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Sample Business Contracts

Incentive Agreement - Concord EFS Inc. and Edward A. Labry III

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                                CONCORD EFS, INC.

                               INCENTIVE AGREEMENT


     AGREEMENT  dated as of February  26, 1998 (the  "Effective  Date")  between
Concord EFS, Inc., a Delaware  corporation  with its principal place of business
at 2525 Horizon Lake Drive, Suite 120, Memphis,  Tennessee (the "Company"),  and
Edward A. Labry, III (the "Executive").

     1.  Employment.  The Company  agrees to employ the  Executive as President,
with  all  of  the  authority  and  responsibility   customarily  accorded  such
positions. The Executive agrees, while employed hereunder, to perform his duties
faithfully  and to the  best of his  ability  and in  accordance  with  criteria
established by the Board of Directors.

     2. Term.  This  Agreement  shall begin as of the  Effective  Date and shall
continue  until  February  25, 2003 unless  terminated  earlier for cause by the
Company,  cause to include  failure to perform his duties  faithfully and to the
best of his ability and in accordance with criteria  established by the Board of
Directors.  The rights,  obligations and agreements of the Executive pursuant to
Sections 6 and 7 hereof shall survive the  termination of this Agreement for any
reason.

     3. Compensation.

     3.1. Base Salary.  As compensation for the Executive's  services during the
Term,  the Company  shall pay the Executive an annual Base Salary at the rate of
$475,000  per year,  payable with the same  frequency as salaries  paid to other
senior executive  officers.  At least annually during the Term, the Compensation
Committee  of the  Board of  Directors  (the  "Committee")  shall  undertake  an
evaluation of the services of the  Executive.  The Committee  shall consider the
performance of the Executive,  his  contribution  to the success of the Company,
and other  factors  and shall  adjust the annual  Base  Salary to be paid to the
Executive.  For continued  performance at current levels,  the parties expect an
annual  cost-of-living  adjustment  not to exceed 1.5 times the  consumer  price
index change.

     3.2.  Incentive  Compensation.  For each  year,  commencing  in  1998,  the
Committee  will  establish an incentive  compensation  program which will have a
bonus  potential of 50% of Base Salary.  Payment of one-half the bonus potential
will be based on the rate of  increase  of  fully-diluted  earnings  per  share,
taking into account historic  performance,  changes in capitalization and market
expectation.  Payment of the remaining  one-half of the bonus  potential will be
based on the  achievement  of performance  criteria  determined by the Committee
after discussion with the Executive.  The bonus for each year will be accrued in
the year for which it has been earned.  Within a reasonable period after audited
operating  results  have  been  determined  for  each  year  and  the  Company's
Compensation  Committee  has made its  determination,  payment of the  incentive
compensation  for  that  year  shall  be made in  cash,  subject  to  applicable
employment and withholding  taxes,  but only if the Executive is employed by the
Company in good standing on the date of payment.

     4. Stock Options.

<PAGE>
     4.1.  Special Options.  As of the date of this Agreement,  the Company will
grant to the Executive, as an incentive for his entering into this Agreement, an
option to purchase  500,000 shares of the Company's  common stock with an option
price equal to $30.38 per share,  the fair market value of the Company's  common
stock on the date of this Agreement (the "First Option"). The First Option shall
vest (a) as to 250,000  shares on the earlier of (i)  February  26, 2003 or (ii)
the first day after the closing  price of the Company's  common stock  (adjusted
for any capital  changes)  has  averaged  $48 or higher over twenty  consecutive
trading days,  and (b) as to the remaining  250,000 shares on February 26, 2003.
On the date  described in clause (a)(ii) of the preceding  sentence,  if earlier
than  February  26, 2003,  the Company will grant to the  Executive an option to
purchase  250,000  shares  with an option  price  equal to $48.00 per share (the
"Second  Option") The Second Option shall vest (c) as to 125,000 shares on the
earlier of (i) February 26, 2003,  or (ii) the first day after the closing price
of the Company's  common stock  (adjusted for any capital  changes) has averaged
$64 or higher over twenty consecutive  trading days, and (d) as to the remaining
125,000  shares on February 26, 2003. On the date described in clause (c)(ii) of
the  preceding  sentence,  if earlier than  February 26, 2003,  the Company will
grant to the Executive an option to purchase 125,000 shares with an option price
equal to $64.00 per share (the "Third  Option").  The Third Option shall vest as
to all its shares on February 26, 2003.  Except as provided in Section 7, if the
Executive's  employment  with the Company is terminated at any time prior to any
vesting  date,  the unvested  portions of First,  Second and Third Options shall
lapse  without  vesting.  All share  numbers and prices  shall be  adjusted  for
capital changes.

     4.2.  Regular  Options.  Each year during the term of this  Agreement on or
before the Company's annual meeting, the Company shall grant to the Executive an
additional option to purchase up to 250,000 shares of the Company's common stock
(adjusted  for capital  changes),  with an option price equal to the fair market
value of the Company's common stock on the date of grant ("Additional  Option").
Options to  purchase  up to 125,000  shares each year will be based on growth in
fully-diluted earnings per share, under the principles set forth in Section 3.2,
and  options to  purchase  up to 125,000  shares  each year will be based on the
achievement  of other  performance  criteria  determined by the Committee  after
discussion  with the  Executive.  Except as provided in Section 7, the Executive
shall become vested in any  Additional  Option in accordance  with the Company's
1993 Incentive Stock Option Plan.

     5. Employee  Benefits.  The Executive  shall  participate  in all "employee
pension  benefit  plans" and in all "employee  welfare  benefit  plans" (each as
defined in the Employee  Retirement  Income Security Act of 1974), and all other
benefits  plans  available to any of the Company's  officers,  maintained by the
Company,  on a basis no less  advantageous  to the  Executive  than the basis on
which similarly  situated  executives  participate  (collectively,  "Benefits").
Without  limiting  the  generality  of the  foregoing,  the  Executive  shall be
entitled to the following Benefits:

     5.1. Medical Insurance.  The Executive and the Executive's dependents shall
be covered by medical insurance  comparable in scope to the coverage afforded on
the date hereof, with only such contribution by the Executive toward the cost of
such  insurance  as may be  required  from  time to time  from  other  similarly
situated executive employees.

<PAGE>
     5.2.  Deferred  Compensation.  The Company and the Executive  shall seek to
establish a mutually satisfactory  procedure permitting the Executive to defer a
portion of his otherwise currently taxable compensation.

     5.3. Expenses.  The Company shall reimburse the Executive from time to time
for the  reasonable  expenses  incurred by the Executive in connection  with the
performance of his obligations hereunder,  subject to compliance with reasonable
documentation procedures.

     5.4.  Holidays  and  Vacations.  The  Executive  shall be entitled to legal
holidays and to annual paid vacation of up to four weeks, all in accordance with
the Company's holiday and vacation policy.

     6. Protective Agreements.

     6.1. Not to Compete. For the period beginning on the date of this Agreement
and  continuing for three years after the  Termination  Date (except as modified
pursuant to Section  7.3),  the  Executive  shall not,  directly  or  indirectly
(including  through a spouse or other family  member),  engage in, invest in, or
enter into or participate  in, at any place within North America any Competitive
Business (as defined below),  either as an individual for his own account, or as
a  partner  or a  joint  venturer,  or  as  an  officer,  director,  consultant,
independent  contractor or holder of more than a 1% equity interest in any other
person,  firm,  partnership,  corporation,  limited  liability  company or other
business  entity or as an employee,  agent,  consultant or  salesperson  for any
person.  For purposes of this Section 6, the term  "Competitive  Business" shall
mean any business of  electronic  transmission  of  financial  data or any other
business or commercial  activity  that competes with or is reasonably  likely to
compete with or adversely  affect any part or area of the  Company's  current or
proposed  business at any time  throughout the entire period of the  Executive's
employment by the Company.

     6.2. Not to Solicit or Interfere.  For the period  beginning on the date of
this Agreement and continuing for three years after the Termination Date (except
as modified  pursuant to Section  7.3),  the  Executive  shall not,  directly or
indirectly: (i) solicit, service, accept orders from, or otherwise have business
contact  with any  person  or  entity  who has,  within  the  three-year  period
immediately prior to such termination of Executive's employment, been a customer
of the  Company;  (ii) interfere  with the  contractual  relations  between  the
Company and any of its employees, vendors or agents; or (iii) employ or cause to
be employed in any capacity,  or retain or cause to be retained as a consultant,
any person who was  employed  by the  Company  at any time  during the  one-year
period ended on the date of termination of the Executive's employment.

     6.3. Confidential Information.

     (a) The Executive recognizes and acknowledges that during the course of his
employment,  he may have  exposure to and develop  special  knowledge and skills
concerning certain of the Company's Confidential  Information (as defined below)
vital to the Company's  ability to compete  successfully  in its  business.  The
Executive  further  acknowledges  that it is vital to the  Company's  legitimate
business interests that the confidentiality of such Confidential  Information be
preserved,  and that use or reliance on such  Confidential  Information by or on
behalf of any other  business or  commercial  activity in  competition  with the

<PAGE>
Company could result in irreparable harm to the Company.  The Executive  further
acknowledges that the Confidential Information is a valuable, special and unique
asset of the Company's  business,  and that the Confidential  Information is and
shall remain the exclusive property of the Company and nothing in this Agreement
shall be construed as a grant to the Executive of any rights,  title or interest
in the Confidential Information.

     (b) Without the prior written consent of the Company, approved by its Board
of Directors,  the Executive  shall not, at any time either during or subsequent
to his employment by the Company,  use any Confidential  Information (as defined
below)  for the  benefit of anyone  other  than the  Company,  or  disclose  any
Confidential Information to any person or party; the Executive may, however, use
or disclose  Confidential  Information  as required  by his  obligations  to the
Company or as  necessary  or  desirable  (and for the benefit of the Company) in
connection  with  the  Company's  business  (but  all  such  permitted  uses and
disclosures  shall  be  made  under  circumstances  and  conditions   reasonably
appropriate   to  preserve  the   Confidential   Information  as  the  Company's
confidential  property).  In particular,  without limiting the generality of the
foregoing, the Executive shall not remove any Confidential Information,  however
embodied, from the Company's premises,  facilities or place of business,  except
as required in the course of employment by the Company.

     (c) After the term of the  Executive's  employment  with the  Company,  the
foregoing  restrictions  shall not apply to Confidential  Information  which the
Executive can establish by competent written proof:

     (i) was known, other than under binder of secrecy,  to the Executive prior
to his employment by the Company; or

     (ii) was subsequently obtained by the Executive, other than under binder of
secrecy, from a third party not acquiring the information under an obligation of
confidentiality from the disclosing party.

     (d) The term "Confidential  Information"  includes all information which is
acquired by the Executive from the Company,  its other employees,  its suppliers
or customers, its agents or consultants, or others, during his employment by the
Company,  and which relates to the present or potential  businesses and products
of the Company,  as well as any other  information  as may be  designated by the
Company as  confidential.  The term  Confidential  Information  may relate,  for
example,  to Inventions (as defined below),  trade secrets,  computer  software,
research, development, design, engineering, manufacturing,  purchasing, supplier
lists,  customer lists, price lists,  accounting,  profit margins,  marketing or
sales volume information or strategic plans; may include information  contained,
for example, in drawings, models, data, specifications, reports, compilations or
computer programs;  and may be in the nature of unwritten knowledge or technical
or  manufacturing  know-how;  but shall not in any event include any information
which  becomes  generally  known or  available  to  persons in the  business  or
industry of the Company other than as a result of acts or omissions attributable
to the Executive.

     6.4 Specific  Enforcement.  The parties  acknowledge  that the  Executive's
breach of the provisions of this Section 6 could cause  irreparable  harm to the
Company.  It is agreed and  acknowledged  that the remedy of damages will not be
adequate for the  enforcement of such provisions and that such provisions may be
enforced  by  equitable   relief,   including   injunctive  relief  or  specific

<PAGE>
performance,  which  relief  shall be  cumulative  and in  addition to any other
relief to which the Company may be entitled.

     6.5. Enforceability Amendment. If at any time any of the provisions of this
Section 6 shall be deemed invalid or unenforceable or are prohibited by the laws
of the state or place where they are to be performed  or enforced,  by reason of
being  vague or  unreasonable  as to duration  or  geographic  scope or scope of
activities  restricted,  or for any  other  reason,  such  provisions  shall  be
considered divisible and shall become and be immediately amended to include only
such  restrictions  and to such extent as shall be deemed to be  reasonable  and
enforceable by the court or other body having  jurisdiction over this Agreement;
and the Company and the Executive  agree that the  provisions of this Section 6,
as so amended, shall be valid and binding as though any invalid or unenforceable
provision had not been included herein.

     7. Change in  control.  Upon a Change in Control of the Company (as defined
in this Section 7), the  following  changes  shall be made in the  provisions of
this Agreement:

     7.1. Incentive Compensation.  The full bonus potential will be paid for the
year in which the Change in Control occurs.

     7.2. Stock Options.  All stock options granted before the Change in Control
pursuant  to  Sections  4.1 and 4.2 of this  Agreement  will  become  fully  and
immediately exercisable upon the Change in Control.

     7.3.  Protective  Agreements.   The  period  during  which  the  protective
agreements  set forth in Section 6.1 and  Section  6.2 may be enforced  shall be
reduced to the six-month period following the Change in Control.

     7.4.  Definition of Change in Control.  For purposes of this  Agreement,  a
"Change in Control" shall be deemed to have occurred if the conditions set forth
in any one of the following paragraphs shall have been satisfied:

     (a) Any person is or becomes the beneficial  owner as defined in Rule 13d-3
under  the  Securities  Exchange  Act of  1934  ("Exchange  Act"),  directly  or
indirectly,  of securities of the Company  representing fifty percent or more of
the combined voting power of the Company's then outstanding  voting  securities;
or

     (b) the  stockholders of the Company shall have approved a plan of complete
liquidation  of the Company or the Company shall have sold or disposed of all or
substantially  all of the Company's assets (or completed a transaction  having a
similar effect).

     8.  Governing  Law.  This  Agreement  shall be deemed a  contract  made and
performed in Tennessee and shall be governed by the laws of Tennessee.

     9. Entire  Agreement;  Amendment.  This  Agreement  constitutes  the entire
agreement of the parties and may be altered or amended or any  provision  hereof
waived  only by an  agreement  in  writing  signed  by the  party  against  whom
enforcement of any alteration,  amendment, or waiver is sought. No waiver by any
party of any breach of this  Agreement  shall be  considered  as a waiver of any
subsequent breach.

<PAGE>
     10. Binding Obligations.  This Agreement shall be binding upon and inure to
the benefit of the Company and its  successors and assigns and the Executive and
his personal representatives.

     11.  Assignability.  Neither this Agreement nor any benefits payable to the
Executive  hereunder  shall be  assigned,  pledged,  anticipated,  or  otherwise
alienated by the  Executive,  or subject to attachment or other legal process by
any creditor of the Executive,  and  notwithstanding  any attempted  assignment,
pledge,  anticipation,  alienation,  attachment,  or other  legal  process,  any
benefit  payable to the Executive  hereunder shall be paid only to the Executive
or his estate.

     12.  NOTICES.  All payments,  notices or other  communications  required or
permitted  to be given  hereunder  shall be in writing  and shall be  personally
delivered or sent be registered or certified  mail,  return  receipt  requested,
postage prepaid, addressed to the parties.


     IN WITNESS WHEREOF,  the Company,  by its officer hereunto duly authorized,
and the  Executive  have signed and sealed this  Agreement  as of the date first
written above.

                                      CONCORD EFS, INC.



                                      By:/s/Edward A. Labry, III
                                         --------------------------------------
                                         Edward A Labry, III President       

                                         /s/Dan M. Palmer
                                         --------------------------------------
                                         Dan M. Palmer