, or the person or persons to whom the Options may be transferred by
will or by the laws of descent and distribution, the word “Participant” shall be deemed to include
such person or persons.
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7. Non-Transferability. The Option shall not be transferable by the Participant other
than by will or by the laws of descent and distribution or pursuant to a domestic relations order
(within the meaning of Rule 16a-12 promulgated under the Exchange Act) and the Option shall be
exercisable during the lifetime of the Participant only by the Participant or his guardian or legal
representative. The terms of the Option shall be final, binding and conclusive upon the
beneficiaries, executors, administrators, heirs and successors of the Participant. Until the
Option has vested, shares subject to the Option shall not be sold, transferred or otherwise
disposed of, shall not be pledged or otherwise hypothecated, and shall not be subject to the claims
of creditors.
8. Adjustments; Change in Control.
(a) In the event that the Committee determines that any dividend or other distribution
(whether in the form of cash, Stock or other property), recapitalization, forward or reverse split,
reorganization, merger, consolidation, spin-off, combination, repurchase or exchange of Stock or
other securities, liquidation, dissolution, or other similar corporate transaction or event,
affects the Stock such that an adjustment is appropriate in order to prevent dilution or
enlargement of the rights of Participants under the Plan, then the Committee shall, in such manner
as it may deem equitable, adjust any or all of (i) the number and kind of shares that may be issued
in respect of outstanding Options and (ii) the exercise price or purchase price relating to an
Option In addition, the Committee is authorized to make adjustments in the terms and conditions
of, and the criteria included in, Options in recognition of unusual or nonrecurring events
(including, without limitation, events described in the preceding sentence) affecting the Company
or any Affiliate or the financial statements of the Company or any Affiliate or in response to
changes in applicable laws, regulations, or accounting principles. Notwithstanding the foregoing,
no such adjustment shall be authorized with respect to Options subject to Section 6(g) of the Plan
to the extent that such authority could cause such Options to fail to qualify as “qualified
performance-based compensation” under Section 162(m)(4)(C) of the Code.
(b) In connection with a Change in Control, the Committee may, in its sole discretion,
accelerate the vesting with respect to any or all Options granted under the Plan and may require
that any and all vested Options be cancelled irrespective of whether the exercise price of such
Options is greater than the Fair Market Value of the shares covered by such Options. In the event
of any such cancellation, if the exercise price of such Option is less than the Fair Market Value
of the shares covered by such Options (the “Spread”), the Committee must provide either that (a)
any such cancelled Options shares or combination thereof be deemed automatically exercised or (b)
the affected Participants shall receive property, shares or a combination thereof, an amount equal
to the value of the Spread. If the Option is not assumed, substituted for an Award of equal value,
or otherwise continued after a Change in Control, the Option shall automatically vest prior to the
Change in Control at a time designated by the Committee. Notwithstanding the foregoing, no
cancellation pursuant to this provision shall be deemed an action that materially impairs the
rights of any Participant with respect to his Option and no Participant consent shall be required
with respect to the cancellation of any Option under this provision. Timing of any payment or
delivery of shares of Stock under this provision shall be subject to the 409A of the Code.
Notwithstanding the foregoing, no such adjustment shall be authorized with respect to Options
subject to Section 6(g) of the Plan to the extent that such
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authority could cause such Options to fail to qualify as “qualified performance-based
compensation” under Section 162(m)(4)(C) of the Code.
(c) Notwithstanding any other provision contained herein to the contrary, all conditions and
restrictions relating to the Option, including limitations on exercisability, risks of forfeiture
and conditions and restrictions requiring continued employment or the achievement of performance
objectives with respect to the exercisability of the Option, shall immediately lapse upon a
termination of employment or service by the Company without Cause or by a Participant for Good
Reason, within twelve months after a Change in Control, and the Option shall remain outstanding
until the earlier of the last day of the term of such Option, or the end of the last day of the
one-year period following such termination.
9. Clawback. Notwithstanding anything in the Plan or this Agreement to the contrary,
in the event that the Participant breaches any nonsolicitation Agreement entered into with, or
while acting on behalf of, the Company or any Affiliate, the Committee may (a) cancel the Option,
in whole or in part, whether or not vested, and/or (b) if such conduct or activity occurs within
one year following the exercise or payment of the Option, require the Participant to repay to the
Company any gain realized or payment or shares received upon the exercise or payment of the Option
(with such gain, payment or shares valued as of the date of exercise or payment). Such
cancellation or repayment obligation shall be effective as of the date specified by the Committee.
Any repayment obligation may be satisfied in shares of Stock or cash or a combination thereof
(based upon the Fair Market Value of the shares of Stock on the date of repayment), and the
Committee may provide for an offset to any future payments owed by the Company or any Affiliate to
the Participant if necessary to satisfy the repayment obligation; provided,
however, that if any such offset is prohibited under applicable law, the Committee shall
not permit any offsets and may require immediate repayment by the Participant.
10. Rights as Shareholder. The Participant or a transferee of the Options shall have
no rights as shareholder with respect to any Option Shares until he shall have become the holder of
record of such share, and no adjustment shall be made for dividends or distributions or other
rights in respect of such Option Shares for which the record date is prior to the date upon which
he shall become the holder of record thereof.
11. Compliance with Law. Notwithstanding any of the provisions hereof, the
Participant hereby agrees that he will not exercise the Option, and that the Company will not be
obligated to issue or transfer any shares to the Participant hereunder, if the exercise hereof or
the issuance or transfer of such shares shall constitute a violation by the Participant or the
Company of any provisions of any law or regulation of any governmental authority. Any
determination in this connection by the Committee shall be final, binding and conclusive. The
Company shall in no event be obliged to register any securities pursuant to the Securities Act of
1933 (as now in effect or as hereafter amended) or to take any other affirmative action in order to
cause the exercise of the Options or the issuance or transfer of shares pursuant thereto to comply
with any law or regulation of any governmental authority.
12. No Right to Continued Employment. Nothing in this Agreement or in the Plan shall
confer upon the Participant any right to continue in the employ of the Company or shall interfere
with or restrict in any way the rights of the Company, which are hereby expressly
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reserved, to terminate the employment of the Participant at any time for any reason
whatsoever, with or without Cause. Participant acknowledges and agrees that the continued vesting
of the Options granted hereunder is premised upon his provision of future services with the Company
and such Option shall not accelerate upon his termination of employment for any reason unless
specifically provided for herein.
13. Taxes and Share Withholding. At such time as the Participant has taxable
income in connection with an Option (a “Taxable Event”), the Participant shall pay to the Company
in cash an amount equal to the minimum federal, state and local income taxes and other amounts as
may be required by law to be withheld by the Company in connection with the Taxable Event (the
“Withholding Taxes”).
14. Notice. Every notice or other communication relating to this Agreement shall be
in writing, and shall be mailed to or delivered to the party for whom it is intended at such
address as may from time to time be designated by it in a notice mailed or delivered to the other
party as herein provided; provided, that, unless and until some other address be so
designated, all notices or communications by the Participant to the Company shall be mailed or
delivered to the Company at its principal executive office, and all notices or communications by
the Company to the Participant may be given to the Participant personally or may be mailed to him
at his address as recorded in the records of the Company. Notwithstanding the foregoing, at such
time as the Company institutes a policy for delivery of notice by e-mail, notice may be given in
accordance with such policy.
15. Nonqualified Stock Option. The Option granted hereunder is not intended to be an
“incentive stock option” within the meaning of Section 422 of the Code (“ISO”).
16. Binding Effect. Subject to Section 7 hereof, this Agreement shall be binding upon
the heirs, executors, administrators and successors of the parties hereto.
17. Governing Law. This Agreement shall be construed and interpreted in accordance
with the laws of the State of Delaware without regard to its conflict of law principles.
18. Plan. The terms and provisions of the Plan are incorporated herein by reference,
and the Participant hereby acknowledges receiving a copy of the Plan. In the event of a conflict
or inconsistency between the terms and provisions of the Plan and the provisions of this Agreement,
the Plan shall govern and control. All capitalized terms not defined herein shall have the meaning
ascribed to them as set forth in the Plan.
19. Electronic Transmission. The Company reserves the right to deliver any notice or
Award by email in accordance with its policy or practice for electronic transmission and any
written Award or notice referred to herein or under the Plan may be given in accordance with such
electronic transmission policy or practice.
* * * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first
above written.
| ALLIANCE DATA SYSTEMS | ||
| CORPORATION | ||
| By: | ||
 |
||
| Transient X. Xxxxxx | ||
| Executive Vice President, Human Resources | ||
| PARTICIPANT | ||
| [First] [Last] |
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