Exhibit 10.1

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (“Agreement”) is entered into as
of January 7, 2009 (the “Effective Date”) between ACI Worldwide, Inc., a
Delaware corporation formerly known as Transaction Systems Architects, Inc. (the
“Company”), and Philip G. Heasley (“Executive”), and supersedes in its entirety
that certain Employment Agreement dated as of March 5, 2005, and amended by the
First Amendment thereto dated as of September 5, 2007, pertaining to the terms
of the employment of Executive by the Company.

 

RECITALS:

 

WHEREAS, Executive has served as the President and Chief Executive Officer of
the Company since March 5, 2005 (the “Initial Employment Date”), and Executive
desires to continue to serve as the President and Chief Executive Officer of the
Company;

 

WHEREAS, the Company shall employ Executive on the terms and conditions set
forth in this Agreement, and Executive shall be retained and employed by the
Company to perform such services under the terms and conditions of this
Agreement.

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

 

1.                                       Certain Definitions. Certain words or
phrases with initial capital letters not otherwise defined herein shall have the
meanings set forth in Section 8 hereof.

 

2.                                       Employment. The Company shall employ
Executive, and Executive accepts employment with the Company, upon the terms and
conditions set forth in this Agreement for the period beginning on the Effective
Date and ending as provided in Section 5 hereof (the “Employment Period”).

 

3.                                       Position and Duties.

 

(a)                                  During the Employment Period, Executive
shall serve as the President and Chief Executive Officer of the Company and
shall have the normal duties, responsibilities and authority of an executive
serving in such position, subject to the power of the Board of Directors of the
Company (the “Board”) to provide oversight and direction with respect to such
duties, responsibilities and authority, either generally or in specific
instances and consistent with such position. So long as Executive is the
President and Chief Executive Officer of the Company, the Board will nominate
Executive to serve as a member of the Board.

 

(b)                                 Executive shall report to the Board.

 

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(c)                                  During the Employment Period, Executive
shall devote Executive’s best efforts and Executive’s full business time and
attention (except for permitted vacation periods and reasonable periods of
illness or other incapacity) to the business and affairs of the Company, its
subsidiaries and affiliates. Executive shall perform Executive’s duties and
responsibilities to the best of Executive’s abilities in a diligent,
trustworthy, business-like and efficient manner. During the Employment Period,
Executive may not serve as a director or a principal of another company without
the Board’s prior consent.

 

(d)                                 Executive shall perform Executive’s duties
and responsibilities principally in the metropolitan area of the Company’s
headquarters.

 

(e)                                  Executive has acquired through purchase on
the NASDAQ National Market System at least 100,000 shares (the “Threshold
Ownership”) of the Company’s common stock.  Executive shall at all times during
the Initial Employment Period (as defined in Section 5 below) continue to meet
the Threshold Ownership.

 

4.                                       Compensation and Benefits.

 

(a)                                  Salary. The Company agrees to pay Executive
a salary during the Employment Period in installments based on the Company’s
payroll practices as may be in effect from time to time. Executive’s salary
during the Initial Employment Period (as defined in Section 5) shall be at the
rate of $575,000 per year (“Base Salary”). For any renewal periods as set forth
in Section 5(b) below, the amount of the Executive’s Base Salary will be
mutually agreed to by the Board and Executive. Notwithstanding the foregoing,
the Board may decrease Executive’s Base Salary only if, as a result of a
reasonable business judgement of the Board, there is an across-the-board salary
reduction for all executive level management employees of the Company. If there
is any modification to the Base Salary as defined herein, “Base Salary” in this
Agreement will refer to such modified Base Salary.

 

(b)                                 Bonus.   During the Initial Employment
Period, Executive will be eligible for a bonus under the Company’s Management
Incentive Compensation Plan (or any successor plan), with a targeted annual
bonus of $575,000 and with such performance criteria as are approved by the
Board for each fiscal year. During any renewal period as set forth in
Section 5(b) below, Executive’s bonus will be mutually agreed to by the Board
and Executive.

 

(c)                                  Stock Options.  During Executive’s
employment with the Company, Executive has received certain stock option
grants.  The terms and conditions for the grants are set forth in those certain
stock option agreements between the Company and Executive as the same may be
amended from time to time by the parties.

 

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(d)                                 Expense Reimbursement. The Company shall
reimburse Executive for all reasonable expenses incurred by Executive during the
Employment Period in the course of performing Executive’s duties under this
Agreement that are consistent with the Company’s policies in effect from time to
time with respect to travel, entertainment and other business expenses, subject
to the Company’s requirements applicable generally with respect to reporting and
documentation of such expenses.    The Company shall reimburse Executive for the
cost incurred in maintaining a parking space in New York, New York, the amount
of which reimbursement shall be approved by the Board.  The Company shall also
reimburse Executive an amount up to $18,000 for the transportation of
Executive’s household goods in connection with Executive’s relocation to the
metropolitan area of the Company’s headquarters.

 

(e)                                  Standard Executive Benefits Package.
Executive shall be entitled during the Employment Period to participate, on the
same basis as other executives of the Company, in the Company’s Standard
Executive Benefits Package. The Company’s “Standard Executive Benefits Package”
means those benefits (including insurance and other benefits, but excluding,
except as hereinafter provided in Section 6, any severance pay program or policy
of the Company) for which substantially all of the executives of the Company are
from time to time generally eligible, as determined from time to time by the
Board. Notwithstanding the foregoing, Executive shall be entitled to four weeks
of paid vacation per calendar year.

 

(f)                                    Additional Compensation/Benefits. Any
compensation or benefits to be provided to Executive during the Employment
Period other than as set forth in this Agreement, including, without limitation,
any future grant of stock options or other equity awards, shall be determined by
the Board in its sole discretion.

 

5.                                       Employment Period.

 

(a)                                  Except as hereinafter provided, the
Employment Period shall commence on the Effective Date and shall continue until,
and shall end upon, the sixth anniversary of the Initial Employment Date (the
“Initial Employment Period”).

 

(b)                                 On the sixth anniversary of the Initial
Employment Date and on each anniversary thereafter, unless the Employment Period
shall have ended pursuant to Section 5(c) below or the Company shall have given
Executive 30 days written notice that the extension provision in this sentence
shall not apply, the Employment Period shall be extended for an additional year.

 

(c)                                  Notwithstanding (a) or (b) above, the
Employment Period shall end early upon the first to occur of any of the
following events:

 

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(i)                                     Executive’s death;

 

(ii)                                  the Company’s termination of Executive’s
employment on account of Disability;

 

(i)                                     the Company’s termination of Executive’s
employment for Cause (a “Termination for Cause”);

 

(iv)                              the Company’s termination of Executive’s
employment without Cause (a “Termination without Cause”);

 

(v)                                 Executive’s termination of Executive’s
employment for Good Reason (a “Termination for Good Reason”); or

 

(vi)                              Executive’s termination of Executive’s
employment for any reason other than Good Reason (a “Voluntary Termination”).

 

(d)                                 Notwithstanding anything herein to the
contrary, this Agreement and the Employment Period hereunder shall terminate
immediately upon the occurrence of the “Effective Date” defined in that certain
Change In Control Employment Agreement between the Company and Executive dated
September 5, 2008, or any change in control employment agreement that supersedes
and replaces that agreement (the “Change In Control Employment Agreement”). 
Thereafter, Executive’s employment with the Company shall be governed by the
terms and conditions of the Change In Control Employment Agreement.

 

6.                                       Post-Employment Period Payments.

 

(a)                                  At the end of the Employment Period for any
reason, Executive shall cease to have any rights to salary, bonus, expense
reimbursements or other benefits and Executive shall be entitled to (i) any Base
Salary which has accrued but is unpaid, any reimbursable expenses which have
been incurred but are unpaid, and any unexpired vacation days which have accrued
under the Company’s vacation policy but are unused, as of the end of the
Employment Period, (ii) any plan benefits which by their terms extend beyond
termination of Executive’s employment (but only to the extent provided in any
such benefit plan in which Executive has participated as an employee of the
Company and excluding, except as hereinafter provided in Section 6, any
severance pay program or policy of the Company) and (iii) any benefits to which
Executive is entitled under Part 6 of Subtitle B of Title I of the Employee
Retirement Income Security Act of 1974, as amended (“COBRA”). In addition,
Executive shall be entitled to the additional benefits and amounts described in
the succeeding subsections of this Section 6, in the circumstances described in
such subsections.

 

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(b)                                 If the Employment Period ends pursuant to
Section 5 hereof on account of Executive’s death, Disability or Voluntary
Termination, or on account of a Termination for Cause, the Company shall make no
further payments to Executive except as contemplated in subsection (a) above.

 

(c)                                  If the Employment Period ends early
pursuant to Section 5 hereof on account of a Termination without Cause or a
Termination for Good Reason, Executive shall be entitled to the following:

 

(i)                                     a lump sum payment equal to Executive’s
bonus for the quarter in which the Employment Period ends; provided, however,
that if such Termination without Cause or Termination for Good Reason occurs at
any time during fiscal year 2005, this Section 6(c) shall not apply and
Executive shall not be entitled to any portion of the bonus for fiscal year
2005;

 

(ii)                                  a lump sum payment equal to two times the
sum of (A) Executive’s Base Salary at the time of such termination, plus (B) the
Bonus Amount in effect at the time of such termination; and

 

(iii)                               Executive shall be entitled to continue to
participate, on the same basis as active employees participate in such plans, in
the Company’s medical and dental plans until the earlier of (A) Executive’s
eligibility for any such coverage under another employer’s or any other medical
or dental insurance plans or (B) two years from the date of termination of
Executive’s employment (the “Benefit Continuation Period”) but only to the
extent that Executive makes a payment to the Company in an amount equal to the
monthly premium payments (both the employee and employer portion) required to
maintain such coverage on the first day of each calendar month commencing with
the first calendar month following the date of termination of Executive’s
employment and the Company shall reimburse Executive on an after-tax basis for
the amount of such premiums, if any, in excess of any employee contributions
necessary to maintain such coverage for the Benefit Continuation Period and such
reimbursement shall comply with the Reimbursement Rules set forth below.
Executive agrees that the period of coverage under such plans (or the period of
reimbursement if participation is barred) shall count against the plans’
obligation to provide continuation coverage pursuant to COBRA.

 

Notwithstanding any other provision to the contrary in this Section 6(c), the
medical and dental plan benefits provided pursuant to Section 6(c)(iii) that are
not non-taxable medical benefits within the meaning of Treasury Regulation
Section 1.409A-1(a)(5) shall be treated as follows (the “Reimbursement Rules”): 
(i) the amount of such benefits provided during one taxable year shall not
affect the amount of such benefits provided in any other taxable year, except
that to the

 

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extent such benefits consist of the reimbursement of expenses referred to in
Section 105(b) of the Code, a limitation may be imposed on the amount of such
reimbursements over some or all of the Benefit Continuation Period, as described
in Treasury Regulation Section 1.409A-3(i)(1)(iv)(B), (ii) to the extent that
any such benefits consist of reimbursement of eligible expenses, such
reimbursement must be made on or before the last day of the calendar year
following the calendar year in which the expense was incurred, and (iii) no such
benefit may be liquidated or exchanged for another benefit.

 

(d)                                 Subject to the delay of certain payments
pursuant to Section 20 of this Agreement, the Company shall make all payments
required to be made pursuant to this Section 6 within seventy-five (75) days of
the end of the Employment Period; provided, however, no payments shall be made
under Section 6(c), and all such payments and benefits shall be forfeited, if
Executive fails to sign and return a Release Agreement to the Company within
seventy-five (75) days after the end of the Employment Period or revokes such
Release Agreement within the time period provided therein.

 

(e)                                  Except as provided in
Section 6(c)(iii) above, Executive shall not be required to mitigate the amount
of any payment or benefit provided for in this Agreement by seeking other
employment or otherwise.

 

(f)                                    Notwithstanding any other provision of
this Agreement, no payment will be made pursuant to this Agreement if Executive
is entitled to, and receives, payments or other benefits pursuant to the Change
in Control Agreement.

 

7.                                       Competitive Activity: Confidentiality:
Nonsolicitation.

 

(a)                                  Acknowledgements and Agreements. Executive
hereby acknowledges and agrees that in the performance of Executive’s duties to
the Company during the Employment Period, Executive will be brought into
frequent contact, either in person, by telephone or through the mails, with
existing and potential customers of the Company. Executive also agrees that
trade secrets and confidential information of the Company, more fully described
in Section 7(j) of this Agreement, gained by Executive during Executive’s
association with the Company, have been developed by the Company through
substantial expenditures of time, effort and money and constitute valuable and
unique property of the Company. Executive further understands and agrees that
the foregoing makes it necessary for the protection of the business of the
Company that Executive not compete with the Company during the Employment Period
and not compete with the Company for a reasonable period thereafter, as further
provided in the following subsections.

 

(b)                                 Covenants During the Employment Period.
During the Employment Period, Executive will not compete with the Company
anywhere within the United States.

 

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In accordance with this restriction, but without limiting its terms, during the
Employment Period, Executive will not:

 

(i)                                     enter into or engage in any business
which competes with the business of the Company;

 

(ii)                                  solicit customers, business, patronage or
orders for, or sell, any products and services in competition with, or for any
business that competes with, the business of the Company;

 

(iii)                               divert, entice or otherwise take away any
customers, business, patronage or orders of the Company or attempt to do so; or

 

(iv)                              promote or assist, financially or otherwise,
any person, firm, association, partnership, corporation or other entity engaged
in any business which competes with the business of the Company.

 

(c)                                  Covenants Following Termination. For a
period of one year following the termination of Executive’s employment for any
reason, Executive will not:

 

(i)                                     enter into or engage in any business
which competes with the Company’s business within the Restricted Territory (as
defined in Section 7(g));

 

(ii)                                  solicit customers, business, patronage or
orders for, or sell, any products and services in competition with, or for any
business, wherever located, that competes with, the Company’s business within
the Restricted Territory;

 

(iii)                               divert, entice or otherwise take away any
customers, business, patronage or orders of the Company within the Restricted
Territory, or attempt to do so; or

 

(iv)                              promote or assist, financially or otherwise,
any person, firm, association, partnership, corporation or other entity engaged
in any business which competes with the Company’s business within the Restricted
Territory.

 

(d)                                 Indirect Competition. For the purposes of
Sections 7(b) and 7(c), but without limitation thereof, Executive will be in
violation thereof if Executive engages in any or all of the activities set forth
therein directly as an individual on Executive’s own account, or indirectly as a
partner, joint venturer, employee, agent, salesperson, consultant, officer
and/or director of any firm, association, partnership, corporation or other
entity, or as a stockholder of any corporation or the owner of the interests in
any other entity, in which Executive or Executive’s spouse, child or parent
owns, directly or indirectly, individually or in the

 

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aggregate, more than five percent (5%) of the outstanding stock or other
ownership interests.

 

(e)                                  The Company. For purposes of this
Section 7, the Company shall include any and all direct and indirect subsidiary,
parent, affiliated, or related companies of the Company.

 

(f)                                    The Company’s Business. For the purposes
of Sections 7(b), 7(c), 7(k) and 7(1), the Company’s business is defined to be
the development and sale of software products that facilitate electronic
payments, as further described in any and all manufacturing, marketing and sales
manuals and materials of the Company as the same may be altered, amended,
supplemented or otherwise changed from time to time, or of any other products or
services substantially similar to or readily suitable for any such described
products and services.

 

(g)                                 Restricted Territory. For the purposes of
Section 7(c), the Restricted Territory shall be defined as and limited to:

 

(i)                                     the geographic area(s) within a 100 mile
radius of any and all Company location(s) in, to, or for which Executive worked,
to which Executive was assigned or had any responsibility (either direct or
supervisory) at the time of termination of Executive’s employment and at any
time during the one (1) year period prior to such termination; and

 

(ii)                                  all of the specific customer accounts,
whether within or outside of the geographic area described in (i) above, with
which Executive had any contact or for which Executive had any responsibility
(either direct or supervisory) at the time of termination of Executive’s
employment and at any time during the one (1) year period prior to such
termination.

 

(h)                                 Extension. If it shall be judicially
determined that Executive has violated any of Executive’s obligations under
Section 7(c), then the period applicable to each obligation that Executive shall
have been determined to have violated shall automatically be extended by a
period of time equal in length to the period during which such
violation(s) occurred.

 

(i)                                     Non-Solicitation. For a period of two
years following the termination of Executive’s employment for any reason,
Executive will not directly or indirectly solicit or induce or attempt to
solicit or induce any employee(s), sales representative(s), agent(s) or
consultant(s) of the Company and/or of its parent, or its other subsidiary,
affiliated or related companies to terminate their employment, representation or
other association with the Company and/or its parent or its other subsidiary,
affiliated or related companies.

 

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(j)                                     Further Covenants.

 

(i)                                     Executive will keep in strict
confidence, and will not, directly or indirectly, at any time during or after
Executive’s employment with the Company, disclose, furnish, disseminate, make
available or, except in the course of performing Executive’s duties of
employment, use any trade secrets or confidential business and technical
information of the Company or its customers or vendors, including without
limitation as to when or how Executive may have acquired such information. Such
confidential information shall include, without limitation, the Company’s unique
selling, manufacturing and servicing methods and business techniques, training,
service and business manuals, promotional materials, training courses and other
training and instructional materials, vendor and product information, customer
and prospective customer lists, other customer and prospective customer
information and other business information. Executive specifically acknowledges
that all such confidential information, whether reduced to writing, maintained
on any form of electronic media, or maintained in Executive’s mind or memory and
whether compiled by the Company, and/or Executive, derives independent economic
value from not being readily known to or ascertainable by proper means by others
who can obtain economic value from its disclosure or use, that reasonable
efforts have been made by the Company to maintain the secrecy of such
information, that such information is the sole property of the Company and that
any retention and use of such information by Executive during Executive’s
employment with the Company (except in the course of performing Executive’s
duties and obligations to the Company) or after the termination of Executive’s
employment shall constitute a misappropriation of the Company’s trade secrets.

 

(ii)                                  Executive agrees that upon termination of
Executive’s employment with the Company, for any reason, Executive shall return
to the Company, in good condition, all property of the Company, including
without limitation, the originals and all copies of any materials which contain,
reflect, summarize, describe, analyze or refer or relate to any items of
information listed in Section 7G)(i) of this Agreement. In the event that such
items are not so returned, the Company will have the right to charge Executive
for all reasonable damages, costs, attorneys’ fees and other expenses incurred
in searching for, taking, removing and/or recovering such property.

 

(k)                                  Discoveries and Inventions: Work Made for
Hire.

 

(i)                                     Executive hereby assigns and agrees to
assign to the Company, its successors, assigns or nominees, all of Executive’s
rights to any discoveries, inventions and improvements, whether patentable or
not, made, conceived or suggested, either solely or jointly with others, by

 

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Executive while in the Company’s employ, whether in the course of Executive’s
employment with the use of the Company’s time, material or facilities or that is
in any way within or related to the existing or contemplated scope of the
Company’s business. Any discovery, invention or improvement relating to any
subject matter with which the Company was concerned during Executive’s
employment and made, conceived or suggested by Executive, either solely or
jointly with others, within one (1) year following termination of Executive’s
employment under this Agreement or any successor agreements shall be
irrebuttably presumed to have been so made, conceived or suggested in the course
of such employment with the use of the Company’s time, materials or facilities.
Upon request by the Company with respect to any such discoveries, inventions or
improvements, Executive will execute and deliver to the Company, at any time
during or after Executive’s employment, all appropriate documents for use in
applying for, obtaining and maintaining such domestic and foreign patents as the
Company may desire, and all proper assignments therefor, when so requested, at
the expense of the Company, but without further or additional consideration.

 

(ii)                                  Executive acknowledges that, to the extent
permitted by law, all work papers, reports, documentation, drawings,
photographs, negatives, tapes and masters therefor, prototypes and other
materials (hereinafter, “items”), including without limitation, any and all such
items generated and maintained on any form of electronic media, generated by
Executive during Executive’s employment with the Company shall be considered a
“work made for hire” and that ownership of any and all copyrights in any and all
such items shall belong to the Company. The item will recognize the Company as
the copyright owner, will contain all proper copyright notices, e.g., “(creation
date) [Company Name], All Rights Reserved,” and will be in condition to be
registered or otherwise placed in compliance with registration or other
statutory requirements throughout the world.

 

(l)                                     Communication of Contents of Agreement.
During Executive’s employment and for one (1) year thereafter, Executive will
communicate the contents of this Agreement to any person, firm, association,
partnership, corporation or other entity which Executive intends to be employed
by, associated with, or represent.

 

(m)                               Relief. Executive acknowledges and agrees that
the remedy at law available to the Company for breach of any of Executive’s
obligations under this Agreement would be inadequate. Executive therefore agrees
that, in addition to any other rights or remedies that the Company may have at
law or in equity, temporary and permanent injunctive relief may be granted in
any proceeding which may be brought to enforce any provision contained in
Sections 7(b), 7(c), 7(d), 7(h), 7(i), 7(j), 7(k) and 7(1) of this Agreement,
without the necessity of proof of actual damage.

 

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(n)                                 Reasonableness. Executive acknowledges that
Executive’s obligations under this Section 7 are reasonable in the context of
the nature of the Company’s business and the competitive injuries likely to be
sustained by the Company if Executive was to violate such obligations. Executive
further acknowledges that this Agreement is made in consideration of, and is
adequately supported by the agreement of the Company to perform its obligations
under this Agreement and by other consideration, which Executive acknowledges
constitutes good, valuable and sufficient consideration.

 

8.                                       Definitions.

 

(a)                                  “Base Period” means the two most recent
fiscal years of the Company ending prior to the date of Executive’s termination
of employment; provided, however that if Executive was not an employee of the
Company (or a Predecessor Entity or a Related Entity, as such terms are defined
in Section 8 hereof) at any time during one of such two fiscal years, the Base
Period is the one fiscal year of such two fiscal year period during which
Executive performed personal services for the Company or a Predecessor Entity or
a Related Entity.

 

(b)                                 “Bonus Amount” means the quotient of (i) the
total of the annual bonus amounts described in Section 4(b) of this Agreement
received by Executive during the fiscal year or years comprising the Base
Period, divided by (ii) the number of the Company’s fiscal years in the Base
Period.

 

(c)                                  “Cause” means the occurrence of any of the
following events prior to the termination of the Employment Period:

 

(i)                                   Executive’s conviction of a felony
involving moral turpitude;

 

(ii)                                Executive’s serious, willful gross
misconduct or Executive’s repeated failure or refusal to perform or observe
Executive’s material duties, responsibilities and obligations as an employee or
officer of the Company for reasons other than Disability, if such misconduct,
failure or refusal continues ten days following written notice thereof by the
Company to Executive identifying the same and specifying that Executive’s
employment may be terminated if the same continues;

 

(iii)                             Executive’s breach of any provision of
Section 7 of this Agreement, which is not cured within three days after written
notice thereof to Executive; or

 

(iv)                            Executive’s violation of any provision of the
Company’s Code of Business Conduct and Ethics or the Company’ Code of Ethics for
the Chief Executive Officer and Senior Financial Officers, as the same may be
amended from time to time.

 

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For purposes of this Agreement, any termination of Executive’s employment by the
Company for Cause shall be authorized by a vote of at least a majority of the
nonemployee members of the Board. No termination for Cause shall take effect
until the expiration of the correction period, if any, described above and the
determination by a majority of the non-employee members of the Board that
Executive has failed to correct the act or failure to act.

 

(d)                                 “Code” means the Internal Revenue Code of
1986, as amended.

 

(e)                                  “Disability” means, as a result of
Executive’s incapacity due to physical or mental illness, Executive shall have
been unable, with or without a reasonable accommodation, to perform his duties
with the Company on a full-time basis for six months and, within 30 days after a
written notice of termination of employment is thereafter given by the Company,
Executive shall not have returned to the full-time performance of Executive’s
duties.

 

(f)                                    “Good Reason” means a material adverse
change in Executive’s title, duties, authority or reporting relationship,
without Executive’s consent, excluding any inadvertent change that is remedied
by the Company promptly after receipt of a written notice thereof from Executive
or any other material breach of this Agreement that is not remedied by the
Company promptly after receipt of a written notice thereof from Executive;
provided, however, that during the two year period following a Change in Control
(as such phrase is defined in the Change in Control Agreement), no Good Reason
for termination shall have occurred under this Agreement unless Good Reason for
termination exists under the terms of the Change in Control Agreement.

 

(g)                                 “Predecessor Entity” is any entity which, as
a result of a merger, consolidation, purchase or acquisition of property or
stock, corporate separation, or other similar business transaction transfers
some or all of its employees to the Company or to a Related Entity or to a
Predecessor Entity of the Company.

 

(h)                                 “Related Entity” includes any entity treated
as a single employer with the Company in accordance with subsections (b), (c),
(m) and (0) of Code Section 414.

 

(i)                                     “Release Agreement” means an agreement,
substantially in a form approved by the Company, pursuant to which Executive
releases all current or future claims, known or unknown, arising on or before
the date of the release against the Company, its subsidiaries and its officers.

 

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9.                                       Certain Additional Payments by the
Company.

 

(a)                                  Anything in this Agreement to the contrary
notwithstanding, in the event that this Agreement becomes operative and it is
determined (as hereafter provided) that any payment (other than the Gross-Up
payments provided for in this Section 9 and Annex A) or distribution by the
Company or any of its affiliates to or for the benefit of Executive, whether
paid or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise pursuant to or by reason of any other agreement, policy,
plan, program or arrangement, including without limitation any stock option,
performance share, performance unit, stock appreciation right or similar right,
or the lapse or termination of any restriction on or the vesting or
exercisability of any of the foregoing (a “Payment”), would be subject to the
excise tax imposed by Section 4999 of the Code (or any successor provision
thereto) by reason of being considered “contingent on a change in ownership or
control” of the Company, within the meaning of Section 280G of the Code (or any
successor provision thereto) or to any similar tax imposed by state or local
law, or any interest or penalties with respect to such tax (such tax or taxes,
together with any such interest and penalties, being hereafter collectively
referred to as the “Excise Tax”), then Executive will be entitled to receive an
additional payment or payments (collectively, a “Gross-Up Payment”). The
Gross-Up Payment will be in an amount such that, after payment by Executive of
all taxes (including any interest or penalties imposed with respect to such
taxes), including any Excise Tax imposed upon the Gross-Up Payment, Executive
retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon
the Payment. For purposes of determining the amount of the Gross-Up Payment,
Executive will be considered to pay (x) federal income taxes at the highest rate
in effect in the year in which the Gross-Up Payment will be made and (y) state
and local income taxes at the highest rate in effect in the state or locality in
which the Gross-Up Payment would be subject to state or local tax, net of the
maximum reduction in federal income tax that could be obtained from deduction of
such state and local taxes.

 

(b)                                 The obligations set forth in
Section 9(a) will be subject to the procedural provisions described in Annex A.

 

(c)                                  Any Gross-Up Payment provided under this
Section 9 and the procedural provisions described in Annex A shall be paid to
the Executive at the time or times specified in Annex A but in no event later
than the last day of the calendar year next following the calendar year in which
the Executive remits the related taxes (together with any interest or penalties
with respect to such taxes) which has resulted in the obligation of the Company
to make such Gross-Up Payment.  Any reimbursement by the Company of any fees,
costs and expenses incurred by the Executive in connection with the
determination of tax or which are incurred with respect to any audit, contest or
litigation involving such taxes and which are required to be reimbursed in
accordance with the provisions of Annex A shall be paid to the Executive at the
time or times specified in Annex A but in no event later than the last day of
the calendar year following the calendar year in which

 

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the taxes that are the subject of the audit, contest or litigation are remitted
by the Executive or, where no taxes are remitted, the end of the calendar year
in which the audit is completed or there is a final and nonappealable settlement
or other resolution of the contest or litigation.

 

10.                                 Executive Representations. Executive
represents and warrants to the Company that (a) the execution, delivery and
performance of this Agreement by Executive does not and will not conflict with,
breach, violate or cause a default under any contract, agreement, instrument,
order, judgment or decree to which Executive is a party or by which Executive is
bound, (b) Executive is not a party to or bound by any employment agreement,
noncompete agreement or confidentiality agreement with any other person or
entity and (c) upon the execution and delivery of this Agreement by the Company,
this Agreement shall be the valid and binding obligation of Executive,
enforceable in accordance with its terms.

 

11.                                 Survival. Subject to any limits on
applicability contained therein, Section 7 hereof shall survive and continue in
full force in accordance with its terms notwithstanding any termination of the
Employment Period.

 

12.                                 Withholding of Taxes. The Company may
withhold from any amounts payable under this Agreement all federal, state, city
or other taxes as the Company is required to withhold pursuant to any applicable
law, regulation or ruling.

 

13.                                 Notices. Any notice provided for in this
Agreement shall be in writing and shall be either personally delivered, sent by
reputable overnight carrier or mailed by first class mail, return receipt
requested, to the recipient at the address below indicated:

 

Notices to Executive:

 

Philip G. Heasley

c/o ACI Worldwide, Inc.

120 Broadway, Suite 3350

New York, NY 10271

 

Notices to the Company:

 

ACI Worldwide, Inc.

6060 Coventry Drive

Elkhorn, NE 68022

Attn: General Counsel

 

or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement will be deemed to have been given when so delivered,
sent or mailed.

 

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14.                                 Severability. Whenever possible, each
provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement
is held to be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision or any other jurisdiction,
but this Agreement shall be reformed, construed and enforced in such
jurisdiction as if such invalid, illegal or unenforceable provision had never
been contained herein.

 

15.                                 Complete Agreement. This Agreement embodies
the complete agreement and understanding between the parties with respect to the
subject matter hereof and effective as of its date supersedes and preempts any
prior understandings, agreements or representations by or between the parties,
written or oral, which may have related to the subject matter hereof in any way.

 

16.                                 Counterparts. This Agreement may be executed
in separate counterparts, each of which shall be deemed to be an original and
both of which taken together shall constitute one and the same agreement.

 

17.                                 Successors and Assigns. This Agreement shall
bind and inure to the benefit of and be enforceable by Executive, the Company
and their respective heirs, executors, personal representatives, successors and
assigns, except that neither party may assign any rights or delegate any
obligations hereunder without the prior written consent of the other party.
Executive hereby consents to the assignment by the Company of all of its rights
and obligations hereunder to any successor to the Company by merger or
consolidation or purchase of all or substantially all of the Company’s assets,
provided such transferee or successor assumes the liabilities of the Company
hereunder.

 

18.                                 Choice of Law. This Agreement shall be
governed by the internal law, and not the laws of conflicts, of the State of
Nebraska.

 

19.                                 Amendment and Waiver. The provisions of this
Agreement may be amended or waived only with the prior written consent of the
Company and Executive, and no course of conduct or failure or delay in enforcing
the provisions of this Agreement shall affect the validity, binding effect or
enforceability of this Agreement. This Agreement is intended to comply with the
provisions of Section 409A of the Internal Revenue Code so that the income
inclusion provisions of said Section 409A do not apply to Executive, and the
Company and Executive accordingly agree to such amendments to the Agreement as
may be necessary or appropriate to reform the provisions of the Agreement to
comply with the applicable requirements of Section 409A of the Internal Revenue
Code and the regulations and Treasury guidance thereunder to prevent any of the
benefits provided by this Agreement from being includible in Executive’s gross
income before being paid pursuant to this Agreement or otherwise subject to
additional income taxes and interest penalties under Section 409A of the
Internal Revenue Code.

 

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20.                                 Delay of Payment Date for Nonqualified
Deferred Compensation.  Notwithstanding anything to the contrary in this
Agreement, any payments to be made to Executive upon his separation from service
(within the meaning of Section 409A of the Internal Revenue Code) which
constitutes nonqualified deferred compensation (within the meaning of
Section 409A of the Internal Revenue Code), will not be made to Executive until
the earliest to occur of:

 

(a)                                  the first day of the seventh month
following the date of the Executive’s separation from service; or

 

(b)                                 Executive’s death.

 

The foregoing provisions which delay the payment date of certain nonqualified
deferred compensation shall only apply if the Executive is a “specified
employee” (within the meaning of Section 409A of the Internal Revenue Code) as
determined by the Company under the methodology established by the Company at
the time of his separation from service.

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.

 

ACI Worldwide, Inc.

 

Philip G. Heasley

 

 

 

 

 

 

BY:

/S/ DENNIS P. BYRNES

 

/S/ PHILIP G. HEASLEY

 

 

 

 

 

 

 

 

ITS:

SENIOR VICE PRESIDENT

 

 

 

 

Annex A -Procedural provisions regarding the Gross Up Payment

 

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Annex A

 

Excise Tax Gross-Up Procedural Provisions

 

(1)                                  Subject to the provisions of Paragraph 5,
all determinations required to be made under Section 9 and Annex A, including
whether an Excise Tax is payable by Executive and the amount of such Excise Tax
and whether a Gross-Up Payment is required to be paid by the Company to
Executive and the amount of such Gross-Up Payment, if any, will be made by a
nationally recognized accounting firm (the “National Firm”) selected by
Executive in Executive’s sole discretion. Executive will direct the National
Firm to submit its determination and detailed supporting calculations to both
the Company and Executive within 30 calendar days after-the date of termination
of Executive’s employment, if applicable, and any such other time or times as
may be requested by the Company or Executive. If the National Firm determines
that any Excise Tax is payable by Executive, the Company will pay the required
Gross-Up Payment to Executive within five business days after receipt of such
determination and calculations with respect to any Payment to Executive. If the
National Firm determines that no Excise Tax is payable by Executive with respect
to any material benefit or amount (or portion thereof), it will, at the same
time as it makes such determination, furnish the Company and Executive with an
opinion that Executive has substantial authority not to report any Excise Tax on
Executive’s federal, state or local income or other tax return with respect to
such benefit or amount. As a result of the uncertainty in the application of
Section 4999 of the Code and the possibility of similar uncertainty regarding
applicable state or local tax law at the time of any determination by the
National Firm hereunder, it is possible that Gross-Up Payments that will not
have been made by the Company should have been made (an “Underpayment”),
consistent with the calculations required to be made hereunder. In the event
that the Company exhausts or fails to pursue its remedies pursuant to Paragraph
5 and Executive thereafter is required to make a payment of any Excise Tax,
Executive will direct the National Firm to determine the amount of the
Underpayment that has occurred and to submit its determination and detailed
supporting calculations to both the Company and Executive as promptly as
possible. Any such Underpayment will be promptly paid by the Company to, or for
the benefit of, Executive within five business days after receipt of such
determination and calculations.

 

(2)                                  The Company and Executive will each provide
the National Firm access to and copies of any books, records and documents in
the possession of the Company or Executive, as the case may be, reasonably
requested by the National Firm, and otherwise cooperate with the National Firm
in connection with the preparation and issuance of the determinations and
calculations contemplated by Paragraph 1. Any determination by the National Firm
as to the amount of the Gross-Up Payment will be binding upon the Company and
Executive.

 

(3)                                  The federal, state and local income or
other tax returns filed by Executive will be prepared and filed on a consistent
basis with the determination of the National Firm with

 

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respect to the Excise Tax payable by Executive. Executive will report and make
proper payment of the amount of any Excise Tax, and at the request of the
Company, provide to the Company true and correct copies (with any amendments) of
Executive’s federal income tax return as filed with the Internal Revenue Service
and corresponding state and local tax returns, if relevant, as filed with the
applicable taxing authority, and such other documents reasonably requested by
the Company, evidencing such payment. If prior to the filing of Executive’s
federal income tax return, or corresponding state or local tax return, if
relevant, the National Firm determines that the amount of the Gross-Up Payment
should be reduced, Executive will within five business days pay to the Company
the amount of such reduction.

 

(4)                                  The fees and expenses of the National Firm
for its services in connection with the determinations and calculations
contemplated by Paragraph 1 will be borne by the Company. If such fees and
expenses are initially paid by Executive, the Company will reimburse Executive
the full amount of such fees and expenses within five business days after
receipt from Executive of a statement therefor and reasonable evidence of
Executive’s payment thereof.

 

(5)                                  Executive will notify the Company in
writing of any claim by the Internal Revenue Service or any other taxing
authority that, if successful, would require the payment by the Company of a
Gross-Up Payment. Such notification will be given as promptly as practicable but
no later than 10 business days after Executive actually receives notice of such
claim and Executive will further apprise the Company of the nature of such claim
and the date on which such claim is requested to be paid (in each case, to the
extent known by Executive). Executive will not pay such claim prior to the
expiration of the 30-calendar-day period following the date on which Executive
gives such notice to the Company or, if earlier, the date that any payment of
amount with respect to such claim is due. If the Company notifies Executive in
writing prior to the expiration of such period that it desires to contest such
claim, Executive will:

 

(a)          provide the Company with any written records or documents in
Executive’s possession relating to such claim reasonably requested by the
Company;

 

(b)         take such action in connection with contesting such claim as the
Company reasonably requests in writing from time to time, including without
limitation accepting legal representation with respect to such claim by an
attorney competent in respect of the subject matter and reasonably selected by
the Company;

 

(c)          cooperate with the Company in good faith in order effectively to
contest such claim; and

 

(d)         permit the Company to participate in any proceedings relating to
such claim;

 

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provided, however, that the Company will bear and pay directly all costs and
expenses (including interest and penalties) incurred in connection with such
contest and will indemnify and hold harmless Executive, on an after-tax basis,
for and against any Excise Tax or income or other tax, including interest and
penalties with respect thereto, imposed as a result of such representation and
payment of costs and expenses. Without limiting the foregoing provisions of this
Paragraph 5, the Company will control all proceedings taken in connection with
the contest of any claim contemplated by this Paragraph 5 and, at its sole
option, may pursue or forego any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in respect of such claim
(provided, however, that Executive may participate therein at Executive’s own
cost and expense) and may, at its option, either direct Executive to pay the tax
claimed and sue for a refund or contest the claim in any permissible manner, and
Executive agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company determines; provided, however, that if the
Company directs Executive to pay the tax claimed and sue for a refund, the
Company will advance the amount of such payment to Executive on an interest-free
basis and will indemnify and hold Executive harmless, on an after-tax basis,
from any Excise Tax or income or other tax, including interest or penalties with
respect thereto, imposed with respect to such advance; and provided further,
however, that any extension of the statute of limitations relating to payment of
taxes for the taxable year of Executive with respect to which the contested
amount is claimed to be due is limited solely to such contested amount.
Furthermore, the Company’s control of any such contested claim will be limited
to issues with respect to which a Gross-Up Payment would be payable hereunder
and Executive will be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority.

 

(6)                                  If, after the receipt by Executive of an
amount advanced by the Company pursuant to Paragraph 5, Executive receives any
refund with respect to such claim, Executive will (subject to the Company’s
complying with the requirements of Paragraph 5) promptly pay to the Company the
amount of such refund (together with any interest paid or credited thereon after
any taxes applicable thereto). If, after the receipt by Executive of an amount
advanced by the Company pursuant to Paragraph 5, a determination is made that
Executive is not entitled to any refund with respect to such claim and the
Company does not notify Executive in writing of its intent to contest such
denial or refund prior to the expiration of 30 calendar days after such
determination, then such advance will be forgiven and will not be required to be
repaid and the amount of any such advance will offset, to the extent thereof,
the amount of Gross-Up Payment required to be paid by the Company to Executive
pursuant to Section 9 and this Annex A.

 

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