EXHIBIT 10.52
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made effective as of the
22nd day of February, 2001 (the "Effective Date") by and between Xxxxx X.
Xxxxxxxxxx (hereinafter referred to as "Employee") and NOVA Corporation, a
Georgia corporation ("NOVA").
W I T N E S S E T H :
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WHEREAS, NOVA, through its direct and indirect subsidiaries, is in the
business of providing credit card and debit card transaction processing services
and settlement services (including the related products and services of
automated teller machines and check guarantee services) to merchants, financial
institutions, independent sales organizations ("ISOs"), and other similar
customers (collectively, the "Business") throughout the United States (the
"Territory");
WHEREAS, Employee currently serves as Chief Financial Officer of NOVA
pursuant to an Employment Agreement between Employee and NOVA effective May 24,
2000 (the "Prior Agreement");
WHEREAS, NOVA and Employee desire to terminate the Prior Agreement, which
termination shall be contemporaneous with the effectiveness of this Agreement;
WHEREAS, NOVA desires that Employee continue to work for NOVA, and Employee
desires to continue said employment, all as contemplated herein;
NOW, THEREFORE, for and in consideration of his continued 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 continue to 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
Chief Financial Officer of NOVA. Employee shall perform such duties as are
assigned to him by NOVA's Chief Executive Officer, including but not
limited to such duties as are customary for an officer in Employee's
position.
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(c) Employee shall devote substantially all of his business time,
attention, and energies to NOVA's Business, shall act at all times in the
best interests of NOVA, and shall not during the term of his Employment be
engaged in any other business activity, whether or not such business is
pursued for gain, profit, or other pecuniary advantage, or permit such
personal interests as he may have to interfere with the performance of his
duties hereunder. Notwithstanding the foregoing, Employee may participate
in industry, civic and charitable activities so long as such activities do
not materially interfere with the performance of his duties hereunder.
2. Compensation. During the term of Employee's Employment and in
accordance with the terms hereof, NOVA shall pay or otherwise provide to
Employee the following compensation:
(a) Employee's annual salary during the term of his Employment shall
be Three Hundred Thousand and No/100 Dollars ($300,000.00) ("Base Salary").
So long as this Agreement remains in effect, Employee's Base Salary shall
be reviewed 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. Following such review (or at any other
time), NOVA may, in its sole and exclusive discretion, increase Employee's
Base Salary. The Base Salary shall be paid by NOVA in accordance with
NOVA's regular payroll practice.
(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"). NOVA
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may, in its sole discretion, unilaterally modify Exhibit A on an annual
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basis. 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) Under Section 2(c) of the Prior Agreement, NOVA granted Employee
certain options and such options shall continue to vest pursuant to the
terms set forth in the Prior Agreement.
(d) As an inducement for Employee to enter the Prior Agreement, NOVA
paid Employee a special one time incentive of Seventy-Five Thousand and
No/100 Dollars ($75,000) (the "Signing Bonus"). If Employee's employment
with NOVA ends pursuant to Sections 6(b), 6(e), or 6(f) of this Agreement
or if Employee otherwise voluntarily ends his employment with NOVA within
twelve (12) months of the May 24, 2000, Employee will repay the Signing
Bonus
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to NOVA. Employee's obligation to repay the Signing Bonus under this
Section will be reduced by 1/12/th/ of the full amount for each full month
of employment completed by Employee.
(e) To assist Employee's transition to NOVA, and subject to the
approval of NOVA's Board of Directors, NOVA will loan employee up to Five
Hundred Thousand and No/00 Dollars ($500,000.00). The execution of a
promissory note for the amount borrowed is an express condition precedent
to NOVA's obligation to deliver any funds to Employee. Any loan taken
pursuant to this Section will be payable over five years or within 30 days
of the end of Employee's employment with NOVA for any reason whatsoever,
whichever is sooner. Payment terms and frequency will be determined prior
to the disbursement of any loan and will be set forth in the promissory
note. The interest rate on any loan under this Section shall be equal to
NOVA's cost of funds plus ten (10) basis points.
(f) 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 and shall waive, to the extent possible, any
applicable waiting periods :
(a) Medical Insurance. Employee and his dependents shall be entitled
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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
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life insurance plans established, offered, or adopted from time to time by
NOVA for the benefit of its employees and/or executive officers.
(c) Disability Insurance. Employee shall be entitled to participate
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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
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(4) weeks of paid vacation each year and all holidays observed by NOVA.
(e) Stock Option Plans. Employee also shall be eligible for
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participation in any stock option plan or restricted stock plan adopted by
NOVA's Board of Directors or the Compensation Committee which is applicable
to NOVA's Executive Vice Presidents.
(f) Other Benefits. In addition to and not in any way in limitation
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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
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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
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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 a "Change in Control"
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(as defined in Section 7(f)) 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 that are not vested on the date of occurrence of
such an event, as well as any Deferred Compensation Plan balance that is
not vested on the date of occurrence of such an event, shall become vested
and exercisable immediately (collectively, the "Vested Rights"). As
provided under the applicable plan or agreement, Employee shall have the
right to exercise any or all of the Vested Rights.
4. Personnel Policies. Employee shall conduct himself at all times in a
businesslike and professional manner as appropriate for a person in his position
and shall represent NOVA in all respects with good business and ethical
practices. In addition, Employee shall be subject to and abide by the policies
and procedures of NOVA applicable generally to personnel of NOVA, as adopted
from time to time.
5. Reimbursement for Business Expenses. Employee shall be reimbursed, on
no less frequently than a monthly basis, for all out-of-pocket business expenses
incurred by him in the performance of his duties hereunder, provided that
Employee shall first document and substantiate said business expenses in the
manner generally required by NOVA under its policies and procedures.
6. Term and Termination of Employment.
(a) This Agreement shall be effective as of the Effective Date.
(b) Employee's Employment shall terminate immediately upon the
discharge of Employee by NOVA for "Cause." For the purposes of this
Agreement, the term "Cause," when 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
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the event NOVA desires to terminate Employee's Employment pursuant to
subsections (i), (ii), or (iii) of this Section 6(b),
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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
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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
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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. Notwithstanding anything to the contrary
contained herein, NOVA shall not be entitled to discharge Employee for
"Cause" pursuant to this provision because of Employee's failure to perform
his duties or to comply with the decisions or policies of NOVA if
performance of such duties or compliance with such decisions or policies of
NOVA would be illegal or inconsistent with the rules and regulations of any
regulatory agency governing the duties of a Chief Financial Officer or
Principal Accounting Officer.
(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
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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
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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 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,
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that with respect only to
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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
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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
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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), 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(f)) multiplied by
two (2) (the "Severance Payment"). The Severance Payment shall be
paid in twenty-four (24) equal monthly installments, 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:
(A) 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.
(B) if, within the two-year period immediately following a
Change in Control of NOVA, Employee's Employment is terminated by
Employee pursuant to Section 6(f), because Employee "quits" or
voluntarily terminates his
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employment or this Agreement expires following notice of non-
renewal by Employee pursuant to Section 6(h), such a termination
shall not be deemed to be a Termination Exclusion for purposes of
this Section 7. Accordingly, NOVA shall pay Employee an amount
equal to his Annual Base Compensation multiplied by two (2), and
NOVA shall pay Employee this Severance Payment in one lump sum
within thirty (30) days of the Termination Date; provided,
however, in such a case, (i) Employee will not be paid any
Supplemental Payment and (ii) Employee will not be entitled to
his Bonus Compensation if such a terminating event occurs prior
to the date when any accrued Bonus Compensation would be paid to
Employee (even if he was employed for the entire calendar year
upon which such Bonus Compensation would be calculated).
(C) in the event Employee is terminated for Cause pursuant
to the terms of Section 6(b), such event shall be governed by
Section 7(b) hereof even if such Termination Date is within two
(2) years after a Change in Control of NOVA.
(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 1/st/ 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 the NOVA
Corporation Deferred Compensation Plan (the "Deferred Compensation
Plan"), the Deferred Compensation Plan Administrative Committee will
exercise its sole option and sole discretion pursuant to Sections 7.02
and 9.02 of the Deferred Compensation Plan, and will determine that
Employee shall become fully vested immediately in all of his Deferred
Compensation Plan accounts as of the Termination Date.
(iv) 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
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of such termination. As provided under the applicable plan or
agreement, Employee shall have the right to exercise any or all of
such rights. Further, in the event Employee's Employment is terminated
for whatever reason (other than termination for "Cause" pursuant to
Section 6(b)) within two (2) years after a Change in Control of NOVA,
Employee shall have the continuing right to exercise the "Qualified
Options" (as defined in Section 7(f)(iv)), at any time prior to the
date which is one (1) year after the Termination Date (without regard
to any provision thereof requiring earlier expiration upon termination
of employment).
(v) 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) on the same terms and
conditions as it provides such coverage to its currently employed
Executive Vice Presidents; 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 disclose confidential information, solicit
or compete set forth in Sections 10, 11, and 12 below. If Employee is
found by a court of competent jurisdiction or an arbitrator to be in breach
of Section 10, 11, or 12 as they are written, Employee shall have no
further right to any unpaid installment of the Severance Payment. In
addition, Employee shall be obligated to repay to Employer all installments
of the Severance Payment delivered to him by Employer from the time the
Employee first breached Section 10, 11, and/or 12 through the date of the
court or arbitrator's decision.
Except as provided in Section 7(a)(i)(B), 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 through the Termination Date, and
any other benefits required to be provided to Employee and his dependents
under contract and applicable law. Employee will not be entitled to his
Bonus Compensation if Employee's Employment is terminated as a result of
one of the Termination Exclusions prior to the date when any earned Bonus
Compensation would be paid to Employee. In such a case, Employee shall not
be entitled to any portion of his Bonus Compensation upon such termination
of employment even if he was employed for the entire calendar year upon
which such Bonus Compensation would be calculated.
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(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 installments, 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 installments, 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".
(iii) During the Exclusion Period, if Employee is found by a
court of competent jurisdiction or an arbitrator to be in breach of
Section 10, 11, or 12 as they are written, Employee shall have no
further right to any unpaid portion of the applicable Payment. In
addition, Employee shall be obligated to repay to Employer all
portions of the applicable Payment delivered to him by Employer from
the time Employee first breached Section 10, 11, and/or 12 through the
date of the court's or arbitrator's decision.
(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.
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(f) Gross-Up Payment.
(i) Anything in this Agreement to the contrary notwithstanding,
in the event it shall be determined that any payment or distribution
by or on behalf of NOVA to or for the benefit of Employee as a result
of a "Change in Control" or as otherwise payable under Sections 3(h)
or 7(a) (whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise, but determined
without regard to any additional payments required under this Section
7(e) (a "Payment")) would be subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended (the
"Code"), or any interest or penalties are incurred by Employee with
respect to such excise tax (such excise tax, together with any such
interest and penalties, are hereinafter collectively referred to as
the "Excise Tax"), then Employee shall be entitled to receive an
additional payment (a "Gross-Up Payment") in an amount such that,
after payment by Employee of all taxes upon the Gross-Up Payment (such
taxes including, without limitation, any income taxes and Excise Tax
imposed upon the Gross-Up Payment, and any interest or penalties
imposed with respect to such taxes), Employee retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payment.
(ii) Subject to the provisions of Section 7(e)(iii), all
determinations required to be made under this Section 7, including
whether and when a Gross-Up Payment is required and the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at
such determination, shall be made by a nationally recognized
accounting firm or law firm selected by Employee and reasonably
acceptable to NOVA (the "Tax Firm"); provided, however, that the Tax
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Firm shall not determine that no Excise Tax is payable by Employee
unless it delivers to Employee a written opinion (the "Accounting
Opinion") that failure to pay the Excise Tax and to report the Excise
Tax and the payments potentially subject thereto on or with Employee's
applicable federal income tax return will not result in the imposition
of an accuracy-related or other penalty on Employee. All fees and
expenses of the Tax Firm shall be borne solely by NOVA. Within
fifteen (15) business days of the receipt of notice from Employee that
there has been a Payment, the Tax Firm shall make all determinations
required under this Section 7, shall provide to NOVA and Employee a
written report setting forth such determinations, together with
detailed supporting calculations, and, if the Tax Firm determines that
no Excise Tax is payable, shall deliver the Accounting Opinion to
Employee. Any Gross-Up Payment, as determined pursuant to this
Section 7, shall be paid by NOVA to Employee within fifteen (15) days
of the receipt of the Tax Firm's determination. Subject to the
remainder of this Section, any determination by the Tax Firm shall be
binding upon NOVA and Employee; provided, however, that Employee shall
only be bound to the extent that the determinations of the Tax Firm
hereunder, including the determinations made in the Accounting
Opinion, are reasonable and reasonably supported by applicable law.
As a result of the uncertainty in the application of Section 4999 of
the Code at the time of the initial determination by the Tax Firm
hereunder, it is possible that Gross-Up Payments which will not have
been made by NOVA should have been made ("Underpayment"), consistent
with the calculations
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required to be made hereunder. In the event that it is ultimately
determined in accordance with the procedures set forth in Section
7(e)(iii) that Employee is required to make a payment of any Excise
Tax, the Tax Firm shall reasonably determine the amount of the
Underpayment that has occurred and any such Underpayment shall be
promptly paid by NOVA to or for the benefit of Employee. In
determining the reasonableness of Tax Firm's determinations hereunder,
and the effect thereof, NOVA and Employee shall be provided a
reasonable opportunity to review such determinations with Tax Firm and
their respective tax counsel, if separate from the Tax Firm. Tax
Firm's determinations hereunder, and the Accounting Opinion, shall not
be deemed reasonable until Employee's reasonable objections and
comments thereto have been satisfactorily accommodated by Tax Firm.
(iii) Employee shall notify NOVA in writing of any claims by the
Internal Revenue Service that, if successful, would require the
payment by NOVA of the Gross-Up Payment. Such notification shall be
given as soon as practicable, but no later than thirty (30) calendar
days after Employee actually receives notice in writing of such claim,
and shall apprise NOVA of the nature of such claim and the date on
which such claim is requested to be paid; provided, however, that the
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failure of Employee to notify NOVA of such claim (or to provide any
required information with respect thereto) shall not affect any rights
granted to Employee under this Section except to the extent that NOVA
is materially prejudiced in the defense of such claim as a direct
result of such failure. Employee shall not pay such claim prior to
the expiration of the thirty (30) day period following the date on
which he gives such notice to NOVA (or such shorter period ending on
the date that any payment of taxes with respect to such claim is due).
If NOVA notifies Employee in writing prior to the expiration of such
period that it desires to contest such claim, Employee shall do all of
the following:
(A) give NOVA any information reasonably requested by NOVA
relating to such claim;
(B) take such action in connection with contesting such
claim as NOVA shall reasonably request in writing from
time to time, including, without limitation, accepting
legal representation with respect to such claim by an
attorney selected by NOVA and reasonably acceptable to
Employee;
(C) cooperate with NOVA in good faith in order effectively
to contest such claim;
(D) if NOVA elects not to assume and control the defense of
such claim, permit NOVA to participate in any
proceedings relating to such claim; provided, however,
that NOVA shall bear and pay directly all costs and
expenses (including additional interest and penalties)
incurred in connection with such contest and shall
indemnify and hold Employee harmless, on an after-tax
basis, for any Excise Tax or income tax (including
interest and penalties with respect thereto) imposed as
a result
11
of such representation and payment of costs and
expenses. Without limiting the foregoing provisions of
this Section 7, NOVA shall have the right, at its sole
option, to assume the defense of and control all
proceedings in connection with such contest, in which
case it may pursue or forego any and all administrative
appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may
either direct Employee to pay the tax claimed and xxx
for a refund or contest the claim in any permissible
manner, and Employee agrees to prosecute such contest
to a determination before any administrative tribunal,
in a court of initial jurisdiction and in one or more
appellate courts, as NOVA shall determine; provided,
--------
however, that if NOVA directs Employee to pay such
-------
claim and xxx for a refund, NOVA shall advance the
amount of such payment to Employee, on an interest-free
basis and shall indemnify and hold Employee harmless,
on an after-tax basis, from any Excise Tax or income
tax (including interest or penalties with respect
thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such
advance; and further provided that any extension of the
statute of limitations relating to payment of taxes for
the taxable year of Employee with respect to which such
contested amount is claimed to be due is limited solely
to such contested amount. Furthermore, NOVA's right to
assume the defense of and control the contest shall be
limited to issues with respect to which a Gross-Up
Payment would be payable hereunder and Employee shall
be entitled to settle or contest, as the case may be,
any other issue raised by the Internal Revenue Service
or any other taxing authority.
(iv) If, after the receipt by Employee of an amount advanced
by NOVA pursuant to this Section 7(e), Employee becomes entitled to
receive any refund with respect to such claim, Employee shall (subject
to NOVA's complying with the requirements of Section 7(e)(iii))
promptly pay to NOVA the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If,
after the receipt by Employee of an amount advanced by NOVA pursuant
to Section 7(e)(iii), a determination is made that Employee is not
entitled to a refund with respect to such claim and NOVA does not
notify Employee in writing of its intent to contest such denial of
refund prior to the expiration of thirty (30) days after such
determination, then such advance shall, to the extent of such denial,
be forgiven and shall not be required to be repaid and the amount of
forgiven advance shall offset, to the extent thereof, the amount of
Gross-Up Payment required to be paid.
(f) 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)
12
of the Securities Exchange Act of 1934 (the "Exchange
Act") (excluding, for this purpose, any employee
benefit plan of NOVA or its subsidiaries which acquires
beneficial ownership of voting securities of NOVA) of
beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 25% or more of
either the then outstanding shares of NOVA Stock or the
combined voting power of NOVA's then outstanding voting
securities entitled to vote generally in the election
of directors; or
(B) The consummation by NOVA of a reorganization, merger,
or 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 (i) NOVA, if NOVA remains a publicly-
traded company, or (ii) the ultimate parent company, if
NOVA becomes a direct or indirect subsidiary of another
company.
(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).
Notwithstanding the foregoing definition, a leverage buyout
transaction whereby NOVA becomes a privately-held company
and the management of NOVA obtains an equity interest in
NOVA or its successor as part of such transaction shall not
constitute a Change in Control for purposes of this
Agreement.
(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
13
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).
(iv) "Qualified Options" shall mean all stock options,
restricted stock, and other similar rights (a) granted to Employee
prior to the date hereof (whether vested or unvested), that entitle
Employee to acquire NOVA Stock for a price per share equal to or
greater than $17.92; or (b) granted to Employee on or after the date
of this Agreement.
(g) The benefits provided for in this Section 7 are the only benefits
Employee can be entitled to upon the termination of his employment.
Employee expressly agrees and acknowledges that the benefits described in
this Section are in lieu of, and not in addition to, benefits the Company
may have provided for any other individual under any severance plan or
severance agreement.
8. Products, Notes, Records and Software. Employee acknowledges and
agrees that all memoranda, notes, records and other documents and computer
software created, developed, compiled, or used by Employee or made available to
him during the term of his Employment concerning or relative to the Business,
including, without limitation, all customer data, billing information, service
data, and other technical material of NOVA is and shall be NOVA's property.
Employee agrees to deliver without demand all such materials to NOVA within
three (3) days after the termination of Employee's Employment. Employee further
agrees not to use such materials for any reason after said termination.
9. Arbitration.
(a) NOVA and Employee acknowledge and agree that (except as
specifically set forth in Section 9(d)) any claim or controversy arising
out of or relating to this Agreement shall be settled by binding
arbitration in Atlanta, Georgia, in accordance with the National Rules of
the American Arbitration Association for the Resolution of Employment
Disputes in effect on the date of the event giving rise to the claim or
controversy. NOVA and Employee further acknowledge and agree that either
party must request arbitration of any claim or controversy within one (1)
year of the date of the event giving rise to the claim or controversy by
giving 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
14
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, 11, and 12 of this Agreement nor shall such
provisions prevent NOVA from seeking equitable relief from a court of
competent jurisdiction for violations of Sections 10, 11, and 12 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.
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;
15
(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. (S) 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. Covenant Not to Compete. Employee acknowledges and agrees that,
because of his Employment, he will 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 he
Employment and continuing through the Severance Period or the Exclusion Period
as applicable, Employee shall not, either individually, in partnership, jointly,
or in conjunction with, or on behalf of, any person, firm, partnership,
corporation, or unincorporated association or entity of any kind:
(a) perform services within the United States (the "Territory") in a
financial, supervisory, or managerial capacity or as an advisor, consultant
or independent contractor for any person, firm, partnership, corporation,
or unincorporated association of any kind which is providing credit card
and/or debit card transaction processing services within the Territory;
(b) obtain any ownership or financial interest in (except as a
stockholder holding less than five percent (5%) interest in a corporation
which is traded on a national exchange or over the counter) any firm,
partnership, corporation or unincorporated association of any kind which is
providing credit card and/or debt card transaction processing services.
12. Covenant Not to Solicit. Employee further agrees that during the term
of his Employment and continuing through the Severance Period or the Exclusion
Period as applicable, Employee shall not:
(a) 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;
(b) 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,
16
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
(c) persuade or attempt to persuade any person who (i) was employed
by NOVA or under agreement to provide services as an independent contractor
to 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 or other contractual relationship,
whether or not pursuant to a written agreement, with NOVA, as the case may
be.
13. 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.
14. Remedy for Breach. Employee acknowledges and agrees that his breach
of any of the covenants contained in Sections 8, 10, 11, 12 and 13 of this
Agreement would cause irreparable injury to NOVA and that remedies at law of
NOVA for any actual or threatened breach by Employee of such covenants would be
inadequate and that NOVA shall be entitled to specific performance of the
covenants in such sections or injunctive relief against activities in violation
of such sections, or both, by temporary or permanent injunction or other
appropriate judicial remedy, writ or order, without the necessity of proving
actual damages. This provision with respect to injunctive relief shall not
diminish the right of NOVA to claim and recover damages against Employee for any
breach of this Agreement in addition to injunctive relief. Employee
acknowledges and agrees that the covenants contained in Sections 8, 10, 11, 12
and 13 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.
15. Reasonableness. Employee has carefully considered the nature and
extent of the restrictions upon him and the rights and remedies conferred on
NOVA under this Agreement, and Employee hereby acknowledges and agrees that:
(a) the restrictions and covenants contained herein, and the rights
and remedies conferred upon NOVA, are necessary to protect the goodwill and
other value of the Business;
(b) the restrictions placed upon Employee hereunder are narrowly
drawn, are fair and reasonable in time and territory, will not prevent him
from earning a livelihood, and place no greater restraint upon Employee
than is reasonably necessary to secure the Business and goodwill of NOVA;
17
(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.
(e) The restrictions placed on Employee pursuant to Sections 11 and
12 above are reasonable as to time and geographic area, in consideration of
the unique character of NOVA's business and Employee's high position in
NOVA's corporate structure. Sections 10, 11, and 12 also are definite as to
time. Employee understands that under certain circumstances the Agreement
allows NOVA to elect one or two years of protection under these Sections.
Employee agrees that he is receiving good and valuable consideration for
the providing NOVA with this election.
16. 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 said court declines
to so amend or modify this Agreement, the parties either will agree to modify
the term in question to make it enforceable or will submit the Agreement to
binding arbitration in accordance with the commercial arbitration rules then in
effect of the American Arbitration Association for the purpose of modifying the
covenant in question so that it is enforceable. By this Agreement, the parties
expressly grant the arbitrator to authority to make a binding determination as
to what restriction will, under these circumstances, be enforceable. 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.
17. Full Settlement and Legal Expenses. NOVA's obligation to make the
payments provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counter-claim, recoupment,
defense or other claim, right or action which NOVA may have against the Employee
or others. In no event shall the Employee be obligated to seek other employment
or take any other action by way of mitigation of the amounts payable to the
Employee under any of the provisions of this Agreement. NOVA agrees to pay, to
the full extent permitted by law, all legal fees and expenses which the Employee
may reasonably incur as a result of any legitimate, non-frivolous 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 legitimate, non-
frivolous contest by the Employee about the amount of any payment pursuant to
18
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. NOVA will not be
bound to pay any legal fees or expenses arising out of baseless, meritless or
frivolous contests brought hereunder by Employee or others. A contest will be
deemed baseless, meritless and/or frivolous if a court or other arbiter assesses
penalties or sanctions for bringing said contest, or a court or other arbiter
dismisses said contest for failure to state a colorable claim.
18. Applicable Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Georgia.
19. 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.
20. 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.
21. 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:
Xxxxx X. Xxxxxxxxxx
0000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, 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
19
22. 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, including but not limited to the Prior Agreement, which
is hereby terminated. 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.
23. 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.
24. Survival. The provisions of Sections 7, 8, 9, 10, 11, 12, 13, 14, 15,
16, 17, 18, 21, 23, 24 and 25 shall survive termination of Employee's Employment
and termination of this Agreement.
25. 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. Nothing in this
Section shall be construed to reduce Employee's right to payments described in
Section 7(e).
20
IN WITNESS WHEREOF, the parties hereto have executed this Agreement under
seal as of the date first above shown.
"EMPLOYEE":
By: /s/ Xxxxx X. Xxxxxxxxxx
--------------------------
Xxxxx X. Xxxxxxxxxx
"NOVA":
NOVA Corporation
By: /s/ Xxxxxx Xxxxxxxxxxx
--------------------------
Xxxxxx Xxxxxxxxxxx
Chairman, CEO and President
21
EXHIBIT A
---------
Annual Incentive Compensation Schedule
* Payment of annual incentive compensation (the "Bonus Payment") to be based
upon relative achievement of Targeted Net Income (as defined).
* Net Income is Net Income determined in accordance with GAAP as determined
from the annual audited Financial Statements, as adjusted to exclude non-
operating gains and losses.
* Targeted Net Income will be established annually by the Board of Directors.
* The Bonus Payment will be calculated by following the steps outlined below:
(1) Determining the percentage equivalent to a fraction, the numerator of
which is Net Income and the denominator of which is Targeted Net
Income (such percentage being referred to as the "Actual/Targeted
Ratio").
(2) Values will be calculated based on (A) through (E):
(A) For each full percentage point (up to 84%) by which the
----
Actual/Targeted Ratio equals or exceeds 80%, a value of 1% will
be awarded.
(B) For each full percentage point (up to 89%) by which the
----
Actual/Targeted Ratio exceeds 84%, a value of 2% will be awarded.
(C) For each full percentage point (up to 94%) by which the
----
Actual/Targeted Ratio exceeds 89%, a value of 3% will be awarded.
(D) For each full percentage point (up to 99%) by which the
----
Actual/Targeted Ratio exceeds 94%, a value of 4% will be awarded.
(E) For each full percentage point (up to 150%) by which the
----
Actual/Targeted Ratio exceeds 100%, a value of 1% will be
awarded. (note: for this purpose, no value will be awarded for
----
equaling 100%).
(3) The sum of the values calculated in (A) through (E) (the "Bonus
Percentage") shall be multiplied by Employee's then current Base
Salary to yield the Bonus Payment.
22
Examples:
---------
. If the Actual/Targeted Ratio is 92%, the Bonus Percentage would be
29%. This is calculated by adding:
5% (1% for 80-84% of Actual/Targeted Ratio)
+ 15% (2% for 85-89% of Actual/Targeted Ratio)
+ 9% (3% for 90-92% of Actual/Targeted Ratio)
---------------------------------------------
29%
Employee's Bonus Payment would be equal to Employee's then-current
Base Salary multiplied by 29%.
. If the Actual/Targeted Ratio is 112%, the Bonus Percentage would be
62%. This is calculated by adding:
5% (1% for 80-84% of Actual/Targeted Ratio)
+ 10% (2% for 85-89% of Actual/Targeted Ratio)
+ 15% (3% for 90-94% of Actual/Targeted Ratio)
+ 20% (4% for 95-99% of Actual/Targeted Ratio)
+ 0% (0% for 100% of Actual/Targeted Ratio)
+ 12% (1% for 101-112% of Actual/Targeted Ratio)
-----------------------------------------------
62%
Employee's Bonus Payment would be equal to Employee's then-current
Base Salary multiplied by 62%.
* The foregoing notwithstanding, in order for any bonus to be payable with
respect to any calendar year, the "Revenue" (as defined below) for such
calendar year must equal or exceed 105% of the Revenue for the immediately
preceding calendar year. "Revenue" means revenue of NOVA determined in
accordance with GAAP as determined from the annual audited Financial
Statements, as adjusted to exclude non-operating items.
* Notwithstanding anything to the contrary in this Agreement, in order to
receive Bonus Compensation for any calendar year, Employee must be employed
by NOVA on the day that the Bonus Compensation is actually paid or on April
15 of the following calendar year, whichever date occurs sooner.
23
