<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. ____)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
NATIONAL DATA CORPORATION
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriat e box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11
(Set forth the amount on which the filing fee is calculated and state
how it was determined):
-----------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------
5) Total fee paid:
-----------------------------------------------------------------
[X] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
[LOGO OF NATIONAL DATA PLAZA APPEARS HERE]
NATIONAL DATA PLAZA
ATLANTA, GEORGIA 30329-2010
TO THE STOCKHOLDERS:
The Annual Meeting of Stockholders (the "Annual Meeting") of National Data
Corporation, a Delaware corporation (the "Company"), will be held at the
Company's offices at National Data Plaza, Atlanta, Georgia, on October 26, 1995,
at 11:00 A.M., Atlanta time, for the following purposes:
1. To elect two directors in Class III to serve until the annual meeting
of stockholders in 1998, or until their successors are duly elected
and qualified;
2. To vote on a proposal to amend the National Data Corporation 1987 Stock
Option Plan to increase the number of shares that may be issued
thereunder from 3,787,500 to 5,287,500 and to limit total grants of
options thereunder to any individual to not more than 1,500,000 shares.
3. To vote on a proposal to amend the National Data Corporation 1983
Restricted Stock Plan to increase the number of shares that may be
issued thereunder from 487,500 to 750,000 and to add a performance-
based award feature to the plan.
4. To vote on a proposal to adopt the National Data Corporation 1995 Non-
Employee Director Compensation Plan which provides that one-half of the
annual retainer payable to the Company's non-employee directors will be
paid in shares of Common Stock of the Company in lieu of cash.
5. To vote on a proposal to amend the National Data Corporation 1984 Non-
Employee Director Stock Option Plan to provide for a new series of five
additional grants of stock options to purchase 5,000 shares per grant
to non-employee directors, to extend exercise rights to the expiration
date of the option and to establish a five year vesting schedule.
6. To vote on a proposal to approve the National Data Corporation 1995
Performance-Based Executive Officer Bonus Plan which provides for
performance-based awards to the executive officers of the Company.
7. To vote on a proposal to amend the Certificate of Incorporation of the
Company to increase the number of shares of Common Stock of the Company
authorized for issuance from 30,000,000 to 60,000,000.
8. To transact such other business as may properly come before the Annual
Meeting or any adjournment thereof.
Only stockholders of record at the close of business on August 28, 1995 are
entitled to notice of, and to vote at, the Annual Meeting. The transfer books
will not be closed. A complete list of stockholders entitled to vote at the
Annual Meeting will be available for inspection by stockholders at the offices
of the Company during the ten days prior to the Annual Meeting.
By Order of the Board of Directors
E. MICHAEL INGRAM, Secretary
Dated: August 30, 1995
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE ANNUAL MEETING IN PERSON, PLEASE
VOTE, SIGN, DATE, AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE ENCLOSED
BUSINESS REPLY ENVELOPE. IF YOU DO ATTEND THE MEETING, YOU MAY, IF YOU WISH,
WITHDRAW YOUR PROXY AND VOTE IN PERSON.
<PAGE>
NATIONAL DATA CORPORATION
NATIONAL DATA PLAZA
ATLANTA, GEORGIA 30329-2010
August 30, 1995
PROXY STATEMENT
FOR COMMON STOCK
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 26, 1995
INTRODUCTION
This Proxy Statement is furnished to holders of the $.125 par value per
share Common Stock ("Common Stock") of National Data Corporation, a Delaware
corporation (the "Company" or "NDC"), in connection with the solicitation of
proxies by the Company's Board of Directors from holders of the outstanding
shares of Common Stock for use at the Annual Meeting of Stockholders to be held
at 11:00 A.M. local time at the Company's offices at National Data Plaza,
Atlanta, Georgia, on Thursday, October 26, 1995, and at any adjournments thereof
(the "Annual Meeting").
The Annual Meeting will be held for the following purposes: (1) to elect
two directors to serve until the 1998 Annual Meeting of Stockholders and until
their successors are elected and qualified; (2) to adopt an amendment to the
National Data Corporation 1987 Stock Option Plan (the "1987 Plan") to increase
the number of shares that may be issued thereunder from 3,787,500 to 5,287,500
and to limit total grants of options thereunder to any individual to not more
than 1,500,000 shares; (3) to adopt an amendment to the National Data
Corporation 1983 Restricted Stock Plan (the "1983 Plan") to increase the number
of shares that may be issued thereunder from 487,500 to 750,000 and to add a
performance-based award feature to the plan; (4) to adopt the National Data
Corporation 1995 Non-Employee Director Compensation Plan (the "1995 Director
Plan") which provides that one-half of the annual retainer payable to the
Company's non-employee directors will be paid in shares of Common Stock in lieu
of cash; (5) to adopt an amendment to the National Data Corporation 1984 Non-
Employee Director Stock Option Plan (the "Director Option Plan") to provide for
a new series of five additional grants of stock options to purchase 5,000 shares
per grant to non-employee directors, to extend exercise rights to the expiration
date of the option and to establish a five year vesting schedule; (6) to adopt
the National Data Corporation 1995 Performance-Based Executive Officer Bonus
Plan (the "Executive Bonus Plan") which provides for performance-based awards to
the executive officers of the Company; (7) to adopt an amendment to the
Company's Certificate of Incorporation (the "Certificate") to increase the
number of shares of Common Stock authorized for issuance from 30,000,000 to
60,000,000; and (8) to transact such other business as may properly come before
the Annual Meeting or any adjournments thereof.
The Company's mailing address and the location of its principal offices are
National Data Plaza, Atlanta, Georgia 30329-2010. This Proxy Statement and the
accompanying Proxy are first being mailed to stockholders of the Company on or
about August 30, 1995.
STOCKHOLDERS ENTITLED TO VOTE
Only stockholders of record of the Company at the close of business on
August 28, 1995 (the "Record Date") will be entitled to notice of, and to vote
at, the Annual Meeting. On the Record Date, there were 22,630,667 shares of the
Common Stock issued and outstanding held by approximately 2,084 stockholders of
record. The Company's stock transfer books will not be closed and shares may be
transferred subsequent to the Record Date. However, all votes must be cast in
the names of stockholders of record on the Record Date. Pursuant to the
Certificate of the Company, holders of Common Stock are entitled to one vote per
share.
<PAGE>
The Company effected a three-for-two stock split of the Common Stock in the
form of a stock dividend on March 20, 1995. All numbers of shares and prices
per share relating to the Common Stock set forth in this Proxy Statement have
been restated to reflect such stock split.
QUORUM AND VOTING REQUIREMENTS
The holders of Common Stock are entitled to one vote per share of Common
Stock. Pursuant to the Company's Bylaws, the holders of a majority of the
shares of Common Stock issued and outstanding and entitled to vote at the Annual
Meeting, present in person or represented by proxy, shall constitute a quorum.
For the purpose of determining the presence of a quorum, abstentions and broker
nonvotes will be counted as present.
Proposal 1, the election of two directors, will require the affirmative vote
of the holders of a majority of the shares of Common Stock represented and
entitled to vote at the Annual Meeting at which a quorum is present. With
respect to Proposal 1, the election of directors, stockholders may (i) vote
"for" the nominees, (ii) "withhold authority" to vote for the nominees or (iii)
withhold authority to vote for any individual nominee or nominees but vote for
all other nominees. Because Proposal 1 will require the affirmative vote of the
holders of a majority of the shares of Common Stock represented and entitled to
vote at the Annual Meeting at which a quorum is present, an abstention and a
broker nonvote (which occur when shares held by brokers or nominees for
beneficial owners are voted on some matters but not on others) will have the
same effect as a vote to "withhold authority" although they would be counted as
present for purposes of determining the existence of a quorum.
With respect to Proposals 2 through 6, stockholders may (i) vote "for ,"
(ii) vote "against," or (iii) "abstain" from voting on the proposal. Proposals
2 through 6 will require the affirmative vote of the holders of a majority of
the shares of Common Stock represented and entitled to vote at the Annual
Meeting at which a quorum is present, and, therefore, an abstention and a broker
nonvote will have the same effect as a vote "against." With respect to Proposal
7, stockholders may (i) vote "for," (ii) vote "against," or (iii) "abstain" from
voting on the proposal. Proposal 7 will require the affirmative vote of a
majority of the outstanding shares of Common Stock entitled to vote thereon,
and, therefore, an abstention and a broker nonvote will have the same effect as
a vote "against."
PROXIES
If the enclosed Proxy is executed, returned in time and not revoked, the
shares represented thereby will be voted in accordance with the instructions
indicated in such Proxy. IF NO INSTRUCTIONS ARE INDICATED, PROXIES WILL BE
VOTED FOR (1) THE ELECTION OF ALL DIRECTOR NOMINEES; (2) THE AMENDMENT OF THE
1987 PLAN; (3) THE AMENDMENT OF THE 1983 PLAN; (4) THE ADOPTION OF THE 1995
DIRECTOR PLAN; (5) THE AMENDMENT OF THE DIRECTOR OPTION PLAN; (6) THE ADOPTION
OF THE EXECUTIVE BONUS PLAN; (7) THE AMENDMENT TO THE COMPANY'S CERTIFICATE OF
INCORPORATION; AND (8) IN THE BEST JUDGMENT OF SUCH PROXIES AS TO ANY OTHER
MATTERS WHICH MAY PROPERLY COME BEFORE THE ANNUAL MEETING OR ANY ADJOURNMENTS
THEREOF.
A stockholder who has given a Proxy may revoke it at any time prior to its
exercise at the Annual Meeting by either (i) giving written notice of revocation
to the Secretary of the Company, (ii) properly submitting to the Company a duly
executed Proxy bearing a later date, or (iii) appearing at the Annual Meeting
and voting in person. All written notices of revocation of Proxies should be
addressed as follows: National Data Corporation, National Data Plaza, Atlanta,
Georgia 30329-2010, Attention: E. Michael Ingram, Secretary.
2
<PAGE>
1. ELECTION OF DIRECTORS
The Board of Directors of the Company is divided into three classes, with
the term of office of each class ending in successive years. The terms of
directors of Class III expire with this Annual Meeting. The terms of office of
directors in Class I and Class II expire at the 1996 and 1997 annual meetings of
stockholders, respectively. The stockholders are being asked to vote on the
election to Class III of Mr. Don W. Sands and Ms. J. Veronica Biggins.
Each Class III director will be elected to hold office until the 1998 annual
meeting of stockholders and thereafter until a successor has been duly elected
and qualified. The persons named in the enclosed proxy intend to vote the
shares represented thereby in favor of the election to the Board of the Class
III nominees whose names appear below, unless authority to vote for the nominees
is withheld or such proxy has previously been revoked. It is anticipated that
management stockholders of the Company will grant authority to vote for the
election of the nominees. In the event that the nominees are unable to serve
(which is not anticipated), the persons designated as proxies will cast votes
for such other persons as they may select.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES FOR ELECTION AS
DIRECTORS. IF A CHOICE IS SPECIFIED ON THE PROXY BY THE STOCKHOLDER, THE SHARES
WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THE SHARES WILL BE
VOTED "FOR" THE NOMINEES. THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF
THE SHARES OF COMMON STOCK REPRESENTED AND ENTITLED TO VOTE AT THE ANNUAL
MEETING AT WHICH A QUORUM IS PRESENT IS REQUIRED FOR THE ELECTION OF THE
NOMINEES.
CERTAIN INFORMATION CONCERNING NOMINEES AND DIRECTORS
The following table sets forth the names of the nominees and the directors
continuing in office, their ages, the month and year in which they first became
directors of the Company, their positions with the Company, their principal
occupations and employers for at least the past five years, and any other
directorships held by them in companies that are subject to the reporting
requirements of the Securities Exchange Act of 1934 or any company registered as
an investment company under the Investment Company Act of 1940. For information
concerning membership on committees of the Board, see "Other Information About
the Board and its Committees" below.
NOMINEES FOR DIRECTOR
<TABLE>
<CAPTION>
MONTH AND POSITIONS WITH THE COMPANY, PRINCIPAL
YEAR FIRST OCCUPATIONS DURING AT LEAST THE PAST FIVE
NAME AND AGE BECAME A DIRECTOR YEARS, AND OTHER DIRECTORSHIPS
- -------------- ----------------- -----------------------------------------
CLASS III
FOR THREE-YEAR TERM EXPIRING ANNUAL MEETING 1998
<S> <C> <C>
Don W. Sands September 1989 Director of the Company
(69) Member of the Board of Directors,
Georgia World Congress Center,
Atlanta (since 1985); Chief Executive
Officer Emeritus and Counselor to the
Board of Directors of Gold Kist, Inc.
(a diversified agricultural
cooperative association), Atlanta
(since November 1991); President,
Chief Executive Officer, and Chairman
of the Management Executive Committee
of Gold Kist, Inc. (1988-1991);
Director of Golden Poultry Co.
</TABLE>
3
<PAGE>
<TABLE>
<S> <C> <C>
J. Veronica Biggins -- Consultant, Heidrick & Struggles
(48) (since 1995); Assistant to the
President of the United States
(1994-1995); Executive Vice
President, NationsBank of Georgia
(1973-1994); Director, Kaiser
Foundation; Director, HealthPlan of
Georgia, Inc.
</TABLE>
MEMBERS OF THE BOARD OF DIRECTORS
CONTINUING IN OFFICE
<TABLE>
<CAPTION>
MONTH AND POSITIONS WITH THE COMPANY, PRINCIPAL
YEAR FIRST OCCUPATIONS DURING AT LEAST THE PAST
NAME AND AGE BECAME A DIRECTOR FIVE YEARS, AND OTHER DIRECTORSHIPS
- -------------- ----------------- -------------------------------------
CLASS I
TERM EXPIRING ANNUAL MEETING 1996
<S> <C> <C>
Robert A. Yellowlees April 1985 Chairman of the Board (since June
(56) 1992), and President, Chief
Executive Officer and Chief
Operating Officer (since May 1992)
and Director (since 1987) of the
Company Chairman, Spectrum Research
Group, Inc. (consultants on the
management of technology), Atlanta;
Director of John H. Harland Co.
James B. Edwards January 1989 Director of the Company
(68) President, The Medical University of
South Carolina (since November
1982); Director of the Harry Frank
Guggenheim Foundation, Phillips
Petroleum Company, The William
Benton Foundation, Encyclopedia
Britannica, Inc., SCANA Corporation,
Imo Industries, Inc., WMX
Technologies, Inc. and
Norfolk-Southern Corporation
Advisory Board.
</TABLE>
CLASS II
TERM EXPIRING ANNUAL MEETING 1997
<TABLE>
<S> <C> <C>
Edward L. Barlow January 1969 Director of the Company
(60) General Partner, Whitcom Partners
(an investment partnership), New
York.
Neil Williams April 1977 Director of the Company
(59) Managing Partner, Alston & Bird
(Attorneys and Counsel for the
Company), Atlanta.
</TABLE>
OTHER INFORMATION ABOUT THE BOARD AND ITS COMMITTEES
Meetings and Compensation. During the fiscal year ended May 31, 1995, the
Company's Board of Directors held 12 meetings. During the last fiscal year, the
Company's policy regarding the compensation of directors was to pay directors
who are not also employees of the Company an annual retainer of $2,000 per month
plus $1,000 per meeting attended. Each member of the Audit and Compensation
Committees received $1,000 per Audit or Compensation Committee meeting attended
in addition to his other compensation as a director. As of June 1, 1995, the
Board of Directors adopted the 1995 Director Plan which, subject to approval of
the stockholders at the Annual Meeting, provides for the payment of one-
4
<PAGE>
half of the annual retainer of the Company's non-employee directors in shares of
Common Stock in lieu of cash. See "Proposal 4 - Approval of 1995 Non-Employee
Director Compensation Plan" below.
Non-employee directors who were initially elected to the Board of Directors
prior to January 1, 1995, are also eligible for certain retirement benefits.
Each such non-employee director with five or more years of service to the
Company as a director is entitled to receive a retirement benefit on the later
of (a) the first day of the month on or after his seventieth birthday, or (b)
his retirement date. The retirement benefit will generally continue annually
thereafter for the lesser of (i) the number of years equal to the number of
years the individual served as a director or (ii) ten years. In the case of
non-employee directors with greater than ten years service as a director on the
effective date of the retirement plan (December 18, 1991), however, the
retirement benefit will continue for fifteen years. Retirement benefits may be
paid to a retired director prior to his attaining age 70 if the retired director
is at least age 60, with not less than ten years of service as a director. The
retirement benefit will be calculated from a base amount equal to the annual
retainer for non-employee directors in effect on the date of a director's
retirement. The retired director would receive as the retirement benefit 50% of
the base amount plus 10% for each year of service up to 100% of the base amount
for ten years' service. As of August 1, 1995, Messrs. Sands, Edwards, Barlow,
and Williams had 6, 6-8/12, 26-8/12, and 18-5/12 years of service as directors
for purposes of the retirement plan. In the event of a change in control of the
Company, each non-employee director will be deemed to have completed 10 years of
service as a director and will be paid the retirement benefit if his service as
a director of the Company is terminated, with his benefit commencing upon his
termination as a director.
The Company also maintains the Director Option Plan which most recently
provided that each eligible director was to receive up to five options to
purchase 7,500 shares, one for each year of service as a director, and all of
the non-employee directors received such option grants. The proposed amendment
of the Director Option Plan to be considered at the Annual Meeting provides for
a new series of five additional grants of options to purchase 5,000 shares per
grant and a new five year vesting schedule. Options previously granted under
the Directors Plan are exercisable immediately at a price equal to the fair
market value (as defined in the Directors Plan) of Common Stock at the date of
the grant. See "Proposal 5 - Amendment of 1984 Non-Employee Director Stock
Option Plan" for information regarding grants of stock options under the
Director Option Plan during the last fiscal year and the proposed amendment of
the Director Option Plan.
Committees. The Company's Board of Directors has an Audit Committee and a
Compensation Committee. The Company does not have a nominating committee. The
full Board of Directors performs the function which would be performed by a
nominating committee. Certain information regarding the functions of the
Board's Committees and their present membership is provided below.
Audit Committee. The Company's Board of Directors has an Audit Committee
composed of Messrs. Barlow (Chairman), Sands and Williams. The Audit Committee
annually reviews and recommends to the Board the firm to be engaged as
independent auditors for the next fiscal year, reviews with the independent
auditors the plan and results of the auditing engagement, reviews the scope and
results of the Company's procedures for internal auditing, and inquires as to
the adequacy of the Company's internal accounting controls. During the fiscal
year ended May 31, 1995, the Audit Committee held two meetings, each of which
was separate from regular Board meetings.
Compensation Committee Interlocks and Insider Participation. The Board of
Directors also has a Compensation Committee composed of Messrs. Sands
(Chairman), Edwards and Barlow. This Committee reviews and recommends to the
Board levels of compensation and performance criteria for the Company's
executive officers and administers the Company's 1982 Incentive Stock Option
Plan, the 1983 Plan and the 1987 Plan. During the fiscal year ended May 31,
1995, the Compensation and Stock Option Committees of the Board were
consolidated into the Compensation Committee. During the last fiscal year, the
Compensation Committee held six meetings, all of which were separate from
regular Board meetings. None of the members of the Compensation Committee
served as an officer or an employee of the Company during the fiscal year ended
May 31, 1995.
5
<PAGE>
COMMON STOCK OWNERSHIP OF MANAGEMENT
The following table sets forth information as of August 1, 1995, with
respect to the beneficial ownership of Common Stock by the nominees to the
Board, directors of the Company, by each of the executive officers named in the
Summary Compensation Table, and by the 14 persons, as a group, who were
directors and/or executive officers of the Company on August 1, 1995.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT OF
NAME BENEFICIAL OWNERSHIP (1) CLASS (1)
- ---- ---------------------------- -----------
<S> <C> <C>
Edward L. Barlow 113,072(2) *
Neil Williams 75,066(3) *
Robert A. Yellowlees 613,174(4) 2.7%
James B. Edwards 38,522(5) *
Don W. Sands 49,322(6) *
J. Veronica Biggins -- --
J. David Lyons 14,001(7) *
James R. Henderson 31,250(8) *
Jerry W. Braxton 47,017(9) *
Kevin C. Shea 83,782(10) *
All Directors and
Executive Officers
(14 persons) as a Group 1,173,351(11) 5.0%
</TABLE>
___________________
* Less than one percent.
(1) The amounts and percentages of Common Stock beneficially owned are reported
on the basis of regulations of the Securities and Exchange Commission
governing the determination of beneficial ownership of securities. The
beneficial owner has both voting and investment power over the shares,
unless otherwise indicated.
(2) This amount includes 55,500 shares of Common Stock of which Mr. Barlow has
the right to acquire beneficial ownership.
(3) This amount includes 55,500 shares of Common Stock of which Mr. Williams
has the right to acquire beneficial ownership.
(4) This amount includes 384,250 shares of Common Stock of which Mr. Yellowlees
has the right to acquire beneficial ownership, 30,000 shares held by The
Yellowlees Charitable Trust, of which Mr. Yellowlees is the Trustee, and
2,839 shares held by Mr. Yellowlees' wife as to which he disclaims all
beneficial ownership.
(5) This amount includes 37,500 shares of Common Stock of which Mr. Edwards has
the right to acquire beneficial ownership.
(6) This amount includes 37,500 shares of Common Stock of which Mr. Sands has
the right to acquire beneficial ownership.
(7) This amount includes 12,501 shares of Common Stock of which Mr. Lyons has
the right to acquire beneficial ownership and 1,500 shares of restricted
stock over which he currently has sole voting power only.
(8) This amount consists of 25,250 shares of Common Stock of which Mr.
Henderson has the right to acquire beneficial ownership and 3,500 shares of
restricted stock over which he currently has sole voting power only.
(9) This amount includes 35,376 shares of Common Stock of which Mr. Braxton has
the right to acquire beneficial ownership and 3,750 shares of restricted
stock over which he currently has sole voting power only.
(10) This amount includes 69,379 shares of Common Stock of which Mr. Shea has
the right to acquire beneficial ownership and 3,750 shares of restricted
stock over which he currently has sole voting power only.
(11) This amount includes 791,759 shares of Common Stock of which the directors
and executive officers, as a group, have the right to acquire beneficial
ownership and 40,250 shares of restricted stock over which the beneficial
owners have sole voting power only.
6
<PAGE>
COMMON STOCK OWNERSHIP BY CERTAIN OTHER PERSONS
The following table sets forth information as of the date indicated with
respect to the only persons who are known by the Company to be the beneficial
owners of more than 5% of the outstanding shares of Common Stock.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE
NAME AND ADDRESS OF BENEFICIAL PERCENT OF
OF BENEFICIAL OWNER DATE OWNERSHIP (1) CLASS
- ------------------- ------ ------------- -------------
<S> <C> <C> <C>
Prudential Insurance February 7, 1995 1,283,100 5.7%
Company of America(2)
Prudential Plaza
Newark, NJ 07102-3777
Montgomery Asset (3) February 11, 1994 1,181,223 5.2%
Management, L.P.
600 Montgomery Street
San Francisco, CA 94111
</TABLE>
____________________
(1) Adjusted to give effect to a three-for-two stock split effected on March
20, 1995.
(2) This information is contained in a Schedule 13G dated February 7, 1995
filed by Prudential Insurance Company of America with the Securities and
Exchange Commission, a copy of which was received by the Company. Such
Schedule 13G states that Prudential Insurance Company has sole voting and
shared dispositive power with respect to all such shares.
(3) This information is contained in a Schedule 13G dated February 11, 1994
filed by Montgomery Asset Management, L.P. with the Securities and Exchange
Commission, a copy of which was received by the Company. Such Schedule 13G
states that Montgomery Asset Management has sole voting and dispositive
power with respect to all such shares.
7
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
As previously noted, the Compensation Committee and Stock Option Committee
have been combined into one Compensation Committee. Decisions on compensation
and stock-based plans are made by the three-member Compensation Committee. All
decisions by the Compensation Committee relating to the compensation of the
Company's executive officers are reviewed by the full Board. Decisions of the
Compensation Committee related to stock-based plans are made solely by that
committee in order for awards or grants under the Company's equity-based plans
to satisfy Rule 16b-3 pursuant to the Securities Exchange Act of 1934, as
amended.
The Company's primary objective in designing and implementing its
compensation programs is to maximize stockholder value over time through
alignment of employee performance with business goals and strategies that serve
stockholders' interests. The overall goal of the Compensation Committee is to
develop executive compensation and equity-based programs which are consistent
with and linked to the Company's strategic and annual business objectives.
Compensation Philosophy
The Compensation Committee has adopted certain principles which are applied
in structuring the compensation opportunity for executive officers. These are:
LONG TERM AND AT-RISK FOCUS. A significant percentage of total
compensation for executive officers should be composed of long term,
at-risk rewards to focus senior management on the long term interests
of stockholders. Equity-based plans should comprise a major part of
the long term, at-risk portion of total compensation to encourage
stockholder value-based management decisions, and to link compensation
to Company performance and stockholder interests.
SHORT TERM AND AT RISK FOCUS. A significant portion of cash
compensation for executives is linked to achievement of annual business
plans or performance objectives. This includes cash bonuses that may
be approved by the Compensation Committee relating to those objectives.
There is real risk in bonuses paid under this plan, recognizing
variability in individual, unit and overall company performance.
COMPETITIVENESS. Base pay and total compensation should be
competitive with other similar companies based upon size, products and
markets. A proxy survey of peer group companies is conducted
periodically. The peer group surveyed includes appropriate companies
contained in the Standard and Poor's Computer Software and Services
Index used in the stockholder return analysis shown later, in addition
to other firms in the Company's business sectors.
Stock Option Awards and Restricted Stock Grants
Equity-based compensation comprises a significant portion of the Company's
executive officer compensation programs. These plans are administered solely by
the Compensation Committee. There are two Company plans utilized for this
component of executive officer, long term, equity-oriented compensation. These
involve Stock Options and Restricted Stock grants:
STOCK OPTIONS. Options provide executive officers with the
opportunity to achieve an equity interest in the Company. Stock
options are granted at 100% of fair market value on the date of grant
and have 10-year terms. Effective with grants after May 31, 1994,
stock options vest two years after the date of grant with respect to
20% of the shares granted, an additional 25% after three years, an
additional 25% after four years, and the remaining 30% after five
years. The objective is to emphasize a long term focus by key
employees in the acquisition and holding of Common Stock. The number
of stock options granted to an individual is based upon the
responsibility level of the individual's
8
<PAGE>
position and the individual's potential to contribute to future growth
of the Company as evidenced by current performance, with an objective
of fostering broad-based equity participation. Annual grant amounts
vary as a result of the Company's prior year and potential future
performance and the number of options required to achieve target grant
values based on the prevailing fair market value of the Common Stock.
RESTRICTED STOCK. Restricted stock grants are designed to be
granted on a selective basis to key employees to further focus them on
the longer term performance of the Company. Grants of restricted
shares are subject to forfeiture if a grantee, among other conditions,
fails to perform or leaves the Company prior to expiration of the
restricted period. Restricted periods are generally from two to three
years.
Target Stock Ownership
The Company's Board of Directors and management believe that significant
stock ownership is a major incentive in building stockholder value and aligning
the interests of executives and stockholders. The Board has therefore adopted
guidelines for minimum stock ownership by senior executives.
To encourage this growth in stockholder wealth, the Company believes that
senior executives who are in a position to make a significant contribution to
the long term success of the Company should have a significant stake in its
ongoing success. Guidelines are based upon a multiple of base salary and range
from .8 to 3 times annual salary amounts. Executives are encouraged to achieve
these guidelines by building stock ownership over a period of approximately five
years beginning with fiscal year 1995.
Chief Executive Officer's Compensation
Mr. Yellowlees' fiscal year 1995 compensation derived primarily from
commitments under Mr. Yellowlees' employment agreement (see "Employment
Agreements - Robert A. Yellowlees" below) entered into prior to fiscal year
1995. The only decisions affecting compensation made after that date related to
Mr. Yellowlees' specific annual performance goals, results evaluation, and
resulting fiscal year 1995 incentive bonus payment.
Mr. Yellowlees' target annual bonus was set in his employment agreement,
based upon quantitative and qualitative performance factors. In deciding upon
Mr. Yellowlees' fiscal year 1995 bonus payment, the factors given the greatest
weight were the Company's 32% improvement from year to year in earnings per
share, 17% growth in revenue, 38% improvement in productivity (as reflected by
operating income growth), and 95% increase in market valuation. In addition,
the Compensation Committee recognized the progress made in developing and
refining strategies and the progress made in implementing those strategies in
the health care and payment systems businesses.
Effective June 1, 1994, Mr. Yellowlees received a base compensation
increase of 8.2%. This increase was based upon the Compensation Committee's
evaluation of Mr. Yellowlees' performance for fiscal year 1994. During a six
month period from March through September 1994, Mr. Yellowlees waived 10% of his
base compensation in recognition of the need to set a leadership example in the
continuing effort to reduce expenses.
The Compensation Committee's general approach in setting Mr. Yellowlees
target annual compensation is to seek to be competitive with other companies in
the Company's industry, but to have a large percentage of his target
compensation based upon current year performance as well as actions to provide
sustained long term growth in stockholder value. To accomplish this a mix of
cash, restricted stock and stock options are provided to Mr. Yellowlees, which
include a significant element of risk that is based upon the Company's
performance. In accordance with this general approach, and in recognition of
Mr. Yellowlees' performance results in fiscal year 1994 the Stock Option
Committee awarded Mr. Yellowlees 22,500 shares of restricted stock and granted
him options to purchase 150,000 shares of Common Stock.
9
<PAGE>
In May 1994, the Compensation Committee recommended, and the full Board of
Directors initiated action to extend Mr. Yellowlees' employment agreement for a
term of three years from the expiration of his existing agreement. See
"Employment Agreements" below for a full summary of the terms of such renewal.
The decision to renew Mr. Yellowlees' employment agreement was based on several
factors. Included among the considerations were the progress made in developing
a new strategy for the Company focusing on revenue growth and productivity
improvements, as well as the Company's financial and market valuation
performance during the first two years of Mr. Yellowlees' tenure and the outlook
for continuation of these trends. Also considered was the requirement in Mr.
Yellowlees' existing agreement that its renewal be negotiated by the end of the
second year of the current agreement.
In consideration of this renewal term and as an incentive to sustained
growth in stockholder value, the Compensation Committee awarded Mr. Yellowlees
an additional non-qualified stock option effective May 18, 1995, at the outset
of the three year period of his renewal employment agreement in lieu of
determining a separate grant in each year. There are three separate components
to the grant, each subsequent annual component having a 12% higher exercise
price or premium over the prior year. See "Compensation and Other Benefits --
Option Grants" and "Compensation and Other Benefits -- Employment Agreements"
below. While this grant is for future fiscal years 1996, 1997 and 1998, it is
reported here and elsewhere in this proxy statement because it was granted
during fiscal year 1995. The Compensation Committee believes that it is in the
best interests of the Company's stockholders to ensure the retention of Mr.
Yellowlees for this renewal term.
COMPENSATION COMMITTEE
Don W. Sands, Chairman
James B. Edwards
Edward L. Barlow
10
<PAGE>
COMPENSATION AND OTHER BENEFITS
The following table presents certain summary information concerning
compensation paid or accrued by the Company for services rendered in all
capacities during the fiscal years ended May 31, 1995 ("1995 fiscal year"), 1994
("1994 fiscal year") and 1993 ("1993 fiscal year"), for (i) the Chief Executive
Officer of the Company; and (ii) each of the four other most highly compensated
executive officers of the Company (determined as of the end of the last fiscal
year) whose total annual salary and bonus exceeded $100,000 (collectively, the
"Named Executive Officers"). Share numbers for all fiscal years shown have been
adjusted to give effect to a three-for-two stock split effected on March 20,
1995.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
--------------------------------------
Awards
--------------------------------------
Annual Compensation Securities All Other
Name and Fiscal ---------------------------- Restricted Stock Underlying Compensation
Principal Position Year Salary ($) Bonus ($) Award(s) ($)(1) Options (#)(2) ($)(3)
- --------------------------- ------ --------- ---------------- ---------------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Robert A. Yellowlees 1995 458,354 690,000 240,001 600,000 67,283
Chairman and Chief 1994 427,806 175,000 396,500 174,000 66,488
Executive Officer, 1993 399,557 95,000 1,259,250 207,000 57,131
President and Chief
Operating Officer
Jerry W. Braxton 1995 175,834 70,000 40,000 26,250 6,038
Chief Financial 1994 158,077 20,000 45,750 15,001 5,321
Officer 1993 145,976 40,000 --- 18,000 834
J. David Lyons 1995 185,000 55,000 16,000 22,500 7,846
General Manager, 1994 168,635 55,917(4) --- 37,501 1,440
Payment Services 1993(5) --- --- --- --- ---
James R. Henderson 1995 185,000 41,000 16,000 15,000 1,373
General Manager, 1994 185,000 19,500 45,750 19,500 1,114
Pharmacy and Dental 1993 131,032 45,000 --- 37,500 310
Application Systems
Kevin C. Shea 1995 159,975 55,000 40,000 22,500 663
General Manager, 1994 144,200 19,000 45,750 15,001 488
Integrated Payment 1993 141,741 40,000 --- 28,002 1,027
Systems
</TABLE>
_______________
(1) All awards of restricted shares to the Named Executive Officers have been
made under the 1983 Plan and are valued in the table based upon the closing
market prices of the Common Stock on the grant dates. Grantees have the
right to vote and dividends are payable to the grantees with respect to all
awards of restricted shares reported in this column. As of May 31, 1995,
the shares listed in the table were the only outstanding grants of
restricted shares. The restrictions on 54,501, 54,498, 54,498 and 39,000
shares awarded to Mr. Yellowlees expired on June 1, 1993, June 1, 1994,
June 1, 1995 and May 17, 1995, respectively. The restrictions on 4,500
shares awarded to each of Messrs. Braxton and Shea expired on June 28,
1995, and the restrictions on 2,500 shares awarded to Mr. Henderson expired
on that date. The value of the restricted stock held by the Named Executive
Officers at May 31, 1995 was $1,597,709, $171,188, $31,125, $124,500, and
$171,188 for Messrs. Yellowlees, Braxton, Lyons, Henderson, and Shea,
respectively. The numbers of shares of restricted stock held by Messrs.
Yellowlees, Braxton, Lyons, Henderson, and Shea at May 31, 1995 were
76,998, 8,250, 1,500, 6,000, and 8,250, respectively.
(2) All option awards granted to the Named Executive Officers were made under
the 1987 Plan.
(3) For the 1995 fiscal year, includes for each of the indicated individuals
the following amounts representing (i) Company contributions to the
Company's Employee Savings Plan: Mr. Yellowlees - $4,500, Mr. Braxton -
$5,046 and Mr. Lyons - $4,966 and (ii) insurance premiums paid by the
Company for term life insurance policies for the benefit of the Named
Executive Officer: Mr. Yellowlees - $62,783; Mr. Braxton - $992; Mr. Lyons
- $2,880; Mr. Henderson - $1,373 and Mr. Shea - $663.
(4) Mr. Lyons received $47,917 of his bonus amount as a one-time award made
pursuant to the terms of his initial employment arrangements.
(5) Mr. Lyons became an executive officer in June 1993.
11
<PAGE>
Option Grants. The following table sets forth information on options
granted to the Named Executive Officers in the 1995 fiscal year.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
----------------------------------------------------------
Number of % of Total
Securities Options
Underlying Granted to
Options Employees in Exercise
Granted Fiscal Year or Base Expiration Grant Date
Name (#)(1)(2) ($/Sh) Price Date Present Value (3)
- ---- --------- ------------------- ------------------ ------------------- ------------------
<S> <C> <C> <C> <C> <C>
Robert A. Yellowlees 150,000 13.4% $11.167 6/1/04 $ 844,500(4)
150,000(5) 13.4% 20.125 5/18/05 1,762,500(6)
150,000(5)(7) 13.4% 22.54 5/18/06 1,753,500(8)
150,000(5)(7) 13.4% 25.245 5/18/07 1,743,000(9)
Jerry W. Braxton 26,250 2.4% 11.167 6/1/04 147,788(4)
J. David Lyons 22,500 2.0% 11.167 6/1/04 126,675(4)
James R. Henderson 15,000 1.3% 11.167 6/1/04 84,450(4)
Kevin C. Shea 22,500 2.0% 11.167 6/1/04 126,675(4)
</TABLE>
___________________
(1) The total number of shares covered by options granted to employees in the
1995 fiscal year was 665,325.
(2) These options were granted under the 1987 Plan. Except for Mr. Yellowlees,
the option agreements governing these grants provide that during each of the
four successive twelve-month periods of continued employment commencing on
the date two years after the grant date the option becomes exercisable on a
cumulative basis as to 20%, 45%, 70% and 100%, respectively, of the total
shares covered by such option grant. Pursuant to the 1987 Plan, the
Compensation Committee of the Company's Board of Directors at any time
before the termination of an option may accelerate the time or times at
which such option may be exercised, in whole or in part. For information
regarding the vesting of Mr. Yellowlees' options, see "Employment Agreements
-- Robert A. Yellowlees" below.
(3) These grant date values, based on the Black-Scholes option pricing model,
are for illustrative purposes only, and are not intended to be a forecast of
what future performance will be.
(4) This value is based upon the following assumptions: (i) an expected stock
price volatility of 49%; (ii) a risk-free rate of return of 7.41%; (iii) a
current dividend yield of 2.6%; and (iv) a term of grant of 10 years.
(5) Granted pursuant to the first renewal to Mr. Yellowlees employment
agreement in lieu of separate grants for each of the three years of the
renewal agreement. See "--Employment Agreements" below.
(6) This value is based upon the following assumptions: (i) an expected stock
price volatility of 48%; (ii) a risk-free rate of return of 7.24%; (iii) a
current dividend yield of 1.46%; and (iv) a term of grant of 10 years.
(7) Granted subject to the approval by the stockholders at the Annual Meeting of
the 1987 Plan Amendments. See Proposal 2 below.
(8) This value is based upon the following assumptions: (i) an expected stock
price volatility of 49%; (ii) a risk-free rate of return of 7.31%; (iii) a
current dividend yield of 1.46%; and (iv) a term of grant of 11 years.
(9) This value is based upon the following assumptions: (i) an expected stock
price volatility of 49%; (ii) a risk-free rate of return of 7.37%; (iii) a
current dividend yield of 1.46%; and (iv) a term of grant of 12 years.
12
<PAGE>
Option Exercises and Fiscal Year-End Values. The following table sets
forth information on the number and value of unexercised options held by the
Named Executive Officers as of May 31, 1995. None of the Named Executive
Officers exercised options during the fiscal year ended May 31, 1995.
FY-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised Options In-the-Money Options
at Fiscal Year-End (#) at Fiscal Year-End ($)
--------------------------------- ----------------------
Name Exercisable Unexercisable Exercisable Unexercisable
------------ ------------- ----------- -------------
<S> <C> <C> <C> <C>
Robert A. Yellowlees 384,250 767,750 $5,070,197 $5,163,947
Jerry W. Braxton 35,376 46,375 441,020 490,926
J. David Lyons 12,501 47,500 132,302 480,206
James R. Henderson 25,250 46,750 361,105 576,895
Kevin C. Shea 63,754 43,750 848,989 475,519
</TABLE>
Retirement Plan. The Company maintains the National Data Corporation
Employees' Retirement Plan (the "Retirement Plan"), which provides monthly
benefits upon retirement to eligible employees, including officers. Most
employees become participants in the Retirement Plan after meeting certain
minimal eligibility requirements. The benefits provided upon normal retirement
at age 60 are equal to the sum of (i) a basic benefit based solely on the number
of the employee's completed years of continuous service at his normal retirement
date and (ii) a supplemental benefit calculated under a formula based on years
of continuous service and the employee's average earnings during the five years
of highest compensation during the ten years preceding his retirement, reduced
by an amount equal to 75% of the primary social security benefits to which the
employee is entitled. The term "earnings" for purposes of the Retirement Plan
means compensation of any kind paid by the Company to the participating employee
as reported on Internal Revenue Service Form W-2, but excluding the cost of
certain employee benefits (as defined) and excluding amounts which become
taxable to the employee under a stock option or other stock plan. The
Retirement Plan covers all eligible employees retiring after its effective date.
The following table shows estimated annual retirement benefits payable to
participants in the Retirement Plan on a straight life annuity basis upon
retirement in specified years of continuous service and remuneration classes.
The annual benefit amounts have been computed by multiplying the monthly benefit
payable under the Retirement Plan by 12. Also, under current law the retirement
benefit for an employee at age 65 cannot exceed $112,221 per year.
<TABLE>
<CAPTION>
HIGHEST ESTIMATED ANNUAL RETIREMENT BENEFITS
-------------------------------------------------
FIVE-YEAR AVERAGE YEARS OF CONTINUOUS SERVICE (1)
-------------------------------------------------
ANNUAL EARNINGS 15 20 25 30 35
<S> <C> <C> <C> <C> <C>
$144,000 $33,120 $ 44,160 $ 55,200 $ 66,240 $ 77,280
192,000 43,620 58,560 73,200 87,840 102,480
240,000 54,720 72,960 91,200 109,440 112,221
288,000 65,520 87,360 109,200 112,221 112,221
336,000 76,320 101,760 112,221 112,221 112,221
384,000 87,120 112,221 112,221 112,221 112,221
432,000 97,920 112,221 112,221 112,221 112,221
</TABLE>
- ---------------
(1) The average annual earnings for the highest five years over the last 10-
year period and the eligible years of credited service as of May 31, 1995
for each of the Named Executive Officers was as follows: Mr. Yellowlees (3-
1/12 years) $425,968; Mr. Braxton (3-4/12 years) $178,551; Mr. Lyons
(1-10/12 year) $189,526; Mr. Henderson (2-8/12 years) $183,677 and Mr.
Shea (8-2/12 years) $164,413. The amounts shown in the column "Salary" in
the Summary Compensation Table above are substantially equal to the
compensation of the individuals named in such table for purposes of the
Retirement Plan.
13
<PAGE>
Employment Agreements.
Robert A. Yellowlees. The Company entered into an employment agreement
with Robert A. Yellowlees, effective as of May 18, 1992, providing for his
employment as Chief Executive Officer, President and Chief Operating Officer for
a term continuing through May 17, 1995, subject to earlier termination in
certain events, which agreement was renewed effective May 18, 1995 for an
additional three year term ending May 17, 1998. The agreement provides for
subsequent three year renewal terms upon mutual agreement. The agreement also
provides that Mr. Yellowlees will serve as Chairman of the Board and that during
the term of the agreement the Company will use its best efforts to cause him to
be nominated and elected as a director of the Company.
The agreement initially provided for a minimum annual base salary of
$395,000, subject to yearly review, and additional annual bonus targets equal to
Mr. Yellowlees' base salary for each year for which the bonus is to be paid.
The actual bonus paid for any year may range from none to 150% of the target
amount and will be based upon qualitative and quantitative standards agreed upon
by Mr. Yellowlees and the Company, upon recommendation by the Compensation
Committee of the Board of Directors and approval by the Board. The bonus is
paid, at Mr. Yellowlees' election, in whole or in part in shares of Common
Stock. Mr. Yellowlees is also entitled to participate in all other benefit
plans maintained by the Company for executive officers, and his years of service
as a director while an employee will be included in his years of service for
purposes of determination of eligibility for benefits under and computation of
the amount of benefits payable under the Retirement Plan for Non-Employee
Directors described above. See "Retirement Plan for Non-Employee Directors."
In addition, the Company is required to maintain on behalf of Mr. Yellowlees, or
reimburse Mr. Yellowlees for the premiums paid for, specified life insurance and
additional disability insurance coverage, with the Company's payments not to
exceed $55,000 per year.
Pursuant to the agreement, Mr. Yellowlees also was granted an initial
option for 135,000 shares of Common Stock at an option price of $6.17 per share
under the 1987 Plan and was awarded 163,500 shares of Common Stock as restricted
stock under the 1983 Restricted Stock Plan. Of the shares of restricted stock,
54,500 were released from escrow on each of June 1, 1993, June 1, 1994 and June
1, 1995.
Upon termination of the agreement prior to expiration of its term
(including any renewals) (i) as a result of Mr. Yellowlees' physical or mental
incapacity, (ii) by the Company other than as a result of specified misconduct
by Mr. Yellowlees, or (iii) by Mr. Yellowlees following a significant change in
his employment duties or conditions within three years after a change in control
of the Company (as defined in the agreement), (a) the Company will be required
to pay Mr. Yellowlees a severance benefit equal to three times the greater of
(A) his average annual compensation during the preceding three years or (B) his
current year compensation plus a bonus amount equal to 75% of his current year
salary, (b) the Restricted Stock awarded to him will be fully and immediately
vested, (c) all stock options held by Mr. Yellowlees will be fully and
immediately vested, and (d) the Company will pay Mr. Yellowlees 75% of the
target amount of the bonus for the fiscal year in which his employment was
terminated. For purposes of this provision of the agreement, Mr. Yellowlees'
average annual compensation is currently $762,353. Also, upon termination of
the agreement by the Company other than as a result of specified misconduct by
Mr. Yellowlees or by Mr. Yellowlees following a significant change in his
employment duties or conditions within three years after a change in control of
the Company, the Company is required to maintain Mr. Yellowlees' participation
in existing employee benefit plans until the earlier of three years after his
termination of employment or commencement of his full-time employment with a new
employer. The agreement also provides that upon its termination as a result of
Mr. Yellowlees' death, the restricted stock awarded to him and all stock options
granted to him will be fully vested.
The Company, during fiscal year 1994, entered into a first renewal
employment agreement with Mr. Yellowlees, as contemplated in the initial
employment agreement described above. The renewal agreement became effective as
of May 18, 1995, and provides for Mr. Yellowlees' continued employment as
chairman and chief executive officer and president and chief operating officer
of the Company for a
14
<PAGE>
second three year term continuing through May 17, 1998. The renewal agreement
provides for subsequent three-year renewal terms upon mutual agreement. The
renewal agreement also provides that during the term of the renewal agreement
the Company will use its best efforts to cause him to be nominated and elected
as a director of the Company.
The renewal agreement is essentially identical to the original employment
agreement, except as follows. The renewal agreement provides for a minimum
annual base salary of $470,000. Under the renewal agreement, the Company
granted Mr. Yellowlees an additional non-qualified stock option effective May
18, 1995, at the outset of the three-year period of the renewal agreement in
lieu of three separate grants. The grant contains a premium grant price feature
that provides added incentive to increase stockholder value. A total of 450,000
shares of Common Stock under the 1987 Plan were allocated to this grant. The
option agreement includes the following provisions:
(A) One-third of the shares subject to the option have an exercise
price equal to $20.125 per share, the closing price of the Common Stock on
the date the grant was approved by the Board. The shares subject to this
grant will vest as follows: 20% on May 17, 1997, an additional 25% on May
17, 1998, an additional 25% on May 17, 1999, and an additional 30% on May
17, 2000.
(B) One-third of the shares subject to the option have an exercise
price equal to $22.54 per share, 112% of the exercise price for the shares
described in (A) above. The shares subject to the grant under this
paragraph will vest as follows: 20% on May 17, 1998, an additional 25% on
May 17, 1999, an additional 25% on May 17, 2000, and an additional 30% on
May 17, 2001.
(C) One-third of the shares subject to the option have an exercise
price equal to $25.245 per share, 124% of the exercise price for the shares
described in (A) above. The shares subject to the grant under this
paragraph will vest as follows: 20% on May 17, 1999, an additional 25% on
May 17, 2000, an additional 25% on May 17, 2001, and an additional 30% on
May 17, 2002.
The option agreement also provides for the immediate and full vesting of the
options in the event of (i) a change in control of the company, (ii) the death
or physical or mental incapacity of Mr. Yellowlees, (iii) the termination of
employment of Mr. Yellowlees or (iv) non-renewal of his employment agreement for
an additional three year term upon the expiration of the renewal agreement on
May 17, 1998.
Executive Severance Agreements. In addition to Mr. Yellowlees' employment
agreement described above, the Company has entered into compensation agreements
with Messrs. Braxton and Shea and certain other key Company officers. The
agreements provide that in the event that the executive officer is terminated
other than for cause (as defined in the agreements), by reason of death or by
reason of disability (as defined in the agreements), or if the officer resigns
after a significant change in his employment conditions as specified by the
agreements during the three year period following a change in control (as
defined in the agreements) of the Company, the officer would be entitled to
payment of a severance benefit. The severance benefit would be equal to
approximately three times the officer's average annual taxable compensation from
the Company during the five year period immediately preceding the officer's
termination as described above, with such multiple of three reduced by the
number of years, if any, that the officer remained employed by the Company
following such change of control. In addition, the Company would be required to
maintain the officer's participation in existing group life, medical, accident,
and equivalent plans for a period of three years (reduced by the number of years
the officer remained employed by the Company following the change of control) or
until the executive had earlier taken other full time employment. The amounts
of the average annual taxable compensation during the five fiscal years ended
May 31, 1995, for the Named Executive Officers who are parties to such
agreements were approximately the following: Mr. Braxton $177,489 and Mr. Shea
$179,678.
STOCKHOLDER RETURN ANALYSIS.
15
<PAGE>
The following line-graph presentation compares cumulative stockholder
returns of the Company with Standard & Poor's Computer Software and Services
Index and Standard and Poor's 500 Stock Index for the five year period beginning
on May 31, 1990 (assuming the investment of $100 in the Company's Common Stock,
Standard & Poor's Computer Software and Services Index and Standard and Poor's
500 Stock Index and reinvestment of all dividends).
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG NATIONAL DATA CORPORATION, THE S&P 500 INDEX
AND THE S&P COMPUTER SOFTWARE & SERVICES INDEX
16
<PAGE>
2. AMENDMENT OF 1987 STOCK OPTION PLAN
The Company's 1987 Stock Option Plan (the "1987 Plan") was approved by the
stockholders of the Company at the 1987 annual meeting of stockholders. The
1987 Plan was amended at the 1991 annual meeting of stockholders to increase the
number of shares of Common Stock available from 2,475,000 to 3,187,500 shares,
and was also amended at the 1992 annual meeting of stockholders to increase the
number of shares of Common Stock available from 3,187,500 to 3,787,500 shares.
On July 19, 1995, the Board of Directors approved amendments to the 1987 Plan
(the "1987 Plan Amendments") and directed that such amendments be submitted to
the stockholders for approval at the Annual Meeting. It is anticipated that
management stockholders of the Company will grant authority to vote for approval
of the 1987 Plan Amendments.
The 1987 Plan currently provides that a maximum of 3,787,500 shares of
Common Stock shall be reserved and made available for sale thereunder. As of
August 1, 1995, there were 99,308 shares available for grant under the 1987
Plan. In addition, the Compensation Committee as of that date had granted an
option to purchase 300,000 shares of Common Stock pursuant to the 1987 Plan,
which grant was expressly conditioned on approval of the 1987 Plan Amendments at
the Annual Meeting.
The 1987 Plan Amendments would make an additional 1,500,000 shares
available for award under the 1987 Plan by increasing the maximum number of
shares of Common Stock as to which options may be granted under the 1987 Plan
(except by operation of the adjustment provisions of the 1987 Plan) from
3,787,500 to 5,287,500 shares. The 1987 Plan Amendments are intended to provide
additional shares of Common Stock so that the Compensation Committee may
continue to make grants of stock options at a competitive level to key employees
as a performance incentive to the achievement of stockholder value-related
goals. It is estimated that the recommended number of shares, if approved,
would meet the Company's needs for three to four years based on current trends.
The 1987 Plan Amendments would also provide that options with respect to no
more than a total of 1,500,000 shares of Common Stock may be granted to any
individual pursuant to the 1987 Plan. Such limitation on the number of options
that may be granted to any individual is being submitted for stockholder
approval in order to preserve the deductibility by the Company of the value of
nonqualified stock options granted to certain employees under Section 162(m) of
the Internal Revenue Code (the "Code").
Under the 1987 Plan, key employees are eligible for the grant of options to
purchase shares of Common Stock. Currently, approximately 180 key employees are
eligible for the grant of awards. Options granted under the 1987 Plan may
qualify as incentive stock options under Section 422 of the Code or nonqualified
stock options. Any key employee of the Company who, in the opinion of the
Compensation Committee, has proven the potential for contributing significantly
to the effective management and supervision of the Company or its subsidiaries
is eligible for grants under the 1987 Plan. The Compensation Committee
determines the grant value and the number of shares of Common Stock subject to
each grant and prescribes the other terms and conditions of each grant.
The exercise price for incentive stock options granted under the 1987 Plan
is 100% of the fair market value on the date the option is granted. The
exercise price for nonqualified stock options granted under the 1987 Plan shall
be determined by the Compensation Committee and may be equal to or less or more
than the fair market value of the shares of Common Stock subject to the
nonqualified stock option on the date of grant of such option. Options will
expire and become exercisable at such time and in such installments as the
Compensation Committee shall determine. The exercise price of an option is
payable in cash or other form of legal consideration accepted by the
Compensation Committee. The fair market value of the Common Stock underlying
options outstanding under the 1987 Plan was $25.25 per share as of August 25,
1995.
17
<PAGE>
The following table presents information regarding options granted under
the 1987 Plan to certain individuals and groups during fiscal 1995.
<TABLE>
<CAPTION>
EXERCISE
PRICE PER
NUMBER OF SHARE AT
NAME POSITION OPTIONS TIME OF GRANT
--------- --------------- ------------ --------------
<S> <C> <C> <C>
Robert A. Yellowlees Chairman and 150,000 $ 11.167
Chief Executive 150,000(2) 20.125
Officer, President 150,000(2) 22.54
and Chief 150,000(2) 25.245
Operating Officer
Jerry W. Braxton Chief Financial 26,250 11.167
Officer
J. David Lyons General Manager, 22,500 11.167
Payment Services
James R. Henderson General Manager, 15,000 11.167
Pharmacy and Dental
Application Systems
Kevin C. Shea General Manager, 22,500 11.167
Integrated
Payment Systems
All Current Executive 297,000 11.167
Officers
All Employees 368,325 11.70 (1)
Total 1,115,325 11.70 (1)
</TABLE>
- ------------------
(1) Reflects the average exercise price per share pursuant to such options.
(2) Granted pursuant to the first renewal to Mr. Yellowlees employment agreement
in lieu of separate grants for each of the three years of the renewal
agreement. See "Compensation and Other Benefits -- Employment Agreements."
Under the Code, the optionee of an incentive stock option will not realize
taxable income on the grant or the exercise of the incentive stock option and
the Company will not receive an income tax deduction at either such time. If
the optionee does not sell the shares of Common Stock acquired upon exercise of
an incentive stock option within either (i) two years after the grant of the
incentive stock option or (ii) one year after the date of the exercise of the
incentive stock option, the gain upon a subsequent sale of the shares will be
taxed as long-term gain. The difference between the exercise price and the fair
market value of the shares received upon exercise, however, can affect an
optionee's alternative minimum tax.
If the optionee, within either of the above periods, disposes of the shares
of the Common Stock acquired upon exercise of the incentive stock option, the
optionee will realize as ordinary income an amount equal to the lesser of (i)
the gain realized by the optionee upon such disposition, or (ii) the difference
between the exercise price and the fair market value of the shares on the date
of exercise. In such event, the Company will be entitled to a corresponding
income tax deduction equal to the amount recognized as ordinary income by the
optionee. The gain in excess of such amount realized by the optionee as
ordinary income would be taxed as a long-term or short-term capital gain
depending upon the holding period requirements for long-term or short-term
capital gain treatment. If an optionee exercises an incentive stock option
following his or her termination of employment, the incentive stock option must
be exercised within three months following such termination (12 months if
termination is due to death or disability) to receive incentive stock option tax
treatment. Exercise of an incentive stock option after these dates will result
in such options being taxed as nonqualified stock options.
The aggregate fair market value of the shares (determined at the time the
incentive stock option is granted) subject to incentive stock options granted to
a key employee under all stock option plans of the
18
<PAGE>
Company and the Company's subsidiaries (if any), and that become exercisable for
the first time by such key employee during any calendar year may not exceed
$100,000. Any incentive stock options granted to any employee who, immediately
after the grant of such option, would own more than 10% of the total combined
voting power of all classes of the Company's stock must have an exercise price
of not less than 110% of the fair market value of the Common Stock on the date
of grant and a term of no more than five years.
Under present law, the optionee of a nonqualified stock option realizes no
taxable income upon the grant of such option, but upon the exercise of such
option the optionee will realize ordinary income equal to the difference between
the market value of the stock received at the time of exercise and the amount
paid for the stock. Under present law, the Company is permitted to consider the
income realized by the optionee at the time of exercise of a nonqualified stock
option as a tax deductible expense. Since June 1, 1994, all options granted
under 1987 Plan have been nonqualified stock options.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE 1987 PLAN AMENDMENTS. IF
A CHOICE IS SPECIFIED ON THE PROXY BY THE STOCKHOLDER, THE SHARES WILL BE VOTED
AS SPECIFIED. IF NO SPECIFICATION IS MADE, THE SHARES WILL BE VOTED "FOR" THE
PROPOSAL. THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF THE SHARES OF
COMMON STOCK REPRESENTED AND ENTITLED TO VOTE AT THE ANNUAL MEETING AT WHICH A
QUORUM IS PRESENT IS REQUIRED FOR THE APPROVAL OF PROPOSAL 2.
3. AMENDMENT OF 1983 RESTRICTED STOCK PLAN
The Company's 1983 Restricted Stock Plan (the "1983 Plan") was approved by
the stockholders of the Company at the 1983 annual meeting of stockholders. The
1983 Plan was amended at the 1991 annual meeting of stockholders to increase the
number of shares of Common Stock available from 150,000 to 262,500 shares and to
provide that the 1983 Plan will terminate on July 11, 2003. At the 1992 annual
meeting of stockholders, the 1983 Plan was further amended to increase the
number of shares of Common Stock available from 262,500 to 487,500 shares. On
July 19, 1995, the Board of Directors approved amendments to the 1983 Plan (the
"1983 Plan Amendments") and directed that such amendments be submitted to the
stockholders for approval at the Annual Meeting. It is anticipated that
management stockholders of the Company will grant authority to vote for approval
of the 1983 Plan Amendments.
The 1983 Plan currently provides that a maximum of 487,500 shares of Common
Stock shall be reserved and made available for award thereunder and that the
1983 Plan shall terminate on July 11, 2003. Of the 487,500 reserve shares,
442,502 shares have been awarded to employees, of which 123,498 shares had been
released from escrow as of August 1, 1995.
The 1983 Plan Amendments would make an additional 262,500 shares available
for award under the 1983 Plan by increasing the maximum number of shares of
Common Stock as to which awards may be granted under the 1983 Plan (except by
operation of the adjustment provisions of the 1983 Plan) from 487,500 to 750,000
shares. The 1983 Plan Amendments would provide a sufficient supply of shares so
that the Compensation Committee could continue to make grants to key employees
on a highly selective basis. Restricted stock grants serve as both a meaningful
performance incentive and a strong aid in the retention of key employees. Based
on current trends and usage, it is estimated that the additional shares, if
approved, would meet the Company's needs for an additional three to four years.
The 1983 Plan Amendments also would add a provision to the 1983 Plan which
would allow the Compensation Committee to establish certain performance goals
with respect to grants of restricted stock under the 1983 Plan. The 1983 Plan,
as amended, would provide that for each grant of restricted stock an overall
performance goal may be set. A "performance goal" shall mean the criteria and
objectives, determined by the Compensation Committee, which must be met during
the applicable performance period for the restricted period to expire with
respect to restricted stock awarded under the 1983 Plan. Performance goals
shall include one or a combination of the following: shareholder value;
earnings per
19
<PAGE>
share; earnings before interest, taxes, depreciation and amortization; net
income; profit contribution; target gross revenue; and return on equity. The
performance goal may be stated as dollar amount, as a percent increase, as a
target percent, or as an amount or percent of change over time. Further, under
the 1983 Plan, as amended, the exact terms of each grant of restricted stock,
including the performance goals, would be within the discretion of the
Compensation Committee, but in no instance could the value of the restricted
shares released upon the attainment of a performance goal level exceed
$5,000,000. Such amendments relating to performance goals under the 1983 Plan
are being submitted for stockholder approval in order to preserve the
deductibility by the Company of performance-based compensation to certain
employees under Code Section 162(m).
Under the 1983 Plan, key employees are eligible for the grant of awards of
restricted Common Stock. Currently, approximately 180 key employees are
eligible for the grant of awards. Any key employee of the Company who, in the
opinion of the Compensation Committee, has proven the potential for contributing
significantly to the effective management and supervision of the business of the
Company or its subsidiaries is eligible for awards under the 1983 Plan. The
Compensation Committee determines the employees to whom restricted stock should
be awarded, the number of shares of restricted stock subject to each award and
prescribes the other terms and conditions of each award. Shares subject to an
award granted under the 1983 Plan are held in escrow and released to the grantee
only upon the grantee's satisfaction of conditions prescribed by the
Compensation Committee.
The fair market value of the Common Stock awarded as restricted stock under
the 1983 Plan was $25.25 per share as of August 25, 1995.
The following table presents information regarding shares granted as
restricted stock under the 1983 Plan to certain individuals and groups during
fiscal 1995.
<TABLE>
<CAPTION>
NUMBER OF SHARES OF
NAME POSITION RESTRICTED STOCK GRANTED
-------- ------------------------- ------------------------
<S> <C> <C>
Robert A. Yellowlees Chairman of the Board 22,500
and President, Chief
Executive Officer and
Chief Operating Officer
David Lyons General Manager, Payment 1,500
Services
James R. Henderson General Manager, 1,500
Pharmacy and Dental
Application Systems
Jerry W. Braxton Chief Financial Officer 3,750
Kevin C. Shea General Manager, 3,750
Integrated Payment
Systems
All Current Executive 38,250
Officers as a Group
All Other Employees -0-
Total 38,250
</TABLE>
Unless an election is made as described in the following paragraph, a key
employee to whom restricted stock is awarded will not realize taxable income,
and the Company will not receive an income tax deduction, upon the award of
restricted stock under the 1983 Plan because such stock is considered to be
subject to a substantial risk of forfeiture for tax purposes. At the time
shares of restricted stock are released from escrow, however, the key employee
to whom such shares were awarded will realize ordinary
20
<PAGE>
income and the Company is entitled to an income tax deduction. The extent of the
key employee's income and the measure of the Company's income tax deduction will
be in an amount equal to the fair market value of the shares of restricted stock
at the time of release from escrow. If a key employee disposes of shares of
restricted stock subsequent to release from escrow, the gain realized from such
disposition generally will be eligible for capital gains treatment (short or
long-term depending on the employee's holding period), and the employee's basis
in such shares will be in the amount of the fair market value of such shares at
the time of release from escrow. If cash dividends are paid with respect to
shares of restricted stock while such shares are held in escrow, such dividends
will be treated as ordinary income to the key employee to whom such shares were
awarded and the Company will receive a corresponding income tax deduction. The
delivery of the shares from escrow and the payment of any cash dividends will be
subject to applicable federal income tax withholding requirements.
Notwithstanding the foregoing, a key employee may elect to be taxed at the
time of an award of Common Stock under the 1983 Plan even though such Common
Stock is considered to be subject to a substantial risk of forfeiture. If such
an election is made, the employee's compensation and the Company's deduction are
measured by the fair market value of the shares of Common Stock on the date of
the award, an amount which may be more or less than the compensation recognized
absent such an election. Were an employee subsequently to forfeit restricted
stock as to which such an election was made, the employee may not be entitled to
any deduction or loss.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS GRANT AUTHORITY TO
VOTE "FOR" APPROVAL OF THE 1983 PLAN AMENDMENTS. IF A CHOICE IS SPECIFIED ON
THE PROXY BY THE STOCKHOLDER, THE SHARES WILL BE VOTED AS SPECIFIED. IF NO
SPECIFICATION IS MADE, THE SHARES WILL BE VOTED "FOR" THE PROPOSAL. THE
AFFIRMATIVE VOTE OF THE HOLDERS OF THE MAJORITY OF THE SHARES OF COMMON STOCK
REPRESENTED AND ENTITLED TO VOTE AT THE ANNUAL MEETING AT WHICH A QUORUM IS
PRESENT IS REQUIRED FOR THE APPROVAL OF PROPOSAL 3.
4. APPROVAL OF 1995 NON-EMPLOYEE DIRECTOR COMPENSATION PLAN
On May 23, 1995, the Board of Directors adopted a resolution approving the
1995 Non-Employee Director Compensation Plan (the "1995 Director Plan"). The
1995 Director Plan is subject to stockholder approval, and is presented to the
holders of the Common Stock at the Annual Meeting for consideration and
approval. Stockholder approval of the 1995 Director Plan is sought to qualify
the 1995 Director Plan under Rule 16b-3 of the Securities Exchange Act of 1934,
as amended, (the "1934 Act"), and thereby render certain transactions under the
1995 Director Plan exempt from certain provisions of the 1934 Act.
The 1995 Director Plan is intended to advance the interests of the Company
by encouraging ownership of the Company's Common Stock by non-employee directors
of the Company, thereby giving such directors an increased incentive to devote
their efforts to the success of the Company. The following is a summary of the
provisions of the 1995 Director Plan, which summary is qualified in its entirety
by reference to the 1995 Director Plan. A copy of the 1995 Director Plan may be
obtained from the Secretary of the Company.
The non-employee directors are entitled automatically to receive on June 1
of each year, in lieu of their cash retainer, that number of shares of Common
Stock, rounded up to the next whole share, with a fair market value equal to 50%
of the total annual retainer paid to non-employee directors. Fair market value
is defined in the 1995 Director Plan to be the closing sales price of the Common
Stock on the New York Stock Exchange on June 1 of each year, or the first
trading day thereafter. The annual retainer of non-employee directors is
defined to include the monthly compensation paid ($2,000 per month for fiscal
1995) and excludes any fees paid for attending meetings of the Board of
Directors or committees thereof, and also excludes reimbursement for travel or
other out-of-pocket expenses. The 1995 Director Plan provides that up to 25,000
shares of Common Stock be available to be issued to directors who are not
21
<PAGE>
employees of the Company for payment of one-half of their annual retainer as
provided for by the 1995 Director Plan.
As of June 1, 1995, each of Messrs. Sands, Edwards, Barlow and Williams was
issued 572 shares of Common Stock based on the fair market value of the Common
Stock on that date of $21.00 per share and the current annual retainer for the
non-employee directors of $24,000.
Under present law, the non-employee directors must treat the fair market
value of the Common Stock as income received on the date of grant and the
Company is permitted to consider the amount of income as a tax deductible
expense.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS GRANT AUTHORITY TO
VOTE "FOR" APPROVAL OF THE 1995 DIRECTOR PLAN. IF A CHOICE IS SPECIFIED ON THE
PROXY BY THE STOCKHOLDER, THE SHARES WILL BE VOTED AS SPECIFIED. IF NO
SPECIFICATION IS MADE, THE SHARES WILL BE VOTED "FOR" THE PROPOSAL. THE
AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF THE SHARES OF COMMON STOCK
REPRESENTED AND ENTITLED TO VOTE AT THE ANNUAL MEETING AT WHICH A QUORUM IS
PRESENT IS REQUIRED FOR THE APPROVAL OF PROPOSAL 4.
5. AMENDMENT OF 1984 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
The Company's 1984 Non-Employee Director Stock Option Plan (the "Director
Option Plan") was approved by the stockholders at the 1984 annual meeting of
stockholders and amended by the stockholders at the 1989 annual meeting of
stockholders. The Director Option Plan initially provided that stock options
could be granted thereunder to directors who were not employees of the Company
for up to a total of 157,500 shares of Common Stock, and each such director was
entitled automatically to receive an option to purchase 4,500 shares for each
completed year of service as a director after his election by the stockholders,
up to five such options. As amended in 1989, the Director Option Plan provided
that non-employee directors may be granted options for up to a total of 345,000
shares under the Director Option Plan; that each eligible director may receive
up to five options to purchase 7,500 shares, one for each year of service as a
director, following approval by the stockholders in 1989 of the amendments to
the Director Option Plan; and that each newly elected director be granted an
option to acquire 7,500 shares after the first annual meeting of stockholders
following such director's election.
On July 19, 1995, the Board of Directors approved amendments to the
Director Option Plan (the "Director Option Plan Amendments") to provide that
non-employee directors shall receive up to five additional options each to
purchase 5,000 shares, one for each year of service as a director, following
approval by the stockholders at the Annual Meeting. The Director Option Plan
Amendments also provide that any option granted under the Director Option Plan
would not terminate 120 days after the retirement of the director, but instead
would remain exercisable for the remaining term of the option.
Currently, options granted under the Director Option Plan are exercisable
immediately at a price equal to the fair market value (as defined in the
Director Option Plan) of Common Stock at the date of grant. Pursuant to the
Director Option Plan Amendments, options granted under the Director Option Plan
will be granted at a price equal to the fair market value (as defined in the
Director Option Plan) of Common Stock at the date of grant and will vest 20% two
years after the date of grant, an additional 25% after three years, an
additional 25% after four years, and the remaining 30% after five years. The
fair market value of the Common Stock subject to options outstanding under the
Director Option Plan was $25.25 per share as of August 25, 1995.
The only option granted under the Director Option Plan during fiscal 1995
was to Ira C. Herbert for 7,500 shares of Common Stock at an exercise price per
share of $13.92. Mr. Herbert died on March 4, 1995.
22
<PAGE>
Under present law, the optionee of a nonqualified stock option realizes no
taxable income upon the grant of such option, but upon the exercise of such
option the optionee will realize taxable income equal to the difference between
the market value of the stock received at the time of exercise and the amount
paid for the stock. Under present law, the Company is permitted to consider the
income realized by the optionee at the time of exercise of an unqualified stock
option as a tax deductible expense.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS GRANT AUTHORITY TO
VOTE "FOR" APPROVAL OF THE DIRECTOR OPTION PLAN AMENDMENTS. IF A CHOICE IS
SPECIFIED ON THE PROXY BY THE STOCKHOLDER, THE SHARES WILL BE VOTED AS
SPECIFIED. IF NO SPECIFICATION IS MADE, THE SHARES WILL BE VOTED "FOR" THE
PROPOSAL. THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF THE SHARES OF
COMMON STOCK REPRESENTED AND ENTITLED TO VOTE AT THE ANNUAL MEETING AT WHICH A
QUORUM IS PRESENT IS REQUIRED FOR THE APPROVAL OF PROPOSAL 5.
6. APPROVAL OF 1995 PERFORMANCE-BASED EXECUTIVE OFFICER BONUS PLAN
On July 19, 1995, the Board of Directors adopted a resolution approving the
1995 Performance-Based Executive Officer Bonus Plan (the "Executive Bonus
Plan"). The Executive Bonus Plan is subject to stockholder approval, and is
presented to the holders of the Common Stock at the Annual Meeting for
consideration and approval in order to preserve the deductibility by the Company
of performance-based compensation to certain employees under Code Section
162(m).
The Executive Bonus Plan is designed to provide a performance incentive for
the Company's executive officers based on the attainment of strategic business
objectives which would be established to demonstrate a clear link between the
executive's compensation and increasing stockholder value.
Under the Executive Bonus Plan, the Compensation Committee would establish
a performance goal for each participating executive officer for each fiscal
year. The performance goal would be the objective which must be met during the
fiscal year in order for the applicable executive officer to receive payment of
an award under the Executive Bonus Plan. The performance goal shall be based on
one or more of the following: net income; earnings per share; earnings before
interest, taxes, depreciation and amortization; operating income and/or margin
percentage of revenue; profit contribution; return on equity; return on invested
capital; or gross revenue. Further, the performance goal may be stated in terms
of a dollar amount, a percentage increase, a target percentage or as an amount
or percent of change over time. Each performance goal in addition would be
subdivided into levels representing (i) the minimum level of achievement below
which no award would be made; (ii) the target level at which 100% of the annual
award would be payable; and (iii) if the performance goal is exceeded, the
maximum level at which the maximum award would be payable. Additional
intermediate levels may be determined. All awards under the Executive Bonus
Plan will be taxed as ordinary income to the recipient.
The Compensation Committee would have discretion under the Executive Bonus
Plan to set the annual award amount for each participating executive officer.
However, the maximum award payable to any individual shall not exceed $500,000.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS GRANT AUTHORITY TO
VOTE "FOR" APPROVAL OF THE EXECUTIVE BONUS PLAN. IF A CHOICE IS SPECIFIED ON A
PROXY BY THE STOCKHOLDER, THE SHARES WILL BE VOTED AS SPECIFIED. IF NO
SPECIFICATION IS MADE, THE SHARES WILL BE VOTED "FOR" THE PROPOSAL. THE
AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF THE SHARES OF COMMON STOCK
REPRESENTED AND ENTITLED TO VOTE AT THE ANNUAL MEETING AT WHICH A QUORUM IS
PRESENT IS REQUIRED FOR THE APPROVAL OF PROPOSAL 6.
23
<PAGE>
7. AMENDMENT OF CERTIFICATE OF INCORPORATION
On July 19, 1995, the Board of Directors adopted a resolution approving an
amendment to the Company's Certificate of Incorporation to increase the number
of authorized shares of Common Stock from 30,000,000 to 60,000,000. The
amendment is subject to stockholder approval, and is presented to the holders of
the Common Stock at the Annual Meeting for consideration and approval. If
approved by the stockholders, the proposed amendment will become effective upon
the filing of an amendment to the Company's Certificate of Incorporation with
the Secretary of State of Delaware, which will occur as soon as reasonably
practicable.
As of August 25, 1995, the Company had 22,629,467 shares of Common Stock
issued and outstanding, and the Board of Directors of the Company has
recommended the amendment to the Certificate in order to provide the Company
with a sufficient number of authorized shares of Common Stock for the Company's
general corporate needs. The Board of Directors believes that the availability
of additional shares will provide the Company with the flexibility to issue
Common Stock for possible future financings, stock dividends or distributions,
acquisitions, stock option plans or other proper corporate purposes which may be
identified in the future by the Board of Directors, without the possible expense
and delay of a special stockholders' meeting. The issuance of additional shares
of Common Stock may have a dilutive effect on earnings per share and, for
persons who do not purchase additional shares to maintain their pro rata
interest in the Company, on such stockholders' percentage voting power.
The authorized shares of Common Stock in excess of those issued will be
available for issuance at such times and for such corporate purposes as the
Board of Directors may deem advisable, without further action by the Company's
stockholders, except as may be required by applicable law or by the rules of the
New York Stock Exchange or other stock exchange or national securities
association trading system on which the securities may be listed or traded.
Upon issuance, such shares will have the same rights as the outstanding shares
of Common Stock. Holders of Common Stock have no preemptive rights.
The Company has no arrangements, agreements, understandings or plans at the
present time for the issuance or use of the additional shares of Common Stock
proposed to be authorized. The Board of Directors does not intend to issue any
Common Stock except on terms which the Board deems to be in the best interests
of the Company and its then existing stockholders. Any future issuance of
Common Stock will be subject to the rights of holders of outstanding shares of
any preferred stock which the Company may issue in the future.
Although the Company has no present intention to issue shares of Common
Stock in the future in order to make acquisition of control of the Company more
difficult, future issuances of Common Stock could have that effect. For
example, the acquisition of shares of the Common Stock by an entity in order to
acquire control of the Company might be discouraged through the public or
private issuance of additional shares of Common Stock, since such issuance would
dilute the stock ownership of the acquiring entity. Common Stock also could be
issued to existing stockholders as a dividend or privately placed with
purchasers who might side with the Board of Directors in opposing a takeover
bid, thus discouraging such a bid. The Board of Directors also is authorized to
issue preferred stock in one or more series and to fix the rights, preferences
and privileges thereof without any further vote or action by the stockholders.
The issuance of preferred stock also may have the effect of delaying, deferring
or preventing a change in control of the Company.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS GRANT AUTHORITY TO
VOTE "FOR" APPROVAL OF THE PROPOSED AMENDMENT TO THE CERTIFICATE OF
INCORPORATION. IF A CHOICE IS SPECIFIED ON THE PROXY BY THE STOCKHOLDER, THE
SHARES WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THE SHARES WILL
BE VOTED "FOR" THE PROPOSAL. THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY
OF THE OUTSTANDING SHARES OF COMMON STOCK IS REQUIRED FOR THE APPROVAL OF
PROPOSAL 7.
24
<PAGE>
AUDITORS
Arthur Andersen LLP served as the Company's auditors for the four fiscal
years ended May 31, 1995, and that firm of independent public accountants is
serving as auditors for the Company for the current fiscal year which began June
1, 1995. Representatives of Arthur Andersen LLP are expected to be present at
the Annual Meeting and will have an opportunity to make a statement if they so
desire and will be available to respond to appropriate questions.
SOLICITATION OF PROXIES
The cost of soliciting proxies will be borne by the Company. In addition to
solicitation of stockholders of record by mail, telephone, or personal contact,
arrangements will be made with brokerage houses to furnish proxy materials to
their principals, and the Company may reimburse them for mailing expenses.
Custodians and fiduciaries will be supplied with proxy materials to forward to
beneficial owners of Common Stock. The Company has also engaged Georgeson & Co.
to solicit proxies on behalf of the Company, and it is estimated that Georgeson
& Co.'s fees for its services will not exceed $10,000.
OTHER MATTERS
Management does not know of any matters to be brought before the Annual
Meeting other than those referred to above. If any other matters properly come
before the meeting, the persons designated as proxies will vote on such matters
in accordance with their best judgment.
Whether or not you expect to be present at the meeting in person, please
vote, sign, date, and return promptly the enclosed proxy in the enclosed
envelope. No postage is necessary if the proxy is mailed in the United States.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented for consideration at the
1996 Annual Meeting of Stockholders of the Company must be received by the
Company at its principal executive offices on or before May 3, 1996, in order to
be included in the Company's proxy statement and form of proxy relating to the
1996 Annual Meeting of Stockholders.
SECTION 16(A) REPORTING
Based solely on a review of the copies of reporting forms furnished to the
Company, or written representations that no annual forms (Form 5) were required,
the Company believes that, during the 1995 fiscal year, all of its officers,
directors and 10% stockholders complied with the reporting requirements of the
Securities and Exchange Commission regarding their ownership and changes in
ownership of Common Stock (as required pursuant to Section 16(a) of the
Securities Exchange Act of 1934).
25
<PAGE>
PROXY
NATIONAL DATA CORPORATION
ATLANTA, GEORGIA
ANNUAL MEETING OF STOCKHOLDERS
The undersigned stockholder of National Data Corporation (the "Company"),
Atlanta, Georgia, hereby constitutes and appoints Robert A. Yellowlees or E.
Michael Ingram or either one of them, each with full power of substitution, to
vote the number of shares of Common Stock which the undersigned would be
entitled to vote if personally present at the Annual Meeting of Stockholders to
be held at the Company's offices at National Data Plaza, Atlanta, Georgia
30329-2010, on Thursday, October 26, 1995, at 11:00 A.M., or at any adjournments
thereof (the "Annual Meeting"), upon the proposals described in the Notice of
Annual Meeting of Stockholders and Proxy Statement, both dated August 30, 1995,
the receipt of which is acknowledged, in the manner specified below. The
proxies, in their discretion, are further authorized to vote for the election of
a person to the Board of Directors if any nominee named herein becomes unable to
serve or for good cause will not serve, are further authorized to vote on
matters which the Board of Directors does not know a reasonable time before
making the proxy solicitation will be presented at the Annual Meeting, and are
further authorized to vote on other matters which may properly come before the
Annual Meeting and any adjournments thereof. The Board of Directors recommends
a vote FOR Proposals 1, 2, 3, 4, 5, 6 and 7.
1. ELECTION OF DIRECTORS. On the proposal to elect the following slate of
directors to serve until the 1998 Annual Meeting of Stockholders of the
Company and until their successors are elected and qualified:
Don W. Sands J. Veronica Biggins
For [ ] Withhold Authority [ ]
To withhold authority for any individual nominee(s), write the name of the
nominee(s) in the space provided:
------------------------------------------------------------
2. AMENDMENT OF 1987 PLAN. On the proposal to amend the Company's 1987 Stock
Option Plan:
For [ ] Against [ ] Abstain [ ]
3. AMENDMENT OF 1983 PLAN. On the proposal to amend the Company's 1983
Restricted Stock Plan:
For [ ] Against [ ] Abstain [ ]
4. APPROVAL OF 1995 DIRECTOR PLAN. On the proposal to approve the Company's
1995 Non-Employee Director Compensation Plan:
For [ ] Against [ ] Abstain [ ]
5. AMENDMENT OF DIRECTOR OPTION PLAN. On the proposal to amend the Company's
1984 Non-Employee Director Stock Option Plan:
For [ ] Against [ ] Abstain [ ]
6. APPROVAL OF EXECUTIVE BONUS PLAN. On the proposal to approve the 1995
Performance-Based Executive Officer Bonus Plan:
For [ ] Against [ ] Abstain [ ]
7. AMENDMENT OF CERTIFICATE OF INCORPORATION. On the proposal to amend the
Company's Certificate of Incorporation:
For [ ] Against [ ] Abstain [ ]
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1, 2, 3, 4, 5, 6 AND 7 AND WITH DISCRETIONARY AUTHORITY ON ALL
OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE ANNUAL MEETING OR ANY
ADJOURNMENTS THEREOF.
Please sign exactly as your name appears on your stock certificate and date.
Where shares are held jointly, each stockholder should sign. When signing as
executor, administrator, trustee, or guardian, please give full title as such.
If a corporation, please sign in full corporate name by president or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
Shares Held:
-------------------------------------
-------------------------------------------------
Signature of Stockholder
-------------------------------------------------
Signature of Stockholder (If Held Jointly)
Dated: , 1995
------------------------------
Month Day
THIS PROXY IS SOLICITED ON BEHALF OF NATIONAL DATA CORPORATION'S
BOARD OF DIRECTORS AND MAY BE REVOKED BY THE STOCKHOLDER PRIOR TO ITS EXERCISE.
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NATIONAL DATA CORPORATION
1987 STOCK OPTION PLAN
1. Purpose. The purpose of the National Data Corporation 1987 Stock
Option Plan (the "Plan") is to advance the interests of National Data
Corporation (the "Company") by encouraging and enabling key employees of the
Company and its subsidiaries to acquire a financial interest in the Company
through the issuance of incentive stock options and non-qualified stock options
("Options") granted under the Plan. The Company believes that the Plan will
also aid the Company and its subsidiaries in attracting and retaining
outstanding key employees and in stimulating the efforts of such employees to
work for the success of the Company.
2. Administration. The Plan shall be administered, construed and
interpreted by the Compensation Committee (the "Committee") consisting of
members of the Board of Directors of the Company appointed by the Board of
Directors. The Board of Directors may also from time to time appoint members of
the Committee in substitution for or in addition to members previously appointed
and may fill vacancies, however caused, in the Committee.
The Committee shall from time to time determine the persons who shall
participate in the Plan and the extent of their participation. The Committee
also shall determine the price to be paid for shares upon the exercise of
Options granted under the Plan, the period within which each Option may be
exercised, and the terms and conditions of each individual Stock Option
Agreement by and between the Company and the holder of the Option. The terms
and conditions of each individual Stock Option Agreement shall be consistent
with the provisions of the Plan, but the Committee may provide for such
additional terms and conditions, not in conflict with the provisions of the
Plan, as it deems advisable. Each Stock Option Agreement shall indicate clearly
the status of the Option as an incentive stock option or a non-qualified stock
option.
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In interpreting any portion of the Plan that governs or affects the
issuance, administration, or exercise of incentive stock options, the Committee
shall be governed by the principles and requirements of Sections 421, 422A, 425
and related Sections of the Internal Revenue Code of 1986, as amended ("Code"),
and the Treasury Regulations applicable to incentive stock options and incentive
stock option plans. Where applicable, unless otherwise defined, the term
"subsidiary" and all other terms used herein shall have and shall be interpreted
by the Committee as having the meanings set forth in the applicable provisions
of the Code. The interpretation and construction by the Committee of any
provision of or term used in the Plan or any Option granted under the Plan and
any determination by the Committee pursuant to any provision of the Plan or any
such option shall be final and conclusive. Business shall be transacted by a
majority vote of the members of the Committee, and any decision or determination
reduced to writing and signed by a majority of the members of the Committee
shall be fully as effective as if it had been made by a majority vote at a
meeting duly called and held. No member of the Committee shall be liable for
any action or determination made in good faith, and members of the Committee
shall be entitled to indemnification and reimbursement from time to time for
expenses incurred in defense of such good faith action or determination.
3. Eligibility. Options under the Plan may be granted to key employees of
the Company or of one or more of the present or future subsidiaries of the
Company who, in the opinion of the Committee, are contributing significantly to
the effective management and supervision of the business of the Company or its
subsidiaries. Options may be granted under the Plan only to persons who are
employed by the Company or one of its subsidiaries at the time of the grant.
The fact that an employee is a member of the Board of Directors of the Company
shall not make him ineligible for an Option grant unless he is also a member of
the Committee in which event he shall not be eligible for an Option grant. For
purposes of the Plan, a person to whom an Option is granted under the Plan shall
be referred to as a "Grantee".
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4. Shares Subject to Plan. The shares subject to the Plan shall be
authorized but unissued or reacquired shares of the Company's $.125 par value
Common Stock (the "Common Stock"). Subject to readjustment in accordance with
the provisions of paragraph 6 of the Plan, the maximum number of shares of
Common Stock for which Options may be granted under the Plan shall be 650,000,
and the adoption of the Plan by the Board of Directors of the Company shall
constitute a reservation of 650,000 shares of Common Stock for issuance only
upon the exercise of Options granted under the Plan. In the event that any
outstanding Option granted under the Plan for any reason expires or is
terminated prior to the end of the period during which Options may be granted
under the Plan, the shares of Common Stock allocable to the unexercised portion
of such Option may again be subject in whole or in part to any Option granted
under the Plan.
5. Terms and Conditions of Options. Options granted pursuant to the Plan
shall be evidenced by Stock Option Agreements in such form as the Committee
shall approve from time to time. Such Stock Option Agreements and the Options
evidenced thereby shall comply with and be subject to the terms and conditions
of this paragraph. Incentive Stock Option Agreements shall also comply with and
be subject to the provisions of Sections 421, 422A, 425 and related Sections of
the Code and applicable Treasury Regulations. Nevertheless, non-qualified stock
options shall not be subject to any term or condition applicable only to
incentive stock options and, similarly, incentive stock options shall not be
subject to any term or condition applicable only to non-qualified stock options.
Except as indicated otherwise, the following terms and conditions shall apply to
both incentive stock options and to non-qualified stock options.
(a) Number of Shares. Each Stock Option Agreement shall state the total
number of shares of Common Stock to which it pertains.
(b) Amount Limitation for Incentive Stock Options.
(i) The aggregate fair market value of stock (valued as of the date of
grant of the incentive stock option) subject to incentive stock options
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granted to a key employee under all plans of the Company and, its parent or
subsidiary corporations and that become exercisable for the first time by
such key employee during any calendar year may not exceed One Hundred
Thousand Dollars ($100,000).
(ii) This paragraph 5(b) shall not apply to non-qualified stock options.
(c) Option Price. The option price for each incentive stock option granted
under the Plan shall be the amount determined by the Committee, but, subject to
the provisions of paragraph 5(j) of the Plan, shall not be less than 100% of the
fair market value of the shares of Common Stock subject to the incentive stock
option on the date of grant of such option. The option price for each non-
qualified stock option shall be determined by the Committee and may be less than
the fair market value of the shares of Common Stock subject to the non-qualified
stock option on the date of grant of such option. The date on which the
Committee approves the granting of an Option shall be considered the date on
which such Option is granted. For purposes of the Plan, the "fair market value"
of the shares of Common Stock shall be the closing price of the Common Stock in
the National Association of Securities Dealers Automatic Quotation System
("NASDAQ") National Market of Over-the-Counter Securities or, if such price is
not available, the mean between the high "bid" and the low "asked" prices of the
Common Stock in the over-the-counter market, in either case on the day on which
such value is to be determined or, if no shares were traded on such day, on the
next preceding day on which shares were traded, as reported in The Wall Street
Journal or by a national quotation service. If the Common Stock is not
regularly traded in the over-the-counter market but is registered on a national
securities exchange, the "fair market value" of the shares of Common Stock shall
mean the closing price of the Common Stock on such national securities exchange
on the day on which such value is to be determined or, if no
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shares were traded on such day, on the next preceding day on which shares were
traded, as reported in The Wall Street Journal or by a national quotation
service.
(d) Medium and Time of Payment. The option price shall be payable upon the
exercise of an Option in cash or by check or, if provided in the Stock Option
Agreement, in shares of Common Stock already held by the Grantee. In the event
that all or part of the option price is paid in shares of Common Stock, the
value of such shares shall be equal to the fair market value of such shares on
the date of exercise of the option (determined as provided in paragraph 5(c) of
the Plan), and the Grantee shall deliver to the Company a certificate or
certificates representing such shares duly endorsed to the Company or
accompanied by a duly-executed separate instrument of transfer satisfactory to
the Committee; provided, however, that the Committee, in its discretion, may
allow the Grantee to present satisfactory proof of ownership of such shares
without delivering the endorsed certificate(s) therefor and in such event shall
cause the Company to issue to the Grantee the number of shares of Common Stock
equal to (i) the number of shares as to which the Grantee is exercising the
option less (ii) the number of shares used by the Grantee in payment of the
option price upon exercise of such option.
(e) Term and Exercise. Each Option granted under the Plan shall be
exercisable by the Grantee only during a term fixed by the Committee. The term
of each incentive stock option shall end not later than ten years after the date
of grant of the incentive stock option. The Committee shall determine whether
the Option shall be exercisable in full at any time during the term or in
cumulative or non-cumulative installments during the term.
(f) Method of Exercise. All Options granted under the Plan shall be
exercised by written notice directed to the officer of the Company indicated in
the Stock Option Agreement at the Company's principal place of business. Such
written notice shall specify the form of payment made by the Grantee or his
successor as provided by paragraph 5(d) of the Plan and shall be accompanied by
payment in full of the option price
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for the shares for which such Option is being exercised. The Company shall make
delivery of certificates representing the shares for which an Option has been
exercised within a reasonable period of time; provided, however, that if any
law, regulation or agreement requires the Company to take any action with
respect to the shares for which an Option has been exercised before the issuance
thereof, then the date of delivery of such shares shall be extended for the
period necessary to take such action.
(g) Effect of Termination of Employment or Death.
(A) Termination of Employment. Except as otherwise provided in this
subparagraph (A) or in subparagraph (B) next following, upon the termination of
the employment of any Grantee with the Company or any subsidiary for any reason,
all Options held by the Grantee under the Plan shall immediately terminate.
Whether military, government or other service or other leave of absence shall
constitute a termination of employment shall be determined in each case by the
Committee in its discretion, and any determination by the Committee shall be
final and conclusive. Subject to the limitations set forth below, the Committee
at its election may provide in any Stock Option Agreement that the Grantee may
exercise an Option during a period specified by the Committee after the
termination of employment of the Grantee with the Company or any subsidiary then
employing the Grantee; provided, however, that in the case of an incentive stock
option such period may not be longer than three months from the date of the
Grantee's termination of employment, unless the Grantee's employment is
terminated due to the Grantee's permanent disability in which event such period
may not be longer than one year after the termination of employment. In no
event, however, will the Option be exercisable after the expiration of the term
of the Option. In addition, exercise of the Option following termination of the
Grantee's employment shall be subject to the following terms and conditions: (1)
with respect to any installment of the Option that had not become exercisable at
the time of termination of employment, the period of extension shall not, unless
otherwise approved by the Committee, operate to permit such installment to
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become exercisable within such period; (2) with respect to any installment of
the Option that had become exercisable at the time of termination of employment,
the period of extension shall not operate to permit the exercise of such
installment after the expiration of the period within which such installment may
be exercised; and (3) the period of extension shall not operate to permit the
exercise of an Option if the employment of the Grantee is terminated prior to
the term during which the Option would otherwise have been exercisable. For
purposes of this subparagraph (A), if any corporation ceases to be a subsidiary
of the Company, the employment of any Grantee employed by such corporation shall
be deemed to have terminated unless such Grantee becomes an employee of the
Company or another subsidiary of the Company simultaneously with or prior to the
time such corporation ceases to be a subsidiary of the Company. For purposes of
the Plan, "permanent disability" shall mean a permanent disability as defined in
Section 422A(c)(7) of the Code.
(B) Death. In granting any Option under the Plan, the Committee may
provide in the Stock Option Agreement representing such option that in the event
of the death of a Grantee at a time when an Option is exercisable by the
Grantee, the Grantee's personal representatives, heirs or legatees (the
"Grantee's Successors") may exercise all or any portion of such Option held by
the Grantee on the date of his death upon proof satisfactory to the Company of
their authority. If the Committee so provides that an Option shall be
exercisable by the Grantee's Successors after the death of the Grantee, the
Committee shall specify the period following the Grantee's death during which
the Option may be exercised; provided, however, that no Option may be exercised
after the date of expiration of the Option; and provided further, that in the
case of an incentive stock option such period may not be longer than 12 months
after the date of the Grantee's death. Such exercise otherwise shall be subject
to the terms and conditions of the Plan; provided, however, that with respect to
any installment of the Option that had not become exercisable on the date of the
Grantee's death, the period of extension shall
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not, unless otherwise provided by the Committee, operate to permit such
installment to become exercisable within such period.
(h) Nonassignability of Option Rights. No option shall be assignable or
transferable by the Grantee except by will or by the laws of descent and
distribution. During the lifetime of the Grantee, the Option shall be
exercisable only by the Grantee.
(i) Rights as Stockholder. Neither the Grantee nor the Grantee's
Successors shall have rights as a stockholder of the Company with respect to
shares of Common Stock covered by the Grantee's Option until the Grantee or the
Grantee's Successors become the holder of record of such shares. Unless
specified in paragraph 6 of the Plan, no adjustment will be made for dividends
or other rights for which the record date is prior to the date on which shares
are issued upon exercise of an Option.
(j) No Options in Certain Cases. No Options shall be granted except within
a period of ten years after the effective date of the Plan. In no event shall
an incentive stock option be granted to any person who, immediately after such
incentive stock option is granted, owns (as defined in Sections 422A and 425 of
the Code) stock possessing more than ten percent (10%) of the total combined
voting power or value of all classes of stock of the Company or of any parent or
subsidiary corporation of the Company unless (i) the option price under such
incentive stock option is not less than one hundred and ten percent (110%) of
the fair market value of the shares of Common Stock subject to such incentive
stock option on the date of grant of such incentive stock option (determined as
provided in paragraph 5(c) of the Plan) and (ii) the terms of the Incentive
Stock option Agreement shall make such incentive stock option expire on the date
that is the fifth anniversary after the date on which the incentive stock option
is granted.
(k) Miscellaneous Provisions. The Stock Option Agreements authorized under
the Plan may contain such other provisions, not inconsistent with the Plan, as
the Committee shall deem advisable.
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6. Adjustments.
(a) Recapitalization. In the event that, after the effective date of the
Plan, the outstanding shares of Common Stock are increased or decreased or
changed into or exchanged for a different number or kind of shares or other
securities of the Company by reason of a recapitalization, reclassification,
stock split-up, combination of shares, or dividend payable in stock, appropriate
adjustments shall be made by the Committee in the number and kind of shares or
other securities for which options may be granted under the Plan. In addition,
the Committee upon the occurrence of such an event shall make appropriate
adjustments in the number and kind of shares or other securities as to which
outstanding Options, or portions thereof then unexercised, shall be exercisable,
so that each Grantee's proportionate interest shall be maintained as before the
occurrence of such event. Such adjustment in outstanding Options shall be made
without change in the total price applicable to the unexercised portion of each
Option and with a corresponding adjustment in the option price per share. Any
fractional shares resulting from any of the foregoing adjustments under this
subparagraph (a) shall be disregarded and eliminated. Each such adjustment
under this subparagraph (a) shall be made in such a manner that such adjustment
will not constitute a "modification" as defined in Section 425 of the Code. All
adjustments made by the Committee under this subparagraph (a) shall be final and
conclusive.
(b) Reorganizations; Liquidation. If the Company shall be a party to any
reorganization involving a merger, consolidation or acquisition of the stock or
the assets of the Company, the Committee, in its discretion, may:
(A) Declare that all Options granted under the Plan shall become
exercisable immediately notwithstanding the provisions of the respective Stock
Option Agreements regarding exercisability and that all Options shall terminate
upon the expiration of a period specified by the Committee after the Committee
gives written notice to all Grantees of their immediate right to exercise all
Options then outstanding and of the
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Committee's decision to terminate all options not exercised within such period;
provided, however, that such period may not begin earlier than thirty (30) days
after the Committee gives such written notice to all Grantees; or
(B) Notify all Grantees that all Options granted under the Plan shall apply
with appropriate adjustments as determined by the Committee to the securities of
the resulting corporation to which holders of the number of shares of Common
Stock subject to such Options would have been entitled; or
(C) Some combination of (A) and (B).
The adoption of a plan of dissolution or liquidation by the Board of
Directors and the stockholders of the Company shall cause every Option
outstanding under the Plan to terminate to the extent not exercised prior to the
adoption of the plan of dissolution or liquidation by the stockholders;
provided, however, that the Committee, in its discretion, may declare that all
Options granted under the Plan shall become exercisable immediately
notwithstanding the provisions of the respective Stock Option Agreements
regarding exercisability; and provided further that in the event of the adoption
of a plan of dissolution or liquidation in connection with a reorganization as
described in the first sentence of this subparagraph (b), outstanding Options
shall be governed by and be subject to the provisions of such sentence.
(c) Rights or Warrants. If any rights or warrants to subscribe for
additional shares are given pro rata to holders of outstanding shares of the
Common Stock, each Grantee under the Plan shall be entitled to the same rights
or warrants on the same basis as holders of the outstanding shares with respect
to such portion of the Grantee's Option that may be exercised on or prior to the
date of the expiration of such rights or warrants.
(d) Acceleration Event. If in the opinion of the Board of Directors, based
on circumstances known to it, the Board of Directors believes an event is likely
to lead to changes in control of stock ownership of the Company, whether or not
any such
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change in control actually occurs, the Board of Directors may direct the
Committee to declare that all Options granted under the Plan shall become
exercisable immediately notwithstanding the provisions of the respective Stock
Option Agreements regarding exercisability.
7. Effective Date and Termination of Plan.
(a) Effective Date. The effective date of the Plan shall be August 26,
1987, the date of its adoption by the Board of Directors of the Company,
provided that the stockholders of the Company (acting at a duly called meeting
of the stockholders), shall approve the Plan on or before August 25, 1988.
(b) Termination. The Plan shall terminate ten years after its effective
date, but the Board of Directors may terminate the Plan at any time prior to
such date. Termination of the Plan shall not alter or impair any of the rights
or obligations under any Option theretofore granted under the Plan unless the
Grantee shall so consent.
8. Application of Funds. The proceeds received by the Company from the
sale of shares of Common Stock pursuant to Options granted under the Plan will
be used for general corporate purposes.
9. No Obligation to Exercise Option. The granting of an Option shall
impose no obligation upon the Grantee to exercise such Option.
10. Amendment. The Board of Directors of the Company by majority vote may
at any time and from time to time amend the Plan in such respects as it shall
deem advisable in order that incentive stock options granted under the Plan
shall be "incentive stock options" as defined in Section 422A of the Code, or to
conform to any change in the law, or for any other purpose; provided, however,
that without the approval of the stockholders of the Company, no such amendment
shall change:
(a) The maximum number of shares of Common Stock as to which Options may be
granted under the Plan (except by operation of the adjustment provisions of the
Plan); or
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(b) The date on which the Plan will terminate as provided by paragraph 7(b)
of the Plan; or
(c) The minimum option price as provided under paragraph 5(c) of the Plan,
other than to change the manner of determining the fair market value of the
Common Stock to conform with any provisions of the Internal Revenue Code or
regulations thereunder applicable to incentive stock options; or
(d) The period during which options may be granted as provided in paragraph
5(j) of the Plan (provided, however, that the Board of Directors of the Company
shall have the power set forth in paragraph 7(b) to terminate the Plan); or
(e) The provisions of paragraph 3 of the Plan relating to the determination
of employees to whom Options may be granted; or
(f) The provisions of the Plan in such a manner so as to increase
materially (within the meaning of Rule 16b-3 under the Securities Exchange Act
of 1934, as amended) the benefits accruing under the Plan.
Any amendment to the Plan shall not, without the written consent of the
Grantee, affect such Grantee's rights under any Option theretofore granted to
such Grantee.
Certification. The undersigned hereby certify that the foregoing National
Data Corporation 1987 Stock Option Plan was duly adopted by the Board of
Directors of National Data Corporation on August 26, 1987 and by the
stockholders of National Data Corporation on November 19, 1987.
/s/ L. C. Whitney
-----------------
L. C. WHITNEY
Chairman of the Board and
Chief Executive Officer
/s/ E. Michael Ingram
- ---------------------
E. MICHAEL INGRAM
Vice President, Corporate
Counsel and Secretary
Date:
----------------
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AMENDMENT TO THE NATIONAL DATA CORPORATION
1987 STOCK OPTION PLAN
1. The National Data Corporation 1987 Stock Option Plan (the "Plan") is hereby
amended by deleting the second full sentence in Section 4 thereof in its
entirety and substituting in lieu thereof the following:
"Subject to adjustment in accordance with the provisions of paragraph 6 of
the Plan, the maximum number of shares of Common Stock for which Options
may be granted under the Plan prior to the approval of the amendments to
the Plan by the Company's stockholders at the 1991 Annual Meeting of
Stockholders shall be 650,000, and the initial adoption of the Plan by the
Board of Directors of the Company shall constitute a reservation of 650,000
shares of Common Stock for issuance only upon the exercise of Options
granted under the Plan. Effective upon the approval of the amendments to
the Plan by the Company's stockholders at the 1989 Annual Meeting of
Stockholders, subject to adjustment in accordance with the provisions of
paragraph 6 of the Plan, the maximum number of shares of Common Stock for
which Options may be granted under the Plan shall be increased to
1,650,000, and the adoption on August 8, 1989 of certain amendments to the
Plan by the Board of Directors of the Company shall constitute the
reservation of an additional 1,000,000 shares of Common Stock for issuance
only upon the exercise of Options granted under the Plan."
2. The above amendments to the Plan were effective November 16, 1989 upon their
approval by the holders of a majority of the shares of Common Stock of the
Company represented and entitled to vote at the 1989 Annual Meeting of
Stockholders at which a quorum was present.
3. Except as amended herein, the Plan as adopted shall remain in full force and
effect in accordance with its terms.
/s/ E. Michael Ingram
-----------------------
E. Michael Ingram, Senior Vice
President, Corporate Counsel and
Secretary
<PAGE>
AMENDMENT TO THE NATIONAL DATA CORPORATION
1987 STOCK OPTION PLAN
1. The National Data Corporation 1987 Stock Option Plan (the "Plan") is hereby
amended by deleting the second full sentence in Section 4 thereof in its
entirety and substituting in lieu thereof the following:
"Subject to adjustment in accordance with the provisions of paragraph 6 of
the Plan, the maximum number of shares of Common Stock for which Options
may be granted under the Plan prior to the approval of the amendments to
the Plan by the Company's stockholders at the 1991 Annual Meeting of
Stockholders shall be 1,650,000, and the adoption of the Plan by the Board
of Directors of the Company shall constitute a reservation of 1,650,000
shares of Common Stock for issuance only upon the exercise of Options
granted under the Plan. Effective upon the approval of the amendments to
the Plan by the Company's stockholders at the 1991 Annual Meeting of
Stockholders, subject to adjustment in accordance with the provisions of
paragraph 6 of the Plan, the maximum number of shares of Common Stock for
which Options may be granted under the Plan shall be increased to
2,125,000, and the adoption on September 4, 1991 of certain amendments to
the Plan by the Board of Directors of the Company shall constitute the
reservation of an additional 475,000 shares of Common Stock for issuance
only upon the exercise of Options granted under the Plan."
2. The above amendments to the Plan were effective November 21, 1991 upon their
approval by the holders of a majority of the shares of Common Stock of the
Company represented and entitled to vote at the 1991 Annual Meeting of
Stockholders at which a quorum was present.
3. Except as amended herein, the Plan as adopted shall remain in full force and
effect in accordance with its terms.
/s/ E. Michael Ingram
-----------------------
E. Michael Ingram, Senior Vice
President, Corporate Counsel and
Secretary
<PAGE>
AMENDMENT TO THE NATIONAL DATA CORPORATION
1987 STOCK OPTION PLAN
1. The National Data Corporation 1987 Stock Option Plan (the "Plan") is hereby
amended by deleting the second full sentence in Section 4 thereof in its
entirety and substituting in lieu thereof the following:
"Subject to adjustment in accordance with the provisions of paragraph 6 of
the Plan, the maximum number of shares of Common Stock for which Options
may be granted under the Plan prior to the approval of the amendments to
the Plan by the Company's stockholders at the 1992 Annual Meeting of
Stockholders shall be 2,125,000 and the adoption of the Plan by the Board
of Directors of the Company shall constitute a reservation of 2,125,000
shares of Common Stock for issuance only upon the exercise of Options
granted under the Plan. Effective upon the approval of the amendments to
the Plan by the Company's stockholders at the 1992 Annual Meeting of
Stockholders, subject to adjustment in accordance with the provisions of
paragraph 6 of the Plan, the maximum number of shares of Common Stock for
which Options may be granted under the Plan shall be increased to
2,525,000, and the adoption on August 17, 1992 of certain amendments to the
Plan by the Board of Directors of the Company shall constitute the
reservation of an additional 400,000 shares of Common Stock for issuance
only upon the exercise of Options granted under the Plan."
2. The above amendments to the Plan were effective November 19, 1992 upon their
approval by the holders of a majority of the shares of Common Stock of the
Company represented and entitled to vote at the 1992 Annual Meeting of
Stockholders at which a quorum was present.
3. Except as amended herein, the Plan as adopted shall remain in full force and
effect in accordance with its terms.
/s/ E. Michael Ingram
---------------------
E. Michael Ingram, Senior Vice President,
Corporate Counsel and Secretary
<PAGE>
NATIONAL DATA CORPORATION
1983 RESTRICTED STOCK PLAN
1. Purpose. The purpose of the National Data Corporation 1983 Restricted
Stock Plan (the "Plan") is to advance the interests of National Data Corporation
(the "Company") by encouraging and enabling key employees of the Company and its
Subsidiaries to acquire a financial interest in the Company through awards of
Restricted Stock under the Plan. The Company believes that the Plan will also
aid the Company and its Subsidiaries in attracting and retaining outstanding key
employees and in stimulating the efforts of such employees to work for the
success of the Company.
2. Definitions.
(a) Award Date shall mean the date the Committee makes an award of
Restricted Stock to a Grantee under the Plan. The Award Date shall be set forth
on the Restricted Stock Agreement with respect to such award of Restricted
Stock.
(b) Committee shall mean the Restricted Stock Committee as defined in
Section 3 of the Plan.
(c) Common Stock shall mean the Company's $.125 par value common stock.
(d) Company shall mean National Data Corporation, a Delaware corporation.
(e) Grantee shall mean an employee of the Company or a subsidiary who
receives an award of Restricted Stock under the Plan.
(f) Permanent Disability shall mean a permanent disability as defined in
Section 105(d)(4) of the Internal Revenue Code of 1954, as amended.
(g) Plan shall mean the National Data Corporation 1983 Restricted Stock
Plan, effective July 11, 1983.
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(h) Restricted Period shall mean the period during which any Common Stock
awarded by the Committee to a Grantee under the Plan remains in escrow prior to
its release to the Grantee.
(i) Restricted Stock shall mean Common Stock which has been awarded to a
Grantee under the Plan and which remains in escrow prior to its release to the
Grantee.
(j) Restricted Stock Agreement shall mean a written agreement in such form
as the Committee shall approve that evidences the terms and conditions of an
award of Restricted Stock under the Plan.
(k) Subsidiary shall have the meaning set forth in the applicable
provisions of the Internal Revenue Code of 1954, as amended.
(1) Termination of Employment of a Grantee shall be deemed to have occurred
as of the date that is recorded in the ordinary course in the Company's books
and records as the date of such termination in accordance with the then
prevailing practices and procedures of the Company. Whether military,
government or other service or other leave of absence shall constitute a
Termination of Employment shall be determined in each case by the Committee in
its discretion, and any determination by the Committee shall be final and
conclusive. If any corporation ceases to be a Subsidiary of the Company, the
employment of any Grantee employed by such corporation shall be deemed to have
terminated unless such Grantee becomes an employee of the Company or another
Subsidiary of the Company simultaneously with or prior to the date such
corporation ceases to be a Subsidiary of the Company.
3. Administration. The Plan shall be administered, construed and
interpreted by a Restricted Stock Committee consisting of not less than three
members of the Board of Directors of the Company appointed by the Board of
Directors. The Board of Directors may also from time to time appoint members of
the Committee in substitution
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for or in addition to members previously appointed and may fill vacancies,
however caused, in the Committee.
The Committee shall from time to time select the key employees of the
Company who shall be awarded Restricted Stock under the Plan. The Committee
also shall determine the number of shares of Common Stock to be awarded to each
key employee and the terms and conditions of each individual Restricted Stock
Agreement by and between the Company and the holder of the Restricted Stock.
The interpretation and construction by the Committee of any provision of or term
used in the Plan or any Restricted Stock Agreement and any determination by the
Committee pursuant to any provision of the Plan shall be final and conclusive.
Business shall be transacted by a majority vote of the members of the
Committee, and any decision or determination reduced to writing and signed by
all of the members of the Committee shall be fully as effective as if it had
been made by a majority vote at a meeting duly called and held. No member of
the Committee shall be liable for any action or determination made in good
faith, and members of the Committee shall be entitled to indemnification and
reimbursement from time to time for expenses incurred in defense of such good
faith action or determination.
4. Eligibility. Restricted Stock under the Plan may be awarded to key
employees of the Company or of one or more of the present or future Subsidiaries
of the Company who, in the opinion of the Committee, are contributing
significantly to the effective management and supervision of the business of the
Company or its Subsidiaries. Restricted Stock may be awarded under the Plan
only to persons who are employed by the Company or one of its subsidiaries at
the time of the award. The fact that an employee is a member of the Board of
Directors of the Company shall not make him ineligible for an award of
Restricted Stock unless he is also a member of the Committee and his vote is
required to secure a majority vote in favor of the award of his Restricted
Stock.
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5. Shares Subject to Plan. The shares subject to the Plan shall be
authorized but unissued shares or treasury shares of the Company's Common Stock.
Subject to readjustment in accordance with the provisions of Section 7 of the
Plan, the maximum number of shares of Common Stock which may be awarded as
Restricted Stock under the Plan shall be 100,000, and the adoption of the Plan
by the Board of Directors of the Company shall constitute a reservation of
100,000 shares of Common Stock for issuance only upon the award of Restricted
Stock under the Plan. In the event that any Restricted Stock awarded under the
Plan for any reason is forfeited by a Grantee prior to the end of the Restricted
Period applicable to such Restricted Stock, the forfeited shares shall become
treasury shares and may be awarded again as Restricted Stock under the Plan.
6. Terms and Conditions of Awards. Restricted Stock awarded under the
Plan shall be evidenced by certificates of Common Stock issued in accordance
with Section 6(c) of the Plan and subject to Restricted Stock Agreements in such
form as the Committee shall approve from time to time. The terms and conditions
of each Restricted Stock Agreement shall be consistent with the terms and
conditions set forth below, but the Committee may provide for additional terms
and conditions, not in conflict with the provisions of the Plan, as it deems
advisable.
(a) Number of Shares, Award Date and Restricted Period. Each Restricted
Stock Agreement shall state the total number of shares of Common Stock to which
it pertains, the date on which the award of Restricted Stock was made by the
Committee ("Award Date"), and the Restricted Period or Periods with respect to
the Restricted Stock so awarded. The number of shares awarded and the
Restricted Period or Periods may be different for different awards and for
different Grantees.
(b) Discretionary Conditions. Each Restricted Stock Agreement shall also
be subject to such additional discretionary conditions as the Committee may
determine, including, but not limited to, terms and conditions for compliance
with federal and state securities laws and methods of withholding or providing
for the payment of
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taxes. The Committee may specify different terms and conditions for different
awards of Restricted Stock and for different Grantees.
(c) Issuance of Shares. The Company shall issue a certificate or
certificates for the shares subject to a Restricted Stock Agreement, such
certificate or certificates to evidence ownership of the shares subject to the
Agreement. Where a Restricted Stock Agreement specifies different Restricted
Periods for portions of the shares so awarded, the Company shall issue a
separate certificate for each such portion of shares. Each certificate issued
for shares awarded to a Grantee under the Plan shall be registered in his name
and shall be deposited with the Company or its designee in an escrow account,
together with stock powers or other instruments of transfer appropriately
endorsed in blank by the Grantee. Each certificate shall bear a legend in
substantially the following form:
"This certificate and the shares of stock represented hereby are subject to
the terms and conditions (including forfeiture and restrictions against
transfer) contained in the National Data Corporation 1983 Restricted Stock
Plan and a Restricted Stock Agreement between the registered owner of the
shares represented hereby and National Data Corporation. Release from such
terms and conditions shall obtain only in accordance with the provisions of
such Plan and Agreement, copies of which are on file in the office of the
Secretary of National Data Corporation."
(d) Release of Shares. Subject to the conditions of Section 6(g), (h) and
(i) of the Plan regarding Termination of Employment, death or Permanent
Disability, or acceleration of a Restricted Period, the Company shall release
from escrow and deliver to the Grantee or his legal representative, free of the
legend described in Section 6(c) above, the certificate evidencing the
Restricted Stock on the date the Restricted Period expires with respect to such
certificate.
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<PAGE>
(e) Restrictions on Transfer of Shares. Shares awarded under the Plan, and
the right to vote such shares and to receive dividends thereon, may not, except
as otherwise provided in the Plan, be sold, assigned, transferred, exchanged,
pledged, hypothecated, or otherwise encumbered, except as herein provided,
during the Restricted Period applicable to such shares, respectively, and no
such sale, assignment, transfer, exchange, pledge, hypothecation, or
encumbrance, whether made or created by voluntary act of the Grantee or of any
agent of such Grantee or by operation of law, shall be recognized by, or be
binding upon, or shall in any manner affect the rights of, the Company or any
agent or any custodian holding certificates for such shares during the
applicable Restricted Period, pursuant to the provisions of the Plan.
(f) Rights of Grantee During Restricted Period. Except as otherwise
provided in the Plan, the Grantee shall, during the Restricted Period, have all
of the other rights of a stockholder with respect to shares awarded to such
Grantee including, but not limited to, the right to receive such cash dividends,
if any, as may be declared on such shares from time to time, and the right to
vote (in person or by proxy) such shares at any meeting of stockholders of the
Company. Any stock dividends declared with respect to Restricted Stock shall
not be delivered to the Grantee, but instead shall be held as Restricted Stock
under the same terms and conditions as the Restricted Stock with respect to
which such stock dividends are issued.
(g) Termination of Employment. If a Grantee has a Termination of
Employment with the Company or a Subsidiary, for any reason other than death or
Permanent Disability, then (subject to Section 6(i) of this Plan), in that
event, all shares theretofore awarded to such Grantee with respect to which
there still remains an unexpired portion of a Restricted Period shall, upon such
Termination of Employment, be forfeited by such Grantee to the Company, without
the payment of any consideration by the Company, and neither the Grantee nor any
successors, heirs, assigns, or personal representatives of the Grantee shall
thereafter have any further rights or interest in such
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<PAGE>
shares or certificates, and the Grantee's name shall thereupon be deleted from
the list of the Company's stockholders with respect to such shares.
(h) Death or Permanent Disability. If the Grantee has a Termination of
Employment with the Company or a Subsidiary by reason of death or Permanent
Disability, the Restricted Period to which any shares of the Grantee are subject
shall be deemed to have expired as of the date of death or Permanent Disability.
(i) Committee Acceleration Power. Notwithstanding Section 6(g) above, if a
Grantee has a Termination of Employment with the Company or a Subsidiary for any
reason other than death or Permanent Disability, the Committee shall have the
power to accelerate the release to the Grantee of Restricted Stock theretofore
awarded to such Grantee, upon such terms and conditions as the Committee may
deem advisable.
7. Adjustments.
(a) Recapitalization. In the event that, after the effective date of the
Plan, the outstanding shares of Common Stock are increased or decreased or
changed into or exchanged for a different number or kind of shares or other
securities of the Company by reason of a recapitalization, reclassification,
stock split-up, combination of shares, or dividend payable in stock, appropriate
adjustments shall be made by the Committee in the number and kind of shares or
other securities which may be awarded under the Plan. In addition, the
Committee upon the occurrence of such an event shall make appropriate
adjustments in the number and kind of shares or other securities which the
Company holds in escrow during any Restricted Periods. Any fractional shares
resulting from any of the foregoing adjustments under this subparagraph (a)
shall be disregarded and eliminated. All adjustments made by the Committee
under this subparagraph (a) shall be final and conclusive.
(b) Reorganizations; Liquidation. If the Company shall be a party to any
reorganization involving a merger, consolidation or acquisition of the stock or
the assets of the Company, the Committee, in its discretion, may:
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<PAGE>
(A) Accelerate the release of any and all Restricted Stock immediately,
notwithstanding the provisions of the respective Restricted Stock Agreements
with respect to such shares; or
(B) Notify all Grantees that as of the date of merger, consolidation, or
acquisition, the Restricted Stock then held in escrow for the Grantee shall no
longer be the Common Stock of the Company, but instead shall be the applicable
securities of the resulting corporation, with appropriate adjustments as
determined by the Committee in its discretion. The applicable securities of the
resulting corporation shall continue to be held in escrow as Restricted Stock
under this Plan under the same terms and conditions as applied when such
Restricted Stock was Common Stock of the Company.
The adoption of a plan of dissolution or liquidation by the Board of
Directors and the stockholders of the Company shall cause all shares of
Restricted Stock to be released immediately to the Grantee, notwithstanding the
provisions of the respective Restricted Stock Agreements regarding such shares.
In the event of the adoption of a plan of dissolution or liquidation in
connection with a reorganization as described in the first sentence of this
subparagraph (b), however, the immediately preceding sentence of this
subparagraph (b) shall not apply, and any Restricted Stock shall instead be
governed by and be subject to the provisions of the first sentence of this
subparagraph (b).
(C) Rights or Warrants. If any rights or warrants to subscribe for
additional shares of Common Stock are given pro rata to holders of outstanding
shares of the Common Stock, each Grantee under the Plan shall be entitled to the
same rights or warrants as holders of the outstanding shares with respect to
such portion of the Grantee's Restricted Stock which is then held in escrow;
provided, however, that the Committee may in its discretion set forth special
terms and conditions concerning the exercise of such rights or warrants by
holders of Restricted Stock and shall determine whether and to what
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<PAGE>
extent such shares of Common Stock subscribed to by holders of Restricted Stock
shall become Restricted Stock or shall be released to the Grantee free and clear
of any restrictions under this Plan.
8. Effective Date and Termination of Plan.
(a) Effective Date. The effective date of the Plan shall be July 11, 1983,
the date of its adoption by the Board of Directors of the Company.
(b) Termination. The Plan shall terminate ten years after its effective
date, but the Board of Directors may terminate the Plan at any time prior to
such date. Termination of the Plan shall not alter or impair any of the rights
or obligations theretofore granted under the Plan unless the Grantee shall so
consent.
9. Amendment. The Board of Directors of the Company by majority vote may
at any time and from time to time amend the Plan in such respects as it shall
deem advisable; provided, however, that without the approval of the stockholders
of the Company, no such amendment shall change:
(a) The maximum number of shares of Common Stock which may be granted under
the Plan (except by operation of the adjustment provisions of the Plan); or
(b) The date on which the Plan will terminate as provided by Section 8(b)
of the Plan; or
(c) The provisions of Section 4 of the Plan relating to the determination
of key employees to whom Restricted Stock may be awarded; or
(d) The provisions of the Plan in such a manner so as to increase
materially (within the meaning of Rule 16b-3 under the Securities Exchange Act
of 1934, as amended) the benefits accruing under the Plan.
9
<PAGE>
AMENDMENT TO THE NATIONAL DATA CORPORATION
1983 RESTRICTED STOCK PLAN
1. The National Data Corporation 1983 Restricted Stock Plan (the "Plan")
is hereby amended by deleting the second full sentence in Section 5 thereof in
its entirety and substituting in lieu thereof the following:
"Subject to adjustment in accordance with the provisions of paragraph 7 of
the plan, the maximum number of shares of Common Stock which may be granted
under the Plan prior to the approval of the amendments to the Plan by the
Company's stockholders at the 1991 Annual Meeting of Stockholders shall be
100,000 and the adoption of the Plan by the Board of Directors of the
Company shall constitute a reservation of 175,000 shares of common stock
for issuance under the plan. effective upon the approval of the amendments
to the plan by the company's stockholders at the 1991 annual meeting of
stockholders, subject to adjustment in accordance with the provisions of
paragraph 7 of the plan, the maximum number of shares of common stock which
may be granted under the plan shall be increased to 175,000."
2. The Plan is further amended by hereby deleting the first full sentence
in Section 8(b) thereof in its entirety and substituting in lieu thereof the
following:
"The Plan shall terminate on July 11, 2003, but the Board of Directors may
terminate the Plan at any time prior to such date."
3. The above amendments to the Plan were effective November 21, 1991 upon
their approval by the holders of a majority of the shares of Common Stock of the
Company represented and entitled to vote at the 1991 Annual Meeting of
Stockholders at which a quorum was present.
4. Except as amended herein, the Plan as adopted shall remain in full force
and effect in accordance with its terms.
/s/ E. Michael Ingram
-----------------------------------------
E. Michael Ingram, Senior Vice President,
Corporate Counsel and Secretary
10
<PAGE>
AMENDMENT TO THE NATIONAL DATA CORPORATION
1983 RESTRICTED STOCK PLAN
1. The National Data Corporation 1983 Restricted Stock Plan (the "Plan") is
hereby amended by deleting the second full sentence in Section 5 thereof in its
entirety and substituting in lieu thereof the following:
"Subject to adjustment in accordance with the provisions of paragraph 7 of
the Plan, the maximum number of shares of Common Stock which may be granted
under the Plan prior to the approval of the amendments to the Plan by the
Company's stockholders at the 1992 Annual Meeting of Stockholders shall be
175,000, and the adoption of the Plan by the Board of Directors of the
Company shall constitute a reservation of 175,000 shares of Common Stock
for issuance under the Plan. Effective upon the approval of the amendments
to the Plan by the Company's stockholders at the 1992 Annual Meeting of
Stockholders, subject to adjustment in accordance with the provisions of
paragraph 7 of the Plan, the maximum number of shares of Common Stock which
may be granted under the Plan shall be increased to 325,000, and the
adoption on August 17, 1992 of certain amendments to the Plan by the Board
of Directors of the Company shall constitute the reservation of an
additional 150,000 shares of Common Stock for issuance under the Plan."
2. The above amendments to the Plan were effective November 19, 1992 upon
their approval by the holders of a majority of the shares of Common Stock of the
Company represented and entitled to vote at the 1992 Annual Meeting of
Stockholders at which a quorum was present.
3. Except as amended herein, the Plan as adopted shall remain in full force
and effect in accordance with its terms.
/s/ E. Michael Ingram
----------------------------------------
E. Michael Ingram, Senior Vice President,
Corporate Counsel and Secretary
11
<PAGE>
AMENDMENT TO THE NATIONAL DATA CORPORATION
1983 RESTRICTED STOCK PLAN
1. The National Data Corporation 1983 Restricted Stock Plan (the "Plan") is
hereby amended by deleting Sections 6(b) and 6(d) and substituting in lieu
thereof the following:
"6(b) Discretionary Conditions. Each Restricted Stock Agreement shall
also be subject to such additional discretionary conditions as the
Committee may determine, including, but not limited to, terms and
conditions for compliance with federal and state securities laws, and
methods of withholding or providing for the payment of taxes and any
performance factors or other criteria. The Committee may specify different
terms and conditions for different awards of Restricted Stock and for
different Grantees.
6(d) Release of Shares. Subject to the conditions of Sections 6(g), (h)
and (i) of the Plan regarding Termination of Employment, death or Permanent
Disability, or acceleration of a Restricted Period, the Company, provided
that the Grantee satisfies any performance factors or other criteria set
forth in the Restricted Stock Agreement, shall release from escrow and
deliver to the Grantee or his legal representative, free of the legend
described in Section 6(c) above, the certificate evidencing the Restricted
Stock on the date the Restricted Period expires with respect to such
certificate."
2. The above amendments to the Plan were approved by the National Data
Corporation Board of Directors September 4, 1991 and became effective on such
date.
3. Except as amended herein, the Plan as adopted shall remain in full force
and effect in accordance with its terms.
/s/ E. Michael Ingram
- -------------------------------------
E. Michael Ingram,
Senior Vice President and Secretary
12
<PAGE>
NATIONAL DATA CORPORATION
1995 NON-EMPLOYEE DIRECTOR COMPENSATION PLAN
1. Purpose. The purpose of the National Data Corporation 1995 Non-
Employee Director Compensation Plan (the "Plan") is to advance the interests of
National Data Corporation (the "Company") by encouraging ownership of the
Company's $.125 par value common stock (the "Common Stock") by non-employee
directors of the Company, thereby giving such directors an increased incentive
to devote their efforts to the success of the Company.
2. Administration. The Plan shall be administered, construed and
interpreted by the Board of Directors of the Company. Pursuant to such
authorization, the Board of Directors shall have the responsibility for carrying
out the terms of the Plan; however, the Board of Directors shall have no
authority or discretion either to determine which non-employee directors shall
receive awards of shares under the Plan or to set the number of shares subject
to or the other terms of such awards.
3. Eligibility. Shares granted under the Plan shall be granted in
accordance with paragraph 5 to each member of the Company's Board of Directors
who is not an employee of the Company, provided that shares of the Company's
Common Stock remain available for grant hereunder in accordance with paragraph
4. A person to whom shares are granted under the Plan shall be referred to
hereinafter as a "Grantee".
4. Shares Subject to Plan. The shares subject to the Plan shall be
authorized but unissued or reacquired shares of the Company's Common Stock.
Subject to adjustment in accordance with the provisions of paragraph 6 of the
Plan, the maximum number of shares of Common Stock which may be granted under
the Plan shall be 25,000, and the adoption of the Plan by the Board of Directors
of the Company shall constitute a reservation of 25,000 authorized but unissued,
or reacquired, shares of Common Stock for issuance under the Plan.
1
<PAGE>
5. Terms and Conditions of Awards. Subject to the further provisions set
forth immediately below, on the first day of each fiscal year each non-employee
director of the Company shall be granted an award of that number of shares of
Common Stock having an aggregate Fair Market Value (as defined below) equal to
fifty percent (50%) of the non-employee director's Annual Fixed Director
Compensation (as defined below), rounded up to the next whole share of Common
Stock. A non-employee director assuming office following the first day of the
Company's fiscal year shall receive an award of that number of shares of Common
Stock having a Fair Market Value equal to fifty percent (50%) of the Annual
Fixed Director Compensation payable to such non-employee director for the
remainder of the fiscal year in which he first became a director, rounded up to
the next whole share of Common Stock.
(a) Fair Market Value. For purposes of the Plan, the "Fair Market Value"
of the shares of Common Stock shall mean the closing price of the Common Stock
on the national securities exchange on which it is registered on the day on
which such value is to be determined or, if no shares are traded on such day, on
the next day on which shares are traded, as reported in The Wall Street Journal
or other authoritative source.
(b) Annual Fixed Director Compensation. For purposes of the Plan, "Annual
Fixed Director Compensation" shall mean the total annual retainer payable by the
Company to non-employee directors for service on the Board of Directors ($24,000
as of June 1, 1995, subject to subsequent adjustment), but shall not include any
fees paid for attendance at meetings of the Board of Directors, or any committee
thereof, or any reimbursements made by the Company to non-employee directors for
expenses related to their service on the Board of Directors.
(c) Delivery of Shares. The Company shall make delivery of certificates
representing the shares for which award has been granted within a reasonable
period of time; provided, however, that if any law, regulation or agreement
requires the Company to take any action with respect to the shares before the
issuance thereof, then
2
<PAGE>
the date of delivery of such shares shall be extended for the period necessary
to take such action. Certificates representing shares for which awards have been
granted under the Plan may bear such restrictive legends as may be necessary or
desirable in order to comply with applicable federal and state securities laws.
(d) Effect of Termination of Directorship.
(i) Termination of Directorship Generally. Except as provided in
subparagraph (ii) below, in the event that a Grantee's service as a director is
terminated for any reason after the first day of the Company's fiscal year but
prior to the last day of the Company's fiscal year, such Grantee shall be
obligated to pay to the Company, in cash or shares of Common Stock the Fair
of (x) the number of days remaining in the Company's fiscal year following the
date of such Grantee's termination divided by 365 and multiplied by the Fair
Market Value of the shares of Common Stock granted under the Plan to such
terminated Grantee as of the first day of the fiscal year in which such Grantee
was terminated and (y) all Annual Fixed Director Compensation paid in advance in
currency other than shares of Common Stock and representing compensation for
whole or partial months following termination of such Grantees service as a
director.
(ii) Retirement, Disability or Death. In the event of (A) the termination
of a Grantee's service as a director at which time the Grantee is entitled to
the payment of Retirement Income pursuant to the Retirement Plan for Non-
Employee Directors of the Company, (B) the termination of the Grantee's service
as a director by reason of the Grantee's Disability (as defined in subparagraph
(iii) below) or (C) the death of a Grantee, no obligation of repayment or
reimbursement of any kind for the shares granted to such Grantee under the Plan
shall arise and the Grantee or the Grantee's personal representatives, heirs or
legatees shall take full rights, powers and privileges with regard to any and
all shares awarded to such Grantee under the Plan.
3
<PAGE>
(iii) Disability Defined. A Grantee shall be deemed to be disabled if by
reason of any physical or mental incapacity he has been unable, or it is
reasonably expected that he will be unable, for a period of at least one hundred
eighty (180) substantially continuous calendar days to perform his duties and
responsibilities as a director of the Company. In the event of any disagreement
between a director, or his legal representative, and the Company as to whether a
director is unable to perform his duties and responsibilities as a director of
the Company, the question of such inability shall be submitted to an impartial
and reputable physician for determination, selected by mutual agreement of the
director, or his legal representative, and the Company or, failing such
agreement, selected by two physicians (one of which shall be selected by the
Company and the other by the director, or his legal representative), and such
determination of the question of such incapacity by such physician shall be
final and binding on the director and the Company. The Company shall pay the
reasonable fees and expenses of such physician.
6. Adjustments. In the event that, after the effective date of the Plan,
the outstanding shares of Common Stock are increased or decreased or changed
into or exchanged for a different number or kind of shares or other securities
of the Company by reason of a recapitalization, reclassification, stock split-
up, combination of shares or dividend payable in stock, appropriate adjustments
shall be made by the Company's Board of Directors in the number and kind of
shares or other securities that may be granted under the Plan. All adjustments
made by the Board of Directors under this paragraph 6 shall be final and
conclusive.
7. Effective Date and Termination of Plan.
(a) Effective Date. The effective date of the Plan shall be June 1,
1995 provided that the stockholders of the Company (acting at a duly called
meeting of the stockholders), shall approve the Plan on or before December 1,
1995.
(b) Termination. The Plan shall terminate ten years after its effective
date, but the Board of Directors may terminate the Plan at any time prior to
such date.
4
<PAGE>
Termination of the Plan shall not alter or impair any of the rights or
obligations under any award theretofore made under the Plan unless the Grantee
shall so consent.
8. Amendment. The Board of Directors of the Company by majority vote may at
any time and from time to time amend the Plan; provided, however, that without
the approval of the stockholders of the Company, no such amendment shall change:
(a) The maximum number of shares of Common Stock as to which awards may
be granted under the Plan; or
(b) The date on which the Plan will terminate as provided by paragraph
7(b) of the Plan; or
(c) The number of shares of Common Stock subject to each award; or
(d) The provisions of paragraph 3 of the Plan relating to the
determination of non-employee directors to whom awards may be granted; or
(e) The provisions of the Plan in such a manner so as to increase
materially (within the meaning of Rule 16b-3 under the Securities Exchange Act
of 1934, as amended) the benefits accruing under the Plan.
The 1995 Non-Employee Director Compensation Plan was duly adopted by the
Board of Directors of National Data Corporation effective June 1, 1995, subject
to stockholder approval as provided in Paragraph 7.
NATIONAL DATA CORPORATION
By: /s/ R. A. Yellowlees
----------------------------------
Chairman of the Board
5
<PAGE>
AMENDED AND RESTATED
NATIONAL DATA CORPORATION
1984 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
1. Purpose. The purpose of the National Data Corporation 1984 Non-
Employee Directors Stock Option Plan (the "Plan") is to advance the interests of
National Data Corporation (the "Company") by encouraging ownership of the
Company's $.125 par value common stock (the "Common Stock") by non-employee
directors of the Company, thereby giving such directors an increased incentive
to devote their efforts to the success of the Company.
2. Administration. The Plan shall be administered, construed and
interpreted by the Board of Directors of the Company. Pursuant to such
authorization, the Board of Directors shall have the responsibility for carrying
out the terms of the Plan; however, the Board of Directors shall have no
authority or discretion either to determine which non-employee directors shall
receive options under the Plan or to set the number of shares subject to or the
other terms of such options.
3. Eligibility. Options under the Plan shall be granted in accordance
with paragraph 5 to each member of the Company's Board of Directors who is not
an employee of the Company provided that shares of the Company's Common Stock
remain available for grant hereunder in accordance with paragraph 4. In the
event that a new non-employee director is appointed by the Board of Directors to
fill a directorship position, however, the new director shall not be eligible
for an option grant until elected as a director by the stockholders of the
Company. A person to whom an option is granted under the Plan shall be referred
to hereinafter as a "Grantee".
4. Shares Subject to Plan. The shares subject to the Plan shall be
authorized but unissued or reacquired shares of the Company's Common Stock.
Subject to adjustment in accordance with the provisions of paragraph 6 of the
Plan, the maximum number of shares of Common Stock for which options may be
granted under the Plan
<PAGE>
prior to the approval of the amendments to the Plan by the Company's
stockholders at the 1989 Annual Meeting of Stockholders shall be 105,000, and
the initial adoption of the Plan by the Board of Directors of the Company shall
constitute a reservation of 105,000 authorized but unissued, or reacquired,
shares of Common Stock for issuance only upon the exercise of options granted
under the Plan. Effective upon the approval of the amendments to the Plan by the
Company's stockholders at the 1989 Annual Meeting of Stockholders, subject to
adjustment in accordance with the provisions of paragraph 6 of the Plan, the
maximum number of shares of Common Stock for which options may be granted under
the Plan shall be increased to 230,000, and the adoption on August 8, 1989 of
certain amendments to the Plan by the Board of Directors of the Company shall
constitute the reservation of an additional 125,000 authorized but unissued, or
reacquired, shares of Common Stock for issuance only upon the exercise of
options granted under the Plan. In the event that any outstanding option granted
under the Plan for any reason expires or is terminated prior to the end of the
period during which options may be granted under the Plan, the shares of Common
Stock allocable to the unexercised portion of such option may again be subject
in whole or in part to any option granted under the Plan.
5. Terms and Conditions of Options. Prior to the approval of the
amendments to the Plan by the Company's stockholders at the 1989 Annual Meeting
of Stockholders and subject to the further provisions set forth immediately
below, each non-employee director of the Company shall be granted an option to
purchase 3,000 shares of Common Stock for each completed year of service as a
director, up to a maximum of five such options. Upon initial approval of the
Plan by the Company's stockholders as set forth in paragraph 7(a), each non-
employee director then in office shall immediately be granted an option to
acquire 3,000 shares and shall, provided such director continues in office,
thereafter be granted additional options on November 1 of the years 1985, 1986,
1987, and 1988. A non-employee director assuming office following initial
approval of the Plan
<PAGE>
by the Company's stockholders but prior to the 1989 Annual Meeting of
Stockholders shall be granted an option to acquire 3,000 shares immediately
after completing each full year in office following such director's election by
the stockholders of the Company up to, but not including, the year ending at the
1989 Annual Meeting of Stockholders. Upon approval of the amendments to the Plan
by the Company's stockholders at the 1989 Annual Meeting and subject to the
further provisions set forth immediately below, each non-employee director of
the Company shall be granted an option to purchase 5,000 shares of Common Stock
for each completed year of service as a director, up to a maximum of five such
options. Upon approval of the amendments to the Plan by the Company's
stockholders at the 1989 Annual Meeting, each non-employee director then in
office shall immediately be granted an option to purchase 5,000 shares and
shall, provided such director continues in office, thereafter be granted
additional options upon completion at the 1990, 1991, 1992 and 1993 Annual
Meetings of Stockholders of each of his next four years in office. A non-
employee director assuming office following approval of the amendments to the
Plan by the Company's stockholders shall be granted an option to acquire 5,000
shares immediately following such director's first election by the stockholders
of the Company, and shall, provided such director continues in office,
thereafter be granted additional options upon completion of each of his next
four years in office. Options granted pursuant to the Plan shall be evidenced by
Stock Option Agreements in such form as shall comply with and be subject to the
following terms and conditions:
(a) Number of Shares. Until the approval of the amendments to the Plan by
the Company's stockholders at the 1989 Annual Meeting of Stockholders, each
Stock Option Agreement shall set forth an option to acquire 3,000 shares of
Common Stock. Effective upon the approval of the amendments to the Plan by the
Company's Stockholders at the 1989 Annual Meeting of Stockholders, each Stock
Option Agreement shall set forth an option to acquire 5,000 shares of Common
Stock.
<PAGE>
(b) Option Price. The option price for each option granted under the Plan
shall be the fair market value of the shares of Common Stock subject to the
option on the date of grant of the option. For purposes of the Plan, the "fair
market value" of the shares of Common Stock shall be the mean between the high
"bid" and the low "asked" prices of the Common Stock in the National Association
of Securities Dealers Automatic Quotation System ("NASDAQ") National Market of
Over-the-Counter Securities on the day on which such value is to be determined
or, if no shares were traded on such day, on the next preceding day on which
shares were traded. If the Common Stock is not regularly traded in the over-
the-counter market but is registered on a national securities exchange, the
"fair market value" of the shares of Common Stock shall mean the closing price
of the Common Stock on such national securities exchange on the day on which
such value is to be determined or, if no shares were traded on such day, on the
next preceding day on which shares were traded, as reported by the National
Quotation Bureau, Incorporated or any other national quotation service.
(c) Medium and Time of Payment. The option price shall be payable in full
upon the exercise of an option in cash or by check or in shares of Common Stock
already held by the Grantee. In the event that all or part of the option price
is paid in shares of Common Stock, the value of such shares shall be equal to
the fair market value of such shares on the date of exercise of the option
(determined as provided in paragraph 5(b) of the Plan), and the Grantee shall
deliver to the Company a certificate or certificates representing such shares
duly endorsed to the Company or accompanied by a duly-executed separate
instrument of transfer satisfactory to the Board of Directors.
(d) Term. Each option granted under the Plan shall be exercisable by the
Grantee immediately and shall be exercisable, unless earlier terminated as
provided hereinafter, until the date ten years after the date of grant of the
option on which date the option shall expire to the extent not previously
exercised.
<PAGE>
(e) Method of Exercise. All options granted under the Plan shall be
exercised by written notice directed to the Secretary of the Company at the
Company's principal place of business. Such written notice shall specify the
form of payment made by the Grantee or his successor as provided by paragraph
5(c) of the Plan and shall be accompanied by payment in full of the option price
for the shares for which such option is being exercised. The Company shall make
delivery of certificates representing the shares for which an option has been
exercised within a reasonable period of time; provided, however, that if any
law, regulation or agreement requires the Company to take any action with
respect to the shares for which an option has been exercised before the issuance
thereof, then the date of delivery of such shares shall be extended for the
period necessary to take such action. Certificates representing shares for
which options are exercised under the Plan may bear such restrictive legends as
may be necessary or desirable in order to comply with applicable federal and
state securities laws.
(f) Effect of Termination of Directorship or Death.
(i) Termination of Directorship. Except as otherwise provided in this
subparagraph (i) or in subparagraph (ii) next following, upon the termination of
the directorship of any Grantee with the Company for any reason, all options
held by the Grantee under the Plan shall terminate on the date 120 days
following the date of the Grantee's termination to the extent not previously
exercised.
(ii) Death. In the event of the death of a Grantee, the Grantee's personal
representatives, heirs or legatees (the "Grantee's Successors") may exercise all
or any portion of any option held by the Grantee on the date of his death upon
proof satisfactory to the Company of their authority. The Grantee's Successors
must exercise any such option within 120 days after the date of the Grantee's
death and in any event prior to the date of expiration of the option as provided
by paragraph 5(d) of the Plan. Such exercise otherwise shall be subject to the
terms and conditions of the Plan.
<PAGE>
(g) Nonassignability of Option Rights. No option shall be assignable or
transferable by the Grantee except by will or by the laws of descent and
distribution. During the lifetime of the Grantee, the option shall be
exercisable only by the Grantee.
(h) Rights as Stockholder. Neither the Grantee nor the Grantee's
Successors shall have rights as a stockholder of the Company with respect to
shares of Common Stock covered by the Grantee's option until the Grantee or the
Grantee's Successors become the holder of record of such shares. Unless
specified in paragraph 6 of the Plan, no adjustment shall be made for dividends
or other rights for which the record date is prior to the date on which shares
are issued upon exercise of an option.
(i) No Options in Certain Cases. No options shall be granted except within
a period of fifteen years after the effective date of the Plan.
6. Adjustments.
(a) Recapitalization. In the event that, after the effective date of the
Plan, the outstanding shares of Common Stock are increased or decreased or
changed into or exchanged for a different number or kind of shares or other
securities of the Company by reason of a recapitalization, reclassification,
stock split-up, combination of shares, or dividend payable in stock, appropriate
adjustments shall be made by the Company's Board of Directors in the number and
kind of shares or other securities for which options shall be granted under the
Plan. In addition, the Board of Directors upon the occurrence of such an event
shall make appropriate adjustments in the number and kind of shares or other
securities at to which outstanding options, or portions thereof then
unexercised, shall be exercisable, so that each Grantee's proportionate interest
shall be maintained as before the occurrence of such event. Such adjustment in
outstanding options shall be made without change in the total price applicable
to the unexercised portion of each option and with a corresponding adjustment in
the option price per share. Any fractional shares resulting from any of the
foregoing adjustments under this subparagraph (a) shall be disregarded
<PAGE>
and eliminated. All adjustments made by the Board of Directors under this
subparagraph (a) shall be final and conclusive.
(b) Reorganizations; Liquidation. If the Company shall be a party to any
reorganization involving a merger, consolidation or acquisition of the stock or
the assets of the Company, all options granted under the Plan shall apply with
appropriate adjustments as determined by the Board of Directors to the
securities of the resulting corporation to which holders of the number of
shares of Common Stock subject to such options would have been entitled.
The adoption of a plan of dissolution or liquidation by the Board of
Directors and the stockholders of the Company shall cause every option
outstanding under the Plan to become exercisable immediately notwithstanding
the provisions of the respective Stock Option Agreements regarding
exercisability and to terminate on the date of consummation of such plan to the
extent not exercised prior to such date; provided, however, that in the event
of the adoption of a plan of dissolution or liquidation in connection with a
reorganization as described in the first sentence of this subparagraph (b),
outstanding options shall be governed by and be subject to the provisions of
such sentence.
(c) Rights or Warrants. If any rights or warrants to subscribe for
additional shares are given pro rata to holders of outstanding shares of the
Common Stock, each Grantee under the Plan shall be entitled to the same rights
or warrants on the same basis as holders of the outstanding shares with respect
to such portion of the Grantee's option that may be exercised on or prior to
the date of the expiration of such rights or warrants.
7. Effective Date and Termination of Plan.
(a) Effective Date. The effective date of the Plan shall be September 7,
1984, the date of its adoption by the Board of Directors of the Company,
provided that
<PAGE>
the stockholders of the Company (acting at a duly called meeting of the
stockholders), shall approve the Plan on or before September 6, 1985.
(b) Termination. The Plan shall terminate fifteen years after its
effective date, but the Board of Directors may terminate the Plan at any time
prior to such date. Termination of the Plan shall not alter or impair any of
the rights or obligations under any option theretofore granted under the Plan
unless the Grantee shall so consent.
8. Application of Funds. The proceeds received by the Company from the
sale of shares of Common Stock pursuant to options granted under the Plan may
be used for general corporate purposes.
9. No Obligation to Exercise Grant. The granting of an option shall
impose no obligation upon the Grantee to exercise such option.
10. Amendment. The Board of Directors of the Company by majority vote may
at any time and from time to time amend the Plan; provided, however, that
without the approval of the stockholders of the Company, no such amendment
shall change:
(a) The maximum number of shares of Common Stock as to which options may
be granted under the Plan (except by operation of the adjustment provisions of
the Plan); or
(b) The date on which the Plan will terminate as provided by paragraph 7(b)
of the Plan; or
(c) The number of shares of Common Stock subject to each option; or
(d) The option price as provided under paragraph 5(b) of the Plan; or
(e) The provisions of paragraph 3 of the Plan relating to the determination
of non-employee directors to whom options may be granted; or
(f) The provisions of the Plan in such a manner so as to increase
materially (within the meaning of Rule 16b-3 under the Securities Exchange Act
of 1934, as amended) the benefits accruing under the Plan.
<PAGE>
Any amendment to the Plan shall not, without the written consent of the
Grantee, affect such Grantee's rights under any option theretofore granted to
such Grantee.
<PAGE>
NATIONAL DATA CORPORATION
1995 PERFORMANCE-BASED EXECUTIVE
OFFICER BONUS PLAN
1. PURPOSES.
The purposes of the 1995 Performance-Based Executive Officer Bonus Plan are
to promote the achievement of annual business plans and performance
objectives that are linked to long-range financial and business objectives;
and to provide an incentive reward to participants that connects their
earnings to favorable business results.
2. DEFINITIONS.
The following terms, as used herein, shall have the following meanings:
a. NDC shall mean National Data Corporation, a Delaware corporation.
b. "Annual Base Salary" shall mean: with respect to any Executive
Officer, the annual rate of base salary of such Executive Officer in
effect as of the first day of any Performance Period (or, if an
Executive Officer was not employed as of the first day of a
Performance Period, the annual rate of base salary in effect as of
such Executive Officers first day of employment).
c. "Board" shall mean the Board of Directors of NDC.
d. "Bonus" shall mean an annual incentive compensation Bonus, granted
pursuant to the Plan, which is contingent upon the attainment of
Performance Goals with respect to a Performance Period.
e. "Bonus Agreement" shall mean any written agreement, contract, or other
instrument or document between NDC and a Participant evidencing a
Bonus.
f. "Change in Control" shall mean the occurrence of an event described in
Section 6(f) hereof.
g. "Code" shall mean the Internal Revenue Code of 1986, as amended.
h. "Committee" shall mean the Compensation Committee of the Board.
i. "Company" shall mean, collectively, NDC and its subsidiaries.
j. "Covered Employee" shall have the meaning set forth in Section
162(m)(3) of the Code.
k. "Earnings Before Interest, Taxes, Depreciation and Amortization" shall
mean net income for the Performance Period eliminating the impact of
interest income and expense, income taxes, depreciation and
amortization expense.
l. "Earnings Per Share" shall mean net earnings per share of Stock,
excluding the effects of realized gains or losses on investments and
the cumulative effect of adopting required accounting changes.
m. "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
n. "Executive Officer" shall mean any executive officer or key employee
selected by the Compensation Committee to participate in the Plan as
described in Section 3 hereof.
o. "Gross Revenue" shall mean total revenue for the Performance Period
before subtracting sales returns and allowances.
p. "Invested Capital" shall mean the aggregate amount of funds invested
in the Company from both debt and equity sources measured by the sum
of 1) long-term debt and, 2) shareholders equity.
<PAGE>
q. "Net Income" shall mean the net income of the Company for the
Performance Period determined in accordance with generally accepted
accounting principles and reported in the Companys financial
statements for such Performance Period, but before any provision for
the cumulative effect of accounting changes required to be adopted by
generally accepted accounting principles in respect of such
Performance Period.
r. "Operating Income and/or Margin Percentage of Revenue" shall mean
revenue for the Performance Period less operating expenses, consisting
of 1) costs of service and 2) sales, general and administrative
expenses; and/or Operating Income divided by Net Revenue (gross
revenue less sales returns and allowances).
s. "Participant" shall mean an officer or other employee of the Company
who is, pursuant to Section 4 of the Plan, selected to participate
herein.
t. "Performance Goal" shall mean the criteria and objectives, determined
by the Committee, which must be met during the applicable Performance
Period as a condition of the Participants receipt of payment with
respect to a Bonus. Performance Goals may include any or all of the
following: Net Income; Earnings per Share; Earnings Before Interest,
Taxes, Depreciation and Amortization; Operating Income and/or Margin
Percentage of Revenue; Profit Contribution; Return on Equity; Return
on Invested Capital; or Gross Revenue. Further, the performance goal
may be stated in terms of a dollar amount, a percentage increase, a
target percentage or as an amount or percent of change over time.
u. "Performance Period" shall mean the Companys fiscal year, or such
other period as determined by the Committee.
v. "Plan" shall mean the 1995 Performance-Based Executive Officer Bonus
Plan.
w. "Profit Contribution" shall mean Net Income divided by the Net Revenue
for the Performance Period.
x. "Return on Equity" shall mean the quotient obtained by dividing (i)
Net Income for a Performance Period by (ii) the average of common
shareholders equity of the Company as of the beginning and the end of
the Performance Period. Such common shareholders equity shall exclude
the effect of unrealized gains and losses recognized in a separate
equity component under Financial Accounting Standards Board Statement
No. 115.
y. "Return on Invested Capital" shall mean Net Income divided by Invested
Capital.
z. "Stock" shall mean shares of common stock, par value $.125 per share,
of NDC.
3. ADMINISTRATION.
The Plan shall be administered by the Committee. The Committee shall have
the authority in its sole discretion, subject to and not inconsistent with
the express provisions of the Plan, to administer the Plan and to exercise
all the powers and authorities either specifically granted to it under the
Plan or necessary or advisable in the administration of the Plan,
including, without limitation, the authority to grant Bonuses; to determine
the persons to whom and the time or times at which Bonuses shall be
granted; to determine the terms, conditions, restrictions and performance
criteria, including Performance Goals, relating to any Bonus; to determine
whether, to what extent, and under what circumstances a Bonus may be
settled, canceled, forfeited, or surrendered; to make adjustments in the
Performance Goals in recognition of unusual or non-recurring events
affecting the Company or the financial statements of the Company, or in
response to changes in applicable laws, regulations, or accounting
principles; to construe and interpret the Plan and any Bonus; to prescribe,
amend and rescind rules and regulations relating to the Plan; to determine
the terms and provisions of Bonus Agreements; and to make all other
determinations deemed necessary or advisable for the administration of the
Plan.
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<PAGE>
The Committee shall consist of two or more persons each of whom shall be an
"outside director" within the meaning of Section 162(m) of the Code. The
Committee may appoint a chairperson and/or a secretary and may make such
rules and regulations for the conduct of its business as it shall deem
advisable, and shall keep minutes of its meetings. All determinations of
the Committee shall be made by a majority of its members either present in
person or participating by conference telephone at a meeting or by written
consent. The Committee may delegate to one or more of its members or to one
or more agents such administrative duties as it may deem advisable, and the
Committee or any person to whom it has delegated duties as aforesaid may
employ one or more persons to render advice with respect to any
responsibility the Committee or such person may have under the Plan. All
decisions, determinations and interpretations of the Committee shall be
final and binding on all persons, including the Company, the Participant
(or any person claiming any rights under the Plan from or through any
Participant) and any shareholder.
No member of the Board or the Committee shall be liable for any action
taken or determination made in good faith with respect to the Plan or any
Bonus granted hereunder.
4. ELIGIBILITY.
Bonuses may be granted to officers and other employees of the Company in
the sole discretion of the Committee. Subject to Section 5(b) below, in
determining the persons to whom Bonuses shall be granted and the
Performance Goals relating to each Bonus, the Committee shall take into
account such factors as the Committee shall deem relevant in connection
with accomplishing the purposes of the Plan.
5. TERMS OF BONUSES.
Bonuses granted pursuant to the Plan shall be evidenced by a Bonus
Agreement in such form as the Committee shall from time to time approve.
a. In General. The Committee shall specify with respect to each Bonus
the minimum, target and maximum levels applicable to each Performance
Goal selected and the Performance Period to which they apply. Each
performance goal in addition would be subdivided into levels
representing (i) the minimum level of achievement below which no Bonus
would be made; (ii) the target level at which 100% of the annual Bonus
would be payable; and (iii) if the performance goal is exceeded, the
maximum level at which the maximum Bonus would be payable. Additional
intermediate levels may be determined. Bonuses for any Performance
Period may be expressed as a dollar amount or as a percentage of the
Participants Annual Base Salary. Unless otherwise approved by the
Committee, or except as set forth in Section 6(f) hereof, payment in
respect of Bonuses shall be made only if and to the extent the
Performance Goals with respect to such Performance Period are
attained.
b. Limits on Bonus Amounts. Notwithstanding anything to the contrary
contained in this Section 5, in no event shall payment in respect of
Bonuses granted for a Performance Period be made to a Participant who
is a Covered Employee in an amount that is equal to the lesser of 150%
of the amount payable if the Performance Goal is attained or 75% of
such Participants Annual Base Salary. The maximum annual Bonus
payable to any one individual shall not exceed $500,000.
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<PAGE>
c. Time and Form of Payment. Unless otherwise determined by the
Committee, all payments in respect of Bonuses granted under this Plan
shall be made, in cash, within a reasonable period after the end of
the Performance Period. In the case of Participants who are Covered
Employees, unless otherwise determined by the Committee, such payments
shall be made only after achievement of the Performance Goals has been
certified by the Committee.
6. GENERAL PROVISIONS.
a. Compliance with Legal Requirements. The Plan and the granting and
payment of Bonuses, and the other obligations of the Company under the
Plan and any Bonus Agreement or other agreement shall be subject to
all applicable federal and state laws, rules and regulations, and to
such approvals by any regulatory or governmental agency as may be
required.
b. Nontransferability. Bonuses shall not be transferable by a
Participant except by will or the laws of descent and distribution.
c. No Right To Continued Employment. Nothing in the Plan or in any Bonus
granted or any Bonus Agreement or other agreement entered into
pursuant hereto shall confer upon any Participant the right to
continue in the employ of the Company or to be entitled to any
remuneration or benefits not set forth in the Plan or such Bonus
Agreement or other agreement or to interfere with or limit in any way
the right of the Company to terminate such Participants employment.
d. Withholding Taxes. The Company shall have the right to withhold the
amount of any taxes that the Company may be required to withhold
before delivery of payment of a Bonus to the Participant or other
person entitled too such payment, or to make such other arrangements
for the withholding of taxes that the Company deems satisfactory.
e. Amendment, Termination and Duration of the Plan. The Board or the
Committee may at any time and from time to time alter, amend, suspend,
or terminate the Plan in whole or in part; provided that, no amendment
that requires shareholder approval in order for the Plan to continue
to comply with Code Section 162(m) shall be effective unless the same
shall be approved by the requisite vote of the shareholders of the
Company. Notwithstanding the foregoing, no amendment shall affect
adversely any of the rights of any Participant, without such
Participants consent, under any Bonus theretofore granted under the
Plan. The Plan shall terminate at the completion of the Performance
Period that ends in 2005; provided, however, that all payments with
respect to Bonuses previously granted under the Plan shall be paid out
pursuant to the terms of the Plan.
f. Change in Control. Notwithstanding any other provision of the Plan to
the contrary, if, while any Bonuses remain outstanding under the Plan,
a "Change in Control" of NDC (as defined in this Section 6(f) shall
occur, the Performance Period outstanding at the time of such Change
in Control shall be deemed to have been completed, the maximum level
of performance set forth under the respective Performance Goals shall
be deemed to have been attained and, unless otherwise provided in any
individual employment agreement or Bonus Agreement, and a pro rata
portion (based on the number of full and partial months that have
elapsed with respect to each Performance Period) of each outstanding
Bonus granted to each Participant for the outstanding Performance
Period shall become payable in cash to each Participant.
For purposes of this paragraph 6(f), a Change in Control of NDC shall
occur upon the happening of the earliest to occur of the following:
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<PAGE>
(i) any "person," as such term is used in Section 3(a)(9) of the
Exchange Act, as modified and used in Sections 13(d) and 14(d) of
the Exchange Act (other than (1) NDC, or any of its subsidiaries,
(2) any trustee or other fiduciary holding securities under a
benefit plan of NDC or any of its subsidiaries, (3) any
underwriter temporarily holding securities pursuant to an
offering of such securities, or (4) any corporation owned,
directly or indirectly, by the shareholders of NDC in
substantially the same proportions as their ownership of Stock),
is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of
NDC (not including in the securities benefically owned by such
person any securities acquired directly from NDC or its
affiliates) representing 30% or more of the combined voting power
of NDCs then outstanding voting securities;
(ii) during any period of not more than two consecutive years,
individuals who at the beginning of such period constitute the
Board, and any new director (other than a director designated by
a person who has entered into an agreement with NDC to affect a
transaction described in clause (i), (iii), or (iv) of this
paragraph (f)) whose election by the Board or nomination for
election by NDCs shareholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either
were directors at the beginning of the period or whose election
or nomination for election was previously so approved, cease for
any reason to constitute a majority thereof;
(iii) the shareholders of NDC approve a merger or consolidation of
NDC with any other corporation, other than (A) a merger or
consolidation which would result in the voting securities of NDC
outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into
voting securities of the surviving or patent entity), in
combination with the ownership of any trustee or other fiduciary
holding securities under an employee benefit plan of NDC, at
least 75% of the combined voting power of the voting securities
of NDC or such surviving entity outstanding immediately after
such merger or consolidation or (B) a merger or consolidation
effected to implement a recapitalization of NDC (or similar
transaction) in which no "person" (as hereinabove defined)
acquires more than 50% of the combined voting power of NDCs then
outstanding securities; or
(iv) the shareholders of NDC approve a plan of complete liquidation of
NDC or an agreement for the sale or disposition by NDC of all or
substantially all of NDCs assets (or any transaction having a
similar effect).
g. Participant Rights. No Participant shall have any claim to be granted
any Bonus under the Plan, and there is no obligation for uniformity of
treatment for Participants.
h. Unfunded Status of Bonuses. The Plan is intended to constitute an
"unfunded" plan for incentive and Bonus, nothing contained in the Plan
or any Bonus shall give any such Participant any rights that are
greater than those of a general creditor of the Company.
i. Governing Law. The Plan and all determinations made and actions taken
pursuant hereto shall be governed by the laws of the State of Georgia
without giving effect to the conflict of laws principles thereof.
j. Effective Date. The Plan shall take effect upon its adoption by the
Board; provided, however, that the Plan shall be subject to the
requisite approval of the shareholders of the Company in order to
comply with Section 162(m) of the Code. In the absence of such
approval, the Plan (and any Bonuses theretofore made pursuant to the
Plan) shall be null and void.
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<PAGE>
k. Beneficiary. A Participant may file with the Committee a written
designation of a beneficiary on such form as may be prescribed by the
Committee and may, from time to time, amend or revoke such
designation. If no designated beneficiary survives the Participant,
the Participants estate shall be deemed to be the grantees
beneficiary.
l. Interpretation. The Plan is designed and intended to comply, to the
extent applicable, with Section 162(m) of the Code, and all provisions
hereof shall be construed in a manner to so comply.
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