Exhibit 10(u)

 

VERIFONE, INC

 

AMENDED AND RESTATED

 

1987 SUPPLEMENTAL STOCK OPTION PLAN

 

Amended and restated by HR & Compensation Committee November 21, 2002

Amended and restated by HR & Compensation Committee September 12, 2002

Adopted by Board of Directors in May, 1987

Approved by the Stockholders on April 10, 1988

Amended by Board of Directors on April 30, 1990

Approved by the Stockholder on June 22, 1990

Amended by Board of Directors on February 13, 1992

Approved by the Stockholders on April 23, 1992

Amended by Board of Directors an March 15, 1995

Approved by the Stockholders on May 5, 1995

Amended by Board of Directors on January 18, 1996

Approved by the Stockholders an May 10, 1996

Amended by Board of Directors on January 23, 1997

 

1.             PURPOSE

 

(a)           The purpose of the Plan is to provide a means by which selected
employees, directors and consultants of VeriFone, Inc. (the “Company”) and its
Affiliates, as defined in subparagraph 1(b), may be given an opportunity to
purchase stock of the Company.

(b)           The word “Affiliate” as used in the Plan means any parent
corporation or subsidiary corporation of the company as those terms are defined
in Sections 424(e) and (f), respectively, of the Internal Revenue code of 1986,
as amended from time to time (the “Code”).

(c)           The Company, by means of the Plan, seeks to retain the services of
persons now employed by or serving as consultants or directors to the Company,
to secure and retain the services of new employees/persons capable of filling
such positions, and to provide incentives for such persons to exert maximum
efforts for the success of the Company.

(d)           The Company intends that the options issued under the Plan not be
incentive stock options as that term is used in Section 422 of the Code.

2.             ADMINISTRATION

 

(a)           The Plan shall be administered by the Board of Directors (the
“Board”) of the Company unless and until the Board delegates administration to a
committee, as provided in subparagraph 2(c). Whether or not the Board has
delegated administration,

 

 

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the Board shall have the final power to determine all questions of policy and
expediency that may arise in the administration of the Plan.

(b)           The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:

(i)            To determine from time to time which of the persons eligible
under the Plan shall be granted options; when and how the option shall be
granted; the provisions of each option granted (which need not be identical),
including the time or times during the term of each option within which all or
portions of such option may be exercised; and the number of shares for which an
option shall be granted to each such person.

(ii)           To construe and interpret the Plan and options granted under it,
and to establish, amend and revoke rules and regulations for its administration.
The Board, in the exercise of this power, may correct any defect, omission or
inconsistency in the Plan or in any option agreement, in a manner and to the
extent it shall deem necessary or expedient to make the Plan fully effective.

(iii)          To amend the Plan or an Option as provided in paragraph 10.

(iv)          Generally, to exercise such powers and to perform such acts as the
Board deems necessary or expedient to promote the best interest of the Company.

(c)           The Board may delegate administration of the Plan to a committee
composed of not fewer than two (2) members of the Board (the “Committee”), all
of the members of which Committee may be “non-employee directors,” as defined by
the provisions of subparagraph 2(d), and may also be, in the discretion of the
Board, outside directors as defined in Section 162(m) of the Code.  If
administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore possessed
by the Board, subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the Board and
references to the Board herein shall be construed as references to the
Committee.  The Board may abolish the Committee at any time and revest in the
Board the administration of the Plan.  Notwithstanding anything in this
paragraph 2 to the contrary, the Board may delegate to a committee of one or
more members of the Board the authority to grant options to eligible persons who
(i) are not then subject to Section 16 under the Securities Exchange Act of
1934, as amended (the “Exchange Act”) and (ii) are either (A) not persons
expected to be subject to Section 162(m) of the code (Section 162(m)”) at the
time of recognition of income from such Option or (B) not persons with respect
to whom the Company desires to comply with Section 162(m).

(d)           The term “non-employee director,” as used in the Plan, shall mean
a member of the Company’s Board of Directors who either (i) is not a current
employee or officer of the Company or its parent or subsidiary, does not receive
compensation (directly or indirectly) from the Company or its parent or
subsidiary for services rendered as a consultant or in any other capacity other
than as a member of the Board (except for

 

 

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an amount as to which disclosure would not be required under Item 404(a) of
Regulation 8-K, and is not engaged in a business relationship as to which
disclosure would be required under Item 404(b) of Regulation S-K; or (ii) is
otherwise considered a “non-employee director” for purposes of Rule 16b-3.

(e)           Delegation of Authority for the Day-to-Day Administration of the
Plan.  Except to the extent prohibited by applicable law or applicable rules of
a stock exchange, the Board or any of its committees as shall be administering
the Plan may delegate to one or more individuals the day-to-day administration
of the Plan and any of the functions assigned to it in this Plan. The delegation
may be revoked at any time.

3.             SHARES SUBJECT TO THE PLAN

(a)           Subject to the provisions of paragraph 9 relating to adjustments
upon changes in stock, the stock that may be sold pursuant to options granted
under either the Plan or the Company’s Amended and Restated Incentive Stock
Option Plan shall not exceed in the aggregate Eight Million Five Hundred Fifteen
Thousand (8,515,000) shares of the Company’s common stock.  The aggregate number
of shares as to which options may be granted under the Plan shall be reduced to
reflect the number of shares of the Company’s common stock which has been sold
under, or may be sold pursuant to outstanding options granted under the
Company’s Amended and Restated Incentive Stock Option Plan to the same extent as
if such sales had been made or option had been granted pursuant to this plan. 
If any option granted under the Plan shall for any reason expire or otherwise
terminate without having been exercised in full, the stock not purchased under
such option shall again become available for the Plan.

(b)           The stock subject to the Plan may be unissued shares or reacquired
shares, bought on the market or otherwise.

(c)           Subject to the provisions of paragraph 9 relating to adjustments
upon changes in stock, no employee shall be eligible, during any twelve (12)
month period, to be granted options under the Plan to purchase in excess of
750,000 shares of common stock of the Company.  The total number of shares as to
which options may be granted to an employee under this paragraph 3(c) shall be
reduced to reflect the total number of shares as to which options have been
granted, during the same twelve (12) month period, under the Company’s Amended
and Restated Incentive Stock Option Plan.

4.             ELIGIBILITY

 

(a)           Options may be granted only to employees (including officers) of,
directors of or consultants to the company or its Affiliates.

(b)           A director shall in no event be eligible for the benefits of the
Plan unless and until such director is expressly declared eligible to
participate in the Plan by action of the Board.

 

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5.             OPTION PROVISIONS

 

Each option shall be in such form and shall contain such terms and conditions as
the Board or the Committee shall deem appropriate. The provisions of separate
options need not be identical, but each option shall include (through
incorporation of provisions hereof by reference in the option or otherwise) the
substance of each of the following provisions:

 

(a)           The term of any option shall not be greater than ten (10) years
from the date it was granted. Notwithstanding the foregoing, an option may be
granted with an exercise price lower than that set forth in the preceding
sentence if such option is granted pursuant to assumption or substitution for
another option in a manner satisfying the provisions of Section 424(a) of the
Code.

(b)           The exercise price of each option shall be not less the fair
market value of the stock subject to the option on the date the option is
granted.

(c)           The purchase price of stock acquired pursuant to an option shall
be paid, to the extent permitted by applicable statutes and regulations, either
(i) in cash at the time the option is exercised, or (ii) at the discretion of
the Board or the Committee, either at the time of grant or exercise of the
option (A) by delivery to the Company of other common stock of the Company, (B)
according to a deferred payment or other arrangement (which may include, without
limiting the generality of the foregoing, the use of other common stock of the
Company) with the person to whom the option is granted or to whom the option is
transferred pursuant to subparagraph 5(d), or (C) in any other form of legal
consideration that may be acceptable to the Board or the Committee in their
discretion.

                                In the case of any deferred payment arrangement,
any interest shall be compounded at least annually and shall be charged at the
minimum rate of interest necessary to avoid the treatment as interest, under any
applicable provisions of the Code, of any amounts other than amounts stated to
be interest under the deferred payment arrangement.

(d)           An option shall only be transferable by the optionee upon such
terms and conditions as are set forth in the option agreement for such option,
as the Board or the Committee shall determine in its discretion. The person to
whom an option is granted may, by delivering written notice to the Company, in a
form satisfactory to the Company, designate a third party who, in the event of
the death of the person to whom the option is granted, shall thereafter be
entitled to exercise the option.

(e)           The total number of shares of stock subject to an option may, but
need not, be allotted in periodic installments (which may, but need not, be
equal). From time to time during each of such installment periods, the option
may be exercised with respect to some or all of the shares allotted to that
period, and/or with respect to some or all of the shares allotted to any prior
period as to which the option was not fully exercised. During the remainder of
the term of the option (if its term extends beyond the end of the installment
periods), the option may be exercised from time to time with respect to any
shares then remaining subject to the option. The option may be subject to such
other

 

 

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terms and conditions on the time or times when it may be exercised (which may be
based on performance or other criteria) as the Board may deem appropriate. The
provisions of this subparagraph 5(e) are subject to any option provisions
governing the minimum number of shares as to which an option may be exercised.

(f)            The company may require any optionee, or any person to whom an
option is transferred under subparagraph 5(d), as a condition of exercising any
such option: (1) to give written assurances satisfactory to the Company as to
the optionee’s knowledge and experience in financial and business matters and/or
to employ a purchaser representative reasonably satisfactory to the company who
is knowledgeable and experienced in financial and business matters that he or
she is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the option; and (2) to give
written assurances satisfactory to the Company stating that such person is
acquiring the stock subject to the option for such person’s own account and not
with any present intention of selling or otherwise distributing the stock. These
requirements, and any assurances given pursuant to such requirements, shall be
inoperative if (i) the issuance of the shares upon the exercise of the option
has been registered under a then currently effective registration statement
under the Securities Act of 1933, as amended (the “Securities Act”), or (ii), as
to any particular requirement, a determination is made by counsel for the
Company that such requirement need not be met in the circumstances under the
then applicable securities laws. The Company may require the holder of the
option to provide such other representations, written assurances or information
which the Company shall determine is necessary, desirable or appropriate to
comply with applicable securities and other laws as a condition of granting an
option to such person or permitting such person to exercise the option. The
Company may, upon advice of counsel to the Company, place legends on stock
certificates issued under the Plan as such counsel deems necessary or
appropriate in order to comply with applicable securities laws, including but
not limited to, legends restricting the transfer of the stock.

(g)           An option shall terminate three (3) months after termination of
the optionee’s service with the Company or an Affiliate whether as an employee,
consultant or member of the Board (“Service”), unless (i) the termination of
Service of the optionee is due to such person’s permanent and total disability,
within the meaning of Section 422(e)(3) of the Code, in which case the option
may, but need not, provide that it may be exercised at any time within one (1)
year following such termination of Service; or (ii) the optionee dies while in
the employ of the Company or an Affiliate, or within not more than three (3)
months after termination of such Service, in which case the option may, but need
not, provide that it may be exercised at any time within eighteen (18) months
following the death of the optionee by the person or persons to whom the
optionee’s rights under such option pass by will or by the laws of descent and
distribution; or (iii) the option by its terms specifies either (a) that it
shall terminate sooner than three (3) months after termination of the optionee’s
Service, or (b) that it may be exercised more than three (3) months after
termination of the optionee’s service with the Company or an Affiliate.  This
subparagraph 5(g) shall not be construed to extend the term of any option or to
permit anyone to exercise the option after expiration of its term, nor shall it
be construed to increase the number of shares as to which any option is
exercisable from the amount exercisable on the date of termination of the
optionee’s Service.

 

 

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(h)           The option may, but need not, include a provision whereby the
optionee may elect at any time during the term of his or her Service with the
Company or any Affiliate to exercise the option as to any part or all of the
shares subject to the option prior to the stated vesting date of the option or
of any installment or installments specified in the option. Any shares so
purchased from any unvested installment or option may be subject to a repurchase
right in favor of the Company or to any other restriction the Board or the
Committee determines to be appropriate.

(i)            To the extent provided in the terms of an Option Agreement, an
optionee may satisfy any federal, state, or local tax withholding obligation
relating to the exercise of such option by any of the following means or by a
combination of such means:    (i) tendering a cash payment, (ii) authorizing the
Company to withhold from the shares of common stock otherwise issuable to the
optionee as a result of the exercise of the option or (iii) delivering to the
company owned and unencumbered shares of the common stock of the Company.

(j)            Buyout Provisions. At any time, the Committee may, but shall not
be required to, authorize the Company to offer to buy out for a payment in cash
or shares an option previously granted based on such terms and conditions as the
Committee shall establish and communicate to the optionee in connection with
such offer.

6.             COVENANTS OF THE COMPANY

 

(a)           During the terms of the options granted under the Plan, the
Company shall keep available at all times the number of shares of stock required
to satisfy such options.

(b)           The Company shall seek to obtain from each regulatory commission
or agency having jurisdiction aver the Plan such authority as may be required to
issue and sell shares of stock upon exercise of the options granted under the
Plan; provided, however, that this undertaking shall not require the Company to
register under the Securities Act either the Plan, any option granted under the
Plan or any stock issued or issuable pursuant to any such option. If, after
reasonable efforts, the Company is unable to obtain from any such regulatory
commission or agency the authority which counsel for the company deems necessary
for the lawful issuance and sale of stock under the Plan, the Company shall be
relieved from any liability for failure to issue and sell stock upon exercise of
such options unless and until such authority is obtained.

7.             USE OF PROCEEDS FROM STOCK

 

Proceeds from the sale of stock pursuant to options granted under the Plan shall
constitute general funds of the Company.

 

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8.             MISCELLANEOUS

 

(a)           The Board or the Committee shall have the power to accelerate the
time during which an option may be exercised or the time during which an option
or any portion thereof will vest pursuant to subparagraph 5(e), notwithstanding
the provisions in the option stating the time during which it may be exercised
or the time during which it will vest.

(b)           Neither an optionee nor any person to whom an option is
transferred under subparagraph 5(d) shall be deemed to be the holder of, or to
have any of the rights of a holder with respect to, any shares subject to such
option unless and until such person has satisfied all requirements for exercise
of the option pursuant to its terms.

(c)           Throughout the term of any option granted pursuant to the Plan,
the Company shall make available to the holder of such option, not later than
one hundred twenty (120) days after the close of each of the Company’s fiscal
years during the option term, upon request, such financial and other information
regarding the Company as comprises the annual report to the shareholders of the
Company provided for in the bylaws of the Company.

(d)           Nothing in the Plan or any instrument executed or option granted
pursuant thereto shall confer upon any eligible employee, consultant or optionee
any right to continue in the employ of the Company or any Affiliate or shall
affect the right of the Company or any Affiliate to terminate the employment of
any eligible person or optionee with or without cause, or to terminate the
relationship of any consultant subject to the terms of that consultant’s
agreement with the Company or Affiliate to which such Consultant is providing
services.

9.             ADJUSTMENTS UPON CHANGES IN STOCK

 

(a)           If any change is made in the stock subject to the Plan, or subject
to any option granted under the Plan (through merger, consolidation,
reorganization, recapitalization, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or other transaction not involving the
receipt of consideration by the Company), the Plan and outstanding options will
be appropriately adjusted in the type of security and maximum number of shares
subject to the Plan, the maximum number of shares subject to option that may be
granted to any single person under subparagraph 3(c), and the type of security
and number of shares and price per share of stock subject to outstanding
options.  Such adjustments shall be made by the Board or the Committee, the
determination of which shall be final, binding and conclusive. (The conversion
of any convertible securities of the Company shall not be treated as a
“transaction not involving the receipt of consideration by the Company.”)

(b)           In the event of: (1) a dissolution or liquidation of the Company
or sale of all or substantially all of the assets of the Company; (2) a merger
or consolidation in which the Company is not the surviving corporation; (3) a
reverse merger in which the Company is the surviving corporation but the shares
of the Company’s common stock

 

 

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outstanding immediately preceding the merger are converted by virtue of the
merger into other property, whether in the form of securities, cash or
otherwise; or (4) any other capital reorganization in which more than fifty
percent (50%) of the shares of the Company entitled to vote are exchanged, then,
at the sole discretion of the Board and to the extent permitted by applicable
law: (i) any surviving corporation shall assume any options outstanding under
the Plan or shall substitute similar options for those outstanding under the
Plan, or (ii) the time during which such options may be exercised shall be
accelerated and the option terminated if not exercised prior to such event, or
(iii) such options shall continue in full force and effect.

10.          AMENDMENT OF THE PLAN AND OPTIONS

 

(a)           The Board at any time, and from time to time, may amend the Plan.
However, except as provided in paragraph 9 relating to adjustments upon changes
in stock, no amendment shall be effective unless approved by the vote of a
majority of the outstanding shares of the Company entitled to vote, or by the
written consent of the holders of the outstanding shares of the Company entitled
to vote to the extent necessary under applicable laws to obtain incentive stock
option treatment under Section 422 of the Code, within twelve (12) months before
or after the adoption of the amendment, where the amendment will:

(i)            Increase the number of shares reserved for options under the
Plan;

(ii)           Modify the requirements as to eligibility for participation in
the Plan to the extent such modification requires stockholder approval in order
for the Plan to satisfy the requirements of Section 422 of the Code; or

(iii)          Otherwise modify the Plan to the extent such modification
requires stockholder approval in order for the Plan to satisfy the requirements
of Section 422 of the Code.

(b)           The Board may, in its discretion, submit any other amendment to
the Plan for stockholder approval.

(c)           Rights and obligations under any option granted before amendment
of the Plan shall not be impaired by any amendment of the Plan, except with the
consent of the person to whom the option was granted.

(d)           The Board at any time, and from time to time, may amend the terms
of any one or more options; provided, however, that the rights and obligations
under any option shall not be impaired by any such amendment unless (i) the
Company requests the consent of the person to whom the option was granted and
(ii) such person consents in writing.

 

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11.          TERMINATION OR SUSPENSION OF THE PLAN

 

(a)           The Board may suspend or terminate the Plan at any time. Unless
sooner terminated, the Plan shall terminate on December 31, 2005. No options may
be granted under the Plan while the Plan is suspended or after it is terminated.

(b)           Rights and obligations under any option granted while the Plan is
in effect shall not be impaired by suspension or termination of the Plan, except
with the consent of the person to whom the option was granted.

12.          EFFECTIVE DATE OF PLAN

 

The Plan shall become effective as determined by the Board, but no options
granted under the Plan shall be exercised unless and until the Plan has been
approved by the vote or written consent of the holders of a majority of the
outstanding shares of the Company entitled to vote.

 

 

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