Exhibit 10.1 TSR PSU Agreement







HEARTLAND PAYMENT SYSTEMS, INC.
2008 EQUITY INCENTIVE PLAN
NOTICE OF TOTAL SHAREHOLDER RETURN
PERFORMANCE SHARE UNIT GRANT


Grantee Name: [_____ __________]
Pursuant to the terms of the Heartland Payment Systems, Inc. 2008 Equity Incentive Plan, as amended and restated (the “Plan”), you have been granted Performance Share Units (“PSUs”) of Heartland Payment Systems, Inc. (the “Company”) upon the terms and conditions set forth herein and in the Performance Share Unit Agreement (the “Agreement”) which is attached hereto:
	
		
	Number of PSUs Granted:
	Target Number:                     



	 
	Maximum Number:                                                      



	 
	The number of PSUs subject to this Agreement shall be the Target Number indicated above, adjusted as determined below.



	Date of Grant:


	[__________]



	Vesting Date:


	[__________]



	 
	Subject to the performance benchmarks enumerated below, and so long as you are in Continuous Service (as defined in the Plan) status with the Company, the PSUs shall vest and the Shares underlying such PSUs shall be paid as described under the heading Vesting of PSUs and pursuant to Section 4 of the Agreement.



	Transferability:


	The PSUs granted hereunder may not be transferred.








Vesting of PSUs:    The value of these PSUs, if any, will be dependent upon the Company's percentile rank of total shareholder return (“TSR”) among a group of peer companies (the “Comparison Group) over the Performance Period (as defined below) as described below under the heading “TSR Goals.”  Actual performance against the TSR Goals is measured over the period beginning on [__________] and ending on [__________] (the “Performance Period”) and must be certified by the Administrator in order for any portion of this Award to vest; provided, however, that if the Company's TSR is negative during the Performance Period, then the maximum Shares that the Administrator will certify as eligible to vest will be the Target Number regardless of the Company's percentile rank in the Peer Group.  The Administrator will certify the results of the TSR Goals as soon as reasonably possible (the date of such certification the “Certification Date”) after the Performance Period.  Any portion of this Award that is eligible to vest based on the Administrator's certification will vest on the Vesting Date and will be paid in accordance with Section 4 of the Agreement.  Any portion of this Award that is not eligible to vest based on the Administrator's certification will terminate on the Certification Date. Notwithstanding the foregoing, this Notice and the Agreement provide certain circumstances in which you may vest in this Award before the 









Vesting Date and/or without certification of the TSR Goals by the Administrator.  If any such provisions of this Notice or of the Agreement apply, then any portion of the Award that does not vest pursuant to those sections will terminate.
Peer Group.     The Peer Group will be the companies shown on Exhibit A (each, together with the Company, a “Member Company”); provided, however, that a company will be removed from the Comparison Group if, during the Performance Period, it ceases to have a class of equity securities that is both registered under the Securities Exchange Act of 1934, as amended, and actively traded on a U.S. public securities market (unless such cessation of such listing is due to any of the circumstances in (i) through (iv) of the following paragraph).
Definition of TSR.     “TSR” as applied to any Member Company means stock price appreciation from the beginning to the end of the Performance Period, including dividends paid per share during the Performance Period, expressed as a percentage return (and calculated as described below).  Except as modified due to a Change of Control, for purposes of computing TSR, the stock price at the beginning of the Performance Period will be the closing price of a share of common stock of a Member Company on [__________] (the “Beginning Stock Price”), and the stock price at the end of the Performance Period will be the average price of a share of common stock of a Member Company over the 30 calendar days ending [__________] (the “Ending Stock Price”), adjusted for stock splits or similar changes in capital structure; provided, however, that TSR for a Member Company will be negative one hundred percent (- 100%) if the Member Company: (i) files for bankruptcy, reorganization, or liquidation under any chapter of the U.S. Bankruptcy Code; (ii) is the subject of an involuntary bankruptcy proceeding that is not dismissed within 30 days; (iii) is the subject of a stockholder approved plan of liquidation or dissolution; or (iv) ceases to conduct substantial business operations.
Calculation of TSR.    The TSR will be calculated as follows: (i) (a) the Ending Stock Price minus (b) the Beginning Stock Price (c) plus dividends paid per share over the Performance Period divided by (ii) the Ending Stock Price.
TSR Goals.    For each [__]% that the TSR actually achieved by the Company is above the [__]th percentile of the Peer Group's TSR, the Target Number shall be increased by [__]% (with the resulting determination to be rounded down to the nearest whole number in case of a fractional result); provided, however, that the maximum increase in the Target Number that may be provided pursuant to the foregoing is [__]% (by way of illustration only, if the Company's TSR is [__]% above the [__]th percentile of the Peer Group's TSR, then there would be a [__]% increase in the Target Number).  The table below demonstrates these results for several potential outcomes.
For each [___]% that the TRS actually achieved by the Company is below the [___]th percentile of the Peer Group's TSR, the Target Number shall be decreased by [__]% (with the resulting determination to be rounded down to the nearest whole number in case of a fractional result); provided, however, that the PSUs granted hereunder will be terminated and forfeited if the Company's TSR is below the [__]th percentile of the Peer Group's TSR (by way of illustration only, if the TSR is [__]% below the [__]th percentile of the Peer Group's TSR, then there would be a [__]% decrease in the Target Number).  The table below demonstrates these results for several potential outcomes.
The actual number of PSUs that will vest for the Performance Period is based upon the Company's relative TSR ranking as follows:









	
				
	 
	 
	Three Year
Relative TSR
vs. Peer Group
	PSUs as 
a % of 
Target Number

	Maximum




Target*




Threshold
Below Threshold
	 
	[__]th Percentile
[__]th Percentile
[__]th Percentile
[__]th Percentile
[__]th Percentile
[__]th Percentile
[__]th Percentile
<[__]th Percentile
	[__]%
[__]%
[__]%
[__]%
[__]%
[__]%
[__]%
[__]%




		
	*
	If the Company's TSR is negative during the Performance Period, then the maximum Shares that the Administrator will certify as eligible to vest will be the Target Number regardless of the Company's percentile rank in the Peer Group.


Notwithstanding anything to the contrary herein, the value of the PSUs earned shall be capped at the five times the grant date fair value regardless of the Company's percentile rank at the end of the Performance Period.
No Employment or Service Contract. In addition, you agree and acknowledge that your rights to the PSUs (and applicable related Dividend Equivalents) (and any Shares to be issued to you upon vesting of the PSUs) will be earned only as you provide services to the Company over time, that the grant of the PSUs (and applicable related Dividend Equivalents) is not as consideration for services you rendered to the Company prior to your Vesting Commencement Date, and that nothing in this Notice or the attached Plan or Agreement shall confer upon you any right to continue your employment or consulting relationship with the Company for any period of time, nor does it interfere in any way with your right or the Company's right to terminate that relationship at any time, for any reason, with or without Cause.
Change of Control. 
(a) In the event of a Change of Control (as defined in the Plan), the PSUs shall be deemed to be earned at the above Target Number threshold and will vest on the Vesting Date set forth above.
(b) If there is an interruption or termination of your Continuous Service due to a "qualifying termination" following a Change of Control, then the outstanding PSUs shall vest immediately upon such "qualifying termination" and the Shares underlying such PSUs shall be paid pursuant to Section 4 of the Agreement.
(c) In the event of a Change of Control, if any surviving or acquiring entity does not (i) assume or continue all or any part of the PSU granted hereunder or (ii) substitute substantially equivalent equity awards (including an award to acquire substantially the same consideration paid to the stockholders in the transaction by which the Change of Control occurs), then the outstanding PSUs shall vest immediately prior to such Change of Control and the Shares underlying such PSUs shall be paid pursuant to Section 4 of the Agreement.
For these purposes, a “qualifying termination” means (i) an involuntary termination of your Continuous Service by the Company or (ii) a termination of your Continuous Service by you for “good reason”.   For these purposes, “good reason” shall mean the occurrence, without your written consent, of any of the following circumstances:









(1)the assignment to you of any duties or responsibilities not comparable to your position (as it existed immediately prior to the Change of Control) and that results in a substantial diminution or material adverse change in such duties or responsibilities from those in effect immediately prior to the Change of Control other than a change in title or reporting relationships;
(2)a reduction by the Company in your annual base salary as in effect immediately prior to the Change of Control; or


(3)the relocation of your principal place of employment to a location more than fifty miles from your principal place of employment immediately preceding the Change of Control that materially increases your commute compared to your commute as in effect immediately prior to the Change of Control.
 
For any purported termination of your Continuous Service for “good reason”, you must provide notice not later than 30 days following the date you had actual knowledge of the event constituting “good reason”, and the Company shall have 30 days from such notice to cure the event before any “good reason” termination may occur.
Termination Due to Retirement. If there is a termination of your Continuous Service due to your Retirement (as defined below) during the Performance Period, then the number of Shares underlying the PSUs that are earned for meeting the TSR Goals will be prorated daily to reflect the portion of the Performance Period during which your Continuous Service continued.  The payment of the Shares underlying the PSUs shall be delayed until the date they would have been paid if not for your Retirement.  For purposes hereof, “Retirement” means the termination of your Continuous Service after you have reached age seventy (70) and completed ten full years of Continuous Service with the Company (including any Subsidiary).
Definitions. All capitalized terms in this Notice shall have the meaning assigned to them in this Notice, the attached Agreement or the Plan.
By your signature and the signature of the Company's representative below, you and the Company agree that the PSUs (and applicable related Dividend Equivalents) are granted under and governed by the terms and conditions of the Plan and the Agreement, both of which are attached and made a part of this document. You further acknowledge receipt of a copy of the Plan and the Agreement, represent that you have read and are familiar with their provisions, and hereby accept the PSUs (and applicable related Dividend Equivalents) subject to all of their terms and conditions.
HEARTLAND PAYMENT SYSTEMS, INC.
By:                     
Name: 
Title:  
This award of PSUs is hereby accepted and the terms and conditions thereof hereby agreed to by the undersigned.
Dated:                                  
Grantee's Signature
Grantee's name and address:
                
                


CIRCULAR 230 DISCLOSURE: To ensure compliance with requirements imposed by the IRS, we inform you that any tax advice contained in this communication (including any attachments) (i) was not 









intended or written to be used, and cannot be used, for the purpose of avoiding any tax penalties and (ii) was not written to promote, market or recommend the transaction or matter addressed in the communication.  Each taxpayer should seek advice based on the taxpayer's particular circumstances from an independent tax advisor.

HEARTLAND PAYMENT SYSTEMS, INC.
2008 EQUITY INCENTIVE PLAN
TOTAL SHAREHOLDER RETURN
PERFORMANCE SHARE UNIT AGREEMENT


1.Grant of PSUs. Heartland Payment Systems, Inc., a Delaware corporation (the “Company”), hereby grants to ________________ (the “Grantee”), the total number of Performance Share Units (“PSUs”) set forth in the Notice of Performance Share Unit Grant (the “Notice”), subject to the terms, definitions and provisions of the Heartland Payment Systems, Inc. 2008 Equity Incentive Plan (the “Plan”) adopted by the Company, which is incorporated in this Agreement by reference. Unless otherwise defined in this Agreement, the terms used in this Agreement shall have the meanings defined in the Plan.


2.Restrictions and Conditions.  Prior to the vesting of the PSUs (and applicable related Dividend Equivalents) as described in the Notice, the Grantee shall have no rights in the PSUs (and applicable related Dividend Equivalents) except as specifically provided herein.


(a)No Voting Rights or Dividends.  Until such time as the PSUs are paid to the Grantee in Shares, the Grantee shall have no voting rights and shall not be entitled to payment or accrual of any dividends or other distributions with respect to the PSUs or the Shares underlying the PSUs.


(b)Dividend Equivalents.  Notwithstanding the above, each outstanding PSU shall accrue Dividend Equivalents.  Dividend Equivalents will not accrue interest, and will be subject to similar adjustments relating to the PSUs due to the achievement of the performance criteria provided for in the Notice.  Such Dividend Equivalents shall be paid in cash only when and if the PSU on which such Dividend Equivalents were accrued vests and is settled as provided in the Notice and this Agreement.  To the extent the PSU on which such Dividend Equivalents were accrued does not vest or is otherwise forfeited, any accrued and unpaid Dividend Equivalents shall be forfeited.


(c)Restrictions on Transfer.  The PSUs (and applicable related Dividend Equivalents) granted pursuant to this Agreement  may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated and any such attempt to transfer any PSU (and applicable related Dividend Equivalents) will not be honored.


3.Vesting of PSUs.  The PSUs (and applicable related Dividend Equivalents) shall vest pursuant to the vesting schedule set forth in the Notice, so long as the Grantee remains in Continuous Service status with the Company through the Vesting Date.  Except as specifically provided for herein, the Grantee's rights to all PSUs (and applicable related Dividend Equivalents) granted herein and not yet vested in accordance with the provisions of the Notice shall automatically terminate upon the Grantee's 









termination of Continuous Service status with the Company, whether voluntarily or involuntarily, for any reason.  Notwithstanding the foregoing, if the Grantee's termination of Continuous Service status with the Company is because of the Grantee's death or Disability, then the PSUs shall vest at the Target Number set forth in the Notice and be paid immediately.
4.Receipt of Shares Upon Vesting.  As soon as practicable following the vesting of the PSUs (and applicable related Dividend Equivalents) as set forth in the Notice (but in no event later than 30 days following the applicable vesting date), the Grantee shall receive one Share for each vested PSU (and payment of any applicable related Dividend Equivalents) .  Shares to be acquired pursuant to this Award shall be issued and delivered to the Grantee either in actual stock certificates or by electronic book entry, subject to tax withholding as provided in Section 6 below.


5.Transferability.  This Agreement is personal to the Grantee, is non-assignable and is not transferable in any manner, by operation of law or otherwise, other than by will or the laws of descent and distribution.


6.Tax Consequences.  The Company has not provided any tax advice with respect to the PSUs or the disposition of the Shares.  The Grantee should obtain advice from an appropriate independent professional adviser with respect to the taxation implications of the grant, payment, assignment, release, settlement, cancellation or any other disposition of the PSUs (and applicable related Dividend Equivalents) (each, a “Trigger Event”) and on any subsequent sale or disposition of the Shares.  The Grantee should also take advice in respect of the taxation indemnity provisions under Section 8 below.  The Grantee shall, not later than the date as of which the receipt of any PSU (and applicable related Dividend Equivalents) becomes a taxable event for Federal income tax purposes, pay to the Company or make arrangements satisfactory to the Administrator for payment of any Federal, state, and local taxes required by law to be withheld on account of such taxable event.  The Grantee may elect to have the required minimum tax withholding obligation satisfied, in whole or in part, by (i) authorizing the Company to withhold from Shares to be issued (or applicable related Dividend Equivalents to be paid), or (ii) transferring to the Company, a number of Shares with an aggregate Fair Market Value that would satisfy the withholding amount due.


7.Data Protection.


(a)To facilitate the administration of the Plan and this Agreement, it will be necessary for the Company (or its payroll administrators) to collect, hold and process certain personal information about the Grantee and to transfer this data to certain third parties such as brokers with whom the Grantee may elect to deposit any share capital under the Plan.  The Grantee consents to the Company (or its payroll administrators) collecting, holding and processing the Grantee's personal data and transferring this data to the Company or any other third parties insofar as is reasonably necessary to implement, administer and manage the Plan.


(b)The Grantee understands that the Grantee may, at any time, view the Grantee's personal data, require any necessary corrections to it or withdraw the consents herein in writing by contacting the Company, but acknowledges that without the use of such data it may not be practicable for the Company to administer the Grantee's involvement in the Plan in a timely fashion or at all and this may be detrimental to the Grantee.


8.Grantee's Taxation Indemnity.











(a)To the extent permitted by law, the Grantee hereby agrees to indemnify and keep indemnified the Company and the Company as trustee for and on behalf of any affiliate entity, in respect of any liability or obligation of the Company and/or any affiliate entity to account for income tax or any other taxation provisions under the laws of the Grantee's country or citizenship and/or residence to the extent arising from a Trigger Event or arising out of the acquisition, retention and disposition of the Shares.


(b)The Company shall not be obliged to allot and issue any of the Shares or any interest in the Shares (or any payment of applicable related Dividend Equivalents) unless and until the Grantee has paid to the Company such sum as is, in the opinion of the Company, sufficient to indemnify the Company in full against any liability the Company has for any amount of, or representing, income tax or any other tax arising from a Trigger Event (the “PSU Tax Liability”), or the Grantee has made such other arrangement as in the opinion of the Company will ensure that the full amount of any PSU Tax Liability will be recovered from the Grantee within such period as the Company may then determine.


9.Compensation Recovery Policy.  Without limiting any other provision of this Agreement, the PSUs (and applicable related Dividend Equivalents) granted hereunder, and any related issuance of Shares or payments made hereunder, shall be subject to the Company's Compensation Recovery Policy (as amended from time to time, and including any successor or replacement policy or standard) to the extent applicable.  


10.Miscellaneous.


(a)This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of New Jersey, without giving effect to principles of conflicts of law.


(b)The Grantee acknowledges receipt of a copy of the Plan and represents that he or she is familiar with the terms and provisions thereof (and has had an opportunity to consult counsel regarding the terms of this award of PSUs (and applicable related Dividend Equivalents) ), and hereby accepts the PSUs (and applicable related Dividend Equivalents) and agrees to be bound by the contractual terms as set forth herein and in the Plan. The Grantee hereby agrees to accept as binding, conclusive and final all decisions and interpretations of the Administrator regarding any questions relating to the PSUs (and applicable related Dividend Equivalents).  In the event of a conflict between the terms and provisions of the Plan and the terms and provisions of the Notice and this Agreement, the Plan terms and provisions shall prevail.  This Agreement, the Notice and the Plan, constitute the entire agreement between the Grantee and the Company on the subject matter hereof and supersedes all proposals, written or oral, and all other communications between the parties relating to such subject matter.


(c)It is intended that this Agreement (and any payment to the Grantee) will be exempt from or in compliance with Section 409A of the Internal Revenue Code (the “Code”), and the Agreement (and any payment to the Grantee) shall be interpreted and construed on a basis consistent with such intent.  The Agreement (and any payment to the Grantee) may be amended in any respect deemed necessary or desirable (including retroactively) by the Company with the intent to preserve exemption from or compliance with Section 409A of the Code.  The preceding shall not be construed as a guarantee of any particular tax effect for payment to the Grantee under the Agreement.  The Grantee is solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on the Grantee in connection with the Agreement (including any taxes and penalties under Section 409A of the Code).  If the Grantee is a “specified employee,” as defined in Section 409A(a)(2)(B)(i) of the Code as of the Grantee's termination 









of Continuous Service, payment of deferred compensation subject to Section 409A of the Code shall be made to the Grantee in one (1) lump sum six (6) months following such termination date; provided, however, that any payment or portion thereof which is subject to an exemption provided under Section 409A of the Code and the relevant Treasury Regulations thereunder allowing for payment to a specified employee prior to the date that is six months following the termination of the Grantee's Continuous Service, shall be paid in accordance with the terms and conditions set forth in the Agreement.  Where Section 409A of the Code applies, in the case of any payment made on a termination of the Grantee's Continuous Service, a termination of the Grantee's Continuous Service shall not be deemed to have occurred unless such termination is also a “separation from service” within the meaning of Section 409A of the Code.


(d)The parties agree to execute such further instruments and to take such further action as may be reasonably necessary to carry out the purposes and intent of this Agreement.


This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one document.
	
		
	GRANTEE
_____________________________
(Signature)
_____________________________
(Printed Name)


Dated: _______________________
	HEARTLAND PAYMENT SYSTEMS, INC.
By: _____________________________
Name: __________________________
Title: ___________________________








EXHIBIT A
PEER GROUP