EXHIBIT 10.3
________________________________________________________________
FORM OF
EMPLOYEE BENEFITS AGREEMENT
between
NATIONAL DATA CORPORATION
and
GLOBAL PAYMENTS INC.
___________, 2000
_________________________________________________________________
EMPLOYEE BENEFITS AGREEMENT
TABLE OF CONTENTS
ARTICLE I DEFINITIONS................................................................. 1
1.01 Definitions..................................................................... 1
ARTICLE II GENERAL PRINCIPLES......................................................... 5
2.01 Assumption of Liabilities....................................................... 5
2.02 Establishment of Global Payments Plans and Related Trusts....................... 5
2.03 Terms of Participation by Global Payments Individuals in Global Payments Plans.. 5
ARTICLE III DEFINED BENEFIT PLANS..................................................... 6
3.01 Creation of Global Payments Pension Plan........................................ 6
3.02 Transfer of Assets and Liabilities from NDC Pension Plan........................ 6
3.03 Cooperation..................................................................... 7
3.04 Result of Transfer of Assets and Liabilities.................................... 7
ARTICLE IV DEFINED CONTRIBUTION PLANS................................................. 8
4.01 Creation of Global Payments 401(k) Plan......................................... 8
4.02 Transfer of Assets and Liabilities from NDC 401(k) Plan......................... 8
4.03 Cooperation..................................................................... 9
4.04 Result of Transfer of Assets and Liabilities.................................... 9
ARTICLE V HEALTH AND WELFARE PLANS.................................................... 10
5.01 General Provisions.............................................................. 10
5.02 Insurance Contracts............................................................. 11
5.03 Post-Distribution-Transitional Arrangements..................................... 11
ARTICLE VI EQUITY COMPENSATION AND SERP BENEFITS...................................... 12
6.01 Stock Options................................................................... 12
6.02 Restricted Stock................................................................ 14
6.03 Employee Stock Purchase Plan.................................................... 15
6.04 Supplemental Executive Retirement Plan.......................................... 15
ARTICLE VII GENERAL AND ADMINISTRATIVE................................................ 16
7.01 Non-Termination of Employment, No Third-Party Beneficiaries..................... 16
7.02 Beneficiary Designatins......................................................... 16
7.03 Consent of Third Parties........................................................ 17
7.04 Sharing of Participant Information.............................................. 17
7.05 Indemnity....................................................................... 18
ARTICLE VIII MISCELLANEOUS............................................................ 19
8.01 Effect if Distribution Does Not Occur........................................... 19
8.02 Relationship of Parties......................................................... 19
8.03 Affiliates...................................................................... 19
8.04 Governing Law................................................................... 19
8.05 Entire Agreement, Construction.................................................. 19
8.06 Expenses........................................................................ 19
8.07 Notices......................................................................... 20
8.08 Disputes........................................................................ 20
8.09 Amendment and Waiver............................................................ 20
8.10 Assignment...................................................................... 21
8.11 Captions........................................................................ 21
8.12 Severability.................................................................... 21
8.13 Parties in Interest............................................................. 21
8.14 Schedules....................................................................... 21
8.15 Waivers, Remedies............................................................... 21
8.16 Further Assurances and Consents................................................. 22
8.17 Counterparts.................................................................... 22
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EMPLOYEE BENEFITS AGREEMENT
This EMPLOYEE BENEFITS AGREEMENT ("Agreement") dated as of
___________, 2000 by and between National Data Corporation, a Delaware
corporation ("NDC"), and Global Payments Inc., a Georgia corporation ("Global
Payments"). Capitalized terms used herein and not otherwise defined shall have
the respective meanings assigned to them in Article I hereof or as assigned to
them in the Distribution Agreement (as defined below).
BACKGROUND
A. The Board of Directors of NDC has determined that it is in the
best interests of NDC and its stockholders to separate NDC and its subsidiary,
Global Payments, such that Global Payments will be an independent business
entity (the "Distribution");
B. In furtherance of the foregoing, NDC and Global Payments have
entered into a distribution agreement, dated as of the date hereof (the
"Distribution Agreement"), and certain other agreements that will govern certain
matters relating to the Distribution and the relationship of NDC and Global
Payments, and their respective Subsidiaries following the Distribution; and
C. Pursuant to the Distribution Agreement, NDC and Global Payments
have agreed to enter into this agreement allocating between them the assets,
liabilities and responsibilities with respect to certain employee compensation
and benefit plans and programs.
NOW, THEREFORE, the parties, in consideration of the foregoing
premises and the mutual agreements and covenants contained in this Agreement,
and other good and valuable consideration the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. As used herein, the following terms have the
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following meanings:
"Agreement" means this Employee Benefits Agreement.
"Benefit Liabilities" means any Liabilities (as defined in the
Distribution Agreement) relating to any contributions, compensation or other
benefits accrued or payable under any profit sharing, pension, savings, deferred
compensation, fringe benefit, insurance, medical, medical reimbursement, life,
disability, accident, post-retirement health or welfare benefit, stock option,
stock purchase, sick pay, vacation, employment, severance, termination or other
compensation or benefit plan, agreement, contract, policy, trust fund or
arrangement.
"Close of the Distribution Date" means 11:59:59 P.M., Eastern Standard
Time or Eastern Daylight Time (whichever shall then be in effect), on the
Distribution Date.
"COBRA" means the continuation coverage requirements for "group health
plans" under Title X of the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended, and as codified in Code Section 4980B and ERISA Sections 601
through 608.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor federal income tax law. Reference to a specific Code provision also
includes any proposed, temporary, or final regulation in force under that
provision.
"Distribution" shall have the same meaning as in the Distribution
Agreement.
"Distribution Agreement" is defined in the third paragraph of the
preamble of this Agreement.
"Distribution Date" means the date upon which the Distribution shall
be effective, as determined by the Board of Directors of NDC.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended. Reference to a specific provision of ERISA also includes any proposed,
temporary, or final regulation in force under that provision.
"Ex-Dividend Date" means the trading day on which the Global Payments
Common Stock is first reported on a "regular way" basis on the New York Stock
Exchange - Composite Transactions Tape.
"Global Payments Employee" means any individual (i) who, Immediately
After the Distribution Date, is either actively employed by or on leave of
absence from Global Payments or a Global Payments Entity, or (ii) was employed
exclusively by a member of the Global Payments Group as of the Distribution
Date, but was absent from work on the Distribution Date for any reason.
"Global Payments Employee Stock Purchase Plan" means the employee
stock purchase plan to be established by Global Payments pursuant to Section
2.02.
"Global Payments Entity" means any Person that is, at the relevant
time, a Subsidiary of Global Payments or is otherwise controlled, directly or
indirectly, by Global Payments.
"Global Payments Group" shall have the same meaning as in the
Distribution Agreement.
"Global Payments 401(k) Plan." See Section 4.01.
"Global Payments 401(k) Participant." See Section 4.01.
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"Global Payments Health and Welfare Plan Participant." See Section
5.01.
"Global Payments Long-Term Incentive Plan" means the plan or program
established by Global Payments pursuant to Section 2.02 consisting of a long-
term incentive plan that corresponds to the National Data Corporation 2000 Long-
Term Incentive Plan.
"Global Payments Pension Plan." See Section 3.01.
"Global Payments Pension Participant." See Section 3.01.
"Global Payments Price Ratio" means the amount obtained by dividing
the NDC Pre-Distribution Stock Value by the Global Payments Stock Value.
"Global Payments Stock Value" means the opening price of the Global
Payments Common Stock, trading "regular way", as reported on the New York Stock
Exchange - Composite Transactions Tape on the Ex-Dividend Date.
"Group Life Program," when immediately preceded by "NDC," means the
National Data Corporation group life insurance programs, policies and
arrangements, including accidental death and dismemberment, and travel accident.
When immediately preceded by "Global Payments," Group Life Program means the
life insurance programs, policies and arrangements to be established by Global
Payments pursuant to Section 2.02 that correspond to the respective NDC Group
Life Program.
"GUST" means, collectively, the General Agreement on Tariffs and Trade
(Uruguay Round Agreements Act), the Uniform Services Employment and Re-
employment Rights Act of 1994, the Small Business Job Protection Act, and the
Taxpayer Relief Act of 1997.
"Health and Welfare Plans," when immediately preceded by "NDC," means
the health and welfare plans established and maintained by NDC for the benefit
of employees and retirees of NDC and certain NDC Entities, and such other
welfare plans or programs as may apply to such employees and retirees as of the
Distribution Date. When immediately preceded by "Global Payments," Health and
Welfare Plans means the health and welfare plans to be established by Global
Payments pursuant to Section 2.02 that correspond to the respective NDC Health
and Welfare Plans.
"Immediately After the Distribution Date" means 12:00 A.M., Eastern
Standard Time or Eastern Daylight Time (whichever shall then be in effect), on
the day after the Distribution Date.
"IRS" means the Internal Revenue Service.
"NDC Entity" means any entity that is, at the relevant time, an
Affiliate of NDC, except that, for periods beginning Immediately After the
Distribution Date, the term "NDC Entity" shall not include Global Payments or a
Global Payments Entity.
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"NDC Dental Plan" means the Dental Benefits under the National Data
Corporation Employee Health and Welfare Benefits Plan, as amended and restated
effective November 1, 2000.
"NDC Medical Plan" means the Medical Benefits under the National Data
Corporation Employee Health and Welfare Benefits Plan, as amended and restated
effective November 1, 2000.
"NDC Vision Plan" means the Vision Benefits under the National Data
Corporation Employee Health and Welfare Benefits Plan, as amended and restated
effective November 1, 2000.
"NDC Pension Plan" means the National Data Corporation Employees
Retirement Plan.
"NDC 401(k) Plan" means the National Data Corporation Employee Savings
Plan.
"NDC Equity Incentive Plans" means the plans under which options to
acquire NDC Common Stock or awards of restricted stock are outstanding as of the
Close of the Distribution Date, including some or all of the following plans:
(i) the National Data Corporation 2000 Long-Term Incentive Plan, (ii) the
National Data Corporation 1997 Stock Option Plan, (iii) the National Data
Corporation 1987 Stock Option Plan, as amended, (iv) the National Data
Corporation 1984 Non-Employee Director Stock Option Plan, (v) the Amended and
Restated C.I.S. Technologies, Inc. Employee Stock Option Plan, (vi) the C.I.S.
Technologies, Inc. HCC Management Stock Option Plan, (vii) the Amended and
Restated C.I.S. Technologies, Inc. Stock Option Plan, (viii) the C.I.S.
Technologies, Inc. 1995 Stock Incentive Plan, (ix) the Physician Support
Systems, Inc. Amended and Restated 1996 Stock Option Plan, (x) the National Data
Corporation 1983 Restricted Stock Plan, as amended, and (xi) the Synergistic
Systems, Inc. Stock Option Plan.
"NDC Price Ratio" means the amount obtained by dividing the NDC Pre-
Distribution Stock Value by the NDC Post-Distribution Stock Value.
"NDC Pre-Distribution Stock Value" means the closing price of the NDC
Common Stock, trading "regular way", as reported on the New York Stock Exchange
- Composite Transactions Tape on the trading day immediately prior to the Ex-
Dividend Date.
"NDC Post-Distribution Stock Value" means the opening price of the NDC
Common Stock, trading "regular way", as reported on the New York Stock Exchange
- Composite Transactions Tape on the Ex-Dividend Date.
"NDC SERP" means the NDC Supplemental Executive Retirement Plan.
"Option," when immediately preceded by "NDC," means an option to
purchase NDC Common Stock pursuant to an NDC Equity Incentive Plan. When
immediately preceded by
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"Global Payments," Option means an option to purchase Global Payments Common
Stock pursuant to the Global Payments Long-Term Incentive Plan.
"Plan," when immediately preceded by "NDC" or "Global Payments," means
any plan, policy, program, payroll practice, on-going arrangement, contract,
trust, insurance policy or other agreement or funding vehicle providing benefits
to employees or former employees of NDC or an NDC Entity, or Global Payments or
a Global Payments Entity, as applicable.
ARTICLE II
GENERAL PRINCIPLES
Section 2.01 Assumption of Liabilities. Except as otherwise
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expressly provided in this Agreement, Global Payments hereby assumes and agrees
to pay, perform, fulfill and discharge, in accordance with their respective
terms, all of the following (regardless of when or where such Benefit
Liabilities arose or arise or were or are incurred): (i) all Benefit Liabilities
to or relating to Global Payments Employees, and their respective dependents and
beneficiaries, in each case relating to, arising out of or resulting from
employment by NDC, an NDC Entity, Global Payments or a Global Payments Entity
before the Distribution Date (including Benefit Liabilities under NDC Plans and
Global Payments Plans); (ii) all other Benefit Liabilities to or relating to
Global Payments Employees, and their respective dependents and beneficiaries, to
the extent relating to, arising out of or resulting from future or present
employment with Global Payments or a Global Payments Entity (including Benefit
Liabilities under NDC Plans and Global Payments Plans); and (iii) all other
Benefit Liabilities relating to, arising out of or resulting from obligations,
liabilities and responsibilities expressly assumed or retained by Global
Payments, a Global Payments Entity, or a Global Payments Plan pursuant to this
Agreement.
Section 2.02 Establishment of Global Payments Plans and Related
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Trusts. Effective prior to or Immediately After the Distribution Date, Global
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Payments shall adopt, or cause to be adopted, the Global Payments 401(k) Plan
and its related trust, the Global Payments Pension Plan, the Global Payments
Employee Stock Purchase Plan, the Global Payments Long-Term Incentive Plan, and
the Global Payments Health and Welfare Plans for the benefit of the Global
Payments Employees and other current and future employees of Global Payments and
the Global Payments Entities. Subject to the provisions of Section 4.01
regarding the Global Payments 401(k) Plan, Section 3.01 regarding the Global
Payments Pension Plan, Section 6.02 regarding the Global Payments Long-Term
Incentive Plan, Section 6.03 regarding the Global Payments Employee Stock
Purchase Plan and Section 5.01(b) regarding the Global Payments Health and
Welfare Plans, the foregoing Global Payments Plans as in effect. Immediately
After the Distribution Date shall be substantially similar in all material
respects to the corresponding NDC Plans as in effect as of the Distribution
Date.
Section 2.03 Terms of Participation by Global Payments Employees in
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Global Payments Plans. The Global Payments Plans shall be, with respect to
---------------------
Global Payments Employees, in all respects the successors in interest to, and
shall not provide benefits that duplicate benefits provided by, the
corresponding NDC Plans. NDC and Global Payments shall agree on methods and
procedures, including amending the respective Plan documents and/or requesting
approvals
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or consents of Global Payments Employees where the parties deem appropriate, to
prevent Global Payments Employees from receiving duplicative benefits from the
NDC Plans and the Global Payments Plans. With respect to Global Payments
Employees, each Global Payments Plan shall provide that all service, all
compensation and all other factors affecting benefit determinations that, as of
the Close of the Distribution Date, were recognized under the corresponding NDC
Plan shall, as of Immediately After the Distribution Date, receive full
recognition, credit, and validity and be taken into account under such Global
Payments Plan to the same extent as if such factors were applicable under such
Global Payments Plan, except to the extent that duplication of benefits would
result.
ARTICLE III
DEFINED BENEFIT PLANS
Section 3.01 Creation of Global Payments Pension Plan. At or prior
-----------------------------------------
to the Distribution Date, Global Payments shall establish a defined benefit
pension plan (the "Global Payments Pension Plan") for the benefit of (i) each
Global Payments Employee who immediately prior to the Distribution Date was a
participant in the NDC Pension Plan; and (ii) any former employee of NDC or an
NDC Entity who is designated in writing by NDC and Global Payments as being a
Global Payments Pension Participant, and the persons so included in clauses (i)
and (ii) shall be referred to as "Global Payments Pension Participants." As of
the Distribution Date, the Global Payments Pension Plan shall (x) be
substantially similar to the NDC Pension Plan in all material respects; (y)
recognize for all purposes thereunder the service of the Global Payments Pension
Participants that was recognized under the NDC Pension Plan, provided, however,
that until the transfer described in Section 3.02 occurs, the total accrued
benefit payable under the Global Payments Pension Plan (taking into account
service recognized under the NDC Pension Plan) shall be offset by the benefit
accrued under the NDC Pension Plan as of the Distribution Date, calculated as if
the Global Payments Pension Participants terminated employment as of the earlier
of (A) the Distribution Date, or (B) their actual date of termination of
employment with NDC and all of its subsidiaries; and (z) provide that upon the
transfer described in Section 3.02, the benefit liabilities of the Global
Payments Pension Participants under the Global Payments Pension Plan shall in no
event be less than their benefit liabilities under the NDC Pension Plan as of
the Distribution Date.
Section 3.02 Transfer of Assets and Liabilities from NDC Pension Plan.
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(a) Transfer of Assets. NDC shall cause to be transferred from the
-------------------
trust under the NDC Pension Plan to the trust under the Global Payments Pension
Plan assets, the value of which shall be equal to (i) times (ii), where (i)
equals the fair market value of the assets of the NDC Pension Plan on the date
of actual transfer of assets from the NDC Pension Plan to the Global Payments
Pension Plan, and (ii) equals a fraction, the numerator of which is the present
value of the benefit liabilities on a termination basis (as hereafter defined)
of the Global Payments Pension Participants as of the Distribution Date, and the
denominator of which is the present value of all benefit liabilities on a
termination basis (as hereafter defined) of all NDC Pension Plan participants as
of the Distribution Date. "Benefit liabilities on a termination basis"
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shall mean those benefit liabilities, as defined in ERISA Section 4001(a)(16),
to which the participants would be entitled under Section 4044 of ERISA if the
plan were terminated in accordance with ERISA Section 4041 as of the
Distribution Date. It is the parties' intent that this transfer will satisfy
Section 414(l) of the Code if the NDC Pension Plan is under-funded on a
termination basis as of the Distribution Date, and that this transfer will
include a pro rata share of surplus if the NDC Pension Plan is over-funded on a
termination basis as of the Distribution Date. In NDC's sole and absolute
discretion, the amount so transferred may be in cash or in kind or a combination
thereof.
(b) Adjustment for Receipts and Disbursements. The amount to be
-----------------------------------------
transferred shall be equitably adjusted to take into account non-investment
receipts and disbursements of the NDC Pension Plan after the Distribution Date
but before the date of transfer provided for in Section 3.02(a), such as pension
payments and employer contributions.
(c) Pre-conditions to Transfer. The transfer of assets provided for
--------------------------
in Section 3.02(a) shall take place as soon as practicable after the
Distribution Date; provided, however, that such transfer shall not occur until
(i) Global Payments provides to NDC an acceptable opinion of counsel with
respect to the qualification of the Global Payments Pension Plan under Section
401(a) of the Code; (ii) NDC provides to Global Payments an acceptable opinion
of counsel with respect to the qualification of the NDC Pension Plan under
Section 401(a) of the Code, as amended to (A) comply with changes to the
qualification requirements of Section 401(a) of the Code made pursuant to GUST
and other applicable laws, and (B) provide for the transfer of assets and
liabilities referred to in this Section, and (iii) the receipt of any other
necessary governmental approval.
3.03 Cooperation. Pending the completion of the transfer described in
-----------
this Section, NDC, with the cooperation of Global Payments shall make
arrangements for any required benefit payments to the Global Payments Pension
Participants from the NDC Pension Plan. NDC and Global Payments shall provide
each other with access to information reasonably necessary in order to carry out
the provisions of this Section. If any benefit with respect to a Global
Payments Pension Participant under the NDC Pension Plan is subject to a
qualified domestic relations order at the time of transfer, all documentation
concerning such qualified domestic relations order shall be assigned to the
Global Payments Pension Plan.
3.04 Result of Transfer of Assets and Liabilities. Upon the
--------------------------------------------
completion of the transfer of assets and benefit liabilities, the Global
Payments Pension Plan shall assume the benefit liabilities under the NDC Pension
Plan with respect to the Global Payments Pension Participants, and neither the
NDC Pension nor NDC nor any NDC Entity shall have any further obligation or
responsibility with respect to such benefit liabilities, which shall be
considered for all purposes as having been satisfied as a result of such
transfer.
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ARTICLE IV
DEFINED CONTRIBUTION PLANS
Section 4.0 Creation of Global Payments 401(k) Plan.
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(a) Creation of Global Payments 401(k) Plan. At or prior to the
---------------------------------------
Distribution Date, Global Payments shall establish a qualified 401(k) plan (the
"Global Payments 401(k) Plan") for the benefit of (i) each Global Payments
Employee; and (ii) any former employee of NDC or an NDC Entity who is designated
in writing by NDC and Global Payments as being a Global Payments 401(k)
Participant, and the persons so included in clauses (i) and (ii) shall be
referred to as "Global Payments 401(k) Participants." As of the Distribution
Date, the Global Payments 401(k) Plan shall (i) be substantially similar to the
NDC 401(k) Plan in all material respects; (ii) recognize for all purposes
thereunder the service of the Global Payments 401(k) Participants that was
recognized under the NDC 401(k) Plan, and (iii) provide that upon the transfer
described in Section 4.02, the account balances of the Global Payments 401(k)
Participants under the Global Payments 401(k) Plan shall in no event be less
than their account balances under the NDC 401(k) Plan immediately prior to such
transfer (whether vested or non-vested).
(b) NDC and Global Payments Stock. The Global Payments 401(k) Plan
-----------------------------
shall provide that, until the second anniversary of the Distribution Date, all
or any portion of the NDC Common Stock transferred to the Global Payments 401(k)
Plan may be liquidated and reinvested by Global Payments 401(k) Participants in
any other investment option offered under the Global Payments 401(k) Plan, and
that upon the second anniversary of the Distribution Date, all of the NDC Common
Stock transferred to the Global Payments 401(k) Plan shall be liquidated and
reinvested in one or more investment option offered under the Global Payments
401(k) Plan. The NDC 401(k) Plan shall provide that, until the second
anniversary of the Distribution Date, all or any portion of the Global Payments
Common Stock received by the NDC 401(k) Plan may be liquidated and reinvested by
NDC 401(k) Participants in any other investment option offered under the NDC
401(k) Plan, and that upon the second anniversary of the Distribution Date, all
of the Global Payments Common Stock received by the NDC 401(k) Plan shall be
liquidated and reinvested in one or more investment option offered under the NDC
401(k) Plan.
Section 4.02 Transfer of Assets and Liabilities from NDC 401(k) Plan.
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(a) Transfer of Assets. NDC shall cause to be transferred from the
------------------
trust under the NDC 401(k) Plan to the trust under the Global Payments 401(k)
Plan assets, the value of which shall be equal to the liability for the account
balances with respect to the Global Payments 401(k) Participants. Such transfer
shall be subject to the requirements of Section 414(l) of the Code and Section
208 of ERISA. The assets so transferred shall reflect the investment elections
and participant loans made by Global Payments 401(k) Participants under the NDC
401(k) Plan..
(b) Adjustment for Payments. The amount to be transferred shall be
-----------------------
reduced by the amount of any payments made with respect to the Global Payments
401(k) Participants after the Distribution Date but before the date of transfer
provided for in Section 3.02(a).
(c) Pre-conditions to Transfer. The transfer of assets provided for
--------------------------
in Section 4.02(a) shall take place as soon as practicable after the
Distribution Date; provided, however, that such transfer shall not occur until
(i) Global Payments provides to NDC an acceptable opinion of
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counsel with respect to the qualification of the Global Payments 401(k) Plan
under Sections 401(a) and 401(k) of the Code; and (ii) NDC provides to Global
Payments an acceptable opinion of counsel with respect to the qualification of
the NDC 401(k) Plan under Sections 401(a) and 401(k) of the Code, as amended to
(A) comply with changes to the qualification requirements of Section 401(a) of
the Code made pursuant to GUST and other applicable laws, and (B) provide for
the transfer of assets and liabilities referred to in this Section, and (iii)
the receipt of any other necessary governmental approval.
Section 4.03 Cooperation.
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(a) Benefit Payments. Pending the completion of the transfer
----------------
described in this Section, NDC and Global Payments shall make arrangements for
any required benefit payments to the Global Payments 401(k) Participants from
the NDC 401(k) Plan. NDC and Global Payments shall provide each other with
access to information reasonably necessary in order to carry out the provisions
of this Section.
(b) QDROs. If any benefit with respect to a Global Payments 401(k)
-----
Participant under the NDC 401(k) Plan is subject to a qualified domestic
relations order at the time of transfer, all documentation concerning and
liability arising from such qualified domestic relations order shall be assigned
to the Global Payments 401(k) Plan.
(c) Promissory Notes. If any promissory note representing an
----------------
outstanding loan from the NDC 401(k) Plan is transferred to the Global Payments
401(k) Plan pursuant to Section 4.02(a) above, all of the documentation
regarding such loan, including the promissory note and amortization and payment
schedules shall be transferred to the administrator of the Global Payments
401(k) Plan immediately following the Distribution Date.
Section 4.04 Result of Transfer of Assets and Liabilities. Upon the
--------------------------------------------
completion of the transfer of assets and benefit liabilities, the Global
Payments 401(k) Plan shall be deemed to have assumed the Benefit Liabilities
under the NDC 401(k) Plan with respect to the Global Payments 401(k)
Participants, and neither the NDC 401(k) Plan nor NDC nor any NDC Entity shall
have any further obligation or responsibility with respect to such benefit
liabilities, which shall be considered for all purposes as having been satisfied
as a result of such transfer.
ARTICLE V
HEALTH AND WELFARE PLANS
Section 5.01 General Provisions.
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(a) Cessation of Coverage. Effective as of the Distribution Date, all
---------------------
Global Payments Health and Welfare Plan Participants, together with dependents
and survivors thereof, shall cease to be covered by the NDC Health and Welfare
Plans.
(b) Assumption of Health and Welfare Plan Liabilities. The following
-------------------------------------------------
persons shall be referred to as "Global Payments Health and Welfare Plan
Participants": (i) each Global
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Payments Employee; (ii) each former employee of NDC or an NDC Entity whose last
employment was with a member of the Global Payments Group; and (iii) any other
person who is designated in writing by NDC and Global Payments as being a Global
Payments Health and Welfare Plan Participant. Except as otherwise expressly
provided in this Article V, Immediately After the Distribution Date, all Benefit
Liabilities relating to Global Payments Health and Welfare Plan Participants
under the NDC Health and Welfare Plans shall cease to be Benefit Liabilities of
the NDC Health and Welfare Plans and shall be assumed by the corresponding
Global Payments Health and Welfare Plans. The Benefit Liabilities to be
transferred include but are not limited to (i) all liability for claims incurred
prior to but not paid as of the Distribution Date for the Global Payments Health
and Welfare Plan Participants; (ii) COBRA health care continuation coverage for
each Global Payments Health and Welfare Plan Participant; (iii) short-term and
long-term disability claims of all Global Payments Health and Welfare Plan
Participants arising from disabilities that occurred prior to the Distribution
Date; (iv) accrued but unused vacation days as of the Distribution Date; and (v)
all liability for claims incurred but not paid prior to the Distribution Date
under any flexible spending accounts maintained by NDC or any NDC Entity
pursuant to Section 125 of the Code. The Benefit Liabilities to be transferred
shall not include liability for claims incurred under the NDC Group Life Program
as of the Distribution Date. The obligation of Global Payments Health and
Welfare Plans to assume any of such Benefit Liabilities that are fully insured
is contingent upon Global Payments' insurance carrier agreeing to cover such
Liabilities.
(c) Postretirement Life Insurance Benefits. Immediately After the
--------------------------------------
Distribution Date, all Benefit Liabilities relating to life insurance provided
under any NDC Health and Welfare Plan to retired employees who are designated as
Global Payments Pension Participants shall cease to be Benefit Liabilities of
the NDC Health and Welfare Plans and shall be assumed by the corresponding
Global Payments Health and Welfare Plans, but only if Global Payments' insurance
carrier agrees to cover such Benefit Liabilities.
(d) Certain Health and Welfare Plans. Notwithstanding Section
--------------------------------
5.02(b), the aggregate NDC Medical Plan accrued liability account for NDC and
all subsidiaries immediately prior to the Distribution will be allocated between
NDC and Global Payments based upon the relative payrolls for the current fiscal
year to the Distribution Date for the businesses being conveyed to Global
Payments in the Distribution and the businesses being retained by NDC following
the Distribution. A similar procedure shall be followed for the NDC Dental Plan
and the NDC Vision Plan.
(e) Flexible Spending Accounts. If, as of the Distribution Date, the
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aggregate compensation withheld during the current plan year for all Global
Payments Health and Welfare Participants under any flexible spending accounts
maintained by NDC or any NDC Entity pursuant to Section 125 of the Code, minus
the aggregate payments to all of such Participants from such accounts for the
current plan year, is positive, then, as soon as practicable following the
Distribution Date, NDC shall transfer to Global Payments an amount equal to such
positive amount. If, as of the Distribution Date, such aggregate compensation
withheld, minus such aggregate payments, is negative, then, as soon as
practicable following the Distribution Date, Global Payments shall transfer to
NDC an amount equal to such negative amount.
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Section 5.02 Insurance Contracts.
-------------------
(a) NDC shall use its best efforts to have each insurance carrier that
insures an NDC Health or Welfare Plan (including the issuer of any stop-loss
policy) issue a policy to Global Payments that is identical to the corresponding
NDC policy (except for the identity of the named insured) effective Immediately
After the Distribution Date for the Global Payments Health and Welfare Plan
Participants. Each such policy shall be effective for the portion of the policy
year that begins Immediately After the Distribution Date.
(b) Effect of Change in Rates. NDC and Global Payments shall use
-------------------------
their reasonable efforts to cause each of the insurance companies, point-of-
service vendors and third-party administrators providing services and benefits
under the NDC Health and Welfare Plans and the Global Payments Health and
Welfare Plans to maintain the premium and/or administrative rates based on the
aggregate number of participants in both the NDC Health and Welfare Plans and
the Global Payments Health and Welfare Plans through the expiration of the
financial fee or rate guarantees in effect as of the Close of the Distribution
Date. To the extent they are not successful in such efforts, NDC and Global
Payments shall each bear the revised premium or administrative rates
attributable to the individuals covered by their respective Health and Welfare
Plans.
Section 5.03 Post-Distribution-Transitional Arrangements.
-------------------------------------------
(a) Continuance of Elections, Co-Payments and Maximum Benefits.
----------------------------------------------------------
(i) Global Payments shall cause the Global Payments Health and
Welfare Plans to recognize and maintain all coverage and contribution elections
made by Global Payments Health and Welfare Plan Participants under the NDC
Health and Welfare Plans and apply such elections under the Global Payments
Health and Welfare Plans for the remainder of the period or periods for which
such elections are by their terms applicable. The transfer or other movement of
employment from NDC to Global Payments at any time before the Close of the
Distribution Date shall neither constitute nor be treated as a "status change"
under the NDC Health and Welfare Plans or the Global Payments Health and Welfare
Plans.
(ii) Global Payments shall cause the Global Payments Health and
Welfare Plans to recognize and give credit for (A) all amounts applied to
deductibles, out-of-pocket maximums, and other applicable benefit coverage
limits with respect to which such expenses have been incurred by Global Payments
Health and Welfare Plan Participants under the NDC Health and Welfare Plans for
the remainder of the year (or other applicable limitation period) in which the
Distribution occurs, and (B) all benefits paid to Global Payments Health and
Welfare Plan Participants under the NDC Health and Welfare Plans for purposes of
determining when such persons have reached their lifetime maximum benefits under
the Global Payments Health and Welfare Plans.
(iii) Global Payments shall use reasonable efforts to cause the
respective insurance carriers to recognize and maintain all irrevocable
assignments and accelerated benefit
-11-
option elections made by Global Payments Health and Welfare Plan Participants
under the NDC Group Life Program.
(b) Health and Welfare Plans Subrogation Recovery. After the Close of
---------------------------------------------
the Distribution Date, (i) NDC shall pay to Global Payments any amounts NDC
recovers from time to time through subrogation or otherwise for claims incurred
by or reimbursed to any Global Payments Health and Welfare Plan Participant; and
(ii) Global Payments shall pay to NDC any amounts Global Payments recovers from
time to time through subrogation or otherwise for claims incurred by or
reimbursed to employees and former employees of NDC or an NDC Entity and their
respective beneficiaries and dependents (other than Global Payments Health and
Welfare Plan Participants).
ARTICLE VI
EQUITY COMPENSATION AND SERP BENEFITS
Section 6.01. Stock Options.
-------------
(a) NDC Employees. Except as provided in Section 6.01(c) below, all
-------------
NDC Options will be adjusted as described below in this Section 6.01(a), so
that, immediately after giving effect to the Distribution, the aggregate
intrinsic value of the NDC Options will be equal to or less than the aggregate
intrinsic value of the NDC Options immediately before giving effect to the
Distribution. To accomplish the foregoing, NDC shall cause each NDC Option that
is outstanding at the Close of the Distribution Date (other than certain of
those held by Xxxxxx X. Xxxxxxxxxx, as provided in Section 6.01(c)) to be
adjusted to reflect the effect of the Distribution (each such option shall be
called an "Adjusted NDC Option"). Each Adjusted NDC Option shall provide for
the option to purchase a number of shares of NDC Common Stock equal to the
product of the number of shares of NDC Common Stock subject to the NDC Option as
of the Close of the Distribution Date multiplied by the NDC Price Ratio, and
then rounded down to the nearest whole share. The per-share exercise price of
such Adjusted NDC Option shall equal the quotient obtained by dividing the per-
share exercise price of the NDC Option as of the Close of the Distribution Date
by the NDC Price Ratio and then rounding up to the nearest cent. Each Adjusted
Option shall otherwise have the same terms and conditions as were applicable to
the NDC Option as of the Close of the Distribution Date.
(b) Global Payments Employees. Solely for purposes of Section
-------------------------
6.01(a), any Global Payments Employee holding an NDC Option (or an Adjusted NDC
Option) shall be considered as of the Close of the Distribution Date to have
incurred a termination of employment with NDC for a reason other than (i) cause,
retirement, death or disability or (ii) following a change in control, for
purposes of the NDC Equity Incentive Plan under which it was granted and any
option agreement or other contract evidencing such NDC Option. Such NDC Option
shall be exercisable and subject to termination as provided in such plan,
agreement or contract (i.e., in most cases, Adjusted NDC Options held by Global
Payments Employees would cease to vest as of the Close of Distribution Date, any
of such options that were not vested would be forfeited as of the Close of the
Distribution Date and any such options that were vested would expire 90 days
-12-
or less after the Distribution Date). To the extent that any Global Payments
Employee forfeits an NDC Option as a result of the Distribution, either because
the NDC Option was unvested at the Close of the Distribution Date or because it
was voluntarily surrendered to NDC as of the Close of the Distribution Date,
Global Payments will replace such forfeited NDC Option with an option to acquire
Global Payments Common Stock (collectively, the "Replacement Global Payments
Options") which will have an aggregate intrinsic value equal to or less than the
aggregate intrinsic value of the forfeited NDC Options. The Replacement Global
Payments Options will have the same vesting and terms as the forfeited NDC
Options they replace, except that:
(i) each Replacement Global Payments Option will be exercisable for
that number of whole shares of Global Payments Common Stock equal to the product
of the number of shares of NDC Common Stock that were subject to the forfeited
NDC Option as of the Close of the Distribution Date multiplied by the Global
Payments Price Ratio, rounded down to the nearest whole number of shares of
Global Payments Common Stock, and
(ii) the per share exercise price for the shares of Global Payments
Common Stock issuable upon exercise of such Replacement Global Payments Option
will be equal to the quotient obtained by dividing the exercise price per share
of NDC Common Stock as to which the forfeited NDC Option was exercisable as of
the Close of the Distribution Date by the Global Payments Price Ratio, and then
rounding up to the nearest whole cent.
It is the intention of NDC and Global Payments that the Replacement
Global Payments Options meet the following criteria: (i) the aggregate intrinsic
value of the Replacement Global Payments Options immediately after giving effect
to the Distribution will not be greater than the aggregate intrinsic value of
the corresponding forfeited NDC Options immediately before giving effect to the
Distribution; (ii) with respect to each such Replacement Global Payments Option,
the ratio of the exercise price per share to the Global Payments Stock Value
will not be not less than the ratio of the exercise price per share of the
forfeited NDC Option to the NDC Pre-Distribution Stock Value; and (iii) the
Replacement Global Payments Options will otherwise have the same terms and
conditions as were applicable to the forfeited NDC Options they replace.
(c) Chairman of NDC and Global Payments. Notwithstanding the above,
-----------------------------------
because Xxxxxx X. Xxxxxxxxxx will have continuing responsibilities for NDC and
Global Payments after the Distribution as the Chairman of their respective
Boards of Directors, the NDC Options held by him at the Close of the
Distribution Date (other than those NDC Options that will by their terms expire
shortly after the Distribution, which will adjusted as provided in Section 6(a))
will be split into options to acquire NDC Common Stock and Global Payments
Common Stock, as follows.
Each NDC Option held by Xx. Xxxxxxxxxx at the Close of the
Distribution Date (other than those NDC Options that will by their terms expire
shortly after the Distribution) will be adjusted as follows. The number of
shares of NDC Common Stock into which such option is exercisable shall remain
unchanged from the number of shares subject to the option as of the Close of the
Distribution Date. The per-share exercise price will be adjusted by dividing
the
-13-
same by the NDC Price Ratio and then rounding up to the nearest cent (i.e.,
such new price will bear the same ratio to the NDC Post-Distribution Stock Value
as the former exercise price bore to the NDC Pre-Distribution Stock Value). All
other terms of his NDC Options, including the time for vesting and exercise,
will remain unchanged.
In addition, for each NDC Option held by him at the Close of the
Distribution Date (other than those NDC Options that will by their terms expire
shortly after the Distribution), Global Payments will grant to Xx. Xxxxxxxxxx an
option to acquire the largest number of whole shares of Global Payments Common
Stock determined by multiplying (i) the number of shares of NDC Common Stock
subject to the NDC Option as of the Close of the Distribution Date, by (ii) the
number of shares of Global Payments Common Stock to be distributed for each one
share of NDC Common Stock in the Distribution. The per-share exercise price of
such Global Payments Option will be determined by dividing the per-share pre-
adjustment exercise price of such NDC Option as of the Close of the Distribution
Date by the Global Payments Price Ratio and then rounding up to the nearest cent
(i.e., such exercise price will bear the same ratio to the Global Payments Stock
Value as the exercise price of his corresponding NDC Option bore to the NDC Pre-
Distribution Stock Value). All other terms of his Global Payments Options,
including the time for vesting and exercise, will be the same as in his adjusted
NDC Options.
The aggregate intrinsic value of Xx. Xxxxxxxxxx' Global Payments
Options and NDC Options immediately after giving effect to the Distribution will
not be greater than the aggregate intrinsic value of his NDC Options as of the
time immediately before giving effect to the Distribution.
Section 6.02 Restricted Stock.
----------------
(a) NDC Employees. Restricted stock awards held by NDC employees at
-------------
the Close of the Distribution Date will not be affected by the Distribution,
except that the holders thereof will receive a distribution of Global Payments
Common Stock as part of the Distribution. The shares of Global Payments Common
Stock distributed in respect of such shares of restricted NDC Common Stock will
bear the same restrictions and risks of forfeiture as apply to the shares of
restricted NDC Common Stock as to which they were distributed.
(b) Global Payments Employees. Solely for purposes of Section
-------------------------
6.02(a), any Global Payments Employee holding an NDC restricted stock award
shall be considered as of the Close of the Distribution Date to have incurred a
termination of employment with NDC for a reason other than (i) cause,
retirement, death or disability or (ii) following a change in control, for
purposes of the NDC Equity Incentive Plan under which such award was granted and
any agreement evidencing such NDC restricted stock award. To the extent that
any Global Payments Employee forfeits an NDC restricted stock award as a result
of the Distribution, either because the award is automatically forfeited upon
the holder's termination of employment from NDC or because the award was
voluntarily surrendered to NDC as of the Close of the Distribution Date, Global
Payments will replace such forfeited NDC restricted stock award with a Global
Payments restricted stock award (collectively, the "Replacement Global Payments
Restricted Stock Awards"). Each such Replacement Global Payments Restricted
Stock Award shall consist of
-14-
that number of shares of Global Payments Common Stock determined by dividing the
fair market value of the forfeited NDC restricted stock award immediately before
giving effect to the Distribution (based on the NDC Pre-Distribution Stock
Value) by the Global Payments Stock Value. Such Replacement Global Payments
Restricted Stock Awards shall have the same restrictions, terms and conditions
(including the remaining vesting periods) as were applicable to the
corresponding forfeited NDC restricted stock awards, except that references to
employment shall refer to employment by Global Payments or its Affiliates rather
than by NDC or its Affiliates. NDC shall use reasonable efforts to cancel any
certificates in such Global Payments Employees' names with respect to restricted
shares of NDC Common Stock.
Section 6.03 Employee Stock Purchase Plan. NDC intends to terminate
----------------------------
its current Employee Stock Purchase Plan at the earlier of the Distribution Date
or the end of the current offering period. Until such time, Global Payments
Employees (including for this purpose any employee of NDC who is designated as
an employee of the Global Payments Group for purposes of the Distribution) shall
continue to be eligible for participation in the NDC Employee Stock Purchase
Plan. Effective as of the Distribution Date (or such other date as NDC and
Global Payments may mutually agree), Global Payments and NDC shall each
establish substantially similar Employee Stock Purchase Plans for the benefit of
their respective employees after the Distribution.
Section 6.04 Supplemental Executive Retirement Plan. At or prior to
--------------------------------------
the Distribution Date, Global Payments shall establish a supplemental executive
retirement plan (the "Global Payments SERP") for the benefit of each Global
Payments Employee who was a participant in the NDC SERP on the Distribution
Date, which shall (i) be substantially similar to the NDC SERP in all material
respects; and (ii) recognize for all purposes thereunder the service of each
Global Payments Employee that was recognized under the NDC SERP. Effective as
of the Distribution Date, the Global Payments SERP shall assume and Global
Payments shall be solely responsible for the liabilities under the NDC SERP with
respect to each Global Payments Employee. Neither NDC nor any NDC Entity shall
have any liability, obligation, or responsibility after the Distribution Date
for the accrued benefits of each Global Payments Employee under the NDC SERP.
NDC shall cause to be transferred to either Global Payments or to a "rabbi
trust" created by Global Payments in connection with the Global Payments SERP
any life insurance policy which insures the life of a Global Payments Employee
who will participate in the Global Payments SERP. If, as of the Distribution
Date, the cash surrender value of any life insurance policy insuring the life of
a Global Payments Employee is more than the present value of the benefit accrued
by such Employee under the NDC SERP as of the Distribution Date (with present
value being the "accumulated benefit obligation" as determined under Financial
Accounting Standard No. 87 ("ABO") as of the Distribution Date), then as soon as
practicable following the Distribution Date, Global Payments shall transfer to
NDC an amount equal to such excess. If, as of the Distribution Date, the cash
surrender value of any life insurance policy insuring the life of a Global
Payments Employee is less than the present value of the benefit accrued by such
Employee under the NDC SERP as of the Distribution Date (with present value
being the ABO as of the Distribution Date), then as soon as practicable
following the Distribution Date, NDC shall transfer to Global Payments an amount
equal to such deficit.
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ARTICLE VII
GENERAL AND ADMINISTRATIVE
Section 7.01 Non-Termination of Employment, No Third-Party
---------------------------------------------
Beneficiaries. No provision of this Agreement or the Distribution Agreement
-------------
shall be construed to create any right, or accelerate entitlement, to any
compensation or benefit whatsoever on the part of any Global Payments Employee
or other future, present or former employee of NDC, an NDC Entity, Global
Payments, or a Global Payments Entity under any NDC Plan or Global Payments Plan
or otherwise. Without limiting the generality of the foregoing: (i) except as
expressly provided in Section 6.01(a), the Distribution shall not cause any
employee to be deemed to have incurred a termination of employment which
entitles such individual to the commencement of benefits under any of the NDC
Plans, any of the Global Payments Plans, or any individual agreements; and (ii)
except as expressly provided in this Agreement, nothing in this Agreement shall
preclude Global Payments, at any time after the Close of the Distribution Date,
from merging, amending, modifying, terminating, eliminating, reducing, or
otherwise altering in any respect any Global Payments Plan, any benefit under
any Plan or any trust, insurance policy or funding vehicle related to any Global
Payments Plan, and, beginning one year after the Close of the Distribution Date,
from merging, amending, modifying, terminating, eliminating, reducing, or
otherwise altering in any respect any Global Payments Plan, any benefit under
any Plan or any trust, insurance policy or funding vehicle related to any Global
Payments Plan without regard to any provision in this Agreement.
Section 7.02 Beneficiary Designations and Elections. To the extent
--------------------------------------
permitted by law, all beneficiary designations and other elections made by
Global Payments Employees for NDC Plans shall be transferred to and be in full
force and effect under the corresponding Global Payments Plans until such
beneficiary designations or elections are replaced or revoked by the Global
Payments Employee who made the beneficiary designation or election. See also
Section 5.03(a)(i).
Section 7.03 Consent of Third Parties. If any provision of this
------------------------
Agreement is dependent on the consent of any third party (such as a vendor) and
such consent is withheld, NDC and Global Payments shall use their reasonable
efforts to implement the applicable provisions of this Agreement to the full
extent practicable. If any provision of this Agreement cannot be implemented
due to the failure of such third party to consent, NDC and Global Payments shall
negotiate in good faith to implement the provision in a mutually satisfactory
manner. The phrase "reasonable efforts" as used herein shall not be construed
to require the incurrence of any non-routine or unreasonable expense or
liability or the waiver of any right.
Section 7.04 Sharing of Participant Information. "Participant
----------------------------------
Information" means medical information, employment information, social security
numbers and all other personally identifiable information. Except as limited by
applicable state and federal law, NDC and Global Payments shall share, NDC shall
cause each applicable NDC Entity to share, and Global Payments shall cause each
applicable Global Payments Entity to share, with each other and their respective
agents and vendors (without obtaining releases) all Participant Information
necessary for the efficient and accurate administration of each of the NDC Plans
and the Global Payments
-16-
Plans. Because of the sensitivity of such information, NDC and Global Payments
shall take all safeguards and precautions necessary to insure the
confidentiality of Participant Information. NDC shall be liable for any breach
of confidentiality with respect to such Participant Information by NDC or NDC
Entities, vendors or agents. Global Payments shall be liable for any breach of
confidentiality with respect to such Participant Information by Global Payments
or Global Payments Entities, vendors or agents. The Participant Information
shall not be used for purposes other than those stated in this Agreement, unless
required pursuant to legal process or unless prescribed by statute or government
regulation. Notwithstanding any other provision herein, during the term of this
Agreement, and thereafter, each party shall:
(i) not disclose any Participant Information to unaffiliated
persons, or to personnel who do not have a need to use such Participant
Information for purposes of administering each of the NDC Plans and the Global
Payments Plans, without the written authority of the other party;
(ii) require any subcontractor or vendor utilized by either
party to maintain a level of confidentiality consistent with the terms of these
provisions.
NDC and Global Payments and their respective authorized agents shall,
subject to applicable laws on confidentiality, be given reasonable and timely
access to, and may make copies of, all information relating to the subjects of
this Agreement in the custody of the other party, to the extent necessary for
the administration of the NDC Plans and the Global Payments Plans. Until
December 31, 2000, or such other date as the parties may mutually agree, all
Participant Information shall be provided in a manner and medium that is
compatible with the data processing systems of NDC as in effect on the Close of
the Distribution Date, unless otherwise agreed to by NDC and Global Payments.
Section 7.05 Indemnity.
---------
(a) In any situation where the liabilities or obligations of a Plan
maintained by NDC or an NDC Entity prior to the Distribution Date are divided
between NDC and Global Payments under this Agreement so that each party
maintains part of such Plan after the Distribution Date (such as the NDC Pension
Plan and the NDC 401(k) Plan), there shall be equitably shared by NDC and Global
Payments, in proportion to the liabilities retained or assumed with respect to
such Plan as of the Distribution Date over the total liabilities of such Plan as
of the Distribution Date, any and all claims, losses, liabilities, obligations,
costs, costs of defense (as and when incurred, and including reasonable outside
attorneys' and consultants' fees), expenses, fines, taxes, levies, imposts,
duties, deficiencies, assessments, charges, penalties, allegations, demands,
damages (including but not limited to actual, punitive or consequential,
foreseen or unforeseen, known or unknown), settlements, awards or judgments of
any kind or nature whatsoever arising out of, or with respect to, the
liabilities and obligations of such Plan, other than acts or omissions occurring
after the Distribution Date. The parties intend for this Section 7.05(a) to
address unusual or unexpected liabilities that occur with respect to a Plan
after the Distribution Date, such as a claim for breach of fiduciary duty with
respect to a Plan, rather liabilities for payment of benefits in the normal
course, and this Section shall be so interpreted.
-17-
(b) Global Payments shall defend, indemnify and save and hold harmless
NDC, its subsidiaries, any of their respective directors, shareholders,
officers, employees, agents, consultants, representatives, successors,
transferees or assignees from and against any and all claims, losses,
liabilities, obligations, costs, costs of defense (as and when incurred, and
including reasonable outside attorneys' and consultants' fees), expenses, fines,
taxes, levies, imposts, duties, deficiencies, assessments, charges, penalties,
allegations, demands, damages (including but not limited to actual, punitive or
consequential, foreseen or unforeseen, known or unknown), settlements, awards or
judgments of any kind or nature whatsoever arising out of, or with respect to,
the liabilities and obligations assumed, and agreements made, by Global Payments
pursuant to this Agreement. NDC shall defend, indemnify and save and hold
harmless Global Payments, its subsidiaries, any of their respective directors,
shareholders, officers, employees, agents, consultants, representatives,
successors, transferees or assignees against any and all claims, losses,
liabilities, obligations, costs, costs of defense (as and when incurred, and
including reasonable outside attorneys' and consultants' fees), fines, taxes,
levies, assessments, charges, penalties, allegations, demands, damages
(including but not limited to actual, punitive or consequential, foreseen or
unforeseen, known or unknown), settlements, awards or judgments of any kind or
nature whatsoever arising out of, or with respect to, any liabilities and
obligations retained or assumed, and agreements made, by NDC pursuant to this
Agreement.
ARTICLE VIII
MISCELLANEOUS
Section 8.01 Effect if Distribution Does Not Occur. If the
-------------------------------------
Distribution does not occur, then all actions and events that are, under this
Agreement, to be taken or occur effective as of the Close of the Distribution
Date, Immediately After the Distribution Date, or otherwise in connection with
the Distribution, shall not be taken or occur except to the extent specifically
agreed to by Global Payments and NDC.
Section 8.02 Relationship of Parties. Nothing in this Agreement
-----------------------
shall be deemed or construed by the parties or any third party as creating the
relationship of principal and agent, partnership or joint venture between the
parties, it being understood and agreed that no provision contained herein, and
no act of the parties, shall be deemed to create any relationship between the
parties other than the relationship set forth herein.
Section 8.03 Affiliates. Each of NDC and Global Payments shall cause
----------
to be performed, and hereby guarantees the performance of, all actions,
agreements and obligations set forth in this Agreement to be performed by an NDC
Entity or a Global Payments Entity, respectively.
Section 8.04 Governing Law. To the extent not preempted by
-------------
applicable federal law, this Agreement shall be governed by, construed and
interpreted in accordance with the laws of the State of Georgia, irrespective of
the choice of laws principles of such state, as to all matters, including
matters of validity, construction, effect, performance and remedies.
-18-
Section 8.05 Entire Agreement, Construction. This Agreement and the
------------------------------
Ancillary Agreements (as defined in the Distribution Agreement), including,
without limitation, any annexes, schedules and exhibits hereto or thereto, and
other agreements and documents referred to herein and therein, will together
constitute the entire agreement between the parties with respect to the subject
matter hereof and thereof and will supersede all prior negotiations, agreements
and understandings of the parties of any nature, whether oral or written, with
respect to such subject matter. In the event and to the extent that there is a
conflict between the provisions of this Agreement and the provisions of the
Distribution Agreement, the Transition Support Agreement, the Intercompany
Information Services Agreement, the Intellectual Property Rights Agreement, the
Tax Sharing and Indemnification Agreement or the Real Estate Agreement, the
provisions of this Agreement shall control.
Section 8.06 Expenses. Except as expressly set forth in this
--------
Agreement, all costs and expenses incurred through the Close of the Distribution
Date with respect to any employee matters described herein shall be charged to
and paid by NDC. Except as otherwise set forth in this Agreement, all costs and
expenses incurred following the Distribution Date with respect to any employee
matters described herein shall be charged to and paid by the party for whose
benefit the expenses are incurred, with any expenses that cannot be allocated on
such basis to be split equally between the parties.
Section 8.07 Notices. All notices and communications under this
-------
Agreement shall be deemed to have been given (a) when received, if such notice
or communication is delivered by facsimile, hand delivery or overnight courier,
and, (b) three (3) business days after mailing if such notice or communication
is sent by United States registered or certified mail, return receipt requested,
first class postage prepaid. All notices and communications, to be effective,
must be properly addressed to the party to whom the same is directed at its
address as follows:
If to NDC, to:
National Data Corporation
National Data Plaza
Atlanta, GA 30329
Attention: General Counsel
Fax: (404) 728-____
If to Global Payments, to:
Global Payments Inc.
Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: General Counsel
Fax: (404) 728-____
Either party may, by written notice delivered to the other party in
accordance with this Section 8.07, change the address to which delivery of any
notice shall thereafter be made.
-19-
Section 8.08 Disputes. All disputes arising from or in connection
--------
with this Agreement, whether based on contract, tort, statute or otherwise,
including, but not limited to, disputes in connection with claims by third
parties (collectively, "Disputes"), shall be resolved only in accordance with
the provisions of Section 15.10 of the Distribution Agreement.
Section 8.09 Amendment and Waiver. This Agreement may not be altered
--------------------
or amended, nor may any rights hereunder be waived, except by an instrument in
writing executed by the party or parties to be charged with such aleration,
amendment or waiver. No waiver of any terms, provision or condition of or
failure to exercise or delay in exercising any rights or remedies under this
Agreement, in any one or more instances, shall be deemed to be, or construed as,
a further or continuing waiver of any such term, provision, condition, right or
remedy or as a waiver of any other term, provision or condition of this
Agreement.
Section 8.10 Assignment. Neither party to this Agreement will
----------
convey, assign or otherwise transfer any of its rights or obligations under this
Agreement without the prior written consent of the other party in its sole and
absolute discretion, except that other than as expressly provided herein any
party may (without obtaining any consent) assign any of its rights hereunder to
a successor to all or any part of its business. Any such conveyance, assignment
or transfer requiring the prior written consent of another party which is made
without such consent will be void ab initio. No assignment of this Agreement
will relieve the assigning party of its obligations hereunder.
Section 8.11 Captions. The article, section and paragraph captions
--------
herein and the table of contents hereto are for convenience of reference only,
do not constitute part of this Agreement and will not be deemed to limit or
otherwise affect any of the provisions hereof. Unless otherwise specified, all
references herein to numbered articles or sections are to articles and sections
of this Agreement and all references herein to annexes or schedules are to
annexes and schedules to this Agreement.
Section 8.12 Severability. If any provision of this Agreement or the
------------
application thereof to any person or circumstance is determined by a court of
competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions hereof, or the application of such provision to persons or
circumstances other than those as to which it has been held invalid or
unenforceable, will remain in full force and effect and will in no way be
affected, impaired or invalidated thereby. If the economic or legal substance
of the matters contemplated hereby is affected in any manner adverse to any
party as a result thereof, the parties will negotiate in good faith in an effort
to agree upon a suitable and equitable substitute provision to effect the
original intent of the parties.
Section 8.13 Parties in Interest. Neither of the parties hereto may
-------------------
assign its rights or delegate any of its duties under this Agreement without the
prior written consent of the other party. This Agreement shall be binding upon,
and shall inure to the benefit of, the parties hereto and their respective
successors and permitted assigns. Nothing contained in this Agreement,
-20-
express or implied, is intended to confer any benefits, rights or remedies upon
any person or entity other than members of the NDC Group and the Global Payments
Group.
Section 8.14 Schedules. All annexes and schedules attached hereto
---------
are hereby incorporated in and made a part of this Agreement as if set forth in
full herein. Capitalized terms used in the schedules hereto but not otherwise
defined therein will have the respective meanings assigned to such terms in this
Agreement.
Section 8.15 Waivers; Remedies. No failure or delay on the part of
-----------------
either NDC or Global Payments in exercising any right, power or privilege
hereunder will operate as a waiver thereof, nor will any waiver on the part of
either NDC or Global Payments of any right, power or privilege hereunder operate
as a waiver of any other right, power or privilege hereunder, nor will any
single or partial exercise of any right, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege hereunder. The rights and remedies herein provided are cumulative
and are not exclusive of any rights or remedies which the parties may otherwise
have at law or in equity.
Section 8.16 Further Assurances and Consents. In addition to the
-------------------------------
actions specifically provided for elsewhere in this Agreement, each of the
parties hereto will use its reasonable efforts to (a) execute and deliver such
further instruments and documents and take such other actions as any other party
may reasonably request in order to effectuate the purposes of this Agreement and
to carry out the terms hereof and (b) take, or cause to be taken, all actions,
and do, or cause to be done, all things, reasonably necessary, proper or
advisable under applicable laws, regulations and agreements or otherwise to
consummate and make effective the transactions contemplated by this Agreement,
including, without limitation, using its reasonable efforts to obtain any
consents and approvals, make any filings and applications and remove any liens,
claims, equity or other encumbrance on an Asset of the other party necessary or
desirable in order to consummate the transactions contemplated by this
Agreement; provided that no party hereto shall be obligated to pay any
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consideration therefor (except for filing fees and other similar charges) to any
third party from whom such consents, approvals and amendments are requested or
to take any action or omit to take any action if the taking of or the omission
to take such action would be unreasonably burdensome to the party or its Group
or the business thereof.
Section 8.17 Counterparts. This Agreement may be executed in one or
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more counterparts, each of which shall be deemed an original instrument, but all
of which together shall constitute one and the same Agreement.
(signatures on following page)
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IN WITNESS WHEREOF, the parties have caused this Employee Benefits
Agreement to be duly executed as of the day and year first above written.
NATIONAL DATA CORPORATION
By:
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Title:
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GLOBAL PAYMENTS INC.
By:
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Title:
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