EXHIBIT 10.15
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EMPLOYMENT AGREEMENT
BETWEEN
JAMES G. KELLY
AND
NATIONAL DATA CORPORATION
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EMPLOYMENT AGREEMENT
CONTENTS
1. Effective Date...................................................................... 1
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2. Employment.......................................................................... 1
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3. Employment Period................................................................... 2
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4. Extent of Service................................................................... 2
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5. Compensation and Benefits........................................................... 2
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(a) Base Salary........................................................... 2
(b) Incentive and Savings Plans........................................... 2
(c) Welfare Benefit Plans................................................. 3
(d) Expenses.............................................................. 3
(e) Fringe Benefits....................................................... 4
6. Change in Control................................................................... 4
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7. Termination of Employment........................................................... 5
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(a) Death, Retirement or Disability....................................... 5
(b) Termination by the Company............................................ 5
(c) Termination by Executive.............................................. 6
(d) Notice of Termination................................................. 7
(e) Date of Termination................................................... 7
8. Obligations of the Company upon Termination......................................... 7
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(a) Prior to a Change in Control: Termination by Executive for Good
Reason; Termination by the Company Other Than for Poor Performance,
Cause or Disability................................................... 8
(b) Prior to Change in Control: Termination by the Company for Poor
Performance........................................................... 9
(b) Prior to Change in Control: Termination by Termination by Executive
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for Failure of Condition Subsequent................................... 11
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(c) After or in Connection with a Change in Control....................... 12
(d) Death, Disability or Retirement....................................... 13
(e) Cause or Voluntary Termination........................................ 13
(f) Allocation of Certain Payments........................................ 14
9. Non-exclusivity of Rights.......................................................... 14
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10. Certain Additional Payments by the Company......................................... 14
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11. Costs of Enforcement............................................................... 17
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12. Representations and Warranties..................................................... 17
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13. Restrictions on Conduct of Executive............................................... 17
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(a) General............................................................... 17
(b) Definitions........................................................... 17
(c) Restrictive Covenants................................................. 19
(d) Enforcement of Restrictive Covenants.................................. 21
14. Arbitration........................................................................ 22
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15. Letter of Credit................................................................... 22
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16. Assignment and Successors.......................................................... 23
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17. Miscellaneous...................................................................... 23
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(a) Waiver................................................................ 23
(b) Severability.......................................................... 23
(c) Other Agents.......................................................... 23
(d) Entire Agreement...................................................... 23
(e) Governing Law......................................................... 24
(f) Notices............................................................... 24
(g) Amendments and Modifications.......................................... 24
(h) Full Settlement; No Obligation to Mitigate............................ 24
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into this
___ day of September, 2000 by and between National Data Corporation, a
Delaware corporation (the "Company"), and James G. Kelly ("Executive"), to be
effective as of the Effective Date, as defined in Section 1.
BACKGROUND
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Executive currently serves as the Chief Financial Officer of NDC eCommerce,
a line of business of the Company. Executive and the Company mutually believe
and expect that within 14 months of the Effective Date of this Agreement, the
Company will distribute the NDC eCommerce line of business to the Company's
shareholders (the "Spinoff"), following which NDC eCommerce will exist as a
separate public company. From and after the Spinoff, references herein to "the
Company" shall mean NDC eCommerce, by whatever corporate name it then has. The
parties desire to memorialize the terms of Executive's employment in this
Agreement.
In addition, the Board of Directors of the Company (the "Board"), has
determined that it is in the best interests of the Company and its stockholders
to assure that the Company will have the continued dedication of the Executive,
notwithstanding the possibility, threat or occurrence of a Change in Control (as
defined below) of the Company. As it is desired and anticipated that Executive
will continue to be employed and provide services for the Company's eCommerce
line of business for at least 24 months following a Change in Control, one
purpose of this Agreement is to provide Executive with compensation and benefits
arrangements which ensure that the compensation and benefits expectations of
Executive will be satisfied and which are competitive with those of other
corporations. Therefore, in order to accomplish these objectives, the Board has
caused the Company to enter into this Agreement.
NOW THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Effective Date. The effective date of this Agreement (the "Effective
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Date") is April 1, 2000.
2. Employment. Executive is hereby employed as the Chief Financial
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Officer of NDC eCommerce, a line of business of the Company, reporting directly
to the Chief Executive Officer of the NDC eCommerce. In his capacity as Chief
Financial Officer of NDC eCommerce, Executive shall have the responsibilities
outlined on Exhibit A to this Agreement and such other responsibilities
commensurate with such position as shall be assigned to him in writing by the
Chief Executive Officer of NDC eCommerce, in accordance with the policies and
objectives established by the Board of Directors of the Company.
3. Employment Period. Executive's employment hereunder shall begin on
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the Effective Date and continue until terminated in accordance with Section 7
hereof (the "Employment Period").
4. Extent of Service. During the Employment Period, Executive shall
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render his services to the Company (or to a successor to the Company's eCommerce
line of business following a Change in Control) in conformity with professional
standards, in a prudent and workmanlike manner and in a manner consistent with
the obligations imposed on officers of corporations under applicable law.
Executive shall promote the interests of the Company and its subsidiaries in
carrying out Executive's duties and shall not deliberately take any action which
could, or fail to take any action which failure could, reasonably be expected to
have a material adverse effect upon the business of the Company or any of its
subsidiaries or any of their respective affiliates. Executive agrees to devote
his business time, attention, skill and efforts exclusively to the faithful
performance of his duties hereunder (both before and after a Change in Control);
provided, however, that it shall not be a violation of this Agreement for
Executive to (i) devote reasonable periods of time to charitable and community
activities and, with the approval of the Company, industry or professional
activities, and/or (ii) manage personal business interests and investments, so
long as such activities do not materially interfere with the performance of
Executive's responsibilities under this Agreement. Without limiting the
foregoing, it is expressly understood and agreed that to the extent that any
such activities have been conducted by Executive prior to the date of this
Agreement (as to which activities Executive shall have given written notice to
the Company prior to the execution date), the continued conduct of such
activities subsequent to the Effective Date shall not thereafter be deemed to
interfere with the performance of Executive's responsibilities hereunder.
5. Compensation and Benefits.
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(a) Base Salary. During the Employment Period, the Company will pay
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to Executive a base salary at the rate of U.S. $300,000 per year ("Base
Salary"), less normal withholdings, payable in equal bi-weekly or other
installments as are customary under the Company's payroll practices from time to
time. The Compensation Committee of the Board shall review Executive's Base
Salary periodically and in its sole discretion, subject to approval of the
Board, may increase Executive's Base Salary from time to time. The periodic
review of Executive's salary by the Board will consider, among other things,
Executive's own performance, the Company's performance, and the market
conditions for executives holding similar chief financial officer positions.
(b) Incentive and Savings Plans. During the Employment Period,
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Executive shall be entitled to participate in incentive and savings plans,
practices, policies and programs applicable generally to employees of the
Company. Certain executive programs will be made available on a selective basis
at the discretion of the Chief Executive Officer of the Company or the
Compensation Committee of the Board. Without limiting the foregoing, the
following shall apply:
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(i) Annual Bonus. Executive will have an annual bonus opportunity of
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the greater of $150,000 or 50% of his Base Salary, for each fiscal year of the
Company beginning with the fiscal year ending May 31, 2001, based on achievement
of agreed-upon objectives ("Bonus Opportunity"). For the fiscal year ending May
31, 2001, $100,000 of Executive's Bonus Opportunity is guaranteed, of which
amount $75,000 was advanced to Executive on or about the Effective Date, subject
to reimbursement under Section 8(f). Subject to the foregoing, the annual Bonus
Opportunity and specific performance objectives will be set forth in Executive's
individual performance and incentive plan for each year. Executive may elect to
receive up to 50% of each bonus payment in the form a of a Company restricted
stock grant. Executive's election must be made within 60 days of the start of
the year in which the bonus would otherwise be paid, and the amount of
restricted stock will equal 135% of the amount deferred. Any such restricted
stock will vest 100% three years after the date the deferred portion of the
bonus would otherwise be paid in cash; provided that Executive is still employed
on such third anniversary by the Company or the successor to its eCommerce line
of business.
(ii) Incentive Awards.
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(A) Stock Options. On or about the Effective Date, the Company
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granted to Executive under the National Data Corporation 2000 Long-Term
Incentive Plan non-qualified options to acquire that number of shares of common
stock of the Company having a fair market value on the date of grant equal to
$1,500,000. Such options have an exercise price equal to the fair market value
of the Company's stock on the date of grant, and a vesting schedule similar to
that of options granted to other employees, except that they will become earlier
vested and exercisable under the applicable circumstances set forth in Section 8
hereof.
(B) Restricted Stock. On or about the Effective Date, the
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Company granted to Executive under the National Data Corporation 2000 Long-Term
Incentive Plan that number of shares of restricted stock of the Company having a
fair market value on the date of grant equal to $850,000. Such shares of stock
will vest in full four years after the date of grant or earlier under the
applicable circumstances set forth in Section 8 hereof.
(c) Welfare Benefit Plans. During the Employment Period, Executive and
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Executive's family shall be eligible for participation in, and shall receive all
benefits under, the welfare benefit plans, practices, policies and programs
provided by the Company (including, without limitation, medical, prescription,
dental, vision, disability, employee life, group life, accidental death and
travel accident insurance plans and programs) ("Welfare Plans").
(d) Expenses. During the Employment Period, Executive shall be entitled
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to receive prompt reimbursement for all reasonable expenses incurred by
Executive in accordance with the policies, practices and procedures of the
Company.
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(e) Fringe Benefits. During the Employment Period, Executive shall
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be entitled to fringe benefits in accordance with the plans, practices, programs
and policies of the Company. Such benefits shall include, without limitation,
vacation earned at the rate of 20 days per year from Executive's date of hire on
April 1, 2000, and seven major holidays plus two floating days per year.
(f) Relocation Expenses. Subject to Section 8(c), Executive shall be
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entitled to receive prompt reimbursement for all reasonable expenses incurred by
Executive in connection with relocating his family from Tampa, Florida, to
Atlanta, Georgia, the details of which reimbursable relocation expenses are set
out in that certain offer letter to Executive, dated April 11, 2000, from Paul
R. Garcia (the "Offer Letter").
6. Change in Control. For the purposes of this Agreement, a "Change in
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Control" shall mean:
(a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of 35% or more of
the combined voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors (the
"Outstanding Company Voting Securities"); provided, however, that for purposes
of this subsection (a), the following acquisitions shall not constitute a Change
in Control: (i) any acquisition by a Person who is on the Effective Date the
beneficial owner of 35% or more of the Outstanding Company Voting Securities,
(ii) any acquisition directly from the Company, (iii) any acquisition by the
Company which reduces the number of Outstanding Company Voting Securities and
thereby results in any person having beneficial ownership of more than 35% of
the Outstanding Company Voting Securities, (iv) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company, or (v) any acquisition by any corporation
pursuant to a transaction which complies with clauses (i) and (ii) of subsection
(b) of this Section 6; or
(b) Consummation of a reorganization, merger or consolidation or sale
or other disposition of all or substantially all of the assets of the Company (a
"Business Combination"), in each case, unless, following such Business
Combination, (i) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 50% of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or through one or more
subsidiaries) in
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substantially the same proportions as their ownership, immediately prior to such
Business Combination of the Outstanding Company Common Stock and Outstanding
Company Voting Securities, as the case may be, and (ii) no Person (excluding the
Company or any employee benefit plan (or related trust) of the Company or such
corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 35% or more of the combined voting power of the then
outstanding voting securities of such corporation except to the extent that such
ownership existed prior to the Business Combination; provided, however, that
(c) Notwithstanding anything in this definition to the contrary, a
restructuring and/or separation of any line of business or business unit from
the Company (including the proposed Spinoff) will not of itself constitute a
Change in Control.
7. Termination of Employment.
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(a) Death, Retirement or Disability. Executive's employment and the
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Employment Period shall terminate automatically upon Executive's death or
Retirement. For purposes of this Agreement, "Retirement" shall mean normal
retirement as defined in the Company's then-current retirement plan, or there is
no such retirement plan, "Retirement" shall mean voluntary termination after age
65 with ten years of service. If the Company determines in good faith that the
Disability of Executive has occurred (pursuant to the definition of Disability
set forth below), it may give to Executive written notice of its intention to
terminate Executive's employment. In such event, Executive's employment with
the Company shall terminate effective on the 60th day after receipt of such
written notice by Executive (the "Disability Effective Date"), provided that,
within the 60 days after such receipt, Executive shall not have returned to
full-time performance of Executive's duties. For purposes of this Agreement,
"Disability" shall mean a mental or physical disability as determined by the
Board in accordance with standards and procedures similar to those under the
Company's employee long-term disability plan, if any. At any time that the
Company does not maintain such a long-term disability plan, Disability shall
mean the inability of Executive, as determined by the Board, to substantially
perform the essential functions of his regular duties and responsibilities due
to a medically determinable physical or mental illness which has lasted (or can
reasonably be expected to last) for a period of six consecutive months.
(b) Termination by the Company. The Company may terminate Executive's
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employment for Poor Performance or with or without Cause. For purposes of this
Agreement:
"Poor Performance" shall mean the consistent failure of Executive to
meet reasonable performance expectations (other than any such failure resulting
from incapacity due to physical or mental illness); provided, however, that
termination for Poor Performance shall not be effective unless at least 30 days
prior to such termination Executive shall have received written notice from the
Chief Executive Officer of the Company or the Board which specifically
identifies the manner in which the Board or the
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Chief Executive Officer believes that Executive has consistently failed to meet
reasonable performance expectations and Executive shall have failed after
receipt of such notice to resume the diligent performance of his duties to the
reasonable satisfaction of the Chief Executive Officer or the Board; and
"Cause" shall mean:
(i) the willful and continued failure of Executive to perform
substantially Executive's duties with the Company, as such duties have been
specified in writing (other than any such failure resulting from incapacity due
to physical or mental illness, and specifically excluding any failure by
Executive, after reasonable efforts, to meet performance expectations), after a
written demand for substantial performance is delivered to Executive by the
President or Chief Executive Officer of the Company or the Board which
specifically identifies the manner in which such Board or officer believes that
Executive has willfully and continually failed to substantially perform
Executive's duties, or
(ii) any act of fraud, misappropriation, embezzlement or similar
dishonest or wrongful act by Executive, or
(iii) Executive's habitual abuse of alcohol or any substance which
materially interferes and repeatedly with Executive's ability to perform
services on behalf of the Company, or
(iv) Executive's conviction for, or plea of guilty or nolo
contendere to, a felony.
(c) Termination by Executive. Executive's employment may be terminated
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by Executive for Failure of Condition Subsequent or with or without Good Reason.
For purposes of this Agreement:
"Failure of Condition Subsequent" means that the Spinoff shall not
have occurred within 14 months after the Effective Date and the Company shall
not, during such 14-month period, have offered Executive a mutually acceptable
position substantially similar to that of a chief executive officer of a public
company.
"Good Reason" shall mean:
(i) without the written consent of Executive, the assignment to
Executive of any duties materially inconsistent with Executive's position as
Chief Financial Officer of the Company's eCommerce line of business or of any
successor to substantially all of such line of business), reporting directly to
the Chief Executive Officer of such business (including offices, titles and
reporting requirements), authority, duties or responsibilities as in effect on
the Effective Date, or any other action by the Company which results in a
material diminution in such position, authority, duties
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or responsibilities, excluding for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith and which is remedied by the Company
promptly after receipt of notice thereof given by Executive;
(ii) a reduction by the Company in Executive's Base Salary and
benefits as in effect on the Effective Date or as the same may be increased from
time to time;
(iii) the Company's requiring Executive, without his consent,
to be based at any office or location other than in the greater metropolitan
area of Atlanta, Georgia; or
(iv) any failure by the Company to comply with and satisfy
Section 16(c) of this Agreement.
(d) Notice of Termination. Any termination by the Company for Poor
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Performance or Cause, or by Executive for Failure of Condition Subsequent or
Good Reason, shall be communicated by Notice of Termination to the other party
hereto given in accordance with Section 17(f) of this Agreement. For purposes
of this Agreement, a "Notice of Termination" means a written notice which (i)
indicates the specific termination provision in this Agreement relied upon, (ii)
to the extent applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Executive's
employment under the provision so indicated and (iii) if the Date of Termination
(as defined below) is other than the date of receipt of such notice, specifies
the termination date (which date shall be not more than 60 days after the giving
of such notice). The failure by Executive or the Company to set forth in the
Notice of Termination any fact or circumstance which contributes to a showing of
Failure of Condition Subsequent, Good Reason, Poor Performance or Cause shall
not waive any right of Executive or the Company, respectively, hereunder or
preclude Executive or the Company, respectively, from asserting such fact or
circumstance in enforcing Executive's or the Company's rights hereunder,
provided that no later than the time such fact or circumstance is asserted,
Executive or the Company, respectively, provides the other with written notice
setting forth in reasonable detail the facts and circumstances and the
applicable provisions of this Agreement supporting any such assertion of rights
by Executive or the Company, respectively.
(e) Date of Termination. "Date of Termination" means (i) if
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Executive's employment is terminated other than by reason of death, Disability
or Retirement, the date of receipt of the Notice of Termination, or any later
date specified therein (which shall not be more than 60 days after the date of
delivery of the Notice of Termination), or (ii) if Executive's employment is
terminated by reason of death, Disability or Retirement, the Date of Termination
will be the date of death or Retirement, or the Disability Effective Date, as
the case may be.
8. Obligations of the Company upon Termination.
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(a) Prior to a Change in Control: Termination by Executive for Good
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Reason; Termination by the Company Other Than for Poor Performance, Cause or
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Disability. If, prior to a Change in Control and before the second anniversary
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of the Effective Date, the Company shall terminate Executive's employment other
than for Poor Performance, Cause or Disability, or Executive shall terminate
employment for Good Reason within a period of 90 days after the occurrence of
the event giving rise to Good Reason, then (and with respect to the payments and
benefits described in clauses (ii) through (vii) below, only if Executive
executes a Release in substantially the form of Exhibit B hereto (the
"Release")):
(i) the Company shall pay to Executive in a lump sum in cash
within 30 days after the Date of Termination the sum of (A) Executive's Base
Salary through the Date of Termination to the extent not theretofore paid, and
(B) any accrued vacation pay to the extent not theretofore paid (the sum of the
amounts described in clauses (A) and (B) shall be hereinafter referred to as the
"Accrued Obligations"); and
(ii) for the period of 18 months from the Date of Termination
(the "Normal Severance Period"), the Company will continue to pay Executive a
monthly amount equal to his monthly Base Salary, payable in equal bi-weekly or
more frequent installments as are customary under the Company's payroll
practices from time to time; provided, however, that if Executive becomes
employed by another employer during the Normal Severance Period, the payments by
the Company hereunder shall be reduced dollar for dollar (but not below zero) by
the monthly salary payable to Executive by such other employer during such
period; and provided, further, that the Company's obligation to make or continue
any such payments shall cease if Executive violates any of the Restrictive
Covenants (as defined in Section 13(b) of this Agreement) and fails to remedy
such violation to the reasonable satisfaction of the Board within 10 days of
written notice describing such violation with reasonable specificity; and
(iii) during the Normal Severance Period, the Company shall
continue benefits to Executive and/or Executive's family at least equal to those
which would have been provided to them in accordance with the Welfare Plans
described in Section 5(c) of this Agreement if Executive's employment had not
been terminated; provided, however, that if Executive becomes re-employed with
another employer and is eligible to receive medical or other welfare benefits
under another employer provided plan, the medical and other welfare benefits
described herein shall be secondary to those provided under such other plan
during such applicable period of eligibility; and provided, further that the
Company's obligation to provide such benefits shall cease if Executive violates
any of the Restrictive Covenants (as defined in Section 13(b) of this Agreement)
and fails to remedy such violation to the reasonable satisfaction of the Board
within 10 days of written notice describing such violation with reasonable
specificity; and
(iv) not later than 30 days after the Date of Termination,
Executive will be paid a bonus for the year in which the Date of Termination
occurs in an amount
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equal to the greater of (1) 50% of his potential Bonus Opportunity (as defined
in Section 5(b)(i))) for such year, assuming for purposes of this clause (1)
full satisfaction of all performance objectives, or (2) 100% of his Bonus
Opportunity (prorated through the Date of Termination) adjusted up or down for
purposes of this clause (2) by reference to his year-to-date performance at the
Date of Termination in relation to the prior established performance objectives
under Executive's bonus plan for such year; provided, however that the bonus
payment described in this Section 8(a)(iv) shall be reduced by the amount (if
any) of the Bonus Opportunity that Executive had previously elected to receive
in the form of restricted stock of the Company; and
(v) all grants of restricted stock of the Company ("Restricted
Stock") held by Executive as of the Date of Termination will become immediately
vested as of the Date of Termination; and
(vi) all of Executive's options to acquire Common Stock of the
Company ("Options") that would have become exercisable (by lapse of time) within
the 24-month period following the Date of Termination had Executive remained
employed during such period will become immediately vested and exercisable as of
the Date of Termination; and
(vii) notwithstanding the provisions of the applicable Option
agreement, all of Executive's vested but unexercised Options as of the Date of
Termination (including those with accelerated vesting pursuant to Section
8(a)(vi) above) shall remain exercisable through the earlier of (A) the original
expiration date of the Option, or (B) the 90th day following the end of the
Normal Severance Period; and
(viii) to the extent not theretofore paid or provided, the Company
shall timely pay or provide to Executive any other amounts or benefits required
to be paid or provided or which Executive is eligible to receive under any plan,
program, policy or practice or contract or agreement of the Company (such other
amounts and benefits shall be hereinafter referred to as the "Other Benefits").
(b) Prior to a Change in Control: Termination by the Company for Poor
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Performance. If, prior to the occurrence of a Change in Control and before the
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second anniversary of the Effective Date, the Company shall terminate
Executive's employment for Poor Performance, then (and with respect to the
payments and benefits described in clauses (ii) through (vii) below, only if
Executive executes the Release):
(i) the Company shall pay to Executive the Accrued Obligations in a
lump sum in cash within 30 days after the Date of Termination; and
(ii) for the period of 12 months after the Date of Termination (the
"Poor Performance Severance Period"), the Company will continue to pay Executive
a monthly amount equal to his monthly Base Salary, payable in equal bi-weekly or
more frequent installments as are customary under the Company's payroll
practices from time
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to time; provided, however, that if Executive becomes employed by another
employer during the Poor Performance Severance Period, the payments by the
Company hereunder shall be reduced dollar for dollar (but not below zero) by the
monthly salary payable to Executive by such other employer during such period;
and provided, further, that the Company's obligation to make or continue any
such payments shall cease if Executive violates any of the Restrictive Covenants
(as defined in Section 13(b) of this Agreement) and fails to remedy such
violation to the reasonable satisfaction of the Board within 10 days of written
notice describing such violation with reasonable specificity; and
(iii) during the Poor Performance Severance Period, the Company shall
continue benefits to Executive and/or Executive's family at least equal to those
which would have been provided to them in accordance with the Welfare Plans
described in Section 5(c) of this Agreement if Executive's employment had not
been terminated; provided, however, that if Executive becomes re-employed with
another employer and is eligible to receive medical or other welfare benefits
under another employer provided plan, the medical and other welfare benefits
described herein shall be secondary to those provided under such other plan
during such applicable period of eligibility; and provided, further that the
Company's obligation to provide such benefits shall cease if Executive violates
any of the Restrictive Covenants (as defined in Section 13(b) of this Agreement)
and fails to remedy such violation to the reasonable satisfaction of the Board
within 10 days of written notice describing such violation with reasonable
specificity; and
(iv) not later than 30 days after the Date of Termination, Executive
will be paid a bonus for the year in which the Date of Termination occurs in an
amount equal to 100% of his Bonus Opportunity (prorated through the Date of
Termination) adjusted up or down by reference to his year-to-date performance at
the Date of Termination in relation to the prior established performance
objectives under Executive's bonus plan for such year; provided, however that
the bonus payment described in this Section 8(b)(iv) shall be reduced by the
amount (if any) of the Bonus Opportunity that Executive had previously elected
to receive in the form of restricted stock of the Company; and
(v) all grants of Restricted Stock held by Executive as of the Date
of Termination that would have become vested (by lapse of time) within the 24-
month period following the Date of Termination had Executive remained employed
during such period will become immediately vested as of the Date of Termination;
and
(vi) all of Executive's Options that would have become exercisable
(by lapse of time) within the 24-month period following the Date of Termination
had Executive remained employed during such period will become immediately
vested and exercisable as of the Date of Termination; and
(vii) notwithstanding the provisions of the applicable Option
agreement, all of Executive's vested but unexercised Options as of the Date of
Termination (including those with accelerated vesting pursuant to the Section
8(b)(vi)
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above) shall remain exercisable through the earlier of (A) the original
expiration date of the Option, or (B) the 90th day following the end of the
later of (1) six months from the Date of Termination, or (2) the end of the Poor
Performance Severance Period; and
(viii) to the extent not theretofore paid or provided, the Company
shall timely pay or provide to Executive his Other Benefits.
(c) Prior to a Change in Control: Termination by Executive for Failure of
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Condition Subsequent. If, prior to the occurrence of a Change in Control and
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before the second anniversary of the Effective Date, Executive shall terminate
employment for Failure of Condition Subsequent, then (and with respect to the
payments and benefits described in clauses (ii) through (vi) below, only if
Executive executes the Release):
(i) the Company shall pay to Executive the Accrued Obligations in a
lump sum in cash within 30 days after the Date of Termination; and
(ii) for the period of 12 months after the Date of Termination (the
"Condition Subsequent Severance Period"), the Company will continue to pay
Executive a monthly amount equal to the sum of (A) his monthly Base Salary as in
effect on the Date of Termination plus (B) one-twelfth of his target Bonus
Opportunity for the year in which the Date of Termination occurs, payable in
equal bi-weekly or more frequent installments as are customary under the
Company's payroll practices from time to time; provided, however, that if
Executive becomes employed by another employer during the Condition Subsequent
Severance Period, the payments by the Company hereunder shall be reduced dollar
for dollar (but not below zero) by the monthly salary and prorata monthly target
bonus payable to Executive by such other employer with respect to such period;
and provided, further, that the Company's obligation to make or continue any
such payments shall cease if Executive violates any of the Restrictive Covenants
(as defined in Section 13(b) of this Agreement) and fails to remedy such
violation to the reasonable satisfaction of the Board within 10 days of written
notice describing such violation with reasonable specificity; and
(iii) during the Condition Subsequent Severance Period, the Company
shall continue benefits to Executive and/or Executive's family at least equal to
those which would have been provided to them in accordance with the Welfare
Plans described in Section 5(c) of this Agreement if Executive's employment had
not been terminated; provided, however, that if Executive becomes re-employed
with another employer and is eligible to receive medical or other welfare
benefits under another employer provided plan, the medical and other welfare
benefits described herein shall be secondary to those provided under such other
plan during such applicable period of eligibility; and provided, further that
the Company's obligation to provide such benefits shall cease if Executive
violates any of the Restrictive Covenants (as defined in Section 13(b) of this
Agreement) and fails to remedy such violation to the reasonable satisfaction of
the Board within 10 days of written notice describing such violation with
reasonable specificity; and
-11-
(iv) all grants of Restricted Stock held by Executive as of the
Date of Termination will become immediately vested as of the Date of
Termination; and
(v) to the extent not theretofore paid or provided, the
Company shall timely pay or provide to Executive his Other Benefits.
(d) After or in Connection with a Change in Control. If there occurs
-----------------------------------------------
a Change in Control and, within 36 months following such Change in Control (or
if Executive can reasonably show that such termination by the Company was in
anticipation of the Change in Control), the Company shall terminate Executive's
employment other than for Cause or Disability, or Executive shall terminate
employment for Failure of Condition Subsequent or for Good Reason, then (and
with respect to the payments and benefits described in clauses (ii) through
(vii) below, only if Executive executes the Release):
(i) the Company (or any successor to the Company's eCommerce
line of business) shall pay to Executive the Accrued Obligations in a lump sum
in cash within 30 days after the Date of Termination; and
(ii) for 24 months after the Date of Termination (the "Change
in Control Severance Period"), the Company (or any successor to the Company's
eCommerce line of business) will, as a severance benefit, continue to pay
Executive a monthly amount equal to his monthly Base Salary, payable in equal
bi-weekly or more frequent installments as are customary under the Company's
payroll practices from time to time; provided, however that the Company's
obligation to make or continue such payments shall cease if Executive violates
any of the Restrictive Covenants (as defined in Section 13(b) of this Agreement)
and fails to remedy such violation to the reasonable satisfaction of the Board
within 10 days of written notice describing such violation with reasonable
specificity; and
(iii) during the Change in Control Severance Period, the
Company shall continue benefits to Executive and/or Executive's family at least
equal to those which would have been provided to them in accordance with the
Welfare Plans described in Section 5(c) of this Agreement if Executive's
employment had not been terminated; provided, however, that if Executive becomes
re-employed with another employer and is eligible to receive medical or other
welfare benefits under another employer provided plan, the medical and other
welfare benefits described herein shall be secondary to those provided under
such other plan during such applicable period of eligibility; and provided,
further that the Company's obligation to provide such benefits shall cease if
Executive violates any of the Restrictive Covenants (as defined in Section 13(b)
of this Agreement) and fails to remedy such violation to the reasonable
satisfaction of the Board within 10 days of written notice describing such
violation with reasonable specificity; and
(iv) not later than 30 days after the Date of Termination,
Executive will be paid a bonus for the year in which the Date of Termination
occurs in an amount
-12-
equal to 100% of his potential Bonus Opportunity (as defined in Section
5(b)(i)), assuming for this purposes full satisfaction of all performance
objectives; provided, however that the bonus payment described in this Section
8(d)(iv) shall be reduced by the amount (if any) of the Bonus Opportunity that
Executive had previously elected to receive in the form of restricted stock of
the Company; and
(v) all grants of Restricted Stock held by Executive as of
the Date of Termination will become immediately vested as of the Date of
Termination; and
(vi) all of Executive's Options outstanding on the Date of
Termination will become immediately vested and exercisable as of the Date of
Termination; and
(vii) notwithstanding the provisions of the applicable Option
agreement, all of Executive's vested but unexercised Options as of the Date of
Termination (including those with accelerated vesting pursuant to the Section
8(d)(vi) above) shall remain exercisable through the earlier of (A) the original
expiration date of the Option, or (B) the 90th day following the end of the
Change in Control Severance Period; and
(viii) to the extent not theretofore paid or provided, the
Company shall timely pay or provide to Executive his Other Benefits.
(e) Death, Disability or Retirement. Regardless of whether or not a
-------------------------------
Change in Control shall have occurred, if Executive's employment is terminated
by reason of Executive's death, Disability or Retirement, this Agreement shall
terminate without further obligations to Executive or his estate or legal
representatives under this Agreement, other than for payment of Accrued
Obligations and the timely payment or provision of Other Benefits (including the
acceleration of vesting of options and other awards, as specified in the
applicable plan or agreement evidencing such options or other awards). Accrued
Obligations shall be paid to Executive's estate or beneficiary, as applicable,
in a lump sum in cash within 30 days of the Date of Termination. With respect to
the provision of Other Benefits, the term Other Benefits as used in this Section
8(e) shall include, without limitation, and Executive or his estate and/or
beneficiaries shall be entitled to receive, benefits under such plans, programs,
practices and policies relating to death, disability or retirement benefits, if
any, as are applicable to Executive on the Date of Termination.
(f) Cause or Voluntary Termination. Regardless of whether or not a
------------------------------
Change in Control shall have occurred, if Executive's employment shall be
terminated for Cause, or if Executive voluntarily terminates employment without
Good Reason and not for Failure of Condition Subsequent, then: (i) this
Agreement shall terminate without further obligations to Executive, other than
for payment of Accrued Obligations and the timely payment or provision of Other
Benefits, and (ii) if such termination occurs prior to the first anniversary of
the Effective Date, Executive shall promptly (no later than 30 days
-13-
after the Date of Termination) reimburse to the Company the $75,000 advance of
his annual bonus for such year as provided in Section 5(b)(i), plus an amount
equal to (A) any relocation costs paid by the Company pursuant to Section 5(f)
multiplied by (B) a fraction, the numerator of which is the number of days
remaining from the Date of Termination to April 1, 2001, and the denominator of
which is 365.
(g) Allocation of Certain Payments. The Company and Executive agree
------------------------------
that 50% of any payments made to Executive under Section 8(a)(ii), 8(b)(ii),
8(c)(ii) or 8(d)(ii) shall constitute consideration for Executive's Restrictive
Covenants in Section 13 of this Agreement.
9. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or
-------------------------
limit Executive's continuing or future participation in any plan, program,
policy or practice provided by the Company and for which Executive may qualify,
nor, subject to Section 17(d), shall anything herein limit or otherwise affect
such rights as Executive may have under any contract or agreement with the
Company. Amounts which are vested benefits or which Executive is otherwise
entitled to receive under any plan, policy, practice or program of or any
contract or agreement with the Company at or subsequent to the Date of
Termination shall be payable in accordance with such plan, policy, practice or
program or contract or agreement except as explicitly modified by this
Agreement.
10. Certain Additional Payments by the Company.
------------------------------------------
(a) Anything in this Agreement to the contrary notwithstanding and
except as set forth below, in the event it shall be determined that any payment
or distribution by the Company to or for the benefit of Executive (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 10) (a "Payment") would be subject to the excise tax
imposed by Section 4999 of the Code or any interest or penalties are due from or
asserted against Executive 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 Executive shall be entitled to receive an
additional payment (a "Gross-Up Payment") in an amount such that Executive shall
be in the same after-tax position (taking into account all additional federal,
state and local income, employment and excise taxes imposed on the Gross-Up
Payment, as well as any related interest and penalties) as if Section 4999 of
the Code did not exist. Notwithstanding the foregoing provisions of this
Section 10(a), if it shall be determined that Executive is entitled to a Gross-
Up Payment, but the after-tax cost of the Executive of eliminating the Excise
Tax through a reduction in the present value of the Payments to an amount (the
"Reduced Amount") such that the receipt of the Payments would not give rise to
any Excise Tax is less than $50,000, the present value of the aggregate Payments
shall be reduced to the Reduced Amount. In that event, Executive shall direct
which Payments are to be deferred, reduced or eliminated.
-14-
(b) Subject to the provisions of Section 10(c), all determinations
required to be made under this Section 10, 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 Arthur
Andersen LLP or such other certified public accounting firm reasonably
acceptable to the Company as may be designated by Executive (the "Accounting
Firm") which shall provide detailed supporting calculations both to the Company
and Executive within 15 business days of the receipt of notice from Executive
that there has been or will be a Payment, or such earlier time as is requested
by the Company. In the event that the Accounting Firm is serving as accountant
or auditor for the individual, entity or group effecting the Change in Control,
Executive shall appoint another nationally recognized accounting firm to make
the determinations required hereunder (which accounting firm shall then be
referred to as the Accounting Firm hereunder). All fees and expenses of the
Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as
determined pursuant to this Section 10, shall be paid by the Company to
Executive within five days of the receipt of the Accounting Firm's
determination. Any determination by the Accounting Firm shall be binding upon
the Company and Executive. As a result of the uncertainty in the application of
Section 4999 of the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that Gross-Up Payments which will not
have been made by the Company should have been made ("Underpayment"), consistent
with the calculations required to be made hereunder. In the event that the
Company exhausts its remedies pursuant to Section 10(c) and Executive thereafter
is required to make a payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for the benefit of
Executive.
(c) The Executive shall notify the Company in writing of any claim by
the Internal Revenue Service that, if successful, would require the payment by
the Company of the Gross-Up Payment or an Underpayment. Such notification shall
be given as soon as practicable but no later than ten business days after
Executive actually receives written notice of such claim and shall apprise the
Company of the nature of such claim and the date on which such claim is
requested to be paid. The Executive shall not pay such claim prior to the
expiration of the 30-day period following the date on which the Executive gives
such notice to the Company (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due). If the Company notifies
Executive in writing prior to the expiration of such period that it desires to
contest such claim, Executive shall:
(i) give the Company any information reasonably requested by
the Company relating to such claim,
(ii) take such action in connection with contesting such claim
as the Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim by
an attorney reasonably selected by the Company (it being understood that this
shall not limit
-15-
Executive's right at his own expense to select separate counsel to verify any
determination of a Gross-Up Payment),
(iii) cooperate with the Company in good faith in order
effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings
relating to such claim;
provided, however, that the Company 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 Executive harmless, on an after-
tax basis, for any Excise Tax or income tax (including interest and penalties
with respect thereto) ultimately imposed on account of the Payments as well as
the Company's payment of costs and expenses. Without limitation of the
foregoing provisions of this Section 10(c), the Company shall control all
proceedings taken in connection with such contest and, at its sole option, may
pursue or forgo any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at its
sole option, either direct Executive to pay the tax claimed and sue for a refund
or contest the claim in any permissible manner, and Executive 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 the
Company shall determine; provided, however, that if the Company directs
Executive to pay such claim and sue for a refund, the Company shall advance the
amount of such payment to Executive, on an interest-free basis and shall
indemnify and hold Executive harmless, on an after-tax basis, from any Excise
Tax, income tax and/or employment taxes (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 Executive with respect to which such contested amount is claimed
to be due is limited solely to such contested amount. Furthermore, the Company's
control of the contest shall be limited to issues with respect to which a Gross-
Up Payment would be payable hereunder and Executive 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.
(d) If, after the receipt by Executive of an amount advanced by the
Company pursuant to Section 10(c), Executive becomes entitled to receive any
refund with respect to such claim, Executive shall (subject to the Company's
complying with the requirements of Section 10(c)) promptly pay to the Company
the amount of such refund (together with any interest paid or credited thereon
after taxes applicable thereto). If, after the receipt by Executive of an
amount advanced by the Company pursuant to Section 10(c), a determination is
made that Executive shall not be entitled to any refund with respect to such
claim and the Company does not notify Executive in writing of its intent to
contest such denial of refund prior to the expiration of 30 days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid
-16-
and the amount of such advance shall offset, to the extent thereof, the amount
of Gross-Up Payment required to be paid.
11. Costs of Enforcement. Unless otherwise provided by the arbitrator(s)
--------------------
in an arbitration proceeding pursuant to Section 14 hereof, in any action taken
in good faith relating to the enforcement of this Agreement or any provision
herein, Executive shall be entitled to be paid any and all costs and expenses
incurred by him in enforcing or establishing his rights thereunder, including,
without limitation, reasonable attorneys' fees, whether an arbitration
proceeding or suit be brought or not, and whether or not incurred in
arbitration, trial, bankruptcy or appellate proceedings. Such legal fees and
expenses shall be paid in advance upon submission of requests from Executive's
attorneys for a retainer fee.
12. Representations and Warranties. Executive hereby represents and
------------------------------
warrants to the Company that Executive is not a party to, or otherwise subject
to, any covenant not to compete with any person or entity, and Executive's
execution of this Agreement and performance of his obligations hereunder will
not violate the terms or conditions of any contract or obligation, written or
oral, between Executive and any other person or entity.
13. Restrictions on Conduct of Executive.
------------------------------------
(a) General. Executive and the Company understand and agree that the
-------
purpose of the provisions of this Section 13 is to protect legitimate business
interests of the Company, as more fully described below, and is not intended to
eliminate Executive's post-employment competition with the Company per se, nor
------
is it intended to impair or infringe upon Executive's right to work, earn a
living, or acquire and possess property from the fruits of his labor. Executive
hereby acknowledges that the post-employment restrictions set forth in this
Section 13 are reasonable and that they do not, and will not, unduly impair his
ability to earn a living after the termination of this Agreement. Therefore,
subject to the limitations of reasonableness imposed by law, Executive shall be
subject to the restrictions set forth in this Section 13.
(b) Definitions. The following terms used in this Section 13 shall
-----------
have the meanings assigned to them below, which definitions shall apply to both
the singular and the plural forms of such terms:
"Competitive Position" means any employment with a Competitor in
--------------------
which Executive will use or is likely to use any Confidential Information or
Trade Secrets, or in which Executive has duties for such Competitor that relate
to Competitive Services and that are the same or similar to those services
actually performed by Executive for the Company;
"Competitive Services" means the provision of products and
--------------------
services to facilitate or assist with the electronic, transmission of payment
and financial information, merchant and cardholder processing, credit and debit
transaction processing, check
-17-
guarantee and verification, electronic authorization and capture, terminal
management services, portfolio risk management, purchase card services,
financial electronic data interchange, and cash management services, including
internet applications of any of the foregoing.
"Competitor" means any Person engaged, wholly or in part, in
----------
Competitive Services, including without limitation, Equifax Inc., Vital,
Electronic Data Systems Corporation, Concord EFS, Inc., First Data Corporation,
Total System Services, Inc., Nova Corporation, Harbinger Corporation, First USA,
Inc., First USA Paymentech, Inc., and Automatic Data Processing, Inc.
"Confidential Information" means all information regarding the
------------------------
Company, its activities, business or clients that is the subject of reasonable
efforts by the Company to maintain its confidentiality and that is not generally
disclosed by practice or authority to persons not employed by the Company, but
that does not rise to the level of a Trade Secret. "Confidential Information"
shall include, but is not limited to, financial plans and data concerning the
Company; management planning information; business plans; operational methods;
market studies; marketing plans or strategies; product development techniques or
plans; lists of current or prospective customers; details of customer contracts;
current and anticipated customer requirements; past, current and planned
research and development; business acquisition plans; and new personnel
acquisition plans, in each case, to the extent such information does not rise to
the level of a Trade Secret. "Confidential Information" shall not include
information that has become generally available to the public by the act of one
who has the right to disclose such information without violating any right or
privilege of the Company. This definition shall not limit any definition of
"confidential information" or any equivalent term under state or federal law.
"Determination Date" means the date of termination of Executive's
------------------
employment with the Company for any reason whatsoever or any earlier date of an
alleged breach of the Restrictive Covenants by Executive.
"Person" means any individual or any corporation, partnership,
------
joint venture, limited liability company, association or other entity or
enterprise.
"Principal or Representative" means a principal, owner, partner,
---------------------------
shareholder, joint venturer, investor, member, trustee, director, officer,
manager, employee, agent, representative or consultant.
"Protected Customers" means any Persons to whom NDC eCommerce has
-------------------
sold its products or services or solicited to sell its products or services
during the twelve (12) months prior to the Determination Date.
-18-
"Protected Employees" means employees of the Company who were
-------------------
employed by the Company at any time within six (6) months prior to the
Determination Date.
"Restricted Period" means the Employment Period and a period
-----------------
extending two (2) years from the termination of Executive's employment with the
Company.
"Restricted Territory" means the States of California, Florida,
--------------------
Georgia, Illinois, Maryland, Michigan, New York, Pennsylvania and Texas, plus
Canada, the United Kingdom and South America.
"Restrictive Covenants" means the restrictive covenants contained
---------------------
in Section 13(c) hereof.
"Trade Secret" means all information, without regard to form,
------------
including, but not limited to, technical or nontechnical data, a formula, a
pattern, a compilation, a program, a device, a method, a technique, a drawing, a
process, financial data, financial plans, product plans, distribution lists or a
list of actual or potential customers, advertisers or suppliers which is not
commonly known by or available to the public and which information: (A) derives
economic value, actual or potential, from not being generally known to, and not
being readily ascertainable by proper means by, other persons who can obtain
economic value from its disclosure or use; and (B) is the subject of efforts
that are reasonable under the circumstances to maintain its secrecy. Without
limiting the foregoing, Trade Secret means any item of Confidential Information
that constitutes a "trade secret(s)" under the common law or applicable state
law.
(c) Restrictive Covenants.
---------------------
(i) Restriction on Disclosure and Use of Confidential
-------------------------------------------------
Information and Trade Secrets. Executive understands and agrees that the
- -----------------------------
Confidential Information and Trade Secrets constitute valuable assets of the
Company and its affiliated entities, and may not be converted to Executive's own
use. Accordingly, Executive hereby agrees that Executive shall not, directly or
indirectly, at any time during the Restricted Period reveal, divulge, or
disclose to any Person not expressly authorized by the Company any Confidential
Information, and Executive shall not, directly or indirectly, at any time during
the Restricted Period use or make use of any Confidential Information in
connection with any business activity other than that of the Company. Throughout
the term of this Agreement and at all times after the date that this Agreement
terminates for any reason, Executive shall not directly or indirectly transmit
or disclose any Trade Secret of the Company to any Person, and shall not make
use of any such Trade Secret, directly or indirectly, for himself or for others,
without the prior written consent of the Company. The parties acknowledge and
agree that this Agreement is not intended to, and does not, alter either the
Company's rights or Executive's obligations under any state or federal statutory
or common law regarding trade secrets and unfair trade practices.
-19-
Anything herein to the contrary notwithstanding, Executive shall
not be restricted from disclosing or using Confidential Information that is
required to be disclosed by law, court order or other legal process; provided,
however, that in the event disclosure is required by law, Executive shall
provide the Company with prompt notice of such requirement so that the Company
may seek an appropriate protective order prior to any such required disclosure
by Executive.
(ii) Nonsolicitation of Protected Employees. Executive
--------------------------------------
understands and agrees that the relationship between the Company and each of its
Protected Employees constitutes a valuable asset of the Company and may not be
converted to Executive's own use. Accordingly, Executive hereby agrees that
during the Restricted Period Executive shall not directly or indirectly on
Executive's own behalf or as a Principal or Representative of any Person or
otherwise solicit or induce any Protected Employee to terminate his or her
employment relationship with the Company or to enter into employment with any
other Person.
(iii) Restriction on Relationships with Protected Customers.
-----------------------------------------------------
Executive understands and agrees that the relationship between the Company and
each of its Protected Customers constitutes a valuable asset of the Company and
may not be converted to Executive's own use. Accordingly, Executive hereby
agrees that, during the Restricted Period, Executive shall not, without the
prior written consent of the Company, directly or indirectly, on Executive's own
behalf or as a Principal or Representative of any Person, solicit, divert, take
away or attempt to solicit, divert or take away a Protected Customer for the
purpose of providing or selling Competitive Services; provided, however, that
the prohibition of this covenant shall apply only to Protected Customers with
whom Executive had Material Contact on the Company's behalf during the twelve
(12) months immediately preceding the termination of his employment hereunder.
For purposes of this Agreement, Executive had "Material Contact" with a
Protected Customer if (a) he had business dealings with the Protected Customer
on the Company's behalf; (b) he was responsible for supervising or coordinating
the dealings between the Company and the Protected Customer; or (c) he obtained
Trade Secrets or Confidential Information about the customer as a result of his
association with the Company.
(iv) Noncompetition with the Company. The parties acknowledge:
-------------------------------
(A) that Executive's services under this Agreement require special expertise and
talent in the provision of Competitive Services and that Executive will have
substantial contacts with customers, suppliers, advertisers and vendors of the
Company; (B) that pursuant to this Agreement, Executive will be placed in a
position of trust and responsibility and he will have access to a substantial
amount of Confidential Information and Trade Secrets and that the Company is
placing him in such position and giving him access to such information in
reliance upon his agreement not to compete with the Company during the
Restricted Period; (C) that due to his management duties, Executive will be the
repository of a substantial portion of the goodwill of the Company and would
have an unfair advantage in competing with the Company; (D) that due to
Executive's special experience
-20-
and talent, the loss of Executive's services to the Company under this Agreement
cannot reasonably or adequately be compensated solely by damages in an action at
law; (E) that Executive is capable of competing with the Company; and (F) that
Executive is capable of obtaining gainful, lucrative and desirable employment
that does not violate the restrictions contained in this Agreement. In
consideration of the compensation and benefits being paid and to be paid by the
Company to Executive hereunder, Executive hereby agrees that, during the
Restricted Period, Executive will not, without prior written consent of the
Company, directly or indirectly seek or obtain a Competitive Position in the
Restricted Territory with a Competitor; provided, however, that the provisions
of this Agreement shall not be deemed to prohibit the ownership by Executive of
any securities of the Company or its affiliated entities or not more than five
percent (5%) of any class of securities of any corporation having a class of
securities registered pursuant to the Securities Exchange Act of 1934, as
amended.
(d) Enforcement of Restrictive Covenants.
------------------------------------
(i) Rights and Remedies Upon Breach. In the event Executive
-------------------------------
breaches, or threatens to commit a breach of, any of the provisions of the
Restrictive Covenants, the Company shall have the following rights and remedies,
which shall be independent of any others and severally enforceable, and shall be
in addition to, and not in lieu of, any other rights and remedies available to
the Company at law or in equity:
(A) the right and remedy to enjoin, preliminarily and
permanently, Executive from violating or threatening to violate the Restrictive
Covenants and to have the Restrictive Covenants specifically enforced by any
court of competent jurisdiction, it being agreed that any breach or threatened
breach of the Restrictive Covenants would cause irreparable injury to the
Company and that money damages would not provide an adequate remedy to the
Company; and
(B) the right and remedy to require Executive to
account for and pay over to the Company all compensation, profits, monies,
accruals, increments or other benefits derived or received by Executive as the
result of any transactions constituting a breach of the Restrictive Covenants.
(ii) Severability of Covenants. Executive acknowledges and
-------------------------
agrees that the Restrictive Covenants are reasonable and valid in time and scope
and in all other respects. The covenants set forth in this Agreement shall be
considered and construed as separate and independent covenants. Should any part
or provision of any covenant be held invalid, void or unenforceable in any court
of competent jurisdiction, such invalidity, voidness or unenforceability shall
not render invalid, void or unenforceable any other part or provision of this
Agreement. If any portion of the foregoing provisions is found to be invalid or
unenforceable by a court of competent jurisdiction because its duration, the
territory, the definition of activities or the definition of information covered
is considered to be invalid or unreasonable in scope, the invalid or
unreasonable term shall be redefined, or a new enforceable term provided, such
that the intent of the Company and
-21-
Executive in agreeing to the provisions of this Agreement will not be impaired
and the provision in question shall be enforceable to the fullest extent of the
applicable laws.
14. Arbitration. Any claim or dispute arising under this Agreement
-----------
(other than under Section 13) shall be subject to arbitration, and prior to
commencing any court action, the parties agree that they shall arbitrate all
such controversies. The arbitration shall be conducted in Atlanta, Georgia, in
accordance with the Employment Dispute Rules of the American Arbitration
Association and the Federal Arbitration Act, 9 U.S.C. (S)1, et. seq. The
arbitrator(s) shall be authorized to award both liquidated and actual damages,
in addition to injunctive relief, but no punitive damages. The arbitrator(s)
may also award attorney's fees and costs, without regard to any restriction on
the amount of such award under Georgia or other applicable law. Such an award
shall be binding and conclusive upon the parties hereto, subject to 9 U.S.C.
(S)10. Each party shall have the right to have the award made the judgment of a
court of competent jurisdiction.
Initials of parties as to this Section 14:
Company (by R.A.Y.): _________
Executive: _________
15. Letter of Credit. In order to ensure the payment of the severance
----------------
benefit provided for in Section 8(c)(ii) of this Agreement, immediately
following the commencement of any action by a third party with the aim of
effecting a Change in Control of the Company, or the publicly-announced threat
by a third party to commence any such action, the Company shall establish an
irrevocable standby Letter of Credit issued by a national banking association in
favor of Executive in the amount of the severance payment that would have been
paid to Executive under Section 8(c)(ii) if the Date of Termination had occurred
on the date of commencement, or publicly-announced threat of commencement, of
such action by the third party. Such Letter of Credit shall provide that the
issuer thereof, subject only to Executive's written certification to such issuer
that Executive is entitled to payment of the severance benefit pursuant to
Section 8(c)(ii) of this Agreement and that the Company shall have failed to
commence payment of such benefit to Executive, shall have the unconditional
obligation to pay the amount of such Letter of Credit to Executive in 24 equal
monthly installments commencing on the first day of the month following the Date
of Termination. In the event that subsequent to commencement of such
installment payments to Executive pursuant to such Letter of Credit (i) the
Company and Executive shall mutually agree that Executive shall not have been
entitled to payment of the severance benefit pursuant to Section 8(c)(ii) of
this Agreement or (ii) a court of competent jurisdiction shall finally adjudge
Executive not to have been entitled to payment of such severance benefit and
such judgment shall have been affirmed on appeal or shall not have been appealed
within any time period specified for the filing of an appeal, Executive shall
promptly pay to the Company the total amount previously paid to Executive by the
issuer of such Letter of Credit and no further payment shall be made to
Executive pursuant to such Letter of Credit.
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16. Assignment and Successors.
-------------------------
(a) This Agreement is personal to Executive and without the prior
written consent of the Company shall not be assignable by Executive otherwise
than by will or the laws of descent and distribution. This Agreement shall
inure to the benefit of and be enforceable by the Executive's legal
representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successor and assigns or to any successors and assigns of
substantially all of the assets of the Company's eCommerce line of business.
(c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
17. Miscellaneous.
-------------
(a) Waiver. Failure of either party to insist, in one or more
------
instances, on performance by the other in strict accordance with the terms and
conditions of this Agreement shall not be deemed a waiver or relinquishment of
any right granted in this Agreement or of the future performance of any such
term or condition or of any other term or condition of this Agreement, unless
such waiver is contained in a writing signed by the party making the waiver.
(b) Severability. If any provision or covenant, or any part
------------
thereof, of this Agreement should be held by any court to be invalid, illegal or
unenforceable, either in whole or in part, such invalidity, illegality or
unenforceability shall not affect the validity, legality or enforceability of
the remaining provisions or covenants, or any part thereof, of this Agreement,
all of which shall remain in full force and effect.
(c) Other Agents. Nothing in this Agreement is to be interpreted
------------
as limiting the Company from employing other personnel on such terms and
conditions as may be satisfactory to it.
(d) Entire Agreement. Except as provided herein, this Agreement
----------------
contains the entire agreement between the Company and Executive with respect to
the subject matter hereof and, from and after the Effective Date, this Agreement
shall supersede any other agreement between the parties with respect to the
subject matter hereof, including without limitation, the Offer Letter except to
the extent specifically referenced in Section 5(f) herein.
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(e) Governing Law. Except to the extent preempted by federal law,
-------------
and without regard to conflict of laws principles, the laws of the State of
Georgia shall govern this Agreement in all respects, whether as to its validity,
construction, capacity, performance or otherwise.
(f) Notices. All notices, requests, demands and other
-------
communications required or permitted hereunder shall be in writing and shall be
deemed to have been duly given if delivered or three days after mailing if
mailed, first class, certified mail, postage prepaid:
To Company: National Data Corporation
National Data Plaza
Atlanta, Georgia 30329-2010
To Executive: James G. Kelly
6103 Reserve Drive
Atlanta, Georgia 30319
Any party may change the address to which notices, requests, demands and other
communications shall be delivered or mailed by giving notice thereof to the
other party in the same manner provided herein.
(g) Amendments and Modifications. This Agreement may be amended or
----------------------------
modified only by a writing signed by both parties hereto, which makes specific
reference to this Agreement.
(h) Full Settlement; No Obligation to Mitigate. The Company'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,
counterclaim, recoupment, defense or other claim, right or action which the
Company may have against Executive or others. In no event shall Executive be
obligated to seek other employment or take any other action by way of mitigation
of the amounts payable to Executive under any of the provisions of this
Agreement.
(signatures on following page)
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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Employment Agreement as of the date first above written.
NATIONAL DATA CORPORATION
By: /s/ Robert A. Yellowlees
----------------------------
Robert A. Yellowlees
Chief Executive Officer
EXECUTIVE:
/s/ James G. Kelly
-------------------------------
James G. Kelly
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EXHIBIT A
Description of Responsibilities
-------------------------------
As Chief Financial Officer of NDC eCommerce, Executive's responsibilities
will include, but not be limited to:
. Providing leadership in developing the financial strategy to meet
corporate goals as approved by the Board of Directors
. Coordination of the merger and acquisition activities of NDC eCommerce
following the Spinoff
. Primary responsibility for all financial affairs of NDC eCommerce
. Management of communication with certain external constituencies such
as lenders and stockholders of NDC eCommerce following the Spinoff
. Continuing development of organization, financial systems, financial
management team and workforce for NDC eCommerce
. Membership on the NDC eCommerce Executive Committee and participation
in all significant operational decisions pertaining to NDC eCommerce
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EXHIBIT B
Form of Release
---------------
This Release is granted effective as of the ____ day of _____, ____,
by James G. Kelly ("Executive") in favor of National Data Corporation (the
"Company"). This is the Release referred to that certain Employment Agreement
effective as of April 1, 2000 by and between the Company and Executive (the
"Employment Agreement"). Executive gives this Release in consideration of the
Company's promises and covenants as recited in the Employment Agreement, with
respect to which this Release is an integral part.
1. Release of the Company. Executive, for himself, his successors,
----------------------
assigns, attorneys, and all those entitled to assert his rights, now and forever
hereby releases and discharges the Company and its respective officers,
directors, stockholders, trustees, employees, agents, parent corporations,
subsidiaries, affiliates, estates, successors, assigns and attorneys ("the
Released Parties"), from any and all claims, actions, causes of action, sums of
money due, suits, debts, liens, covenants, contracts, obligations, costs,
expenses, damages, judgments, agreements, promises, demands, claims for
attorney's fees and costs, or liabilities whatsoever, in law or in equity, which
Executive ever had or now has against the Released Parties, including any claims
arising by reason of or in any way connected with any employment relationship
which existed between the Company or any of its parents, subsidiaries,
affiliates, or predecessors, and Executive. It is understood and agreed that
this Release is intended to cover all actions, causes of action, claims or
demands for any damage, loss or injury, which may be traced either directly or
indirectly to the aforesaid employment relationship, or the termination of that
relationship, that Executive has, had or purports to have, from the beginning of
time to the date of this Release, whether known or unknown, that now exists, no
matter how remotely they may be related to the aforesaid employment relationship
including but not limited to claims for employment discrimination under federal
or state law, except as provided in Paragraph 2; claims arising under Title VII
of the Civil Rights Act, 42 U.S.C. (S) 2000(e), et seq. or the Americans With
-- ----
Disabilities Act, 42 U.S.C. (S) 12101 et seq.; claims for statutory or common
-- ----
law wrongful discharge, including any claims arising under the Fair Labor
Standards Act, 29 U.S.C. (S) 201 et seq.; claims for attorney's fees, expenses
-- ----
and costs; claims for defamation; claims for wages or vacation pay; claims for
benefits, including any claims arising under the Executive Retirement Income
Security Act, 29 U.S.C. (S) 1001, et seq.; and provided, however, that nothing
-- ----
herein shall release the Company of its obligations to Executive under the
Employment Agreement or any other contractual obligations between the Company or
its affiliates and Executive, or any indemnification obligations to Executive
under the Company's bylaws, certificate of incorporation, Delaware law or
otherwise.
2. Release of Claims Under Age Discrimination in Employment Act.
------------------------------------------------------------
Without limiting the generality of the foregoing, Executive agrees that by
executing this Release, he has released and waived any and all claims he has or
may have as of the date of this Release for age discrimination under the Age
Discrimination in Employment Act, 29 U.S.C. (S) 621, et seq. It is understood
------
that Executive is advised to consult with an attorney prior to executing this
Release; that he in fact has consulted a knowledgeable,
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competent attorney regarding this Release; that he may, before executing this
Release, consider this Release for a period of twenty-one (21) calendar days;
and that the consideration he receives for this Release is in addition to
amounts to which he was already entitled. It is further understood that this
Release is not effective until seven (7) calendar days after the execution of
this Release and that Executive may revoke this Release within seven (7)
calendar days from the date of execution hereof.
Executive agrees that he has carefully read this Release and is signing it
voluntarily. Executive acknowledges that he has had twenty one (21) days from
receipt of this Release to review it prior to signing or that, if Executive is
signing this Release prior to the expiration of such 21-day period, Executive is
waiving his right to review the Release for such full 21-day period prior to
signing it. Executive has the right to revoke this release within seven (7)
days following the date of its execution by him. However, if Executive revokes
this Release within such seven (7) day period, no severance benefit will be
payable to him under the Employment Agreement and he shall return to the Company
any such payment received prior to that date.
EXECUTIVE HAS CAREFULLY READ THIS RELEASE AND ACKNOWLEDGES THAT IT
CONSTITUTES A GENERAL RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS AGAINST THE
COMPANY UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT. EXECUTIVE ACKNOWLEDGES
THAT HE HAS HAD A FULL OPPORTUNITY TO CONSULT WITH AN ATTORNEY OR OTHER ADVISOR
OF HIS CHOOSING CONCERNING HIS EXECUTION OF THIS RELEASE AND THAT HE IS SIGNING
THIS RELEASE VOLUNTARILY AND WITH THE FULL INTENT OF RELEASING THE COMPANY FROM
ALL SUCH CLAIMS.
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