Form 10-K HENRY JACK & ASSOCIATES For: Jun 30
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E-mailEXHIBIT 4.1
DESCRIPTION OF SECURITIES
The following is a brief description of the common stock of Jack Henry & Associates, Inc. (the “Company”) common stock which is the only security of the Company registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended and is based on and qualified by the Company’s Restated Certificate of Incorporation (the “Certificate of Incorporation”) and Restated and Amended Bylaws (“Bylaws”). For a complete description of the terms and provisions of the Company’s common stock, refer to the Certificate of Incorporation and Bylaws, both of which are filed as Exhibits to this Annual Report on Form 10-K.
GENERAL
Under the Company’s Certificate of Incorporation, our authorized capital stock consists of 250,000,000 shares of common stock, par value $0.01 per share, and 500,000 shares of preferred stock, par value $1.00 per share. As of August 13, 2021, an aggregate of 74,013,999 shares of common stock and no shares of preferred stock were issued and outstanding.
COMMON STOCK
Voting Rights
The holders of our common stock are entitled to one vote per share on any matter to be voted upon by stockholders. The holders of common stock are not entitled to cumulative voting rights with respect to the election of directors, which means that the holders of a majority of the shares voted can elect all of the directors then standing for election.
Dividends
Subject to preferences that may be applicable to any outstanding preferred stock, holders of common stock are entitled to receive ratably such dividends as may be declared by the board of directors (“Board of Directors”) out of legally available funds.
Liquidation
In the event of a liquidation or dissolution of the Company, holders of common stock are entitled to share ratably in all assets remaining after payment of liabilities and the liquidation preference of any outstanding preferred stock.
No Preemptive or Similar Rights
Our common stock is not entitled to preemptive rights, conversion or other rights to subscribe for additional securities and there are no redemption or sinking fund provisions applicable to our common stock.
Fully Paid and Non-assessable
All of the outstanding shares of common stock are fully paid and non-assessable.
ANTI-TAKEOVER EFFECTS OF OUR CERTIFICATE OF INCORPORATION AND BYLAWS AND PROVISIONS OF DELAWARE LAW
Provisions of our Certificate of Incorporation and Bylaws and Delaware law may make it more difficult for a third party to acquire, or may discourage a third party from attempting to acquire, control of us. These provisions could limit the price that investors might be willing to pay in the future for shares of our common stock. These provisions include the following.
Blank Check Preferred Stock
Our Board of Directors is authorized to designate any series of preferred stock and the powers, preferences and rights of the shares of such series and the qualifications, limitations or restrictions thereof without further action by the holders of common stock.
Our Board of Directors may create and issue a series of preferred stock with rights, privileges or restrictions, and adopt a stockholder rights plan, having the effect of discriminating against an existing or prospective holder of such securities as a result of such security holder beneficially owning or commencing a tender offer for a substantial amount of common stock. The issuance of preferred stock, while providing flexibility in connection with possible financings, acquisitions or other corporate purposes, could have the effect of making it more difficult or discouraging an attempt by a potential acquiror to obtain control of the Company by means of a merger, tender offer, proxy contest or otherwise, and thereby protect the continuity of our management. The issuance of such shares of capital stock may have the effect of delaying, deferring or preventing a change in control without any further action by the stockholders.
Size of Board
Our Certificate of Incorporation and Bylaws provide that the number of directors shall be eight, or such other number (one or more), as fixed from time to time by resolution of the Board of Directors.
Director Vacancies
Our Bylaws provide that any vacancies on our Board of Directors and newly created directorships will be filled by the affirmative vote of a majority of the remaining directors, although less than a quorum.
Advance Notice for Stockholder Proposals and Nominations
Our Bylaws contain provisions requiring advance notice be delivered to the Company and procedures to be followed by stockholders in proposing business to be considered by the stockholders at an annual meeting or nominating persons for election to our Board of Directors, including stockholder nominees to be included in our proxy statement. To propose business to be considered by the stockholders at an annual meeting, a stockholder must submit to the secretary of the Company at the principal executive offices of the Company all of the information and documents required by the Bylaws not less than 90 days prior to the first anniversary of the preceding year's annual meeting. To nominate a nominee for election to the Board of Directors, a nominating stockholder must submit to the secretary of the Company at the principal executive offices of the Company all of the information and documents required by the Bylaws not less than 90 days prior to the first anniversary of the preceding year's annual meeting (or in the case of a special meeting, not later than the close of business on the later of the 75th day prior to such special meeting or the 10th day following the date on which public announcement is first made of the date of the special meeting and of the nominees proposed by the board of directors to be elected at such meeting). To nominate a nominee for election to Board of Directors for inclusion in the proxy statement, a nominating stockholder must submit to the secretary of the Company at the principal executive offices of the Company all of the information and documents specified in the Bylaws no earlier than 150 calendar days, and no later than 120 calendar days, before the anniversary of the date that the Company mailed its proxy statement for the prior year’s annual meeting of stockholders.
No Cumulative Voting
Our Bylaws do not provide for cumulative voting for our directors. The absence of cumulative voting may make it more difficult for stockholders owning less than a majority of our common stock to elect any directors to our Board.
Limitations on Liability of Directors; Indemnification of Directors and Officers
Our Certificate of Incorporation limits, to the fullest extent permitted by Delaware law, the liability of our directors to us or our stockholders. Subject to certain limitations, our Certificate of Incorporation provides that our directors, officers and other persons must be indemnified for, and provides for the advancement to them of expenses incurred in connection with, actual or threatened proceedings and claims arising out of their status as our director or officer to the fullest extent permitted by Delaware law. In addition, the Certificate of Incorporation expressly authorizes us to purchase and maintain directors’ and officers’ insurance providing indemnification for our directors, officers, employees or agents. We believe that these indemnification provisions and insurance are useful to attract and retain qualified directors, officers, employees and other agents.
The limitation of liability and indemnification provisions in our Certificate of Incorporation may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duty. These provisions may also have the effect of reducing the likelihood of derivative litigation against directors, officers, employees and other agents, even though such an action, if successful, might otherwise benefit us and our stockholders. In addition, your investment may be adversely affected to the extent we pay the costs of settlement and damage awards against directors, officers, employees, and other agents pursuant to these indemnification provisions.
Super-majority voting requirements
Our Certificate of Incorporation requires a two-thirds vote of the stockholders to approve certain amendments to our Certificate of Incorporation. Our Bylaws may also be amended, altered or repealed at any special meeting of the stockholders if duly called for that purpose or at any annual meeting, by the affirmative vote of the holders of at least two-thirds of the Company’s stock entitled to vote thereon.
Limitations on Calling Special Meetings and Action by Written Consent
Our Certificate of Incorporation prevents stockholder action by written consent in lieu of an annual or special meeting and our Bylaws require special meetings of the stockholders to be called by the Chairman of the Board, the President, the Board of Directors as a whole, or two-thirds of the stockholders.
Limitations on Business Combinations with Interested Stockholders
We are also subject to Section 203 of the Delaware General Corporation Law which, subject to exceptions, prohibits a Delaware corporation from engaging in any business combination with any interested stockholder for a period of three years following the date that a stockholder became an interested stockholder, unless:
•prior to that date, the Board of Directors approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder; or
•upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock outstanding at the time the transaction commenced; or
•on or following that date the business combination is approved by the Board of Directors and authorized at an annual or special meeting of stockholders, by the affirmative vote of at least two-thirds of the outstanding voting stock that is not owned by the interested stockholder.
TRANSFER AGENT AND REGISTRAR
Computershare Trust Company, N.A. is the transfer agent and registrar for our common stock.
LISTING
Our common stock is traded on the NASDAQ Global Select Market under the symbol “JKHY.”
JACK HENRY & ASSOCIATES, INC.
2015 EQUITY INCENTIVE PLAN
RESTRICTED STOCK UNIT AGREEMENT
(Employees)
Date of Award: _______________________
Number of RSUs Granted: _______________________ (the “Award”)
THIS AWARD AGREEMENT dated _____________ is made by and between Jack Henry & Associates, Inc., a Delaware corporation (hereinafter called the “Company”), and _______________ (hereinafter called “Awardee”).
RECITALS:
A. The Company’s stockholders and Board of Directors of the Company (“Board”) has adopted the Jack Henry & Associates, Inc. 2015 Equity Incentive Plan (“Plan”) pursuant to which restricted stock units may be granted to employees of the Company; and
B. The Company desires to grant restricted Stock Units (“RSUs”) to Awardee under the terms and conditions hereinafter set forth;
AGREEMENT:
In consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows:
1. Award Subject to Plan. This Award is made under and is expressly subject to all the terms and provisions of the Plan, and which terms are incorporated herein by reference. Awardee agrees to be bound by all the terms and provisions of the Plan. Terms not defined herein shall have the meaning ascribed thereto in the Plan.
2. Grant of Award. Pursuant to the action of the undersigned officer as authorized by the Board, which action was taken on the date set forth above as Date of Award, the Company awards to Awardee the number of Restricted Stock Units identified above. Subject to the other terms and conditions of the Plan and this Agreement, settlement of each RSU as provided in Section 4 entitles Awardee to the issuance of one share of Common Stock, or, if permitted under the Plan and where the Board elects to settle an RSU for cash, a cash payment equal to the fair market value of the share underlying the RSU that the Board elects to settle for cash.
3. Restrictions. Except as may be permitted under the Plan or by the Board, the RSUs are not transferable by sale, assignment, disposition, gift, exchange, pledge, hypothecation, or otherwise. Any attempted disposition of the RSUs, or the levy of any execution, attachment or similar process upon the RSUs prior to settlement, shall be null and void and without effect. Holding RSUs does not give Awardee the rights of a
shareholder (including without limitation the right to vote or receive dividends or other distributions) with respect to shares of Common Stock underlying the RSUs that the Company may issue under the terms and conditions of this Agreement.
4. Settlement, Forfeiture and Share Issuance.
(a) Settlement Dates. The RSUs awarded hereunder shall settle according to the following schedule (each anniversary, a “Settlement Date”), with the percentages below being applied to the Award by rounding down to the nearest whole share:
Anniversary of Date of Award Percentage Settled
First Anniversary 33 1/3%
Second Anniversary 33 1/3%
Third Anniversary 33 1/3%
(b) Form of Settlement. To the extent permissible under the Plan, the Committee, in its sole discretion, may elect to settle an RSU by issuing shares of Common Stock or by making a cash payment to Awardee in an amount equal to the then fair market value of the share of Common Stock underlying the RSU being settled, less any amounts necessary to satisfy the Company's tax withholding obligations.
(c) Forfeiture.
(i) Subject to the other provisions of this Section 4, all remaining non-settled RSUs shall be forfeited if Awardee ceases to be an employee of the Company prior to any of the Settlement Dates. Upon any such forfeiture, under no circumstances will the Company be obligated to make any payment to Awardee, and no shares of Common Stock shall be issued, as a result of such forfeited RSUs.
(ii) Notwithstanding the foregoing, if Awardee ceases to be an employee of the Company by reason of Retirement prior to full settlement of the RSUs awarded hereunder, then the Awardee shall be entitled to settlement of the Pro Rata Portion of the RSUs that would otherwise be eligible for settlement at the next Settlement Date following such termination, and such settlement shall be made in accordance with Section 4(b). Any other remaining non-settled RSUs shall be forfeited pursuant to Section 4(c).
(iii) For purposes of this Agreement, a “Retirement” means an Awardee’s termination of employment for the express reason of retirement, as determined by the Committee in its sole discretion, for which Awardee has provided the Company at least 6 months’ prior notice and occurs (A) on or after age 55 and following a minimum number of years of employment with the Company such that Awardee’s age plus the number of years of employment with the Company equals or exceeds 72,
or (B) on or after age 65. Unless otherwise determined by the Committee, Participant must have been actively employed as a full-time employee for an entire calendar year to receive credit for such year of employment for purposes of this definition of “Retirement.”
(iv) For purposes of this Agreement, “Pro Rata Portion” means a number, presented as a percentage, computed by (i) the number of days elapsed between the immediately prior Settlement Date and the date of termination of employment divided by (ii) 365; provided, however, if the resulting percentage is less than 75%, the Pro Rata Portion will be deemed to be zero.
(d) Share Issuance; Company Stock Ownership Guidelines.
(i) Except as otherwise provided herein, upon the settlement of a specific number of RSUs for shares of Common Stock as provided in this Section, the Company shall issue a corresponding number of shares of Common Stock to Awardee on the Settlement Date provided that tax withholding obligations have been satisfied as provided in Section 5. The Company’s transfer agent may issue shares of Common Stock in certificated or book entry form as determined by the Company’s Corporate Secretary. Upon issuance of the Shares, Awardee shall have all rights of a shareholder with respect thereto including the right to vote and receive all dividends or other distributions made or paid with respect to the shares of Common Stock.
(ii) Any Shares acquired by Awardee on the Settlement Date pursuant to this Award may be subject to any Company stock ownership guidelines or stock ownership policy as determined appropriate by the Committee and communicated to Awardee. Awardee agrees that Awardee will comply with and adhere to such stock ownership guidelines or stock ownership policy.
5. Tax Withholding. Awardee understands and agrees that, at the time any tax withholding obligation arises in connection with the issuance of a share of Common Stock or, if permitted under the Plan, a cash payment, the Company may withhold, in shares of Common Stock if a valid election applies under this Section 5 or in cash from amounts the Company owes or will owe Awardee, any applicable minimum withholding, payroll and other required tax amounts due upon the issuance of shares of Common Stock or cash payment. Tax withholding may be made by any means permitted under the Plan, as approved by the Committee, and as permitted under the law. The valuation of the RSUs, and any shares of Common Stock that the Company may issue attributable to RSUs, for tax and other purposes shall be determined in accordance with all applicable laws and regulations. In the absence of the satisfaction of tax obligations, the Company may refuse to issue shares of Common Stock or make any other payment hereunder.
6. Dividends and Voting. Prior to an RSU settlement date, Awardee shall have no right to receive any dividends or dividend equivalent payments with respect
to the RSUs. Awardee will have no voting rights with respect to any of the RSUs or the shares of Common Stock underlying the RSUs.
7. Administration. This Award has been made pursuant to a determination made by the Board, or a committee authorized by the Board, subject to the express terms of this Agreement, and the Board or such committee shall have plenary authority to interpret any provision of this Agreement and to make any determinations necessary or advisable for the administration of this Agreement and may waive or amend any provisions hereof in any manner not adversely affecting the rights granted to Awardee by the express terms hereof.
8. No Right to Continued Service. Nothing in this Agreement shall be deemed to create any limitation or restriction on such rights as the Company otherwise would have to terminate the employment of the Awardee.
9. Amendment; Entire Agreement and Binding Effect. This Agreement may be amended only by a writing executed by the parties hereto which specifically states that it is amending this Agreement. This Agreement and the Plan constitute the entire contract between the parties hereto with regard to the subject matter hereof. They supersede any other agreements, representations or understandings (whether oral or written and whether express or implied) that relate to the subject matter hereof. Except as expressly stated herein to the contrary, this Agreement will be binding upon and inure to the benefit of the respective heirs, legal representatives, successors and assigns of the parties hereto.
10. Choice of Law. This Agreement shall be governed by the laws of the State of Delaware, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of the Agreement to the substantive law of another jurisdiction. Awardee is deemed to submit to the exclusive jurisdiction and venue of the federal or state courts of Missouri to resolve any and all issues that may arise out of or relate to this agreement.
The Company has caused this Agreement to be executed on its behalf, and Awardee has signed this Agreement to evidence Awardee’s acceptance of the terms hereof, all as of the date first above written.
JACK HENRY & ASSOCIATES, INC.
By:
Title: CFO/Treasurer
AWARDEE
Name:________________
JACK HENRY & ASSOCIATES, INC.
2015 EQUITY INCENTIVE PLAN
PERFORMANCE SHARES AGREEMENT
Date of Grant: | |||||
Number of Performance Shares Granted | |||||
This Award Agreement dated _______ , is made by and between Jack Henry & Associates, Inc., a Delaware corporation (the “Company”), and _______________ (“Participant”).
RECITALS:
A. Effective November 10, 2015, the Company's stockholders approved the Jack Henry & Associates, Inc. 2015 Equity Incentive Plan pursuant to which the Company may, from time to time, grant Shares of Performance Shares to eligible Service Providers of the Company and its Affiliates.
B. Participant is a Service Provider of the Company or one of its Affiliates and the Company desires to encourage him/her to own Shares and to give him/her added incentive to advance the interests of the Company, and desires to grant Participant shares of Performance Shares of the Company under the terms and conditions established by the Committee.
AGREEMENT:
In consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows:
1. Incorporation of Plan. All provisions of this Award Agreement and the rights of Participant hereunder are subject in all respects to the provisions of the Plan and the powers of the Committee therein provided. Capitalized terms used in this Award Agreement but not defined shall have the meaning set forth in the Plan.
2. Grant of Performance Shares. Effective as of the Date of Grant set forth above opposite the heading "Date of Grant," subject to the conditions and restrictions set forth in this Award Agreement and in the Plan, the Company hereby grants to Participant that number of Shares of Performance Shares identified above opposite the heading "Number of Performance Shares Granted" (the "Performance Shares"), but the number of such Performance Shares actually settled may be ultimately adjusted and determined pursuant to the terms and conditions set forth in this Agreement and including Appendix A hereto. Each Performance Share shall initially be deemed to be the equivalent of one share of Stock; provided, however, that certain levels of
achievement may result in settlement of less than one, or more than one, share of Stock (or its cash equivalent) for each Performance Share. In the sole discretion of the Committee, the Company may elect to settle a Performance Share for cash with a cash payment equal to the fair market value of each Performance Share the Committee elects to settle for cash.
3. Restrictions; Company Stock Ownership Guidelines.
(a) Restrictions. Except as may be permitted under the Plan or by the Committee, none of Participant's rights to payment hereunder are transferable by sale, assignment, disposition, gift, exchange, pledge, hypothecation, or otherwise. Any attempted disposition of any of Participant's rights hereunder, or the levy of any execution, attachment or similar process upon any of the Performance Shares prior to settlement, shall be null and void and without effect. Holding Performance Shares does not give Participant the rights of a shareholder (including without limitation the right to vote or receive dividends or other distributions) with respect to shares of Stock underlying the Performance Shares that the Company may issue under the terms and conditions of this Agreement.
(b) Company Stock Ownership Guidelines. Any Shares acquired by Participant on the Settlement Date pursuant to this Award may be subject to any Company stock ownership guidelines or stock ownership policy as determined appropriate by the Committee and communicated to Participant. Participant agrees that Participant will comply with and adhere to such stock ownership guidelines or stock ownership policy.
4.Settlement, Forfeiture and Share Issuance.
(a) Appendix A Performance Measures. The performance measures applicable to the Performance Shares (the “Performance Measures”) are set forth in Appendix A to this Agreement. By accepting the terms and conditions of this Agreement, Participant shall be deemed to have consented to Appendix A, and Appendix A, its Performance Measures, terms and conditions are incorporated herein by reference. The Performance Measures relate to the Company's 20__, 20__, and 20__ fiscal years (each a “Performance Year”, and collectively the “Performance Period”). Appendix A also sets forth the “Scheduled Settlement Date”, which, if it occurs due to achievement of one or more of the Performance Measures, shall follow the meeting of the Committee at which the applicable level of performance goal achievement is determined for Award purposes (“Applicable Committee Meeting”). At the Applicable Committee Meeting following the 20__ Performance Year, the Committee shall conduct an objective analysis as to whether one or more of the Performance Measures have been satisfied. If one or more of such Performance Measures have been satisfied, the Committee shall certify such achievement (“Certification”) and instruct the Company to begin the Performance Shares settlement process.
(b) Performance Settlement.
(i) The Performance Shares shall be settled in connection with Certification (as provided in Appendix A, but no earlier than any Scheduled Settlement Date). Settlement shall not occur if Certification does not occur at the Applicable Committee Meeting in 20__ (the “Deadline”), and if Certification does not occur by the Deadline, no Performance Shares shall be settled and all of Participant's rights under this Agreement shall be forfeited as of the Deadline.
(ii) To the extent permissible under the Plan, the Committee, in its sole discretion, may elect to settle one or more Performance Shares by making a cash payment to Participant in an amount equal to the then fair market value of the share of Stock underlying the Performance Share being settled, less any amounts necessary to satisfy the Company's tax withholding obligations.
(c) Other Settlement.
(i) Effect of Change in Control on Award and Settlement.
(A) If a Change in Control occurs prior to the last day of the Performance Period, this Award shall automatically convert into a time-based vesting Award relating to a new number of Performance Shares determined under Section 4(c)(i)(B) and subject to the vesting condition and exceptions under Section 4(c)(i)(C).
(B) The new number of Performance Shares for purposes of this Section 4(c)(i) shall be equal to the sum of:
(I) the greater of (a) the number of Shares subject to the TSR Measuring Goal set forth in Appendix A (i.e., the number that would be obtained if goal achievement were 100%) or (b) the number of Shares subject to the TSR Measuring Goal set forth in Appendix A and that would have been settled based on the actual level of TSR goal achievement if the date of such Change in Control event were the applicable measuring date for the TSR performance measure; plus
(II) the number of Performance Shares subject to goals other than the TSR Measuring Goal (i.e., the number that would be obtained for all other non-TSR Measuring Goals) if goal achievement for each of such other performance measures were at 100%.
(C) In the event that this Award Agreement is not converted, assumed, substituted, continued, or replaced (with substantially identical economic terms) by a successor or surviving entity, or a parent or subsidiary thereof, in connection with such
Change in Control event, then, immediately prior to the Change in Control event, all of the Performance Shares (as adjusted under this Section 4(c)(i)) shall vest in full and be issued. In the event that this Award Agreement is converted, assumed, substituted, continued, or replaced (with substantially identical economic terms) by a successor or surviving entity, or a parent or subsidiary thereof, in connection with the Change in Control event, then the Performance Shares (as adjusted under this Section 4(c)(i)) shall become vested, subject to Participant's continuous employment, on the last day of the Performance Period. In the event that the Participant's employment terminates before the last day of the Performance Period, the Performance Shares shall be forfeited; provided, however, if Participant experiences a Covered Termination (as defined below) prior to the last day of such Performance Period, then all of the Performance Shares (as adjusted under this Section 4(c)(i)) shall become immediately vested as of the date of the Covered Termination, and, provided, further, if the Participant dies, becomes Disabled or Retires prior to the last day of such Performance Period, the Participant or the Participant’s estate or beneficiary(ies) shall receive a pro rata portion of the Performance Shares (as adjusted under this Section 4(c)(i)), such pro rata portion determined in the same manner as set forth below in Section 4(c)(ii).
(D) Definitions. For purposes of this Section 4(c)(i):
(I) “Covered Termination” means (a) the termination of the Participant's employment with the Company or the successor or surviving entity, or a parent or subsidiary thereof, in connection with the Change of Control event, within the period commencing 90 days prior to, and ending two years following such Change in Control event (the "Applicable Period") without Cause (as defined below), or (b) Participant’s resignation for Good Reason (as defined below) during the Applicable Period.
(II) "Cause" means (a) failure of the Participant to adequately perform his or her duties assigned by the Committee; or (b) any act or acts of gross dishonesty or gross misconduct on the Participant's part which result or are intended to result directly or indirectly in gain or personal enrichment at the expense of the Company or its subsidiaries to which the Participant is not legally entitled.
(III) "Good Reason" means (a) a material diminution of the Participant's authority, duties or responsibilities
from those being exercised and performed by the Participant immediately prior to the Change in Control event; (b) a transfer of the Participant to a location which is more than 75 miles away from the location where the Participant was employed immediately prior to the Change in Control event; (c) a material diminution in the rate of the Participant's annual salary below his or her rate of annual salary immediately prior to the Change in Control event; (d) a material diminution in the Participant's annual target bonus opportunity below his or her annual target bonus opportunity immediately prior to the Change in Control event; or (e) a material breach by the Company of any incentive award agreement covering the Participant; provided, however, that Good Reason shall not be deemed to exist unless the Participant has first provided notice to the Company of the existence of one of the events described above within a period of 90 days from the initial existence of the event, and after such notice the Company has been provided a period of 30 days to eliminate the existence of Good Reason.
(ii)Effect of Death, Disability and Retirement on Settlement.
(A) Upon Participant's termination of employment due to Disability or “Retirement”, no forfeiture or accelerated settlement of the Performance Shares shall occur (except as provided in Section 4(c)(i) above). Rather, on the Scheduled Settlement Date following the Applicable Committee Meeting, if Certification occurs, a pro rata portion of the Performance Shares subject to this Agreement shall be settled based on the period of time in the Performance Period that elapsed prior to Participant's termination of employment.
(B) Upon Participant's termination of employment due to death, settlement shall be accelerated such that a pro rata portion of the Performance Shares subject to this Agreement shall be settled based on the period of time in the Performance Period that elapsed prior to the Participant’s death. Such pro rata settlement shall occur as if goal achievement occurred at the level resulting in settlement of 100% of the Performance Shares subject to each applicable Performance Measure and shall be settled as soon as practicable following Participant’s death.
For purposes of this Section 4(c)(ii), any pro rata portion of the Performance Shares being settled shall be determined by (I) dividing the aggregate number of Performance Shares Participant would have been entitled to receive had he or she been employed through the end of the Performance Period by 36 (i.e., the number of calendar months in the
Performance Period), and then (II) multiplying the quotient obtained in (I) by the number of whole months elapsed from the commencement of the 20__ fiscal year to the date of Participant's death or termination of employment due to Disability or Retirement. For purposes of this pro rata calculation, Participant must have been actively employed as a full-time employee for an entire calendar month in the Performance Period to receive credit that month.
For purposes of this Agreement “Retirement” means a Participant’s termination of employment for the express reason of retirement, as determined by the Committee in its sole discretion, for which Participant has provided the Company at least 6 months’ prior notice and occurs (a) on or after age 55 and following a minimum number of years of employment with the Company such that Participant’s age plus the number of years of employment with the Company equals or exceeds 72, or (b) on or after age 65. Unless otherwise determined by the Committee, Participant must (1) have been actively employed as a full-time employee for an entire calendar year to receive credit for such year of employment for purposes of this definition of “Retirement” and (2) have been actively employed as a full-time employee for six months following the Date of Award to qualify as a “Retirement” for the purposes of this Agreement. If Participant is not actively employed as a full-time employee for six months following the Date of Award, the Award will not be administered as subject to a “Retirement” under this Agreement.
(d) Forfeiture. Subject to the other provisions of this Section 4, all rights relating to any non-settled Performance Shares shall be forfeited if either (A) Certification does not occur prior to or on the Deadline, or (B) Participant ceases to be employed by the Company during the Performance Period (except as provided in Section 4(c) above). Participant is not deemed to have terminated employment through, and Participant's rights relating to the Performance Shares shall not be forfeited solely as a result of, any change in Participant's duties or position or Participant's temporary leave of absence approved by the Company. Upon any such forfeiture, under no circumstances will the Company be obligated to make any payment to Participant, and no shares of Stock shall be issued, as a result of such forfeited Performance Shares.
(e) Share Issuance. Except as otherwise provided herein, upon the settlement of a specific number of Performance Shares, for shares of Stock, as provided in Paragraphs 4(b) or (c), the Company shall issue a corresponding number of shares of Stock to Participant on the Settlement Date, provided that tax withholding obligations have been satisfied as provided in Section 5. The Company’s transfer agent may issue shares of Stock in certificated or book entry form as determined by the Company’s Corporate Secretary. Upon issuance of the Shares, Participant shall have all rights of a shareholder with respect thereto including the right to vote and receive all dividends or other distributions made or paid with respect to the shares of Stock.
(f) Payments to Third Party. Upon death of Participant followed by a valid written request for payment, the shares of Stock, to the extent eligible to be issued, shall be issued as soon as administratively practical to Participant’s beneficiary named in a written beneficiary designation filed with the Company’s Corporate Secretary on a form for the Plan or, if there is no such designated beneficiary, to Participant’s executor or administrator or other personal representative acceptable to the Corporate Secretary. Any request to pay any person or persons other than Participant shall be accompanied by such documentation as the Company may reasonably require, including without limitation, evidence satisfactory to the Company of the authority of such person or persons to receive the payment.
5. Tax Withholding; Withholding with Stock. The Company's obligations to issue Shares in connection with the settlement of any Performance Shares is subject to the Participant's satisfaction of all applicable federal, state and local income and other tax (including Social Security and Medicare taxes) withholding requirements. Unless specifically denied by the Committee, Participant may elect to pay any portion of the required tax withholding amounts (or greater amounts if permitted by the Committee) by electing to have the Company withhold upon settlement a number of Shares having a Fair Market Value on the withholding date equal to the minimum amount (or greater amount if permitted by the Committee) elected to be withheld by the Participant. Any withholding obligations satisfied through the withholding of Shares shall be in accordance with any rules or established procedures for election by Participant including any rules or restrictions relating to the period of time any previously acquired Shares have been held or owned, the timing of any elections, the irrevocability of any elections, or any special rules relating to Participant if Participant is an officer or trustee of the Company within the meaning of Section 16 of the 1934 Act.
6. Dividends and Voting. Prior to a Performance Share settlement date, Participant shall have no right to receive any dividends or dividend equivalent payments with respect to the Performance Shares. Participant will have no voting rights with respect to any of the Performance Shares.
7. Administration. This Award has been made pursuant to a determination made by the Committee, subject to the express terms of this Agreement, and the Committee shall have plenary authority to interpret any provision of this Agreement and to make any determinations necessary or advisable for the administration of this Agreement and may waive or amend any provisions hereof in any manner not adversely affecting the rights granted to Participant by the express terms hereof.
8. No Right to Continued Service. Nothing in this Agreement shall be deemed to create any limitation or restriction on such rights as the Company otherwise would have to terminate the employment of Participant.
9. Compliance with Section 409A. Notwithstanding any provision in this Agreement or the Plan to the contrary, this Agreement shall be interpreted and administered in accordance with Code Section 409A and regulations and other guidance issued thereunder (“Section 409A”). For purposes of determining whether any payment
made pursuant to this Agreement results in a “deferral of compensation” within the meaning of Treasury Regulation 1.409A-1(b), Company shall maximize the exemptions described in such section, as applicable. Any reference to a “termination of employment” or similar term or phrase shall be interpreted as a “separation from service” within the meaning of Section 409A. If any deferred compensation payment is payable while Participant is a “specified employee” under Section 409A, and payment is due because of separation from service for any reason other than death, then payment of such amount shall be delayed for a period of six months and paid in a lump sum on the first payroll payment date following the earlier of the expiration of such six month period or Participant's death. To the extent any payments under this Agreement are made in installments, each installment shall be deemed a separate payment for purposes of Section 409A and the regulations issued thereunder. Participant or his or her beneficiary, as applicable, shall be solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on Participant or his or her beneficiary in connection with any payments to Participant or his or her beneficiary pursuant to this Agreement, including but not limited to any taxes, interest and penalties under Section 409A, and Company shall have no obligation to indemnify or otherwise hold Participant or his or her beneficiary harmless from any and all of such taxes and penalties.
10. Amendment. This Award Agreement may be amended only by a writing executed by the parties hereto which specifically states that it is amending this Award Agreement.
11. Governing Law. The laws of the State of Delaware will govern the interpretation, validity and performance of this Award Agreement regardless of the law that might be applied under principles of conflicts of laws. Participant is deemed to submit to the exclusive jurisdiction and venue of the federal or state courts of Missouri to resolve any and all issues that may arise out of or relate to this Award Agreement.
12. Clawback Policy. The Performance Shares may be subject to certain provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank”), the Company’s Executive Compensation Recoupment Policy or any other compensation clawback policy that is adopted by the Committee and that will require the Company to be able to claw back compensation paid to its executives under certain circumstances. Participant acknowledges that the Performance Shares may be clawed back by the Company in accordance with any policies and procedures adopted by the Committee in order to comply with Dodd Frank or as set forth in this Award Agreement.
13. Entire Agreement and Binding Effect. This Award Agreement and the Plan constitute the entire contract between the parties hereto with regard to the subject matter hereof. They supersede any other agreements, representations or understandings (whether oral or written and whether express or implied) that relate to the subject matter hereof. Except as expressly stated herein to the contrary, this Agreement will be binding upon and inure to the benefit of the respective heirs, legal representatives, successors and assigns of the parties hereto.
14. Titles. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Award Agreement.
The Company has caused this Agreement to be executed on its behalf, and Participant has signed this Agreement to evidence Participant’s acceptance of the terms hereof, all as of the date first above written.
JACK HENRY & ASSOCIATES, INC.
By:
Title:
PARTICIPANT
Name: _____________________
APPENDIX A TO PERFORMANCE SHARES AWARD AGREEMENT
_______ GRANT
Executive
CLIFF SETTLEMENT
(Settlement occurs based upon the level of achievement of the Performance Measures)
Achievement of the Performance Measures set forth below for the Performance Period (FY20__-FY20__) ("Performance Condition") is required for settlement, and settlement may occur no earlier than the first (1st) business day following the Applicable Committee Meeting (the “Scheduled Settlement Date”), except in the case of a Change in Control or as otherwise provided in the Agreement and this Appendix.
Calculation of the number of Performance Shares eligible to be settled depends on (i) the applicable percentage of the Performance Shares that are subject to Total Stockholder Return ("TSR") measures of the Company and the level of achievement of the Company's TSR compared to the applicable comparator group, (ii) the applicable percentage of the Performance Shares that are subject to a three-year Organic Revenue Growth (CAGR) measure of the Company and the level of achievement of the Company against specified thresholds, and (iii) the applicable percentage of the Performance Shares that are subject to a three-year Non-GAAP Operating Margin Expansion measure of the Company and the level of achievement of the Company against specified thresholds.
The TSR measure, the Organic Revenue Growth (CAGR) measure, and the Non-GAAP Operating Margin Expansion measure are each subject to certain measurement and adjustment principles as set forth immediately following each applicable measuring goal below. In addition, the Committee has the sole discretion to administer, interpret and make adjustments as necessary to determine the number of the Performance Shares that should vest, if any, based on each of the measures.
TSR Measuring Goal -- Performance Against S&P Composite 1500 Software & Services Group Index (“S&P 1500 S&S”) plus Compensation Peer Group
•Number of Shares Subject to TSR Measuring Goal: ________Performance Shares
•Applicable Measuring Goal: The Company's ending TSR percentile rank against the TSRs of the companies in (a) the S&P 1500 S&S (including the Company), plus (b) any members of the Company's compensation peer group not otherwise included in the S&P 1500 S&S, for the three (3) fiscal years ending June 30, 20__.
•Percentage of Performance Shares Vesting Based on Percentile Ranking: The percentage of Performance Shares eligible to be settled shall be determined in accordance with the following schedule:
Company's TSR Compared to Measuring Peer Group | Percentage of Performance Shares Eligible to be Settled* | ||||
< 25% percentile | 0% of Performance Shares (0 shares) | ||||
25th percentile | 25% of Performance Shares (_____ shares) | ||||
50th percentile | 100% of Performance Shares (_____ shares) | ||||
80th percentile or Greater | 200% of Performance Shares (______ shares) | ||||
*The percentage of Performance Shares eligible to be settled when the Company's TSR for the Performance Period falls in between any of the above-listed percentiles shall be determined using linear interpolation between the immediately preceding and immediately following data-points.
•General Principles for TSR Measuring Goal
For purposes of TSR Measuring Goal, TSR (for each company's stock taken into account in the TSR calculation) is calculated as follows:
(i) The closing stock price (average of the closing prices for the trading days during the 30 consecutive calendar days ending on June 30, 20__) plus reinvested dividends paid during the Performance Period;
Divided by
(ii) The beginning stock price (average of the closing prices for the trading days during the 30 consecutive calendar days ending on June 30, 20__).
For this purpose, closing price means the last reported market price for one share of stock, regular way, on the exchange or stock market on which such last reported market price is reported on the day in question.
The TSR comparator group will be only those companies in the S&P 1500 S&S or in the Company's compensation peer group at both the beginning of the Performance Period and at the end of the Performance Period, subject to the following exceptions:
◦Companies within the TSR Measuring Goal comparator group on June 30, 20__, that file for bankruptcy or whose shares are otherwise delisted shall continue to be counted at the end of the Performance Period and shall be considered at the bottom of the peer group for ranking purposes or given a -100% performance under a percentile method.
◦Companies within the TSR Measuring Goal comparator group on June 30, 20__ that are merged into another entity during the Performance Period, shall be removed from the comparator group both at the beginning and the end of the Performance Period.
•Measuring Peer Group: The following is the Company’s comparator group for purposes of this TSR Measuring Goal:
S&P 1500 S&S ◦8x8, Inc. ◦Accenture plc ◦ACI Worldwide, Inc. ◦Adobe Inc. ◦Agilysys, Inc. ◦Akamai Technologies, Inc. ◦Alarm.com Holdings, Inc. ◦Alliance Data Systems Corporation ◦ANSYS, Inc. ◦Aspen Technology, Inc. ◦Autodesk, Inc. ◦Automatic Data Processing, Inc. ◦Blackbaud, Inc. ◦Bottomline Technologies (de), Inc. ◦Broadridge Financial Solutions, Inc. ◦Cadence Design Systems, Inc. ◦CDK Global, Inc. ◦Cerence Inc. ◦Ceridian HCM Holding Inc. ◦Citrix Systems, Inc. ◦Cognizant Technology Solutions Corporation ◦Commvault Systems, Inc. ◦Concentrix Corporation ◦CSG Systems International, Inc. ◦DXC Technology Company ◦Ebix, Inc. ◦Envestnet, Inc. ◦EVERTEC, Inc. ◦ExlService Holdings, Inc. ◦Fair Isaac Corporation ◦Fidelity National Information Services, Inc. ◦Fiserv, Inc. ◦FLEETCOR Technologies, Inc. ◦Fortinet, Inc. ◦Gartner, Inc. ◦Genpact Limited ◦Global Payments Inc. ◦InterDigital, Inc. ◦International Business Machines Corporation ◦Intuit Inc. ◦J2 Global, Inc. ◦Jack Henry & Associates, Inc. | ◦LivePerson, Inc. ◦LiveRamp Holdings, Inc. ◦Manhattan Associates, Inc. ◦Mastercard Incorporated ◦Maximus, Inc. ◦Microsoft Corporation ◦MicroStrategy Incorporated ◦NortonLifeLock Inc. ◦OneSpan Inc. ◦Oracle Corporation ◦Paychex, Inc. ◦Paycom Software, Inc. ◦Paylocity Holding Corporation ◦PayPal Holdings, Inc. ◦Perficient, Inc. ◦Progress Software Corporation ◦PTC Inc. ◦Qualys, Inc. ◦Sabre Corporation ◦SailPoint Technologies Holdings, Inc. ◦salesforce.com, inc. ◦ServiceNow, Inc. ◦SPS Commerce, Inc. ◦Sykes Enterprises, Incorporated ◦Synopsys, Inc. ◦Teradata Corporation ◦The Western Union Company ◦TTEC Holdings, Inc. ◦Tyler Technologies, Inc. ◦Unisys Corporation ◦VeriSign, Inc. ◦Visa Inc. ◦Vonage Holdings Corp. ◦WEX Inc. ◦Xperi Holding Corporation Compensation Peers Not Included in S&P 1500 S&S ◦Black Knight, Inc. ◦Euronet Worldwide, Inc. ◦NCR Corporation ◦Square, Inc. ◦SS&C Technologies Holdings, Inc. ◦Verint Systems Inc. | ||||
Organic Revenue Growth (CAGR) Measuring Goal
•Number of Shares Subject to Organic Revenue Growth (CAGR) Measuring Goal: ________Performance Shares
•Applicable Measuring Goal: The Company's compound annual growth rate (“CAGR”) for revenue (adjusting for deconversion fees) for the three-year period ending June 30, 20__ compared against goal thresholds.
•Percentage of Performance Shares Vesting Based on Outcome: The percentage of Performance Shares eligible to be settled shall be determined in accordance with the following schedule:
Company's Three-Year Organic Revenue Growth (CAGR) | Percentage of Performance Shares Eligible to be Settled* | ||||
< 6.5% | 0% of Performance Shares (0 shares) | ||||
6.5% | 50% of Performance Shares (_____ shares) | ||||
7.5% | 100% of Performance Shares (_____ shares) | ||||
9.0% | 200% of Performance Shares (______ shares) | ||||
*The percentage of Performance Shares eligible to be settled when the Company's Organic Revenue Growth (CAGR) for the Performance Period falls in between any of the above-listed percentages shall be determined using linear interpolation between the immediately preceding and immediately following data-points.
•General Principles for Organic Revenue Growth (CAGR) Measuring Goal
For purposes of Organic Revenue Growth (CAGR) Measuring Goal, the following principles will apply:
(i) Non-GAAP revenue will be calculated by adjusting GAAP revenue for the relevant periods for deconversion fee revenue.
(ii) Organic Revenue Growth (CAGR) is calculated as follows:
(a) The quotient equal to the Company’s non-GAAP revenue for the final Performance Year of the Performance Period divided by the Company’s non-GAAP revenue for the fiscal year ending immediately prior to the beginning of the Performance Period.
Raised to an exponent of
(b) one-third
Subtracting from the result of (a) and (b)
(c) 1.
(iii) If there is any acquisition or divestiture by the Company during the Performance Period, the Compensation Committee will adjust the goal and/or results to ensure Participant is neither benefited nor penalized by the acquisition or divestiture. This will be accomplished by:
(a) Adjusting the goal to reflect the “pro forma” revenue based on the approved deal modeling and expectations.
(b) Removing any one-time costs and/or transaction related fees.
(c) Fully excluding any deal that occurs in year three of the Performance Period from goals and results.
Non-GAAP Operating Margin Expansion
•Number of Shares Subject to Non-GAAP Operating Margin Expansion Measuring Goal: ________Performance Shares
•Applicable Measuring Goal: The expansion of the Company's non-GAAP operating margin over the three-year period ending June 30, 20__ compared against goal thresholds.
•Percentage of Performance Shares Vesting Based on Percentile Ranking: The percentage of Performance Shares eligible to be settled shall be determined in accordance with the following schedule:
Company's Three-Year Non-GAAP Operating Margin Expansion | Percentage of Performance Shares Eligible to be Settled* | ||||
< 1.0% | 0% of Performance Shares (0 shares) | ||||
1.0% | 50% of Performance Shares (_____ shares) | ||||
1.4% | 100% of Performance Shares (_____ shares) | ||||
2.1% | 200% of Performance Shares (______ shares) | ||||
*The percentage of Performance Shares eligible to be settled when the Company's Non-GAAP Operating Margin Expansion for the Performance Period falls in between any of the above-listed percentiles shall be determined using linear interpolation between the immediately preceding and immediately following data-points.
•General Principles for Non-GAAP Operating Margin Expansion Measuring Goal
For purposes of Non-GAAP Operating Margin Expansion Measuring Goal, the following principles will apply:
(i) Non-GAAP revenue will be calculated by adjusting GAAP revenue for the relevant periods for deconversion fee revenue.
(ii) Non-GAAP operating income will be calculated by adjusting GAAP operating income for the relevant periods for operating income from deconversion fees and operating income/loss from acquisitions, divestitures and asset write-offs:
(iii) Non-GAAP Operating Margin Expansion is calculated as follows:
(a) An amount equal to non-GAAP operating income for the final Performance Year of the Performance Period divided by Non-GAAP revenue for the final Performance Year of the Performance Period
Less
(b) An amount equal to non-GAAP operating income for the fiscal year ending immediately prior to the beginning of the Performance Period divided by non-GAAP revenue for the fiscal year ending immediately prior to the beginning of the Performance Period
(iv) If there is any acquisition or divestiture by the Company during the Performance Period, the Compensation Committee will adjust the goal and/or results to ensure Participant is neither benefited nor penalized by the acquisition or divestiture. This will be accomplished by:
(a) Adjusting the goal to reflect the “pro forma” revenue and operating income based on the approved deal modeling and expectations.
(b) Removing any one-time costs and/or transaction related fees.
(c) Fully excluding any deal that occurs in year three of the Performance Period from goals and results.
JACK HENRY & ASSOCIATES, INC.
2015 EQUITY INCENTIVE PLAN
RESTRICTED STOCK UNIT AGREEMENT
(Employees)
Date of Award: __________
Number of RSUs Granted: __________ (the “Award”)
THIS AWARD AGREEMENT dated ______ is made by and between Jack Henry & Associates, Inc., a Delaware corporation (hereinafter called the “Company”), and ______ (hereinafter called “Awardee”).
RECITALS:
A. The Company’s stockholders and Board of Directors of the Company (“Board”) has adopted the Jack Henry & Associates, Inc. 2015 Equity Incentive Plan (“Plan”) pursuant to which restricted stock units may be granted to employees of the Company; and
B. The Company desires to grant restricted Stock Units (“RSUs”) to Awardee under the terms and conditions hereinafter set forth;
AGREEMENT:
In consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows:
1. Award Subject to Plan. This Award is made under and is expressly subject to all the terms and provisions of the Plan, and which terms are incorporated herein by reference. Awardee agrees to be bound by all the terms and provisions of the Plan. Terms not defined herein shall have the meaning ascribed thereto in the Plan.
2. Grant of Award. Pursuant to the action of the undersigned officer as authorized by the Board, which action was taken on the date set forth above as Date of Award, the Company awards to Awardee the number of Restricted Stock Units identified above. Subject to the other terms and conditions of the Plan and this Agreement, settlement of each RSU as provided in Section 4 entitles Awardee to the issuance of one share of Common Stock, or, if permitted under the Plan and where the Board elects to settle an RSU for cash, a cash payment equal to the fair market value of the share underlying the RSU that the Board elects to settle for cash.
3. Restrictions. Except as may be permitted under the Plan or by the Board, the RSUs are not transferable by sale, assignment, disposition, gift, exchange, pledge, hypothecation, or otherwise. Any attempted disposition of the RSUs, or the levy of any execution, attachment or similar process upon the RSUs prior to settlement, shall
be null and void and without effect. Holding RSUs does not give Awardee the rights of a shareholder (including without limitation the right to vote or receive dividends or other distributions) with respect to shares of Common Stock underlying the RSUs that the Company may issue under the terms and conditions of this Agreement.
4. Settlement, Forfeiture and Share Issuance.
(a) Settlement Dates. The RSUs awarded hereunder shall settle according to the following schedule (each anniversary, a “Settlement Date”), with the percentages below being applied to the Award by rounding down to the nearest whole share:
Anniversary of Date of Award Percentage Settled
First Anniversary 33 1/3%
Second Anniversary 33 1/3%
Third Anniversary 33 1/3%
(b) Form of Settlement. To the extent permissible under the Plan, the Committee, in its sole discretion, may elect to settle an RSU by issuing shares of Common Stock or by making a cash payment to Awardee in an amount equal to the then fair market value of the share of Common Stock underlying the RSU being settled, less any amounts necessary to satisfy the Company's tax withholding obligations.
(c) Forfeiture.
(i) Subject to the other provisions of this Section 4, all remaining non-settled RSUs shall be forfeited if Awardee ceases to be an employee of the Company prior to any of the Settlement Dates. Upon any such forfeiture, under no circumstances will the Company be obligated to make any payment to Awardee, and no shares of Common Stock shall be issued, as a result of such forfeited RSUs.
(ii) Notwithstanding the foregoing, if Awardee ceases to be an employee of the Company by reason of Retirement prior to full settlement of the RSUs awarded hereunder, then the Awardee shall be entitled to settlement of any non-settled RSUs according to the remaining Settlement Date schedule, and such settlement shall be made in accordance with Section 4(b). However, if, following a termination of employment by reason of Retirement, Awardee breaches any of the covenants set forth in Section 4(e) hereof, all remaining non-settled RSUs shall be forfeited pursuant to Section 4(c)(i) effective as of such breach.
(iii) For purposes of this Agreement, a “Retirement” means an Awardee’s termination of employment for the express reason of retirement, as determined by the Committee in its sole discretion, for which Awardee has provided the Company at least 6 months’ prior notice and occurs (A) on or after age 55 and following a minimum number of years of employment with the Company such that Awardee’s age plus the
number of years of employment with the Company equals or exceeds 72, or (B) on or after age 65. Unless otherwise determined by the Committee, Awardee must (1) have been actively employed as a full-time employee for an entire calendar year to receive credit for such year of employment for purposes of this definition of “Retirement” and (2) have been actively employed as a full-time employee for six months following the Date of Award to qualify as a “Retirement” for the purposes of this Agreement. If Awardee is not actively employed as a full-time employee for six months following the Date of Award, the Award will not be administered as subject to a “Retirement” under this Agreement.
(d) Share Issuance; Company Stock Ownership Guidelines.
(i) Except as otherwise provided herein, upon the settlement of a specific number of RSUs for shares of Common Stock as provided in this Section, the Company shall issue a corresponding number of shares of Common Stock to Awardee on the Settlement Date provided that tax withholding obligations have been satisfied as provided in Section 5. The Company’s transfer agent may issue shares of Common Stock in certificated or book entry form as determined by the Company’s Corporate Secretary. Upon issuance of the Shares, Awardee shall have all rights of a shareholder with respect thereto including the right to vote and receive all dividends or other distributions made or paid with respect to the shares of Common Stock.
(ii) Any Shares acquired by Awardee on the Settlement Date pursuant to this Award may be subject to any Company stock ownership guidelines or stock ownership policy as determined appropriate by the Committee and communicated to Awardee. Awardee agrees that Awardee will comply with and adhere to such stock ownership guidelines or stock ownership policy.
(e) Restrictive Covenants in the event of Retirement.
(i) Awardee acknowledges that in consideration of the continued vesting of RSUs after Awardee ceases to be an employee of the Company by reason of Retirement, Awardee shall, from the time of Retirement through the final Settlement Date hereunder (the “Restrictive Period”), abide by the restrictive covenants in Section 4(e)(ii), (iii), and (iv) hereunder (together, the “Restrictive Covenants”). Awardee further acknowledges that a failure to abide by the Restrictive Covenants during the Restrictive Period shall result in forfeiture of non-settled RSUs pursuant to Section 4(c)(ii).
(ii) During the Restrictive Period, Awardee agrees and covenants not to engage in Prohibited Activity anywhere in the United States. For purposes of this Section 4(e)(ii), “Prohibited Activity” is any activity in which the Awardee serves as an employee, employer, owner, operator, manager, advisor, consultant, agent, partner, director,
stockholder, officer, volunteer, or any similar capacity to an entity engaged in the same or similar business as the Company. Nothing herein shall prohibit the Awardee from purchasing or owning less than five percent (5%) of the publicly traded securities of any corporation, provided that such ownership represents a passive investment and the Awardee is not a controlling person of, or a member of a group that controls, such corporation.
(iii) During the Restrictive Period, Awardee agrees and covenants not to directly or indirectly (i) solicit, contact, aid, or induce, or attempt to solicit, contact, aid, or induce, using any form of oral, written, or electronic communication, any current, former, or prospective customer of the Company for the purpose of purchasing goods or services then sold by the Company from any other person, firm, corporation, or other entity or assist or aid any other person or entity in identifying or soliciting any such customer, (ii) solicit, hire, recruit, attempt to hire or recruit, or to induce or attempt to induce the termination of employment of any employee of the Company, or (iii) interfere, or aid or induce any other person or entity in interfering, with the relationship between the Company and any of its vendors, joint venturers, or licensors.
(iv) During the Restrictive Period, Awardee agrees and covenants that Awardee will not make, publish, or communicate to any person or entity or in any public forum any defamatory or disparaging remarks, comments, or statements concerning the Company or its businesses, or any of its employees or officers. The foregoing shall not be violated by exercising protected legal rights to the extent that such rights cannot be waived by agreement or from providing truthful statements in response to legal process, required governmental testimony or filings, or similar proceedings.
(v) The Company and Awardee acknowledge that the Restrictive Covenants are reasonable and reasonably necessary to protect the legitimate business interest of the Company. If it is determined by a court of competent jurisdiction in any state that any restriction in this Section 4(e) is excessive in duration or scope or is unreasonable or unenforceable under applicable law, it is the intention of the parties that such restriction may be modified or amended by the court to render it enforceable to the maximum extent permitted by the laws of that state.
(f) Effect of Change in Control on Award and Settlement.
(i) In the event a Change in Control occurs prior to full settlement of the RSUs awarded hereunder and this Award Agreement is not converted, assumed, substituted, continued, or replaced (with substantially identical economic terms) by a successor or surviving entity, or a parent or subsidiary thereof, in connection with such Change in Control event, then, immediately prior to the Change in Control event, all remaining non-settled RSUs shall vest in full and be issued.
(ii) In the event that this Award Agreement is converted, assumed, substituted, continued, or replaced (with substantially identical economic terms) by a successor or surviving entity, or a parent or subsidiary thereof, in connection with the Change in Control event, if Awardee’s employment terminates prior to the final Settlement Date, all remaining non-settled RSUs shall be forfeited; provided, however, if Awardee experiences a Covered Termination (as defined below) prior to the final Settlement Date, then all remaining non-settled RSUs shall vest in full and be issued.
(iii) For purposes of this Section 4(f), “Covered Termination” means (A) the termination of the Awardee’s employment with the Company or the successor or surviving entity, or a parent or subsidiary thereof, in connection with the Change of Control event, within the period commencing 90 days prior to, and ending two years following such Change in Control event (the “Applicable Period”) without Cause (as defined below), or (B) Awardee’s resignation for Good Reason (as defined below) during the Applicable Period.
(iv) For purposes of this Section 4(f), “Cause” means (A) failure of the Awardee to adequately perform his or her duties assigned by the Committee; or (B) any act or acts of gross dishonesty or gross misconduct on the Awardee’s part which result or are intended to result directly or indirectly in gain or personal enrichment at the expense of the Company or its subsidiaries to which the Awardee is not legally entitled.
(v) “Good Reason” means (A) a material diminution of the Awardee’s authority, duties or responsibilities from those being exercised and performed by the Awardee immediately prior to the Change in Control event; (B) a transfer of the Awardee to a location which is more than 75 miles away from the location where the Awardee was employed immediately prior to the Change in Control event; (C) a material diminution in the rate of the Awardee’s annual salary below his or her rate of annual salary immediately prior to the Change in Control event; (D) a material diminution in the Awardee’s annual target bonus opportunity below his or her annual target bonus opportunity immediately prior to the Change in Control event; or (E) a material breach by the Company of any incentive award agreement covering the Awardee; provided, however, that Good Reason shall not be deemed to exist unless the Awardee has first provided notice to the Company of the existence of one of the events described above within a period of 90 days from the initial existence of the event, and after such notice the Company has been provided a period of 30 days to eliminate the existence of Good Reason.
5. Tax Withholding. Awardee understands and agrees that, at the time any tax withholding obligation arises relating to the vesting of the right to receive, or the issuance of a share of Common Stock or, if permitted under the Plan, a cash payment, the Company may withhold, in shares of Common Stock if a valid election applies under
this Section 5 or in cash from amounts the Company owes or will owe Awardee, any applicable minimum withholding, payroll and other required tax amounts due upon the issuance of shares of Common Stock or cash payment. Tax withholding may be made by any means permitted under the Plan, as approved by the Committee, and as permitted under the law. The valuation of the RSUs, and any shares of Common Stock that the Company may issue attributable to RSUs, for tax and other purposes shall be determined in accordance with all applicable laws and regulations. In the absence of the satisfaction of tax obligations, the Company may refuse to issue shares of Common Stock or make any other payment hereunder.
6. Dividends and Voting. Prior to an RSU settlement date, Awardee shall have no right to receive any dividends or dividend equivalent payments with respect to the RSUs. Awardee will have no voting rights with respect to any of the RSUs or the shares of Common Stock underlying the RSUs.
7. Administration. This Award has been made pursuant to a determination made by the Board, or a committee authorized by the Board, subject to the express terms of this Agreement, and the Board or such committee shall have plenary authority to interpret any provision of this Agreement and to make any determinations necessary or advisable for the administration of this Agreement and may waive or amend any provisions hereof in any manner not adversely affecting the rights granted to Awardee by the express terms hereof.
8. No Right to Continued Service. Nothing in this Agreement shall be deemed to create any limitation or restriction on such rights as the Company otherwise would have to terminate the employment of the Awardee.
9. Amendment; Entire Agreement and Binding Effect. This Agreement may be amended only by a writing executed by the parties hereto which specifically states that it is amending this Agreement. This Agreement and the Plan constitute the entire contract between the parties hereto with regard to the subject matter hereof. They supersede any other agreements, representations or understandings (whether oral or written and whether express or implied) that relate to the subject matter hereof. Except as expressly stated herein to the contrary, this Agreement will be binding upon and inure to the benefit of the respective heirs, legal representatives, successors and assigns of the parties hereto.
10. Choice of Law. This Agreement shall be governed by the laws of the State of Delaware, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of the Agreement to the substantive law of another jurisdiction. Awardee is deemed to submit to the exclusive jurisdiction and venue of the federal or state courts of Missouri to resolve any and all issues that may arise out of or relate to this agreement.
The Company has caused this Agreement to be executed on its behalf, and Awardee has signed this Agreement to evidence Awardee’s acceptance of the terms hereof, all as of the date first above written.
JACK HENRY & ASSOCIATES, INC.
By:____________________________
Title: CFO/Treasurer
AWARDEE
______________________________
Name:
EXHIBIT 21.1
Jack Henry & Associates, Inc. Subsidiaries
| Name | State/Country of Incorporation | ||||
| Goldleaf Insurance, LLC | Tennessee | ||||
| JHA Payment Solutions, Inc. | Washington | ||||
| Towne Services, Inc. | Georgia | ||||
| iPay Technologies, LLC | Kentucky | ||||
| Profitstars, LLC | Missouri | ||||
| JHA Money Center, Inc. | Missouri | ||||
| Banno, LLC | Iowa | ||||
| Ensenta Corporation | Delaware | ||||
| Vanguard Software Group, LLC | Nevada | ||||
| DebtFolio, Inc. (dba Geezeo) | Delaware | ||||
EXHIBIT 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-63912, 333-130078, 333-130079, 333-138891, 333-208234, 333-214631 and 333-220169) of Jack Henry & Associates, Inc. of our report dated August 25, 2021 relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in this Form 10-K.
/s/ PricewaterhouseCoopers LLP
Kansas City, Missouri
August 25, 2021
EXHIBIT 31.1
CERTIFICATION
I, David B. Foss, certify that:
1. I have reviewed this annual report on Form 10-K of Jack Henry & Associates, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter, (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: August 25, 2021
| /s/ David B. Foss | ||||||||
| David B. Foss | ||||||||
| Chief Executive Officer | ||||||||
EXHIBIT 31.2
CERTIFICATION
I, Kevin D. Williams, certify that:
1. I have reviewed this annual report on Form 10-K of Jack Henry & Associates, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter, (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: August 25, 2021
| /s/ Kevin D. Williams | ||||||||
| Kevin D. Williams | ||||||||
| Chief Financial Officer | ||||||||
EXHIBIT 32.1
Certification of the Chief Executive Officer
Pursuant to 18 U.S.C. Section 1350
Solely for the purposes of complying with 18 U.S.C. Section 1350, I, the undersigned Chief Executive Officer of Jack Henry & Associates, Inc. (the "Company"), hereby certify that, to my knowledge, the Annual Report on Form 10-K of the Company for the fiscal year ended June 30, 2021 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Dated: August 25, 2021
| */s/ David B. Foss | ||||||||
| David B. Foss | ||||||||
| Chief Executive Officer | ||||||||
*A signed original of this written statement required by Section 906 has been provided to Jack Henry & Associates, Inc. and will be retained by Jack Henry & Associates, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
EXHIBIT 32.2
Certification of the Chief Financial Officer
Pursuant to 18 U.S.C. Section 1350
Solely for the purposes of complying with 18 U.S.C. Section 1350, I, the undersigned Chief Financial Officer of Jack Henry & Associates, Inc. (the "Company"), hereby certify that, to my knowledge, the Annual Report on Form 10-K of the Company for the fiscal year ended June 30, 2021 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Dated: August 25, 2021
| */s/ Kevin D. Williams | ||||||||
| Kevin D. Williams | ||||||||
| Chief Financial Officer | ||||||||
*A signed original of this written statement required by Section 906 has been provided to Jack Henry & Associates, Inc. and will be retained by Jack Henry & Associates, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
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