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EXHIBIT 10.2
NCI STOCK OPTION AGREEMENT
Non-Incentive Stock Option 1996 Plan
NATIONAL PROCESSING, INC.
Stock Option Agreement - Non-Incentive Stock Option
1996 Plan
WHEREAS, Xxxxxx E, Xxxxxxxxx ("Optionee") is an officer and key employee of
National Processing, Inc., an Ohio corporation (the "Corporation"), or of a
Subsidiary; and
WHEREAS, the execution of a stock option agreement in the form hereof (the
"Stock Option Agreement") has been duly authorized by a resolution of the
Compensation and Organization Committee (the "Committee") of the Board of
Directors of the Corporation (hereinafter called the "Board") duly adopted on
March 11, 1997 ("Grant Date"),
NOW, THEREFORE, the Corporation hereby grants to the Optionee, pursuant to
the National Processing Company 1996 Stock Option Plan (the "Plan"), (i) an
Option (the "Option") to purchase 200,000 shares of its common stock, without
par value ("Common Stock") ("Option Rights Granted") at the per share exercise
price of $10.50 "Option Price" and (ii) Additional Options (the "Additional
Options") to purchase the number of shares of Common Stock equal to the number
of shares of already owned Common Stock delivered by the Optionee as payment of
the exercise price upon exercise of the Option or portion thereof and/or the
number of shares of Common Stock tendered or relinquished as payment of the
amount to be withheld under applicable federal, state and local tax laws (at
withholding rates not to exceed Optionee's applicable marginal tax rates) in
connection with the exercise of the Option or portion thereof at a per share
exercise price ("Additional Option Price") equal to the Market Value per Share
on the date the Optionee transfers shares of Common Stock to the Corporation to
exercise the Option or portion thereof or transfers or forfeits shares of
Common Stock in payment of income tax withholding on the exercise of the Option
or portion thereof, and agrees to cause certificates for any shares purchased
hereunder to be delivered to the Optionee upon receipt of payment of the Option
Price, all subject, however, to the terms and conditions hereafter set
forth.
1. The Option (until terminated as hereinafter provided) shall be
exercisable only as to one-third of the shares of Common Stock subject to the
Option after the Option shall have been in
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NCI STOCK OPTION AGREEMENT
Non-Incentive Stock Option 1996 Plan
the continuous employ of the Corporation or any affiliate of the Corporation for
one full year from the Grant Date, a second one-third of the Shares Granted
after the Optionee shall have been in continuous employ of the Corporation or
any affiliate for two full years from the Grant Date and shall be fully
exercisable after the Optionee shall have been in the continuous employ of the
Corporation or any affiliate for three full years from the Grant Date;
provided, however, that the Option (until terminated as hereinafter provided)
shall become immediately fully exercisable upon the occurrence of any of the
following:
(a) in the event of a Change in Control as defined in Section
11 of this Stock Option Agreement;
(b) the Optionee ceases to be an employee of the Corporation
or any affiliate of the Corporation at or after Optionee attains the
age of 63; or
(c) the Committee may in its discretion accelerate the time
or times at which the Option or any portion hereof will become
exercisable.
To the extent exercisable, the Option may be exercised in whole or in part from
time to time.
2. The Option shall terminate on the earliest of the following dates:
(a) three years after the death of the Optionee;
(b) ten years from the Grant Date, if the Option is
exercisable under any of the provisions of Section 1 hereof and if the Optionee
becomes disabled or ceases to be an employee of the Corporation or any affiliate
after the third anniversary of the Stock Option Agreement;
(c) immediately, upon the termination of employment of the
Optionee with the Corporation or any Subsidiary prior to the third anniversary
of the Stock Option Agreement for any reason other than as set forth in
Paragraph 2(a) or 2(b), if such termination arises prior to a Change in Control;
(d) ten years from the Grant Date; or
(e) in the event the Optionee shall intentionally commit an
act materially inimical to the interests of the Corporation or any affiliate,
and the Committee shall so find, the Option shall terminate at the time of such
act, notwithstanding any other provision of this Agreement.
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NCI STOCK OPTION AGREEMENT
Non-Incentive Stock Option 1996 Plan
3. Each Additional Option (until terminated as hereinafter provided) shall
be first exercisable six months following the exercise of the underlying Option
or portion thereof, provided, however, that each Additional Option (until
terminated as hereinafter provided) shall become immediately fully exercisable
upon the Optionee's death. To the extent exercisable, the Additional Option may
be exercised in whole or in part from time to time. The Corporation shall not,
however, be required to issue any fractional shares.
4. Each Additional Option or portion thereof shall terminate on the
earliest applicable termination date of the Option as set forth in Section 2
hereof.
5. No Additional Option or portion of an Additional Option shall be issued
on the exercise of an Option when such exercise occurs after the Optionee is no
longer employed by the Corporation or any affiliate of the Corporation.
6. Nothing contained in this Agreement shall limit whatever right the
Corporation or any affiliate of the Corporation might otherwise have to
terminate the employment of the Optionee.
7. Neither the Option nor the Additional Option is transferable by the
Optionee otherwise than by will or the laws of descent and distribution, and is
exercisable during the lifetime of the Optionee only by the Optionee or by the
Optionee's guardian or legal representative.
8. (a) In connection with each exercise of the Option or the Additional
Option arrangements satisfactory to the Corporation shall be made by the
Optionee for the payment of any withholdings required by federal, state or local
income tax laws.
(b) Subject to the restrictions set forth below, the Optionee is hereby
granted the right to elect to satisfy, in whole or in part, the Optionee's
withholding obligations as required by federal, state or local income tax laws
by (i) having the Corporation withhold shares of Common Stock subject to the
Option or the Additional Option having a value equal to or less than the amount
required to be withheld and/or (ii) delivering to the Corporation shares of
Common Stock owned by the Optionee having a value equal to or less than the
amount required to be withheld (the "Election"). For purposes of this
subsection 8(b), the value of shares of Common Stock to be withheld or delivered
by the Optionee shall be based upon the Market Value per Share on the date that
the
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NCI STOCK OPTION AGREEMENT
Non-Incentive Stock Option 1996 Plan
amount of the tax or taxes to be withheld is determined. Shares of Common Stock
withheld pursuant to clause 8(b)(i) will not thereafter be available for
exercise under the Option.
(c) To exercise the Election, the Optionee (i) must make the
Election to have shares withheld or to deliver already owned shares on or prior
to the date that the Optionee exercises the Option or the Additional Option and
(ii) must make the Election in writing on a form provided by the Corporation.
The Election is irrevocable by the Optionee and is subject to the disapproval by
the Committee.
9. The option price shall be payable:
(a) in cash or by check acceptable to the Corporation;
(b) tendering or relinquishing the number of already owned
shares of Common Stock that when multiplied by the Market Value per share on
the date of exercise, will have an equivalent value to the total Option Price or
Additional Option Price for the portion of the Option exercised; or
(c) by a combination of (a) and (b).
10. The Committee may make such adjustments in the number and kind of
shares subject to the Option or the Additional Option and the price per share as
the Committee in its sole discretion, exercised in good faith, may determine is
equitably required to prevent dilution or enlargement of the rights of the
Optionee that otherwise would result from any stock dividend, stock split,
combination of shares, recapitalization or other change in the capital structure
of the Corporation, merger, consolidation, spin-off, reorganization, partial or
complete liquidation, issuance of rights or warrants to purchase securities, or
any other corporate transaction or event having an effect similar to any of the
foregoing. No adjustment provided for in this Section shall require the
Corporation or any Subsidiary to sell a fractional share.
11. "Change in Control" shall mean the occurrence of any of the
following events:
(a) National City Corporation ("NCC"), a successor of NCC (direct
or indirect, by purchase, merger, consolidation, reorganization or otherwise)
("Successor") or an affiliate of NCC or
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NCI STOCK OPTION AGREEMENT
Non-Incentive Stock Option 1996 Plan
of Successor sells or transfers Common Stock to an unaffiliated third party and
as a result of such sale or transfer NCC, Successor, and affiliates of NCC and
Successor own or control less than fifty percent of the combined voting power of
the then-outstanding securities of the Corporation immediately after such
transaction;
(b) The Corporation is merged, consolidated or reorganized into
or with another corporation or other legal person other than NCC, a Successor or
an affiliate of NCC or of Successor, and as a result of such merger,
consolidation or reorganization less than fifty percent of the combined voting
power of the then-outstanding securities of such corporation or person
immediately after such transaction are held by NCC, Successor or an affiliate
of NCC or Successor; or
(c) The Corporation sells or otherwise transfers all or
substantially all of its assets or the Corporation causes or permits the sale or
transfer of all or substantially all of the assets of any Corporation subsidiary
that has assets equal to or greater than eighty percent of the total assets of
the Corporation, as reported on a consolidated basis to another corporation or
other legal person, and as a result of such sale or transfer less than fifty
percent of the combined voting power of the then-outstanding securities of such
corporation or person immediately after such sale or transfer is held by NCC, a
Successor or an affiliate of NCC or Successor, provided, however, that the
change in control of NCC determined by the standards set forth herein or
otherwise shall not constitute a change in control of the Corporation;
12. For purposes of this Agreement, the continuous employ of the
Optionee with the Corporation or any affiliate shall not be deemed interrupted,
and the Optionee shall not be deemed to have ceased to be an employee of the
Corporation or any affiliate by reason of the transfer of his employment among
the Corporation and the affiliates. Also a leave of absence approved by the
Committee for illness, military or governmental service or other cause shall be
considered as employment.
13. Delivery by the Corporation or any Subsidiary of a certificate or
certificates for shares of Common Stock may be deferred for such reasonable time
after payment for such shares as shall be
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NCI STOCK OPTION AGREEMENT
Non-Incentive Stock Option 1996 Plan
necessary to conform to any applicable law or governmental regulation relating
to the Option, the Additional Option or to the issuance or delivery of Common
Stock on exercise hereof.
14. Any contrary provision hereof notwithstanding, neither the Option
nor the Additional Option shall be exercisable by, and the Corporation shall not
be obligated to sell or deliver any Common Stock subject thereto, to a resident
of any country other than the United States of America and unless and until such
Common Stock and the sale thereof pursuant to the Option or the Additional
Option have been registered or otherwise qualified under applicable state and
federal laws or regulations or confirmation of exemption from such state or
federal laws or regulations shall have been obtained and such registration or
qualification or exemption shall continue to be effective, all as the
Corporation shall, in its sole discretion, determine to be necessary or
advisable. The Corporation shall use its best efforts to maintain registration
and applicable qualification of such Common Stock and the sale thereof with the
Securities and Exchange Commission and applicable state regulatory agencies;
provided, however, that the Corporation shall have no obligation to register or
qualify such Common Stock under the laws of any non-United States of
America jurisdiction.
15. Terms used in this Agreement which are defined in the Plan are used
herein as so defined.
EXECUTED This 11th day of March, 1997
National Processing, Inc.
BY: \s\ Xxxxxxx X. Xxxxxxxxx
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Xxxxxxx X. Xxxxxxxxx, Chairman
Xxxxxx X. Xxxxxxxxx hereby accepts the grant to him of the foregoing Option
\s\ Xxxxxx X. Xxxxxxxxx
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Xxxxxx X. Xxxxxxxxx
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