INCENTIVE STOCK OPTION AGREEMENT
THIS INCENTIVE STOCK OPTION AGREEMENT, made and entered into this 1st
day of March, 1996, by and between PAYSYS INTERNATIONAL, INC., a Florida
corporation (the "Corporation") and Xxxxx Xxxxx (the "Optionee"),
W I T N E S S E T H :
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WHEREAS, the Board of Directors of the Corporation (the
"Board") has adopted the PaySys International, Inc. 1995 Stock
Incentive Plan (the "Plan");
WHEREAS, the Plan provides for the granting of incentive
stock option by the Board to directors, officers and key
employees of the Corporation or any subsidiary of the Corporation
to purchase shares of the Common Stock of the Corporation, par
value $.01 per share (the "Stock") in accordance with the terms
and provision thereof; and
WHEREAS, the Board considers the Optionee to be a person who
is eligible for a grant of incentive stock options under the
Plan, and has determined that it would be in the best interest of
the Corporation to grant the incentive stock options documented
herein;
NOW, THEREFORE, the parties hereto, intending to be legally
bound hereby, agree as follows:
1. Grant of Option.
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Subject to the terms and conditions hereinafter set forth,
the Corporation hereby grants to the Optionee, as of the date
hereof (the "Date of Grant"), an option to purchase up to 38,046
shares of Stock at a price of $4.00 per share, the fair market
value as of the Date of Grant. Such option is hereinafter
referred to as the "Option" and the shares of stock purchasable
upon exercise of the option are hereinafter sometimes referred to
as the "Option Shares." The Option is intended by the parties
hereto to be, and shall be treated as, an incentive stock option,
as such term is defined under section 422 of the Internal Revenue
Code of 1986 (the "Code").
2. Installment Exercise.
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Subject to such further limitations as are provided herein,
the Option shall become vested as follow:
1/3 of the option shall become exercisable on June 30, 1996
1/3 of the option shall become exercisable on January 1,
1997
1/3 of the option shall become exercisable on January 1,
1998.
Notwithstanding the above, in the event that the Corporation
sells substantially all of its assets, or more than fifty percent
of the then outstanding voting stock of the Corporation is
acquired by a person or entity not currently a shareholder, or
the Corporation completes an initial public offering prior to
January 1, 1998, the Option shall vest in its entirety and become
completely exercisable immediately prior to the event.
3. Termination of Option.
----------------------
(a) The Option and all rights hereunder with respect
thereto, to the extent such rights shall not have been exercised,
shall terminate and become null and void after the expiration of
ten years from the Date of Grant (the "Option Term").
(b) In the event of termination of Optionee's employment
after the date or dates for vesting of the Option, other than
termination that is (a) for cause, (b) voluntary on the part of
the Optionee and without the written consent of the Corporation
or (c) due to death or disability or retirement in accordance
with normal retirement policies as in effect from time to time,
the Optionee may exercise the Option at any time within a period
ending at the earlier of the Expiration Date or 5:00 P.M. eastern
time, on the day preceding the expiration of three months from
the date of termination of employment, to the extent of the
number of shares which were purchasable hereunder at the date of
termination. As to the shares which were not purchasable on such
date, the Option shall terminate on such date of termination of
employment and shall not thereafter be or become exercisable.
Upon a termination of the Option's employment by reason of
retirement, disability, or death, the Option may be exercised
during the following periods, but only to the extent that the
Option was outstanding and exercisable on any such date of
retirement, disability or death: (i) the one-year period
following the date of such termination of the Optionee's
employment in the case of a disability (within the meaning of
Section 22(e)(3) of the Code), (ii) the six-month period
following the date of issuance of letters testamentary or letters
of administration to the executor or administrator of a deceased
Optionee, in the case of the Optionee's death during his
employment by the Employer, but not later than one year after the
Optionee's death, and (iii) the three-month period following the
date of such termination in the case of retirement on or after
attainment of age 65, or in the case of disability other than as
described in (i) above. In no event, however, shall any such
period extend beyond the Option Term.
(c) In the event of the death of the Optionee, the Option
may be exercised by the Optionee's legal representative(s), but
only to the extent that the Option would otherwise have been
exercisable by the Optionee at the time of his death.
(d) A transfer of the Optionee's employment between the
Corporation and any subsidiary of the Corporation, or between any
subsidiaries of the Corporation, shall not be deemed to be a
termination of the Optionee's employment.
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(e) Notwithstanding any other provisions set forth herein
or in the Plan, if the Optionee shall (i) voluntarily terminate
employment without the Corporation's consent, (ii) commit any act
of malfeasance or wrongdoing affecting the Corporation or any
subsidiary of the Corporation, (iii) breach any covenant not to
compete, or employment contract, with the Corporation or any
subsidiary of the Corporation, or (iv) engage in conduct that
would warrant the Optionee's discharge for cause (excluding
general dissatisfaction with the performance of the Optionee's
duties, but including any act of disloyalty or any conduct
clearly tending to bring discredit upon the Corporation or any
subsidiary of the Corporation), any unexercised portion of the
Option shall immediately terminate and be void.
4. Exercise of Options.
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(a) The Optionee may exercise the Option with respect to
all or any part of the number of Option Shares then exercisable
hereunder by giving the Secretary of the Corporation written
notice of intent to exercise. The notice of exercise shall
specify the number of Option Shares as to which the Option is to
be exercised and the date of exercise thereof, which date shall
be at least five days after the giving of such notice unless an
earlier time shall have been mutually agreed upon.
(b) Full payment (in U.S. dollars) by the Optionee of the
option price for the Option Shares purchased shall be made on or
before the exercise date specified in the notice of exercise in
cash, or, with the prior written consent of the Board, in whole
or in part through the surrender of previously acquired shares of
Stock at their fair market value on the exercise date.
On the exercise date specified in the Optionee's notice or
as soon thereafter as is practicable, the Corporation shall cause
to be delivered to the Optionee, a certificate or certificates
for the Option Shares then being purchased (out of theretofore
unissued Stock or reacquired Stock, as the Corporation may elect)
upon full payment for such Option Shares. The obligation of the
Corporation to deliver Stock shall, however, be subject to the
condition that if at any time the Board shall determine in its
discretion that the listing, registration or qualification of the
Option Shares upon any securities exchange or under any state or
federal law, or the consent or approval of any governmental
regulatory body, is necessary or desirable as a condition of, or
in connection with, the Option or the issuance or purchase of
Stock thereunder, the Option may not be exercised in whole or in
part unless such listing, registration, qualification, consent,
or approval shall have been effected or obtained free of any
conditions not acceptable to the Board.
(c) If the Optionee fails to pay for any of the Option
Shares specified in such notice or fails to accept delivery
thereof, the Optionee's right to purchase such Option Shares may
be terminated by the Corporation. The date specified in the
Optionee's notice as the date of exercise shall be deemed the
date of exercise of the Option, provided that payment in
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full for the Option Shares to be purchased upon such exercise shall have
been received by such date.
5. Adjustment of and Changes in Stock of the Corporation.
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In the event of a reorganization, recapitalization, change
of shares, stock split, spin-off, stock dividend,
reclassification, subdivision, or combination of shares, merger,
consolidation, rights offering, or any other change in the
corporate structure or shares of capital stock of the
Corporation, the Board shall make a proportional adjustment in
the number and kind of shares of Stock subject to the Option or
in the option price; provided, however, that no such adjustment
shall give the Optionee any additional benefits under the Option.
In the event that, within five years from the Date of Grant,
the Corporation sells shares of its common stock at a price per
share which is less than the option price per share, then the
number of shares subject to the Option shall be increased such
that the ratio of the Option Shares to the total shares
outstanding after the sale is the same as such ratio would have
been had the number of shares issued in such transaction been
equal to the total consideration paid divided by the option
price. The option price per share shall be decreased so that the
total purchase price for all option shares (as increased) is the
same as before the sale.
6. No Rights of Stockholders.
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Neither the Optionee nor any personal representative shall
be, or shall have any of the rights and privileges of, a
stockholder of the Corporation with respect to any shares of
Stock purchasable or issuable upon the exercise of the Option, in
whole or in part, prior to the date of exercise of the Option.
7. Non-Transferability of Option.
------------------------------
During the Optionee's lifetime, the Option hereunder shall
be exercisable only by the Optionee or any guardian or legal
representative of the Optionee, and the Option shall not be
transferable except, in case of the death of the Optionee, by
will or the laws of descent and distribution, nor shall the
Option be subject to attachment, execution or other similar
process. In no event of (a) any attempt by the Optionee to
alienate, assign, pledge, hypothecate or otherwise dispose of the
Option, except as provided for herein, or (b) the levy of any
attachment, execution or similar process upon the rights or
interest hereby conferred, the Corporation may terminate the
Option by notice to the Optionee and it shall thereupon become
null and void.
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8. Registration of Option Shares.
------------------------------
The Corporation will file a registration on Form S-8 (or any
successor form) covering the Option Shares prior to the exercise
of the Option, provided that the Option shares are eligible for
registration on such form.
9. Employment Not Affected.
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Neither the granting of the Option nor its exercise shall be
construed as granting to the Optionee any right with respect to
continuance of employment by the Corporation or any parent or
subsidiary. Except as may otherwise be limited by a written
agreement between the Corporation or a parent or subsidiary
thereof and the Optionee, the right of the Optionee's employer to
terminate at will the Optionee's employment with it at any time
(whether by dismissal, discharge, retirement or otherwise) is
specifically reserved by the Corporation, as the employer or on
behalf of the employer (whichever the case may be), and
acknowledge by the Optionee.
10. Amendment of Option.
--------------------
The Option may be amended by the Board at any time (i) if
the Board determines, in its sole discretion, that amendment is
necessary or advisable in the light of any addition to or change
in the Code or in the regulations issued thereunder, or any
federal or state securities law or other law or regulation, which
change occurs after the Date of Grant and by its terms applies to
the Option; or (ii) other than in the circumstances described in
clause (i), with the consent of the Optionee.
11. Notice.
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Any notice to the Corporation provided for in this
instrument shall be addressee to it in care of its Secretary at
its executive offices at The Spectrum Building, 000 Xxxxxxxxx
Xxxxx, X.X. Xxx 0000, Xxxxxxxx, Xxxxxxx 00000-0000, and any
notice to the Optionee shall be addressed to the Optionee at the
current address shown on the payroll records of the Corporation
or any parent or subsidiary employing Optionee. Any notice shall
be deemed to be duly given if and when properly addressee and
posted by registered or certified mail, postage prepaid.
12. Incorporation of Plan by Reference.
-----------------------------------
The Option is granted pursuant to the terms of the Plan, the
terms of which are incorporated herein by reference, and the
Option shall be in all respects interpreted in accordance with
the Plan. The Board shall interpret and construe the Plan and
this instrument, and its interpretations and determination shall
be conclusive and binding on the
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parties hereto and any other person claiming an interest hereunder, with
respect to any issue arising hereunder or thereunder.
13. Governing Law.
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The validity, construction, interpretation and effect of
this instrument shall exclusively be governed by and as
determined in accordance with the law of the State of Florida.
IN WITNESS WHEREOF, the Corporation has caused its duly
authorized officer to execute this Agreement and the Optionee has
placed his signature hereon, effective as of the Date of Grant.
PAYSYS INTERNATIONAL, INC.
By: /s/ Xxxxxxx X. Xxxxx
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ACCEPTED AND AGREED TO:
By: /s/ Xxxxx X. Black
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Optionee
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