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.


 

















 


(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.


 


15

















 


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


 


16

















 


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;


 


A-2

















 


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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