Exhibit 10.56

 

RESTRICTED STOCK AWARD AGREEMENT

 

This Restricted Stock Award Agreement (this “Agreement”) is entered into as of
August 30, 2002 (the “Award Date”), by and between CSG SYSTEMS INTERNATIONAL,
INC., a Delaware corporation (the “Company”), and NEAL C. HANSEN (“Grantee”).

 

* * *

 

WHEREAS, the Company has adopted a 1996 Stock Incentive Plan (the “Plan”); and

 

WHEREAS, the Plan is administered by the Compensation Committee (the
“Committee”) of the Board of Directors of the Company; and

 

WHEREAS, the Committee has authority under the Plan to grant Restricted Stock
Awards covering shares of the Common Stock of the Company (the “Common Stock”);
and

 

WHEREAS, pursuant to the Plan, on the Award Date the Committee granted a
Restricted Stock Award of 110,000 shares of the Common Stock (the “Award”) to
Grantee subject to and in exchange for Grantee’s surrender and cancellation of
certain stock options previously granted to Grantee by the Company covering an
aggregate of 1,390,000 shares of the Common Stock (the “Cancelled Options”) and
directed the Company to execute this Agreement for the purpose of setting forth
the terms and conditions of the Award; and

 

WHEREAS, Grantee accepted the Award and agreed to such exchange; and

 

WHEREAS, the Committee has expressed its intent to grant an additional
Restricted Stock Award of 270,833 shares of the Common Stock to Grantee in 2003
pursuant to the Plan in further exchange for the Cancelled Options;

 

NOW, THEREFORE, in consideration of the premises and of the covenants and
conditions contained herein, the Company and Grantee agree as follows:

 

  1. Award of Restricted Shares.

 

(a) The Company hereby confirms the grant of the Award to Grantee as of the
Award Date in exchange for the surrender and cancellation of the Cancelled
Options, and Grantee hereby confirms Grantee’s acceptance of the Award from the
Company in exchange for the surrender and cancellation of the Cancelled Options.
The Award covers 110,000 shares of the Common Stock (the “Shares”) and is
subject to all of the terms and conditions of this Agreement.

 

(b) Promptly after the execution of this Agreement, the Company shall cause one
or more certificates evidencing the Shares to be issued in the name of Grantee
and deposited with the Escrow Agent pursuant to Section 5.

 

--------------------------------------------------------------------------------

  2. Vesting of the Shares.

 

(a) The Shares automatically shall vest in Grantee on the first anniversary of
the Award Date (such anniversary being referred to herein as the “Vesting
Date”); provided, however, that no Shares shall vest in Grantee on the Vesting
Date unless Grantee has been continuously employed by the Company from the Award
Date until the Vesting Date. For purposes of this Agreement, in the context of
employment of Grantee, the term “Company” shall include a Subsidiary (as defined
in the Plan) if Grantee is then employed by a Subsidiary; provided, however,
that neither a transfer of Grantee from the employ of the Company to the employ
of a Subsidiary nor the transfer of Grantee from the employ of a Subsidiary to
the employ of the Company or another Subsidiary shall be deemed to be a
Termination of Employment of Grantee.

 

(b) Notwithstanding the provisions of Section 2(a), all Shares which have not
previously vested in Grantee pursuant to Section 2(a) automatically shall vest
in Grantee upon the occurrence of any of the following events while Grantee is
employed by the Company:

 

  (1) Grantee’s death;

 

  (2) A Termination of Employment of Grantee by reason of a mental or physical
condition that, in the opinion of the Committee, renders Grantee unable or
incompetent to carry out the job responsibilities which Grantee then holds as an
employee of the Company or the tasks to which Grantee is then assigned as an
employee of the Company and that is expected to be permanent or to continue for
an indefinite duration exceeding one year;

 

  (3) A Termination of Employment of Grantee after Grantee has reached the age
of sixty-five (65) years; or

 

  (4) The occurrence of a Change of Control.

 

(c) Notwithstanding the provisions of Section 2(a), fifty percent (50%) of any
Shares which have not previously vested in Grantee pursuant to Section 2(a)
automatically shall vest in Grantee upon an involuntary Termination of
Employment of Grantee without Cause.

 

(d) For purposes of this Agreement, a “Termination of Employment” of Grantee
means the effective time when the employer-employee relationship between Grantee
and the Company terminates for any reason whatsoever.

 

2

--------------------------------------------------------------------------------

(e) For purposes of this Agreement, a “Change of Control” shall be deemed to
have occurred upon the happening of any of the following events:

 

  (1) The Company is merged or consolidated into another corporation or entity,
and immediately after such merger or consolidation becomes effective the holders
of a majority of the outstanding shares of voting capital stock of the Company
immediately prior to the effectiveness of such merger or consolidation do not
own (directly or indirectly) a majority of the outstanding shares of voting
capital stock or other equity interests having voting rights of the surviving or
resulting corporation or other entity in such merger or consolidation;

 

  (2) any person, entity, or group of persons within the meaning of Sections
13(d) or 14(d) of the Securities Exchange Act of 1934 (the “1934 Act”) and the
rules promulgated thereunder becomes the beneficial owner (within the meaning of
Rule 13d-3 under the 1934 Act) of thirty percent (30%) or more of the
outstanding voting capital stock of the Company;

 

  (3) the Common Stock of the Company ceases to be publicly traded because of an
issuer tender offer or other “going private” transaction (other than a
transaction sponsored by the then current management of the Company);

 

  (4) the Company dissolves or sells or otherwise disposes of all or
substantially all of its property and assets (other than to an entity or group
of entities which is then under common majority ownership (directly or
indirectly) with the Company); or

 

  (5)

In one or more substantially concurrent transactions or in a series of related
transactions, the Company directly or indirectly disposes of a portion or
portions of its business operations (collectively, the “Sold Business”) other
than by ceasing to conduct the Sold Business without its being acquired by a
third party (regardless of the entity or entities through which the Company
conducted the Sold Business and regardless of whether such disposition is
accomplished through a sale of assets, the transfer of ownership of an entity or
entities, a merger, or in some other manner) and either (i) the fair market
value of the consideration received or to be received

 

3

--------------------------------------------------------------------------------

 

by the Company for the Sold Business is equal to at least thirty percent (30%)
of the market value of the outstanding Common Stock of the Company determined by
multiplying the average of the closing prices for the Common Stock of the
Company on the thirty (30) trading days immediately preceding the date of the
first public announcement of the proposed disposition of the Sold Business by
the average of the numbers of outstanding shares of Common Stock on such thirty
(30) trading days or (ii) the revenues of the Sold Business during the most
recent four (4) calendar quarters ended prior to the first public announcement
of the proposed disposition of the Sold Business represented thirty percent
(30%) or more of the total consolidated revenues of the Company during such four
(4) calendar quarters.

 

  (6) during any period of two consecutive years or less, individuals who at the
beginning of such period constituted the Board of Directors of the Company
cease, for any reason, to constitute at least a majority of the Board of
Directors of the Company, unless the election or nomination for election of each
new director of the Company who took office during such period was approved by a
vote of at least seventy-five percent (75%) of the directors of the Company
still in office at the time of such election or nomination for election who were
directors of the Company at the beginning of such period.

 

(f) For purposes of this Agreement, “Cause” shall mean only (i) Grantee’s
confession or conviction of theft, fraud, embezzlement, or other crime involving
dishonesty, (ii) Grantee’s excessive absenteeism (other than by reason of
physical injury, disease, or mental illness) without a reasonable justification,
(iii) material violation by Grantee of the provisions of any employment or
non-disclosure agreement with the Company or any Subsidiary, (iv) habitual and
material negligence by Grantee in the performance of Grantee’s duties and
responsibilities as an employee of the Company or any Subsidiary and failure on
the part of Grantee to cure such negligence within twenty (20) days after
Grantee’s receipt of a written notice from the Board of Directors or the Chief
Executive Officer of the Company setting forth in reasonable detail the
particulars of such negligence, (v) material failure by Grantee to comply with a
lawful directive of the Board of Directors or the Chief Executive Officer of the
Company and failure to cure such non-compliance within twenty (20) days after
Grantee’s receipt of a written notice from the Board of Directors or the Chief
Executive Officer of the Company setting forth in reasonable detail the
particulars of such non-compliance, (vi) a material breach by Grantee of any of

 

4

--------------------------------------------------------------------------------

Grantee’s fiduciary duties to the Company and, if such breach is curable,
Grantee’s failure to cure such breach within ten (10) days after Grantee’s
receipt of a written notice from the Board of Directors or the Chief Executive
Officer of the Company setting forth in reasonable detail the particulars of
such breach, or (vii) willful misconduct or fraud on the part of Grantee in the
performance of Grantee’s duties as an employee of the Company or any Subsidiary.
In no event shall the results of operations of the Company or any Subsidiary or
any business judgment made in good faith by Grantee constitute an independent
basis for a Termination of Employment of Grantee for Cause.

 

  3. Cancellation of Unvested Shares.

 

Upon a Termination of Employment of Grantee, all of the rights and interests of
Grantee in any of the Shares which have not vested in Grantee prior to or upon
such Termination of Employment of Grantee, as provided in Section 2,
automatically shall completely and forever terminate; and the Escrow Agent shall
deliver to the Company for cancellation the certificates for such Shares.

 

  4. Employment.

 

Nothing contained in this Agreement (i) obligates the Company, or a Subsidiary,
to continue to employ Grantee in any capacity whatsoever or (ii) prohibits or
restricts the Company or a Subsidiary from terminating the employment of Grantee
at any time or for any reason whatsoever, subject to any rights which Grantee
may have under any other agreement with the Company or a Subsidiary. In the
event of any Termination of Employment of Grantee, Grantee shall have only the
rights set forth in this Agreement with respect to the Shares.

 

  5. Escrow of Shares.

 

To ensure the availability for delivery to the Company for cancellation of the
certificates for any unvested Shares in the event of a Termination of Employment
of Grantee, Grantee shall deliver to and deposit with the escrow agent (the
“Escrow Agent”) named in joint escrow instructions in the form of Annex A hereto
(the “Joint Escrow Instructions”) a stock power duly endorsed in blank for each
certificate for the Shares, and the Company shall cause the certificates for the
Shares to be delivered to and deposited with the Escrow Agent as provided in
Section 1(b). Such stock powers and certificates are to be held and delivered by
the Escrow Agent pursuant to the terms of the Joint Escrow Instructions, which
shall be executed by Grantee and the Company and delivered to the Escrow Agent
concurrently with the execution of this Agreement. The parties acknowledge that
the Joint Escrow Instructions have been executed solely for administrative
convenience and that all questions as to Share ownership and whether or not
Shares have vested shall be determined solely pursuant to this Agreement
notwithstanding any action by the Escrow Agent. Grantee at all times shall have
the right to vote with respect to all of the Shares, whether or not they have
vested in Grantee.

 

  6. Change in Capitalization.

 

If at any time that any of the Shares have not vested in Grantee there is any
non-cash dividend of securities or other property or rights to acquire
securities or other property, any

 

5

--------------------------------------------------------------------------------

liquidating dividend of cash and/or property, or any stock dividend or stock
split or other change in the character or amount of any of the outstanding
securities of the Company, then in such event any and all new, substituted, or
additional securities or other property to which Grantee may become entitled by
reason of Grantee’s ownership of such unvested Shares immediately shall become
subject to this Agreement, shall be delivered to the Escrow Agent to be held
pursuant to the Joint Escrow Instructions, and shall have the same status with
respect to vesting as the Shares upon which such dividend was paid or with
respect to which such new, substituted, or additional securities or other
property was distributed. Any cash or cash equivalents received pursuant to the
first sentence of this Section 6 shall be invested in conservative short-term
interest-bearing securities, and interest earned thereon also shall have the
same status as to vesting. Cash dividends (other than liquidating dividends)
paid on such unvested Shares shall be paid to Grantee and shall not be subject
to vesting or to the Joint Escrow Instructions.

 

  7. Grantee Representations.

 

Grantee hereby represents and warrants to the Company as follows:

 

(a) Grantee has full power and authority to execute, deliver, and perform
Grantee’s obligations under this Agreement; and this Agreement is a valid and
binding obligation of Grantee, enforceable in accordance with its terms, except
that the enforcement thereof may be subject to bankruptcy, insolvency,
reorganization, moratorium, or other similar laws now or hereafter in effect
relating to creditors’ rights generally and to general principles of equity
(regardless of whether such enforcement is considered in a proceeding in equity
or at law).

 

(b) Grantee (i) received and reviewed copies of this Agreement and the
accompanying Joint Escrow Instructions prior to their execution, (ii) received
all such business, financial, tax, and other information as Grantee deemed
necessary and appropriate to enable Grantee to evaluate the financial risk
inherent in accepting the award of the Shares in exchange for Grantee’s
surrender and cancellation of the Cancelled Options, and (iii) received
satisfactory and complete information concerning the business and financial
condition of the Company in response to all of Grantee’s inquiries in respect
thereof. Grantee acknowledges the public availability of the Company’s periodic
and other filings made with the United States Securities and Exchange Commission
at www.sec.gov.

 

  8. Company Representations and Warranties.

 

The Company hereby represents and warrants to Grantee as follows:

 

(a) The Company is a corporation duly organized, validly existing, and in good
standing under the laws of Delaware and has all requisite corporate power and
authority to enter into this Agreement, to issue the Shares to Grantee, and to
perform its obligations hereunder.

 

(b) The execution and delivery of this Agreement by the Company have been duly
and validly authorized, and all necessary corporate action has been taken to
make this Agreement a valid and binding obligation of the Company, enforceable
in accordance with its terms, except that the enforcement thereof may be subject
to bankruptcy, insolvency,

 

6

--------------------------------------------------------------------------------

reorganization, moratorium, or other similar laws now or hereafter in effect
relating to creditors’ rights generally and to general principles of equity
(regardless of whether such enforcement is considered in a proceeding in equity
or at law).

 

(c) When issued to Grantee as provided for herein, the Shares will be duly and
validly issued, fully paid, and non-assessable.

 

  9. Gross-Up Payments.

 

If the vesting of any Shares is accelerated pursuant to Section 2(b)(4) and such
accelerated vesting causes Grantee to become liable for any excise tax on
“excess parachute payments” (within the meaning of Section 280G of the Internal
Revenue Code of 1986, as amended, and any regulations thereunder) and any
interest or penalties thereon (such excise tax, interest, and penalties,
collectively, the “Tax Penalties”), then the Company promptly shall make a cash
payment (the “Cash Payment”) to Grantee in an amount equal to the Tax Penalties.
The Company also promptly shall make an additional cash payment to Grantee in an
amount rounded to the nearest $100.00 which is equal to any additional income,
excise, and other taxes (using the individual tax rates applicable to Grantee
for the year for which such Tax Penalties are owed) for which Grantee will be
liable as a result of the Grantee’s receipt of the Cash Payment (the additional
cash payment provided for in this sentence being referred to as a “Gross-Up
Payment”). In addition, Grantee shall be entitled to promptly receive from the
Company a further Gross-Up Payment in respect of each prior Gross-Up Payment
until the amount of the last Gross-Up Payment is less than $100.00.

 

  10. Restriction on Sale or Transfer.

 

None of the Shares that have not vested in Grantee pursuant to this Agreement
(or any beneficial interest therein) may be sold, transferred, assigned,
pledged, or encumbered in any way (including transfer by operation of law); and
any attempt to make any such sale, transfer, assignment, pledge, or encumbrance
shall be null and void and of no effect.

 

  11. Legends.

 

The certificates representing the Shares will, upon their issuance to Grantee,
bear a legend in substantially the following form:

 

“This certificate and the shares of stock represented hereby are subject to the
terms and conditions (including forfeiture provisions and restrictions against
transfer) contained in the CSG Systems International, Inc. 1996 Stock Incentive
Plan and a Restricted Stock Award Agreement entered into between the registered
owner and CSG Systems International, Inc. Release from such terms and conditions
may be obtained only in accordance with the provisions of such Plan and
Agreement, a copy of each of which is on file in the office of the Secretary of
CSG Systems International, Inc.”

 

Grantee shall be entitled to have such legend removed from the certificates
representing Shares which have vested in Grantee.

 

7

--------------------------------------------------------------------------------

  12. Enforcement.

 

The parties acknowledge that the remedy at law for any breach or violation or
attempted breach or violation of the provisions of Section 10 will be inadequate
and that, in the event of any such breach or violation or attempted breach or
violation, the Company shall be entitled to injunctive relief in addition to any
other remedy, at law or in equity, to which the Company may be entitled.

 

  13. Violation of Transfer Provisions.

 

The Company shall not be required to transfer on its books any Shares which have
been sold, transferred, assigned, pledged, or encumbered in violation of any of
the provisions of this Agreement or to treat as the owner of such Shares or to
accord the right to vote or pay dividends to any purported transferee or pledgee
to whom such Shares shall have been so sold, transferred, assigned, pledged, or
encumbered.

 

  14. Section 83(b) Election.

 

Grantee shall have the right to make an election pursuant to Treasury Regulation
§ 1.83-2 with respect to the Shares and promptly will furnish the Company with a
copy of the form of election Grantee has filed and evidence that such an
election has been filed in a timely manner.

 

  15. Dispute Resolution.

 

Subject to the provisions of Section 12, any claim or dispute by Grantee or the
Company arising from or in connection with this Agreement, whether based on
contract, tort, common law, equity, statute, regulation, order, or otherwise (a
“Dispute”), shall be resolved as follows:

 

  (a) Such Dispute shall be submitted to mandatory and binding arbitration at
the election of either Grantee or the Company (the “Disputing Party”). Except as
otherwise provided in this Section 15, the arbitration shall be pursuant to the
Commercial Arbitration Rules of the American Arbitration Association (the
“AAA”).

 

  (b)

To initiate the arbitration, the Disputing Party shall notify the other party in
writing within 30 days after the occurrence of the event or events which give
rise to the Dispute (the “Arbitration Demand”), which notice shall (i) describe
in reasonable detail the nature of the Dispute, (ii) state the amount of any
claim, and (iii) specify the requested relief. Within fifteen (15) days after
the other party’s receipt of the Arbitration Demand, such other party shall
serve on the Disputing Party a written statement (i) answering the claims set
forth in the Arbitration Demand and including any affirmative

 

8

--------------------------------------------------------------------------------

 

defenses of such party and (ii) asserting any counterclaim, which statement
shall (A) describe in reasonable detail the nature of the Dispute relating to
the counterclaim, (B) state the amount of the counterclaim, and (C) specify the
requested relief. The parties shall attempt in good faith to agree upon a single
arbitrator (the “Sole Arbitrator”). If the parties are unable to so agree, then
each party shall appoint an arbitrator who (A) has been licensed to practice law
in the U.S. for at least ten years, (B) has no past or present relationship with
either Grantee or the Company, and (C) is experienced in representing clients in
connection with corporate law matters (the “Basic Qualifications”); and
promptly, but in any event within five (5) days after such appointments, the two
arbitrators so appointed shall select a third neutral arbitrator from a list
provided by the AAA of potential arbitrators who satisfy the Basic
Qualifications and who have no past or present relationship with the parties’
counsel, except as otherwise disclosed in writing to and approved by the
parties. If a Sole Arbitrator is not appointed, then the arbitration will be
heard by a panel of the three arbitrators so appointed (the “Arbitration
Panel”), with the third arbitrator so appointed serving as the chairperson of
the Arbitration Panel. Decisions of the Sole Arbitrator or of a majority of the
members of the Arbitration Panel, as the case may be, shall be determinative.

 

  (c) The arbitration hearing shall be held in Denver, Colorado, or such other
city in which the principal executive office of the Company was located
immediately prior to a Change of Control (if a Change of Control has occurred).
The Sole Arbitrator or the Arbitration Panel, as the case may be, is
specifically authorized to render partial or full summary judgment as provided
for in the Federal Rules of Civil Procedure. The Arbitration Panel will have no
power or authority, under the Commercial Arbitration Rules of the AAA or
otherwise, to relieve the parties from their agreement hereunder to arbitrate or
otherwise to amend or disregard any provision of this agreement, including,
without limitation, the provisions of this Section 15. At either party’s
request, the Sole Arbitrator or the Arbitration Panel, as the case may be, shall
have the right to grant injunctive relief.

 

  (d) Within ten (10) days after the closing of the arbitration hearing, the
Sole Arbitrator or the Arbitration Panel, as the case may be, shall prepare and
distribute to the parties a writing setting forth the Sole Arbitrator’s or the
Arbitration Panel’s finding of facts and conclusions of law relating to the
Dispute, including the reason for the giving or denial of any award. The
findings and conclusions and the award, if any, shall be deemed to be
confidential information.

 

  (e)

The Sole Arbitrator or the Arbitration Panel, as the case may be, is instructed
to schedule promptly all discovery and other procedural steps and otherwise to
assume case management initiatives and controls to effect an efficient,
economical, and expeditious resolution of the Dispute. The Sole Arbitrator

 

9

--------------------------------------------------------------------------------

 

or the Arbitration Panel, as the case may be, is authorized to issue monetary
sanctions against either party if, upon a showing of good cause, such party is
unreasonably delaying the proceeding.

 

  (g) Any award rendered by the Sole Arbitrator or the Arbitration Panel, as the
case may be, will be final, conclusive, and binding upon the parties and shall
be the exclusive remedy for all claims, counterclaims, or issues presented to
the Sole Arbitrator or the Arbitration Panel, as the case may be; and any
judgment on such award may be entered and enforced in any court of competent
jurisdiction.

 

  (h) Each party will bear an equal share of all fees, costs, and expenses of
the arbitrators. Notwithstanding any law to the contrary, (i) if the Company is
the prevailing party in the arbitration, then each party will bear all of the
fees, costs, and expenses of such party’s own attorneys, experts, and witnesses
and (ii) if the Grantee is the prevailing party in the arbitration, then the
Company shall pay all of the reasonable fees, costs, and expenses of both the
Company’s and the Grantee’s attorneys, experts, and witnesses. However, in
connection with any judicial proceeding to compel arbitration pursuant to this
agreement or to enforce any award rendered by the Sole Arbitrator or the
Arbitration Panel, as the case may be, the prevailing party in such a proceeding
will be entitled to recover reasonable attorneys’ fees and expenses incurred in
connection with such proceedings, in addition to any other relief to which such
party may be entitled.

 

  (i) Nothing contained in the preceding provisions of this Section 15 shall be
construed to prevent either party from seeking from a court a temporary
restraining order or other injunctive relief pending final resolution of a
Dispute pursuant to this Section 15.

 

  16. Withholding.

 

Upon Grantee’s making of the election referred to in Section 14 with respect to
any of the Shares or upon the vesting in Grantee of any of the Shares as to
which the election referred to in Section 14 was not made, Grantee shall pay to
or provide for the payment to or withholding by the Company of all amounts which
the Company is required to withhold for federal, state, or local tax purposes
from Grantee’s compensation by reason of or in connection with such election or
vesting. Notwithstanding any provision of the Joint Escrow Instructions to the
contrary, neither the Company nor the Escrow Agent shall be obligated to deliver
any certificate for any of the Shares until Grantee’s obligations under this
Section 16 have been satisfied.

 

  17. Application of Plan.

 

The relevant provisions of the Plan relating to Restricted Stock Awards and the
authority of the Committee under the Plan shall be applicable to this Agreement
to the extent that this Agreement does not otherwise expressly address the
subject matter of such provisions.

 

10

--------------------------------------------------------------------------------

  18. General Provisions.

 

(a) No Assignments. Grantee may not sell, transfer, assign, pledge, or encumber
any of Grantee’s rights or obligations under this Agreement without the prior
written consent of the Company; and any such attempted sale, transfer,
assignment, pledge, or encumbrance shall be void.

 

(b) Notices. All notices, requests, consents, and other communications required
or permitted hereunder shall be in writing and shall be deemed to have been duly
given and made upon personal delivery to the person for whom it is intended
(including by a reputable overnight delivery service which shall be deemed to
have effected personal delivery) or upon deposit, postage prepaid, registered or
certified mail, return receipt requested, in the United States mail as follows:

 

(i) if to Grantee, addressed to Grantee at Grantee’s address shown on the stock
register maintained by or on behalf of the Company or at such other address as
Grantee may specify by written notice to the Company, or

 

(ii) if to the Company, addressed to the Chief Executive Officer of the Company
at the principal office of the Company or at such other address as the Company
may specify by written notice to the Grantee.

 

Each such notice, request, consent, and other communication shall be deemed to
have been given upon receipt thereof as set forth above or, if sooner, three (3)
business days after deposit as described above. The addresses for purposes of
this Section 18(b) may be changed by giving written notice of such change in the
manner provided herein for giving notice. Unless and until such written notice
is received, the addresses provided herein shall be deemed to continue in effect
for all purposes hereunder.

 

(c) Choice of Law. This Agreement shall be governed by and construed in
accordance with the internal laws, and not the laws of conflicts of laws, of the
State of Delaware.

 

(d) Severability. The parties hereto agree that the terms and provisions in this
Agreement are reasonable and shall be binding and enforceable in accordance with
the terms hereof and, in any event, that the terms and provisions of this
Agreement shall be enforced to the fullest extent permissible under law. In the
event that any term or provision of this Agreement shall for any reason be
adjudged to be unenforceable or invalid, then such unenforceable or invalid term
or provision shall not affect the enforceability or validity of the remaining
terms and provisions of this Agreement, and the parties hereto hereby agree to
replace such unenforceable or invalid term or provision with an enforceable and
valid arrangement which in its economic effect shall be as close as possible to
the unenforceable or invalid term or provision.

 

(e) Parties in Interest. All of the terms and provisions of this Agreement shall
be binding upon and inure to the benefit of and be enforceable by the respective
permitted heirs, personal representatives, successors, and assigns of the
parties hereto; provided, that the provisions of this Section 18(e) shall not
authorize any assignment which is otherwise prohibited by this Agreement.

 

11

--------------------------------------------------------------------------------

(f) Modification, Amendment, and Waiver. No modification, amendment, or waiver
of any provision of this Agreement shall be effective against the Company or
Grantee unless approved in writing and, in the case of the Company, authorized
by the Committee and unless it specifically states that it is intended to
modify, amend, or waive a specific provision of this Agreement. The failure of a
party at any time to enforce any of the provisions of this Agreement shall in no
way be construed as a waiver of such provisions and shall not affect the right
of such party thereafter to enforce each and every provision of this Agreement
in accordance with its terms.

 

(g) Integration. This Agreement constitutes the entire agreement of the parties
with respect to the subject matter hereof and supersedes all prior negotiations,
understandings, and agreements, written or oral.

 

(h) Headings. The headings of the sections and paragraphs of this Agreement have
been inserted for convenience of reference only and do not constitute a part of
this Agreement.

 

(i) Counterparts. This Agreement may be executed in counterpart with the same
effect as if all parties had signed the same document. All such counterparts
shall be deemed to be an original, shall be construed together, and shall
constitute one and the same instrument.

 

(j) Further Assurances. The parties agree to use their best efforts and act in
good faith in carrying out their obligations under this Agreement. The parties
also agree to execute such further instruments and to take such further actions
as reasonably may be necessary or desirable to carry out the purposes and intent
of this Agreement.

 

In Witness Whereof, the parties hereto have executed this Restricted Stock Award
Agreement as of the date first above written.

 

COMPANY:

 

CSG SYSTEMS INTERNATIONAL, INC.,
a Delaware corporation

     

GRANTEE:

 

/s/ Neal C. Hansen

--------------------------------------------------------------------------------

Neal C. Hansen

By:  

/s/ John P. Pogge

--------------------------------------------------------------------------------

            John P. Pogge, President        

 

12

--------------------------------------------------------------------------------

 

ANNEX A

 

JOINT ESCROW INSTRUCTIONS

 

August 30, 2002

 

Joseph T. Ruble, Corporate Secretary

CSG Systems International, Inc.

7887 East Belleview Avenue, Suite 1000

Englewood, Colorado 80111

 

Dear Sir:

 

As the Escrow Agent for CSG Systems International, Inc. (the “Company”), a
Delaware corporation, and the undersigned holder of Common Stock of the Company
(the “Grantee”), you hereby are authorized and directed to hold the documents
delivered to you pursuant to the terms of that certain Restricted Stock Award
Agreement (the “Agreement”) between the undersigned dated the date hereof, to
which these Joint Escrow Instructions relate, in accordance with the following
instructions:

 

1. A copy of the Agreement has been delivered to you concurrently with the
execution of these Joint Escrow Instructions. By signing these Joint Escrow
Instructions, you acknowledge receipt of such copy.

 

2. The Company promptly shall notify you (with a copy to Grantee) upon (i) the
vesting in Grantee of any of the Shares covered by the Agreement and (ii)
Grantee’s satisfaction of the withholding requirements set forth in Section 16
of the Agreement. Five (5) business days after your receipt of such notice, you
shall deliver to Grantee the certificate or certificates for the Shares that
have so vested and as to which such withholding requirements have been satisfied
and any other items pertaining to such Shares then held by you pursuant to
Section 6 of the Agreement.

 

3. The Company promptly shall notify you (with a copy to Grantee) of a
Termination of Employment (as defined in the Agreement) of Grantee which results
in the termination of the rights and interests of Grantee in any of the Shares
covered by the Agreement in accordance with Section 3 of the Agreement. Five (5)
business days after your receipt of such notice, you shall deliver to the
Company for cancellation the certificates for such Shares and any other items
pertaining to such Shares then held by you pursuant to Section 6 of the
Agreement.

 

4. The escrow created by these Joint Escrow Instructions shall terminate upon
the delivery by you, in accordance with the Agreement and these Joint Escrow
Instructions, of all of the certificates for the Shares covered by the Agreement
and all other items pertaining to the Shares received by you pursuant to Section
6 of the Agreement.

 

5. Your duties hereunder may be altered, amended, modified, or revoked only by a
writing signed by the parties hereto.

 

--------------------------------------------------------------------------------

6. You shall be obligated only for the performance of such duties as are
specifically set forth herein and may rely and shall be protected in acting or
refraining from acting in reliance upon any instrument reasonably believed by
you to be genuine and to have been signed or presented by the proper party or
parties. You shall not be personally liable for any act you may do or omit to do
hereunder as Escrow Agent while acting in good faith and in the exercise of your
own good judgment and not in contravention of the express terms hereof, and any
act done or omitted by you pursuant to the advice of your own independent
attorneys shall be conclusive evidence of such good faith.

 

7. You shall not be liable in any respect on account of the identity, authority,
or rights of the parties executing or delivering or purporting to execute or
deliver the Agreement or any documents or papers deposited or called for
hereunder or thereunder.

 

8. You shall be entitled to employ such independent legal counsel and other
experts as you may deem necessary properly to advise you in connection with your
obligations hereunder, may rely upon the advice of such counsel, and may pay
such counsel reasonable compensation for such advice.

 

9. Your responsibilities as Escrow Agent hereunder shall terminate on the
thirtieth day following receipt by the parties of your written notice of
resignation or upon the joint selection of a successor Escrow Agent by the
Company and Grantee and your receipt of written notification of such a
selection. In the event of your resignation, you and the Company shall jointly
appoint a successor Escrow Agent.

 

10. If you reasonably require other or further instruments in connection with
these Joint Escrow Instructions or your obligations in respect hereto, the
necessary parties hereto shall furnish or join in furnishing such instruments.

 

11. If a dispute arises with respect to the delivery and/or ownership or right
of possession of the securities or any other property held by you hereunder,
then you are authorized and directed to retain in your possession without
liability to anyone all or any part of such securities or other property until
such dispute shall have been settled either by mutual written agreement of the
parties concerned or by a final order of a court of competent jurisdiction, but
you shall be under no duty whatsoever to institute or defend any such
proceedings. All questions as to whether any securities held by you have vested
will be determined under the Agreement by the Company and Grantee or by a final
order of a court of competent jurisdiction, and you have no authority to make
any such decisions. No transfer of securities or other property by you shall be
effective unless made pursuant to the terms of the Agreement, and any transfer
in contravention thereof shall be null and void.

 

2

--------------------------------------------------------------------------------

12. Any notice required or permitted hereunder shall be given in writing and
shall be deemed effectively given upon personal delivery (including by a
reputable overnight delivery service which shall be deemed to have effected
personal delivery) or upon deposit in the United States mail, by registered or
certified mail with postage and fees prepaid, return receipt requested,
addressed to each of the other parties thereunto entitled at the following
addresses, or at such other addresses as a party may designate by ten (10) days’
advance written notice to each of the other parties hereto:

 

Company:

  CSG Systems International, Inc.
7887 East Belleview Avenue, Suite 1000
Englewood, Colorado 80111
Attn: Chief Executive Officer

Grantee:

  Notice to Grantee shall be sent to the address set forth below Grantee’s
signature on these Joint Escrow Instructions.

Escrow Agent:

  Notice to the Escrow Agent shall be sent to his address at the beginning of
these Joint Escrow Instructions.

 

13. By signing these Joint Escrow Instructions, you become a party hereto only
for the purpose of these Joint Escrow Instructions; and you do not become a
party to the Agreement.

 

14. All liabilities, losses, costs, fees, and disbursements incurred or made by
you in connection with the performance of your duties hereunder, including
without limitation the compensation paid to legal counsel pursuant to Paragraph
8 hereof, shall be borne by the Company; and the Company hereby agrees to
indemnify you against and hold you harmless from all claims, actions, demands,
liabilities, losses, costs, fees, and expenses incurred by you in the
performance of your duties hereunder; provided, however, that this indemnity
shall not extend to conduct which has been determined, by a final order of a
court of competent jurisdiction, to have been grossly negligent or to have
constituted intentional misconduct. You shall not be entitled to compensation
for your services hereunder.

 

15. This instrument shall be governed by and construed in accordance with the
internal laws, and not the laws of conflicts of laws, of the State of Delaware.

 

16. This instrument shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.

 

[This space intentionally left blank]

 

3

--------------------------------------------------------------------------------

19. This instrument may be executed in counterparts with the same effect as if
all parties had signed the same document. All such counterparts shall be deemed
an original, shall be construed together and shall constitute one and the same
instrument.

 

Very truly yours, COMPANY: CSG SYSTEMS INTERNATIONAL, INC. By:   /s/ John P.
Pogge  

--------------------------------------------------------------------------------

   

John P. Pogge, President

 

GRANTEE: /s/ Neal C. Hansen

--------------------------------------------------------------------------------

Neal C. Hansen

 

Grantee’s Address:

41 Charlou Circle

Englewood, CO 80111

 

 

Accepted: ESCROW AGENT: /s/ Joseph T. Ruble

--------------------------------------------------------------------------------

Joseph T. Ruble, Corporate Secretary
of CSG Systems International, Inc.

 

4