EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made effective this 15th
day of February, 1999 (the "Effective Date") by and between ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
(hereinafter referred to as "Employee") and NOVA CORPORATION, a Georgia
corporation ("NOVA").
W I T N E S S E T H :
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WHEREAS, NOVA, through its direct and indirect subsidiaries, is in the
business of providing credit card and debit card transaction processing services
and settlement services (including the related products and services of
automated teller machines and check guarantee services) to merchants, financial
institutions, independent sales organizations ("ISOs"), and other similar
customers (collectively, the "Business") throughout the United States;
WHEREAS, NOVA, or its assigns, will continue to engage in the Business
throughout the United States (the "Territory");
WHEREAS, NOVA desires that Employee work for NOVA, and Employee desires
to accept said employment, all as contemplated herein;
NOW, THEREFORE, for and in consideration of his employment by NOVA
pursuant to this Agreement, the NOVA Confidential Information and Trade Secrets
(as hereafter defined) furnished to Employee by NOVA in order that he may
perform his duties under this Agreement, the mutual covenants and agreements
herein contained, and other valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
1. Employment of Employee. NOVA hereby employs Employee for a
period beginning as of the Effective Date and ending two (2) years thereafter
(the "Initial Term"), unless Employee's employment by NOVA is sooner terminated
or automatically renewed pursuant to the terms of this Agreement (Employee's
employment by NOVA pursuant to the terms of this Agreement shall hereinafter be
referred to as "Employment").
(a) Employee agrees to such Employment on the terms and
conditions herein set forth and agrees to devote his reasonable best
efforts to his duties under this Agreement and to perform such duties
diligently and efficiently and in accordance with the directions of
NOVA's Chief Executive Officer.
(b) During the term of Employee's Employment, Employee shall
serve as Senior Executive Vice President of NOVA and President and Chief
Operating Officer of PMT Services, Inc. Employee shall be responsible
primarily for such duties as are assigned to him, from time to time, by
NOVA's Chief Executive Officer, which in any event shall be such duties
as are customary for an officer in those positions.
(c) Employee shall devote substantially all of his business
time, attention, and energies to NOVA's Business, shall act at all times
in the best interests of NOVA, and shall not during the term of his
Employment be engaged in any other business activity, whether or not
such business is pursued for gain, profit, or other pecuniary advantage,
or permit such personal interests as he may have to interfere with the
performance of his duties hereunder. Notwithstanding the foregoing,
Employee may participate in industry, civic and charitable activities so
long as such activities do not materially interfere with the performance
of his duties
hereunder.
2. Compensation. During the term of Employee's Employment and in
accordance with the terms hereof, NOVA shall pay or otherwise provide to
Employee the following compensation:
(a) Employee's annual salary during the term of his
Employment shall be Three Hundred Thousand and No/100 Dollars ($300,000)
("Base Salary"), with such increases (each, a "Merit Increase") as may
from time to time be deemed appropriate by NOVA's Chief Executive
Officer; provided, however, that so long as this Agreement remains in
effect, Employee's Base Salary shall be reviewed annually by NOVA's
Chief Executive Officer in each fiscal year, within a reasonable time
following the availability of NOVA's financial statements for the
preceding fiscal year. The Base Salary shall be paid by NOVA in
accordance with NOVA's regular payroll practice. As used herein, the
term "Base Salary" shall be deemed to include any Merit Increases
granted to Employee.
(b) In addition to the Base Salary, Employee shall be
eligible to receive annual bonus compensation ("Bonus Compensation") in
the amount, and on the terms and conditions described in the Annual
Incentive Compensation Schedule attached as Exhibit A (the "Incentive
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Compensation Plan"). Upon written request and subject to the terms and
conditions set forth in this Section 2(b), Employee shall be entitled to
elect to receive all or part of any Bonus Compensation payable to
Employee under the Incentive Compensation Plan in shares of NOVA common
stock, par value $.01 per share ("NOVA Stock"), valued on the basis of
the closing price of NOVA Stock on the New York Stock Exchange on the
date of Employee's request (or if such date is not a trading day, on the
immediately preceding trading day); provided, however, that NOVA shall
not be obligated to comply with Employee's request if (i) NOVA does not
have shares of NOVA Stock available for issuance or (ii) the issuance of
NOVA Stock to Employee would be impracticable or impede, in any respect,
NOVA's ongoing business operations.
(c) NOVA may withhold from any benefits payable under this
Agreement all federal, state, city or other taxes as shall be required
pursuant to any law or governmental regulation or ruling.
3. Benefits. During the term of Employee's employment, and for such
time thereafter as may be required by Section 7 hereof, NOVA shall provide to
Employee the following benefits:
(a) Medical Insurance. Employee and his dependents shall be
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entitled to participate in such medical, dental, vision, prescription
drug, wellness, or other health care or medical coverage plans as may be
established, offered or adopted from time to time by NOVA for the
benefit of its employees and/or executive officers, pursuant to the
terms set forth in such plans.
(b) Life Insurance. Employee shall be entitled to
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participate in any life insurance plans established, offered, or adopted
from time to time by NOVA for the benefit of its employees and/or
executive officers.
(c) Disability Insurance. Employee shall be entitled to
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participate in any disability insurance plans established, offered, or
adopted from time to time by NOVA for the benefit of its employees
and/or executive officers.
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(d) Vacations, Holidays. Employee shall be entitled to at
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least four (4) weeks of paid vacation each year and all holidays
observed by NOVA.
(e) Stock Option Plans. Employee shall be eligible for
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participation in any stock option plan or restricted stock plan adopted
by NOVA's Board of Directors or the Compensation Committee.
(f) Other Benefits. In addition to and not in any way in
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limitation of the benefits set forth in this Section 3, Employee shall
be eligible to participate in all additional employee benefits provided
by NOVA (including, without limitation, all tax-qualified retirement
plans, non-qualified retirement and/or deferred compensation plans,
incentive plans, other stock option or purchase plans, and fringe
benefits) on the same basis as such are afforded to other executive
officers of NOVA during the term of this Agreement.
(g) Terms and Provisions of Plans. NOVA agrees that it shall
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not take action (during the term of this Agreement or the "Continuation
Period," as defined in Section 7(a)) to modify the terms and provisions
of any such plan or arrangement so as to exclude only Employee and/or
his dependents, either by excluding Employee and/or his dependents
explicitly by name or by modifying provisions generally applicable to
all employees and dependents so that only Employee and/or his dependents
would be affected.
(h) Vesting of Rights. Upon the occurrence of the events set
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forth in Sections 8(e)(i)(A), 8(e)(i)(B) or 8(e)(i)(C) during the term
of this Agreement, and regardless of whether Employee terminates this
Agreement following such occurrence, and notwithstanding any provision
to the contrary in any other agreement or document (including NOVA's
applicable plan documents), all stock options, restricted stock, and
other similar rights that have been granted to Employee and are not
vested on the date of the occurrence of such event shall become vested
and exercisable immediately (collectively, the "Vested Rights") and as
provided under the applicable plan or agreement, Employee shall have the
continuing right to exercise any or all of the Vested Rights.
4. Personnel Policies. Employee shall conduct himself at all times
in a businesslike and professional manner as appropriate for a person in his
position and shall represent NOVA in all respects with good business and ethical
practices. In addition, Employee shall be subject to and abide by the policies
and procedures of NOVA applicable generally to personnel of NOVA, as adopted
from time to time.
5. Reimbursement for Business Expenses. Employee shall be
reimbursed, on no less frequently than a monthly basis, for all out-of-pocket
business expenses incurred by him in the performance of his duties hereunder,
provided that Employee shall first document and substantiate said business
expenses in the manner generally required by NOVA under its policies and
procedures.
6. Term and Termination of Employment.
(a) This Agreement shall be effective as of the Effective
Date.
(b) Employee's Employment shall terminate immediately upon
the discharge of Employee by NOVA for "Cause." For the purposes of this
Agreement, the term "Cause," when
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used with respect to termination by NOVA of Employee's Employment
hereunder, shall mean termination as a result of: (i) Employee's
violation of the covenants set forth in Section 10 or 11; (ii)
Employee's willful, intentional, or grossly negligent failure to perform
his duties under this Agreement diligently and in accordance with the
directions of NOVA; (iii) Employee's willful, intentional, or grossly
negligent failure to comply with the decisions or policies of NOVA; or
(iv) final conviction of Employee of a felony; provided, however, that
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in the event NOVA desires to terminate Employee's Employment pursuant to
subsections (i), (ii), or (iii) of this Section 6(b), NOVA shall first
give Employee written notice of such intent, detailed and specific
description of the reasons and basis therefor, and thirty (30) days to
remedy or cure such perceived breaches or deficiencies (the "Cure
Period"); provided, however, that with respect only to breaches that it
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is not possible to cure within such thirty (30) day period, so long as
Employee is diligently using his best efforts to cure such breaches or
deficiencies within such period and thereafter, the Cure Period shall be
automatically extended for an additional period of time (not to exceed
sixty (60) days) to enable Employee to cure such breaches or
deficiencies, provided, further, that Employee continues to diligently
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use his best efforts to cure such breaches or deficiencies. If Employee
does not cure the perceived breaches or deficiencies within the Cure
Period, NOVA may discharge Employee immediately upon written notice to
Employee. If NOVA desires to terminate Employee's Employment pursuant to
subsection (iv) of this Section 6(b), NOVA shall first give Employee
three (3) days prior written notice of such intent.
(c) Employee's Employment shall terminate immediately upon
the death of Employee.
(d) Employee's Employment shall terminate immediately upon
thirty (30) days prior written notice to Employee if Employee shall at
any time be incapacitated by reason of physical or mental illness or
otherwise become incapable of performing the duties under this Agreement
for a continuous period of one hundred eighty (180) consecutive days;
provided, however, to the extent NOVA could, with reasonable
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accommodation and without undue hardship, continue to employ Employee in
some other capacity after such one hundred eighty (180) day period, NOVA
shall, to the extent required by the Americans With Disabilities Act,
offer to do so, and, if such offer is accepted by Employee, Employee
shall be compensated accordingly.
(e) Employee may terminate this Agreement, upon thirty (30)
days prior written notice to NOVA (the "Notice Period"), in the event
(i) there is a material diminution in Employee's duties and
responsibilities such that they no longer reflect duties and
responsibilities customary for an executive officer of a publicly-traded
company; provided, however, that NOVA's change to a privately-held
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company (for example, as a result of acquisition) and the corresponding
change in Employee's duties and responsibilities shall not, by itself,
be sufficient to qualify as a "Responsibilities Breach"; (ii) Employee
is required to relocate to an office that is more than thirty-five (35)
miles from Employee's current office located at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇; (iii) there is a reduction in
Employee's Base Salary payable under Section 2, an adverse change in the
terms of the Incentive Compensation Plan, or a material reduction in
benefits provided to Employee under Section 3 (whether occurring at once
or over a period of time); or (iv) NOVA materially breaches this
Agreement, (each of (i), (ii), (iii) and (iv) being referred to as a
"Responsibilities Breach"), and NOVA fails to cure said Responsibilities
Breach within the Notice Period; provided, however, that with respect
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only to breaches that it is not possible to cure within the Notice
Period, so long as NOVA is diligently using its best efforts to cure
such breaches within such Notice Period, the Notice Period shall be
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automatically extended for an additional period of time (not to exceed
sixty (60) days) to enable NOVA to cure such breaches, provided,
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further, that NOVA continues to diligently use its best efforts to cure
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such breaches. Notwithstanding anything to the contrary in this Section
6(e), the Notice Period for any breach arising from the failure to pay
compensation shall be five (5) days.
(f) Employee may terminate this Agreement at any time,
without cause, upon thirty (30) days prior written notice to NOVA.
(g) NOVA may terminate this Agreement at any time, without
cause, upon written notice to Employee.
(h) This Agreement shall automatically renew for successive
one (1) year terms (each a "Renewal Term") unless either party hereto
gives the other party hereto written notice of its or his intent not to
renew this Agreement no later than one hundred eighty (180) days prior
to the date the Initial Term, or the then-current Renewal Term, is
scheduled to expire. Employee's Employment shall terminate upon
termination or expiration of this Agreement.
7. Termination Payments.
(a) Upon termination of Employee's Employment, for whatever
reason (other than termination for "Cause" pursuant to Section 6(b),
termination by Employee pursuant to Section 6(f), expiration of this
Agreement following notice of non-renewal by Employee pursuant to
Section 6(h), or termination because Employee otherwise "quits" or
voluntarily terminates his employment other than pursuant to Section
6(e) (each, a "Termination Exclusion") (the effective date of such
termination or expiration being referred to as the "Termination Date"),
in addition to any amounts payable to Employee hereunder (including but
not limited to accrued but unpaid Base Salary or accrued but unpaid
Bonus Compensation), and any other benefits required to be provided to
Employee and his dependents under contract and applicable law:
(i) NOVA shall pay Employee in cash an amount equal
to his "Annual Base Compensation" (as defined in Section 7(e))
multiplied by two (2) (the "Severance Payment"). The Severance
Payment shall be paid in twenty-four (24) equal monthly
payments, the first of which shall be made on the first day of
the calendar month following the calendar month in which the
Termination Date occurs; provided, however, that if Employee's
Employment is terminated (other than by reason of a Termination
Exclusion), within two (2) years after a Change in Control of
NOVA, NOVA shall pay Employee the Severance Payment in one lump
sum within thirty (30) days of the Termination Date.
(ii) NOVA shall pay Employee an amount (the
"Supplemental Payment") equal to (x) the amount of Bonus
Compensation payable to Employee for the calendar year
immediately preceding the year in which the Termination Date
occurs (the "Prior Bonus Amount") multiplied by (y) a fraction,
the numerator of which is the number of days beginning on
January 1st of the calendar year in which the Termination Date
occurs and ending on the Termination Date, and the denominator
of which is 365. The Supplemental Payment shall be paid to
Employee concurrently with the payment of the Prior Bonus
Amount; provided, however, that if the Prior Bonus Amount has
already been paid to Employee, the Supplemental Payment shall be
paid within 30 days of the
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Termination Date. In the event the Termination Date occurs in
the first calendar year of Employee's employment, then the
Supplemental Payment shall equal the pro rata percentage
(determined using the fraction above) of the Bonus Compensation
Employee would have received for the calendar year in which the
Termination Date occurred had Employee remained employed for the
entire calendar year in which the Termination Date occurred, and
the Supplemental Payment shall be paid to Employee concurrently
with NOVA's payment of Bonus Compensation generally for such
calendar year.
(iii) Notwithstanding any provision to the contrary in
any other agreement or document (including but not limited to
NOVA's applicable plan documents), all stock options, restricted
stock and other similar rights that, as of the Termination Date,
have been granted to Employee shall become vested and
exercisable immediately upon notice of such termination and, as
provided under the applicable plan or agreement, Employee shall
have the continuing right to exercise any or all of such rights.
(iv) Until the earlier to occur of (x) the expiration
of the Severance Period or (y) Employee becomes an employee of
another company providing Employee and his dependents with
medical, life and disability insurance (the period from the
Termination Date until such event being referred to herein as
the "Continuation Period"), NOVA shall provide to Employee and
his dependents the coverage for the benefits described in
Sections 3(a), (b) and (c); provided, however, such coverage
shall not be provided to the extent that such coverage is
generally provided through an insurance contract with a licensed
insurance company and such insurance company will not agree to
insure for such coverage.
During the two (2) year period following the Termination Date (the
"Severance Period"), Employee shall comply with the non-disclosure
obligations and covenants not to solicit or compete set forth in
Sections 10 and 11 below.
For purposes of this Section 7(a), any accrued but unpaid Bonus
Compensation shall be paid to Employee on the date that Bonus
Compensation would have been payable under the Incentive Compensation
Plan had termination of Employee's Employment not occurred.
(b) In the event Employee's Employment is terminated
as a result of the Termination Exclusions identified in Section 7(a),
Employee shall be paid his accrued but unpaid Base Salary and/or accrued
but unpaid Bonus Compensation though the Termination Date, and any other
benefits required to be provided to Employee and his dependents under
contract and applicable law. In the event that Employee is entitled to
receive Bonus Compensation under this Section 7(b), such Bonus
Compensation shall be paid on the date that Bonus Compensation would
have been payable under the Incentive Compensation Plan if termination
of Employee's Employment had not occurred.
(c) In the event Employee's Employment is terminated as a
result of one of the Termination Exclusions identified in Section 7(a),
NOVA, at its sole option and its sole discretion and at any time within
thirty (30) days of the Termination Date, may cause Employee to be
obligated to comply with the non-disclosure obligations and covenants
not to solicit or compete set forth in Sections 10 and 11 below for a
period of one (1) or two (2) years following the Termination Date, as
set forth below:
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(i) By giving notice to Employee at any time within
thirty (30) days of the Termination Date of its intent to
exercise the "One Year Option" herein described, NOVA may cause
Employee to be obligated to comply with the non-disclosure
obligations and covenants not to solicit or compete set forth in
Sections 10 and 11 below for a period of one (1) year following
the Termination Date; provided, however, that NOVA shall pay
Employee an aggregate amount in cash equal to Employee's then
Base Salary in effect immediately prior to the Termination Date
multiplied by one (1) (the "One Year Payment"). The One Year
Payment shall be paid by NOVA to Employee in twelve (12) equal
monthly payments, the first of which shall be made on the first
day of the calendar month following the calendar month in which
the Termination Date occurs. In the event NOVA exercises the One
Year Option, the one (1) year period following the Termination
Date shall be deemed the "Exclusion Period";
(ii) By giving notice to Employee any time within
thirty (30) days of the Termination Date of its intent to
exercise the "Two Year Option" herein described, NOVA may cause
Employee to be obligated to comply with the non-disclosure
obligations and covenants not to solicit or compete set forth in
Sections 10 and 11 below for a period of two (2) years following
the Termination Date; provided, however, that NOVA shall pay
Employee an aggregate amount in cash equal to Employee's Base
Salary in effect immediately prior to the Termination Date
multiplied by two (2) (the "Two Year Payment"). The Two Year
Payment shall be paid by NOVA to Employee in twenty-four (24)
equal monthly payments, the first of which shall be made on the
first day of the calendar month following the calendar month in
which the Termination Date occurs. In the event NOVA exercises
the Two Year Option, the two (2) year period following the
Termination Date shall be deemed the "Exclusion Period".
(d) In the event of the death of Employee, all benefits and
compensation hereunder shall, unless otherwise specified by Employee, be
payable to, or exercisable by, Employee's estate.
(e) For purposes of this Agreement, the following terms
shall be defined as follows:
(i) "Change in Control" shall mean:
(A) The acquisition (other than from NOVA)
by any person, entity or "group", within
the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act
of 1934 (the "Exchange Act") (excluding,
for this purpose, any employee benefit
plan of NOVA or its subsidiaries which
acquires beneficial ownership of voting
securities of NOVA) of beneficial
ownership (within the meaning of Rule
13d-3 promulgated under the Exchange
Act) of 25% or more of either the then
outstanding shares of NOVA Stock or the
combined voting power of NOVA's then
outstanding voting securities entitled
to vote generally in the election of
directors; or
(B) The consummation by NOVA of a
reorganization, merger,
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consolidation, in each case, with
respect to which the shares of NOVA
voting stock outstanding immediately
prior to such reorganization, merger or
consolidation do not constitute or
become exchanged for or converted into
more than 50% of the combined voting
power entitled to vote generally in the
election of directors of the
reorganized, merged or consolidated
company's then outstanding voting
securities, or a liquidation or
dissolution of NOVA or of the sale of
all or substantially all of the assets
of NOVA; and
(C) The failure for any reason of
individuals who constitute the Incumbent
Board to continue to constitute at least
a majority of the Board of Directors of
NOVA.
(i.e., either (A) and (C) or (B) and (C) must
occur in order to constitute a Change in Control
for purposes of this definition).
(ii) "Annual Base Compensation" means the greater of
(x) Employee's Base Salary in effect on the Termination Date, or
(y) the greatest Base Salary of Employee in effect during the
calendar year immediately prior to the calendar year in which
the Termination Date occurs.
(iii) "Incumbent Board" shall mean the members of the
Board of Directors of NOVA as of the Effective Date hereof and
any person becoming a member of the Board of Directors of NOVA
hereafter whose election, or nomination for election by NOVA's
shareholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board (other than an
election or nomination of an individual whose initial assumption
of office is in connection with an actual or threatened election
contest relating to the election of the directors of NOVA, as
such terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act).
8. Products, Notes, Records and Software. Employee acknowledges and
agrees that all memoranda, notes, records and other documents and computer
software created, developed, compiled, or used by Employee or made available to
him during the term of his Employment concerning or relative to the Business,
including, without limitation, all customer data, billing information, service
data, and other technical material of NOVA is and shall be NOVA's property.
Employee agrees to deliver without demand all such materials to NOVA within
three (3) days after the termination of Employee's Employment. Employee further
agrees not to use such materials for any reason after said termination.
9. Arbitration.
(a) NOVA and Employee acknowledge and agree that (except as
specifically set forth in Section 9(d)), any claim or controversy
arising out of or relating to this Agreement shall be settled by binding
arbitration in Atlanta, Georgia, in accordance with the National Rules
of the American Arbitration Association for the Resolution of Employment
Disputes in effect on the date of the event giving rise to the claim or
controversy. NOVA and Employee further acknowledge and agree that either
party must request arbitration of any claim or controversy within one
(1) year of the date of the event giving rise to the claim or
controversy by giving
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written notice of the party's request for arbitration. Failure to give
notice of any claim or controversy within one (1) year of the event
giving rise to the claim or controversy shall constitute waiver of the
claim or controversy.
(b) All claims or controversies subject to arbitration
pursuant to Section 9(a) above shall be submitted to arbitration within
six (6) months from the date that a written notice of request for
arbitration is effective. All claims or controversies shall be resolved
by a panel of three arbitrators who are licensed to practice law in the
State of Georgia and who are experienced in the arbitration of labor and
employment disputes. These arbitrators shall be selected in accordance
with the National Rules of the American Arbitration Association for the
Resolution of Employment Disputes in effect at the time the claim or
controversy arises. Either party may request that the arbitration
proceeding be stenographically recorded by a Certified Shorthand
Reporter. The arbitrators shall issue a written decision with respect to
all claims or controversies within thirty (30) days from the date the
claims or controversies are submitted to arbitration. The parties shall
be entitled to be represented by legal counsel at any arbitration
proceedings.
(c) NOVA and Employee acknowledge and agree that the
arbitration provisions in this Agreement may be specifically enforced by
either party, and that submission to arbitration proceedings may be
compelled by any court of competent jurisdiction. NOVA and Employee
further acknowledge and agree that the decision of the arbitrators may
be specifically enforced by either party in any court of competent
jurisdiction.
(d) Notwithstanding the arbitration provisions set forth
herein, Employee and NOVA acknowledge and agree that nothing in this
Agreement shall be construed to require the arbitration of any claim or
controversy arising under Sections 10 and 11 of this Agreement nor shall
such provisions prevent NOVA from seeking equitable relief from a court
of competent jurisdiction for violations of Sections 10 and 11 of this
Agreement. These provisions shall be enforceable by any court of
competent jurisdiction and shall not be subject to arbitration except by
mutual written consent of the parties signed after the dispute arises,
any such consent, and the terms and conditions thereof, then becoming
binding on the parties. Employee and NOVA further acknowledge and agree
that nothing in this Agreement shall be construed to require arbitration
of any claim for workers' compensation or unemployment compensation.
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10. Nondisclosure.
(a) NOVA Confidential Information. Employee acknowledges and
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agrees that because of his Employment, he will have access to
proprietary information of NOVA concerning or relative to the Business
(collectively, "NOVA Confidential Information") which includes, without
limitation, technical material of NOVA, sales and marketing information,
customer account records, billing information, training and operations
information, materials and memoranda, personnel records, pricing and
financial information relating to the business, accounts, customers,
prospective customers, employees and affairs of NOVA, and any
information marked "Confidential" by NOVA. Employee acknowledges and
agrees that NOVA Confidential Information is and shall be NOVA's
property. Employee agrees that during the term of his Employment,
Employee shall keep NOVA Confidential Information confidential, and
Employee shall not use NOVA Confidential Information for any reason
other than on behalf of NOVA pursuant to, and in strict compliance with,
the terms of this Agreement. Employee further agrees that during the
Severance Period or the Exclusion Period, as applicable, Employee shall
continue to keep NOVA Confidential Information confidential, and
Employee shall not use NOVA Confidential Information for any reason or
in any manner.
(b) Notwithstanding the foregoing, Employee shall not be
subject to the restrictions set forth in subsection (a) of this Section
10 with respect to information which:
(i) becomes generally available to the public other
than as a result of disclosure by Employee or the breach of
Employee's obligations under this Agreement;
(ii) becomes available to Employee from a source
which is unrelated to his Employment or the exercise of his
duties under this Agreement, provided that such source lawfully
obtained such information and is not bound by a confidentiality
agreement with NOVA; or
(iii) is required by law to be disclosed.
(c) Trade Secrets. Employee acknowledges and agrees that
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because of his Employment, he will have access to "trade secrets" (as
defined in the Uniform Trade Secrets Act, O.C.G.A. section 10-1-760, et
--
seq. (the "Uniform Trade Secrets Act")) of NOVA ("Trade Secrets").
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Nothing in this Agreement is intended to alter the applicable law and
remedies with respect to information meeting the definition of "trade
secrets" under the Uniform Trade Secrets Act, which law and remedies
shall be in addition to the obligations and rights of the parties
hereunder.
11. Covenants Not to Solicit or Compete.
Employee acknowledges and agrees that, because of his Employment, he
does and will continue to have access to confidential or proprietary information
concerning merchants, associate banks and ISOs of NOVA and shall have
established relationships with such merchants, associate banks and ISOs as well
as with the vendors, consultants, and suppliers used to service such merchants,
associate banks and ISOs. Employee agrees that during the term of his Employment
and continuing throughout the Severance Period or the Exclusion Period, as
applicable, Employee shall not, directly or indirectly, either individually, in
partnership, jointly, or in conjunction with, or on behalf of, any person, firm,
partnership, corporation, or unincorporated association or entity of any kind:
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(a) compete with NOVA in providing credit card and debit
card transaction processing services within the Territory or otherwise
associate with, obtain any interest in (except as a shareholder holding
less than five percent (5%) interest in a corporation traded on a
national exchange or over-the-counter), advise, consult, lend money to,
guarantee the debts or obligations of, or perform services in either a
supervisory or managerial capacity or as an advisor, consultant or
independent contractor for, or otherwise participate in the ownership,
management, or control of, any person, firm, partnership, corporation,
or unincorporated association of any kind which is providing credit card
and debit card transaction processing services within the Territory;
(b) solicit or contact, for the purpose of providing
products or services the same as or substantially similar to those
provided by NOVA in connection with the Business, any person or entity
that during the term of Employee's Employment was a merchant, associate
bank, ISO or customer (including any actively-sought prospective
merchant, associate bank, ISO or customer) of NOVA and with whom
Employee had material contact or about whom Employee learned material
information during the last twelve (12) months of his Employment;
(c) persuade or attempt to persuade any merchant, associate
bank, ISO, customer, or supplier of NOVA to terminate or modify such
merchant's, associate bank's, ISO's, customer's, or supplier's
relationship with NOVA if Employee had material contact with or learned
material information about such merchant, associate bank, ISO, customer
or supplier during the last twelve (12) months of his Employment; or
(d) persuade or attempt to persuade any person who (i) was
employed by NOVA as of the date of the termination of Employee's
Employment and (ii) is in a sales or management position with NOVA at
the time of such contact, to terminate or modify his employment
relationship, whether or not pursuant to a written agreement, with NOVA,
as the case may be.
12. New Developments. Any discovery, invention, process or
improvement made or discovered by Employee during the term of his Employment in
connection with or in any way affecting or relating to the Business (as then
carried on or under active consideration) shall forthwith be disclosed to NOVA
and shall belong to and be the absolute property of NOVA; provided, however,
that this provision does not apply to an invention for which no equipment,
supplies, facility, trade secret information of NOVA was used and which was
developed entirely on Employee's own time, unless (a) the invention relates (i)
directly to the Business or (ii) to NOVA's actual or demonstrably anticipated
research or development; or (b) the invention results from any work performed by
Employee for NOVA.
13. Remedy for Breach. Employee acknowledges and agrees that his
breach of any of the covenants contained in Sections 8, 10, 11 and 12 of this
Agreement would cause irreparable injury to NOVA and that remedies at law of
NOVA for any actual or threatened breach by Employee of such covenants would be
inadequate and that NOVA shall be entitled to specific performance of the
covenants in such sections or injunctive relief against activities in violation
of such sections, or both, by temporary or permanent injunction or other
appropriate judicial remedy, writ or order, without the necessity of proving
actual damages. This provision with respect to injunctive relief shall not
diminish the right of NOVA to claim and recover damages against Employee for any
breach of this Agreement in addition to injunctive relief. Employee acknowledges
and agrees that the covenants contained in Sections 8, 10, 11 and 12 of this
Agreement shall be construed as agreements independent of any other provision of
this or any other contract between the parties hereto, and that the existence of
any claim or cause of action by Employee against NOVA, whether predicated upon
this or any other contract, shall not constitute a
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defense to the enforcement by NOVA of said covenants.
14. Reasonableness. Employee has carefully considered the nature and
extent of the restrictions upon him and the rights and remedies conferred on
NOVA under this Agreement, and Employee hereby acknowledges and agrees that:
(a) the restrictions and covenants contained herein, and the
rights and remedies conferred upon NOVA, are necessary to protect the
goodwill and other value of the Business;
(b) the restrictions placed upon Employee hereunder are
narrowly drawn, are fair and reasonable in time and territory, will not
prevent him from earning a livelihood, and place no greater restraint
upon Employee than is reasonably necessary to secure the Business and
goodwill of NOVA;
(c) NOVA is relying upon the restrictions and covenants
contained herein in continuing to make available to Employee information
concerning the Business; and
(d) Employee's Employment places him in a position of
confidence and trust with NOVA and its employees, merchants, associate
banks, ISOs, customers, vendors and suppliers.
15. Invalidity of Any Provision. It is the intention of the parties
hereto that the provisions of this Agreement shall be enforced to the fullest
extent permissible under the laws and public policies of each state and
jurisdiction in which such enforcement is sought, but that the unenforceability
(or the modification to conform with such laws or public policies) of any
provision hereof shall not render unenforceable or impair the remainder of this
Agreement which shall be deemed amended to delete or modify, as necessary, the
invalid or unenforceable provisions. The parties further agree to alter the
balance of this Agreement in order to render the same valid and enforceable. The
terms of the non-competition provisions of this Agreement shall be deemed
modified to the extent necessary to be enforceable and, specifically, without
limiting the foregoing, if the term of the non-competition is too long to be
enforceable, it shall be modified to encompass the longest term which is
enforceable and, if the scope of the geographic area of non-competition is too
great to be enforceable, it shall be modified to encompass the greatest area
that is enforceable. The parties further agree to submit any issues regarding
such modification to a court of competent jurisdiction if they are unable to
agree and further agree that if said court declines to so amend or modify this
Agreement, the parties will submit the issue of amendment or modification of the
non-competition covenants in this Agreement to binding arbitration in accordance
with the commercial arbitration rules then in effect of the American Arbitration
Association. Any such arbitration hearing will be held in Atlanta, Georgia, and
this Agreement shall be construed and enforced in accordance with the laws of
the State of Georgia, including this arbitration provision.
16. Full Settlement and Legal Expenses. NOVA's obligation to make
the payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any set-off, counter-claim,
recoupment, defense or other claim, right or action which NOVA may have against
the Employee or others. In no event shall the Employee be obligated to seek
other employment or take any other action by way of mitigation of the amounts
payable to the Employee under any of the provisions of this Agreement. NOVA
agrees to pay, to the full extent permitted by law, all legal fees and expenses
which the Employee may reasonably incur as a result of any contest (regardless
of the outcome thereof) by NOVA or others of the validity or enforceability of,
or liability under, any provision of this Agreement or any guarantee of
performance thereof (including as a result of any contest by the Employee
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about the amount of any payment pursuant to Section 7 of this Agreement), plus
in each case interest at the applicable federal rate provided for in Section
7872(f)(2) of the Code.
17. Applicable Law. This Agreement shall be construed and enforced
in accordance with the laws of the State of Georgia.
18. Waiver of Breach. The waiver by NOVA of a breach of any
provision of this Agreement by Employee shall not operate or be construed as a
waiver of any subsequent breach by Employee.
19. Successors and Assigns. This Agreement shall inure to the
benefit of NOVA, its subsidiaries and affiliates, and their respective
successors and assigns. This Agreement is not assignable by Employee but shall
be freely assignable by NOVA.
20. Notices. All notices, demands and other communications hereunder
shall be in writing and shall be delivered in person or deposited in the United
States mail, certified or registered, with return receipt requested, as follows:
(i) If to Employee, to:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
(ii) If to NOVA, to:
NOVA Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Chief Executive Officer
With a copy (which shall not constitute notice) to:
NOVA Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
General Counsel
21. Entire Agreement. This Agreement contains the entire agreement
of the parties, and supersedes all other prior negotiations, commitments,
agreements and understandings (written or oral) between the parties with respect
to the subject matter hereof. It may not be changed orally but only by an
agreement in writing signed by the party against whom enforcement of any waiver,
change, modification, extension, or discharge is sought.
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22. Indemnification. At all times during and after Employee's
Employment and the effectiveness of this Agreement, NOVA shall indemnify
Employee (as a director, officer, employee and otherwise) to the fullest extent
permitted by law and shall at all times maintain appropriate provisions in its
Articles of Incorporation and Bylaws which mandate that NOVA provide such
indemnification.
23. Survival. The provisions of Sections 7, 8, 9, 10, 11, 12, 13,
14, 15, 16, 17, 20, 22 and 24 shall survive termination of Employee's Employment
and termination of this Agreement.
24. Withholding. All payments required to be made by NOVA under this
Agreement will be subject to the withholding of such amounts, if any, relating
to federal, state and local taxes as may be required by law.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal as of the date first above shown.
"EMPLOYEE":
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
"NOVA":
NOVA CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Chairman, CEO and President
EXHIBIT A
Annual Incentive Compensation Schedule
* Payment of annual incentive compensation (the "Bonus Payment") to be
based upon relative achievement of Targeted Net Income (as defined).
* Net Income is Net Income determined in accordance with GAAP as
determined from the annual audited Financial Statements, as adjusted to
exclude non-operating gains and losses.
* Targeted Net Income will be established annually by the Board of
Directors.
* The Bonus Payment will be calculated by following the steps outlined
below:
(1) Determining the percentage equivalent to a fraction, the
numerator of which is Net Income and the denominator of which is
Targeted Net Income (such percentage being referred to as the
"Actual/Targeted Ratio").
(2) Values will be calculated based on (A) through (E):
(A) For each full percentage point (up to 84%) by which the
----
Actual/Targeted Ratio equals or exceeds 80%, a value of
1% will be awarded.
(B) For each full percentage point (up to 89%) by which the
----
Actual/Targeted Ratio exceeds 84%, a value of 2% will be
awarded.
(C) For each full percentage point (up to 94%) by which the
----
Actual/Targeted Ratio exceeds 89%, a value of 3% will be
awarded.
(D) For each full percentage point (up to 99%) by which the
----
Actual/Targeted Ratio exceeds 94%, a value of 4% will be
awarded.
(E) For each full percentage point (up to 150%) by which the
----
Actual/Targeted Ratio exceeds 100%, a value of 1% will
be awarded. (note: for this purpose, no value will be
----
awarded for equaling 100%).
(3) The sum of the values calculated in (A) through (E) (the "Bonus
Percentage") shall be multiplied by Employee's then current Base
Salary to yield the Bonus Payment.
Examples:
. If the Actual/Targeted Ratio is 92%, the Bonus Percentage would
be 29%. This is calculated by adding:
5% (1% for 80-84% of Actual/Targeted Ratio)
+ 15% (2% for 85-89% of Actual/Targeted Ratio)
+ 9% (3% for 90-92% of Actual/Targeted Ratio)
--------------------------------------------------
29%
Employee's Bonus Payment would be equal to Employee's
then-current Base Salary multiplied by 29%.
. If the Actual/Targeted Ratio is 112%, the Bonus Percentage would
be 62%. This is calculated by adding:
5% (1% for 80-84% of Actual/Targeted Ratio)
+ 10% (2% for 85-89% of Actual/Targeted Ratio)
+ 15% (3% for 90-94% of Actual/Targeted Ratio)
+ 20% (4% for 95-99% of Actual/Targeted Ratio)
+ 0% (0% for 100% of Actual/Targeted Ratio)
+ 12% (1% for 101-112% of Actual/Targeted Ratio)
---------------------------------------------------
62%
Employee's Bonus Payment would be equal to Employee's
then-current Base Salary multiplied by 62%.
* The foregoing notwithstanding, in order for any bonus to be payable with
respect to any calendar year, the "Revenue" (as defined below) for such
calendar year must equal or exceed 105% of the Revenue for the
immediately preceding calendar year. "Revenue" means revenue of NOVA
determined in accordance with GAAP as determined from the annual audited
Financial Statements, as adjusted to exclude non-operating items.
* Notwithstanding anything to the contrary in this Agreement, in order to
receive Bonus Compensation for any calendar year, Employee must be
employed by NOVA on the last day of such calendar year.
