TOTAL SYSTEM SERVICES, INC. PERFORMANCE-BASED SPECIAL STOCK OPTION AGREEMENT
Exhibit 10.6
TOTAL SYSTEM SERVICES, INC.
PERFORMANCE-BASED SPECIAL STOCK OPTION AGREEMENT
PERFORMANCE-BASED SPECIAL STOCK OPTION AGREEMENT
THIS AGREEMENT (“Agreement”) is made effective as of , by and between TOTAL
SYSTEM SERVICES, INC., a Georgia corporation (the “Company”), a Georgia corporation having its
principal office at One TSYS Way, Columbus, Georgia, and Option Holder, an employee of the Company
or a Subsidiary of the Company.
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company has adopted the Total System Services, Inc.
2008 Omnibus Plan (the “Plan”); and
WHEREAS, the Company recognizes the value to it of the services of Option Holder and intends
to provide Option Holder with added incentive and inducement to contribute to the success of the
Company; and
WHEREAS, the Company recognizes the potential benefits of providing employees the opportunity
to acquire an equity interest in the Company and to more closely align the personal interests of
employees with those of other shareholders; and
WHEREAS, effective (“Grant Date”), pursuant to the Plan, the Compensation
Committee of the Board of Directors of the Company: (a) granted to Option Holder, pursuant to
Section 6 of the Plan, an Option in respect of the number of Shares herein below set forth, (b)
designated the Option a Non-Qualified Stock Option, and (c) fixed and determined the Option price
and exercise and termination dates and conditions as set forth below.
NOW THEREFORE, in consideration of the mutual promises and representations herein contained
and other good and valuable consideration, it is agreed by and between the parties hereto as
follows:
1. The terms, provisions and definitions of the Plan are incorporated by reference and made a
part hereof. All capitalized terms in this Agreement shall have the same meanings given to such
terms in the Plan except where otherwise noted.
2. Subject to and in accordance with the provisions of the Plan, effective on the Grant Date
the Company hereby grants to Option Holder a Non-Qualified Stock Option to purchase, on the terms
and subject to the conditions hereinafter set forth, all or any part of Shares granted at the
purchase price of $ per Share (the “Xxxxx Xxxxx”), exercisable at such times and in such
manner as described in this Agreement, unless the Compensation Committee, in its sole and exclusive
discretion, shall authorize Option Holder to exercise all or part of the Option at an earlier date.
3. The Option shall become exercisable with respect to 100% of the Shares subject to the
Option on the earlier of
| (a) | , if (i) Option Holder remains continuously employed from the Grant Date through such date, and (ii) either (A) the basic earnings per share for the Company (as shown in the Company’s financial statements) are $ or higher for the Company’s fiscal year or (B) the closing price for a Share on is at least % of the Xxxxx Xxxxx, and | ||
| (b) | the date of Option Holder’s death or total and permanent disability while employed by the Company. |
Except as set forth in Paragraphs 5(b) and 10, if Option Holder terminates employment for any
reason (except death or total and permanent disability) before , the Option shall
be automatically forfeited in full. Furthermore, except as set forth in Paragraph 10, if neither
of the requirements of Paragraph 3(a)(ii) are met, the Option shall be automatically forfeited in
full (unless the Option otherwise becomes exercisable pursuant to Paragraph 3(b) upon Option
Holder’s death or total and permanent disability prior to while employed by the
Company).
4. Unless sooner terminated as provided in the Plan or in this Agreement, the Option shall
terminate, and all rights of Option Holder hereunder shall expire on (“Expiration
Date”). In no event may the Option be exercised after the Expiration Date.
5. (a) In the event of Option Holder’s death or total and permanent disability while employed
by the Company, Option Holder (or the legal representative of Option Holder’s estate or legatee
under Option Holder’s will) shall be able to exercise the Option, to the extent exercisable under
Paragraph 3, through the Expiration Date.
(b) In the event Option Holder’s employment with the Company terminates before
and on or after Option Holder’s early retirement date (which is defined as
attainment of age 62 with 15 or more years of service) or Option Holder’s normal retirement date
(which is defined as attainment of age 65), the Option will be exercisable for a percentage of the
Shares subject to the Option determined by multiplying (i) the number of Shares subject to this
Option, by (ii) the ratio of the number of months of Option Holder’s employment since the Grant
Date to 36; provided that one of the requirements of Paragraph 3(a)(ii) are met. Partial months of
employment will be counted as full months for purposes of this proration calculation. To the
extent the Option is exercisable pursuant to this Paragraph 5(b), it will be exercisable from
through the Expiration Date.
(c) Except as set forth in Paragraph 10, in the event of Option Holder’s termination of
employment for any reason other than the reasons listed in Paragraphs 5(a) or 5(b), the Option
shall cease to be exercisable on the date Option Holder’s employment terminates.
6. The Option or any part thereof, may, to the extent that it is exercisable, be exercised in
the manner provided in the Plan. Payment of the aggregate Xxxxx Xxxxx for the number of Shares
purchased and any withholding taxes shall be made in the manner provided in the Plan.
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7. The Option or any part thereof may be exercised during the lifetime of Option Holder only
by Option Holder and only while Option Holder is in the employ of the Company, except as otherwise
provided in the Plan.
8. Unless otherwise designated by the Compensation Committee, the Option shall not be
transferred, assigned, pledged or hypothecated in any way. Upon any attempt to transfer, assign,
pledge, hypothecate or otherwise dispose of a nontransferable Option or any right or privilege
confirmed hereby contrary to the provisions hereof, the Option and the rights and privileges
confirmed hereby shall immediately become null and void.
9. In the event of any merger, reorganization, consolidation, recapitalization, stock
dividend, or other change in corporate structure affecting the Company’s Stock, any necessary
adjustment shall be made in accordance with the provisions of Section 4.4 of the Plan.
10. In the event of a Change of Control (as defined in Section 2.8 of the Plan) and Option
Holder’s subsequent termination of employment within two years following the date of such Change of
Control either (i) by the Company for any reason other than Cause or (ii) by Option Holder for Good
Reason (as the terms “Cause” and “Good Reason” are defined in the Company’s applicable Change of
Control Agreement, the provisions of which are incorporated herein by reference), the Option may
(to the extent not already exercised in connection with the Change in Control (if required by the
Compensation Committee) or otherwise) be immediately exercised in full as of the date of such
employment termination and, may be exercised in full through the Expiration Date.
11. Any notice to be given to the Company shall be addressed to the President of the Company
at Xxx XXXX Xxx, Xxxxxxxx, Xxxxxxx 00000.
12. Nothing herein contained shall affect the right of Option Holder to participate in and
receive benefits under and in accordance with the provisions of any pension, insurance or other
benefit plan or program of the Company as in effect from time to time and for which Option Holder
is eligible.
13. Nothing herein contained shall affect the right of the Company, subject to the terms of
any written contractual arrangement to the contrary, to terminate Option Holder’s employment at any
time for any reason whatsoever.
14. This Agreement shall be binding upon and inure to the benefit of Option Holder, his
personal representatives, heirs, and legatees, but neither this Agreement nor any rights hereunder
shall be assignable or otherwise transferable by Option Holder except as expressly set forth in
this Agreement or in the Plan.
15. In addition to any other rights the Company may have (including, without limitation, under
Section 20.1 of the Plan), if the Board of Directors of the Company determines after due inquiry
that Option Holder has participated in a material manipulation of the Company’s financial
information or engaged in conduct that would constitute Cause (as defined in Paragraph 10) or a
breach of noncompetition, confidentiality, or other restrictive covenants that apply to Option
Holder, the Company has the right (a) to immediately cancel any outstanding portion of the Option
and (b) to purchase any Shares previously purchased by Option Holder pursuant to the Option by
paying Option Holder an amount per Share equal to the lesser
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of the Xxxxx Xxxxx for such Share under Paragraph 2 or 90% of the Fair Market Value of such
Share on the purchase date.
The Company has issued the Option subject to the foregoing terms and conditions and the
provisions of the Plan.
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