1
EXHIBIT 10.50
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made effective this
15th day of February, 1999 (the "Effective Date") by and between XXXXXX X.
XXXXXXX (hereinafter referred to as "Employee") and NOVA CORPORATION, a Georgia
corporation ("NOVA").
W I T N E S S E T H :
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 Vice President and General Counsel of NOVA. 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
2
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 One Hundred ninety thousand and No/100 Dollars ($190,000)
("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
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
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 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.
2
3
(c) Disability Insurance. Employee shall be entitled to
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.
(d) Vacations, Holidays. Employee shall be entitled to at
least four (4) weeks of paid vacation each year and all holidays
observed by NOVA.
(e) Stock Option Plans. Employee shall be eligible for
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
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
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
forth in Sections 7(e)(i)(A), 7(e)(i)(B) or 7(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 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.
3
4
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 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 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 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
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 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 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 Xxx Xxxxxxxxx
0
0
Xxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000; (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 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 automatically extended for an additional period of time
(not to exceed sixty (60) days) to enable NOVA to cure such breaches,
provided, further, that NOVA continues to diligently use its best
efforts to cure 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))
(the "Severance Payment"). The Severance Payment shall be paid
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;
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.
5
6
(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 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 through 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
6
7
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:
(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")
7
8
(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,
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 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
8
9
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 Section 7 of 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 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.
9
10
10. NONDISCLOSURE.
(a) NOVA Confidential Information. Employee acknowledges and
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
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").
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
10
11
partnership, jointly, or in conjunction with, or on behalf of, any person, firm,
partnership, corporation, or unincorporated association or entity of any kind:
(a) compete with NOVA in providing credit card and debit card
transaction processing services within the Territory or (ii) 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
11
12
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 defense to the enforcement by NOVA of said covenants.
14. REASONABLENESS. Employee has carefully considered the nature and
extent of the restrictions upon her 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
12
13
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 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:
Xxxxxx X. Xxxxxxx
000 Xxxxx Xxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
(ii) If to NOVA, to:
NOVA Corporation
Xxx Xxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxxxxxxxx
Chief Executive Officer
With a copy (which shall not constitute notice) to:
NOVA Corporation
Xxx Xxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
General Counsel
13
14
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.
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.
14
15
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal as of the date first above shown.
"EMPLOYEE":
By:____________________________________
Xxxxxx X. Xxxxxxx
"NOVA":
NOVA CORPORATION
By:_____________________________________
Xxxxxx Xxxxxxxxxxx
Chairman, CEO and President
15
