Exhibit 10.1

 

 

EMPLOYMENT AGREEMENT

BETWEEN

JEFFREY SLOAN

AND

GLOBAL PAYMENTS INC.

Dated as of March 30, 2010

 

 

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EMPLOYMENT AGREEMENT

CONTENTS

 

§ 1.

 

Effective Date

   1

§ 2.

 

Employment

   1

§ 3.

 

Employment Period

   1

§ 4.

 

Extent of Service

   2

§ 5.

 

Compensation and Benefits

   3  

(a)

  

Base Salary

   3  

(b)

  

Incentive and Savings Plans

   3  

(c)

  

Welfare Benefit Plans

   4  

(d)

  

Expenses

   4  

(e)

  

Additional Benefits

   4  

(f)

  

Allowance for Moving and Related Expenses

   4  

(g)

  

Loss on Sale of Residence

   5

§ 6.

 

Change in Control

   6

§ 7.

 

Termination of Employment

   8  

(a)

  

Death, Retirement or Disability

   8  

(b)

  

Termination by the Company Prior to a Change in Control

   8  

(c)

  

Resignation by Executive Prior to a Change in Control

   9  

(d)

  

Termination by the Company After a Change in Control

   10  

(e)

  

Resignation by Executive After a Change in Control

   11  

(f)

  

Notice of Termination

   12  

(g)

  

Date of Termination, “Separation from Service” and Applicable Pay Date

   12

§ 8.

 

Obligations of the Company upon Termination

   13  

(a)

   Prior to a Change in Control: Resignation by Executive for Good Reason;
Termination by the Company Other Than for Cause or Disability    13  

(b)

   After or in Connection with a Change in Control: Resignation by Executive for
Good Reason; Termination by the Company Other Than for Cause or Disability    15
 

(c)

   In Anticipation of a Change in Control: Termination by the Company Other Than
for Cause or Disability or Resignation by Executive for Good Reason    18  

(d)

   Death, Disability or Retirement    20  

(e)

   Cause or Voluntary Termination without Good Reason    21

§ 9.

 

Non-exclusivity of Rights

   21

§ 10.

 

Certain Additional Payments by the Company

   21

§ 11.

 

Costs of Enforcement

   25

§ 12.

 

Representations and Warranties

   26

§ 13.

 

Restrictions on Conduct of Executive

   26  

(a)

  

General

   26  

(b)

  

Definitions

   26  

(c)

  

Restrictive Covenants

   28

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(d)

  

Enforcement of Restrictive Covenants

   30

§ 14.

 

Arbitration

   31

§ 15.

 

Rabbi Trust

   31

§ 16.

 

Assignment and Successors

   32

§ 17.

 

Miscellaneous

   32  

(a)

  

Waiver

   32  

(b)

  

Severability

   32  

(c)

  

Other Agents

   32  

(d)

  

Entire Agreement

   33  

(e)

  

Governing Law

   33  

(f)

  

Notices

   33  

(g)

  

Indemnification

   33  

(h)

  

Amendments and Modifications

   33  

(i)

  

§ 409A

   33  

(j)

  

References

   34  

(k)

  

Accounting Discrepancies

   34

 

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EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into this 30th
day of March 2010 by and between Global Payments Inc., a Georgia corporation
(the “Company”), and Jeffrey Sloan (“Executive”).

BACKGROUND

Executive shall serve as the President of the Company. Executive and the Company
desire to memorialize the terms of such employment in this Agreement. In
addition, the Compensation Committee of the Board of Directors of the Company
(the “Committee”), 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 Executive, notwithstanding the possibility, threat or occurrence
of a Change in Control (as defined in § 6). As it is desired and anticipated
that Executive will continue to be employed and provide services for the
Company’s successor for some period of time 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 Committee
has caused the Company to enter into this Agreement. This Agreement supersedes
any prior agreement or other communication (oral or written) regarding
Executive’s employment.

NOW THEREFORE, in consideration of the foregoing and of the mutual covenants and
agreements set forth in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company and Executive agree as follows:

§ 1. Effective Date. This Agreement is effective as of June 1, 2010, the day
Executive’s employment with the Company shall commence (the “Effective Date”).

§ 2. Employment. Executive is hereby employed as the President of the Company.
In such capacity, Executive shall be responsible for the Company’s corporate
strategy and mergers and acquisitions and for the Company’s lines of business in
North America, and he shall have such other duties and responsibilities
commensurate with such position as shall be assigned to him by the Chief
Executive Officer of the Company (the “Chief Executive Officer”), and Executive
shall report directly and exclusively to the Chief Executive Officer.

§ 3. Employment Period. Subject to § 7, Executive’s initial Employment Period
shall be the period which starts on the Effective Date and then continues
without interruption for the (3) consecutive year period which ends on May 31,
2013; provided, Executive’s initial Employment Period shall automatically be

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extended for one additional year on June 1, 2012 and on each subsequent
anniversary of such date unless either the Company or Executive provides notice
(in accordance with § 17(f)) before such anniversary date that there will be no
such extension. Executive’s initial Employment Period and any subsequent
extension of the initial Employment Period shall be referred to collectively as
Executive’s “Employment Period”. A failure to extend Executive’s Employment
Period shall not be treated for any reason whatsoever as a termination of
Executive’s employment under § 7 unless the Company provides notice that there
will be no such extension following a Change in Control and Executive’s
Employment Period would as a result of such notice end before the second
anniversary of the date of such Change in Control, in which case Executive shall
have the right to resign effective at any time during the 90-day period which
starts on the date of such notice, and the date his resignation is effective
shall be treated as a termination for Good Reason pursuant to § 7(e) of this
Agreement and he shall receive all benefits called for under § 8(b) of this
Agreement.

§ 4. Extent of Service. During the Employment Period, Executive shall render his
services to the Company (or to any successor, including a successor 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 Chief Executive Officer, industry or professional activities;
(ii) manage or participate in personal business interests and investments, so
long as such activities do not, in the judgment of the Chief Executive Officer,
materially interfere with the performance of Executive’s responsibilities under
this Agreement and comply with all Company policies and codes and all of
Executive covenants and agreements; and/or (iii) subject to the approval of the
Committee, serve as a director, trustee, or member of a committee of any
organization involving no conflict of interest with the interests of the Company
so long as such activities do not, in the judgment of the Chief Executive
Officer, materially interfere with the performance of Executive’s
responsibilities under this Agreement and comply with all Company policies and
codes and all of Executive’s covenants and agreements.

 

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§ 5. Compensation and Benefits.

(a) Base Salary. During the Employment Period, the Company will pay to Executive
a base salary in the amount of U.S. $600,000 per year (“Base Salary”), less
normal withholdings, payable in equal bi-weekly or other installments as
provided under the Company’s standard payroll practices in effect for senior
executives from time to time. Executive’s Base Salary will be reviewed at least
annually and, subject to approval of the Committee, the Company may increase
Executive’s Base Salary from time to time. The periodic review of Executive’s
salary by the Committee will consider, among other things, Executive’s own
performance and the Company’s performance.

(b) Incentive and Savings Plans. During the Employment Period, Executive shall
be entitled to participate in all incentive, retirement and savings plans,
practices, policies and programs applicable generally to employees of the
Company at the senior executive level, excluding the Chief Executive Officer.
Certain executive programs will be made available on a selective basis at the
discretion of the Chief Executive Officer, the Board of Directors of the Company
(the “Board”) or the Committee. Without limiting the foregoing, the following
shall apply:

(i) Annual Bonus. Executive will have an annual bonus opportunity for each
fiscal year of the Company based on the achievement of financial and performance
objectives set by the Committee (“Bonus Opportunity”). The annual Bonus
Opportunity and specific performance and financial objectives will be set forth
in Executive’s individual performance and incentive plan for each fiscal year.
Executive’s annual Bonus Opportunity at target levels for any year shall not be
less than 85% of his then current Base Salary for such year. Executive must be
an active employee on the date the annual bonuses are paid on a Company wide
basis in order to be eligible to receive any bonus payment (except as otherwise
expressly provided in § 8) unless Executive’s employment terminates following a
failure to extend his Employment Period in accordance with § 3, his employment
terminates at or after the end of the applicable fiscal year and he satisfies
all or substantially all of the performance requirements for a bonus for such
fiscal year, in which event he shall be eligible for a bonus as determined by
the Committee, and such bonus, if any, shall be paid no later than 2 1/2 months
after the end of such fiscal year.

(ii) Equity Awards. Executive will be eligible to participate in the Company’s
Second Amended and Restated 2005 Incentive Equity Plan (the “2005 Plan”) and any
successor to such plan in accordance with the terms and conditions of the 2005
Plan and any successor to such plan. Further, the Company within the 30-day
period which starts on the Effective Date shall grant Executive a Non-Statutory
Option under the 2005 Plan to purchase 25,000 shares of the Company’s no par
value common stock (“Company Common Stock”) and make a restricted stock grant
under the 2005 Plan for

 

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50,000 shares of Company Common Stock subject to the standard terms and
conditions for such grants under the 2005 Plan except that Executive’s interest
in each such grant shall vest in 25% increments on each anniversary of the date
the grant is made if (except as otherwise expressly provided in § 8) he is still
employed by the Company on such date. Thereafter the Company may, from time to
time, upon approval by the Committee, grant to Executive options to purchase
shares of Company Common Stock, restricted Company Common Stock, restricted
stock units, performance shares, and/or performance units and/or other Company
Common Stock related grants as a long-term incentive for performance.

(c) Welfare Benefit Plans. During the Employment Period, Executive and
Executive’s family shall be eligible for participation in, and shall be eligible
to receive all benefits under, the welfare benefit plans, practices, policies
and programs provided by the Company, including, without limitation, medical,
prescription, dental, disability, employee life, group life, accidental death
and travel accident insurance plans and programs on the same basis as similarly
situated executives of the Company (collectively “Welfare Plans”).

(d) Expenses. During the Employment Period, Executive shall be entitled to
receive prompt reimbursement for all reasonable expenses incurred by Executive
in accordance with the policies, practices and procedures of the Company;
provided, however, (a) the amount of such expenses eligible for reimbursement in
any calendar year shall not affect the expenses eligible for reimbursement in
another calendar year, (b) no such reimbursement may be exchanged or liquidated
for another payment or benefit, and (c) any reimbursements of such expenses
shall be made as soon as practicable under the circumstances but in any event no
later than the end of the calendar year following the calendar year in which the
related expenses are incurred.

(e) Additional Benefits. During the Employment Period, Executive shall be
offered the opportunity to receive or participate in any additional benefits
provided to similarly-situated executives of the Company in accordance with, and
subject to the eligibility requirements of, the plans, practices, programs and
policies of the Company and applicable laws and regulations. Executive also
shall be entitled to up to 25 days of vacation each calendar year, pro-rated for
calendar year 2010.

(f) Allowance for Moving and Related Expenses. The Company on August 15, 2010
shall pay to Executive in a lump sum $500,000 for Executive to use as he sees
fit to cover his moving and other expenses related to his employment by the
Company, plus an additional amount (the lump sum plus the additional amount,
collectively his “Expense Allowance”) (determined using the maximum marginal
federal income tax rate in effect on August 15, 2010) sufficient for Executive
to net $500,000 after paying his federal income tax liability (using such tax
rate) on the Expense Allowance, all net of applicable tax

 

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withholdings, if Executive is still employed by the Company on such date;
provided, however, if Executive’s employment terminates for any reason other
than his resignation for Good Reason, a termination by the Company without
Cause, or the death or Disability of the Executive after August 15, 2010 and
before the first anniversary of the Effective Date, Executive shall no later
than the end of the 30-day period which starts on the date his employment
terminates pay an amount equal to his Expense Allowance to the Company.

(g) Loss on Sale of Residence.

(i) General. If Executive incurs a “Loss” on the sale of his residence at 14
Birch Lane, Short Hills, New Jersey (the “Residence”) in an arm’s length
transaction in connection with moving his family to the Atlanta metropolitan
area, the Company shall reimburse him for such “Loss” as provided in § 5(g)(iii)
if Executive is still employed by the Company on the effective date of a binding
contract for such sale and his Residence is sold pursuant to such binding
contract, or if such Residence is sold pursuant to a binding contract with an
effective date after March 29, 2010 and before June 1, 2010 and Executive’s
employment with the Company actually commences on June 1, 2010. The “effective
date” of such binding contract shall (for purposes of this § 5(g)) be the date
such contract is signed or, if later, the date specified in such contract.

(ii) Definitions. For purposes of this § 5(g),

(1) The term “Loss” means the excess of Executive’s “Basis” in the Residence
over his “Net Proceeds” from the sale of the Residence, up to a cap of
$1,000,000.

(2) The term “Basis” means the price Executive paid for the Residence plus the
cost of any improvements made to the Residence before the Effective Date plus
the cost of any improvements made after the Effective Date which are approved by
the Company, all as documented to the reasonable satisfaction of the Company.

(3) The term “Net Proceeds” means the net proceeds paid on the sale of the
Residence to or on behalf of Executive (or Executive and his spouse) after
deducting the reasonable and customary expenses incurred in connection with such
sale, all as documented to the reasonable satisfaction of the Company.

(iii) Reimbursement. The reimbursement for a “Loss” shall include the amount of
the “Loss” plus an additional amount (the Loss plus the additional amount,
collectively, his “Loss Allowance”) (determined using the maximum marginal
federal income tax rate in effect on the date of the

 

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closing of the sale) sufficient for Executive to net an amount equal to the Loss
after paying his federal income tax liability (using such tax rate) on an amount
equal to the Loss Allowance, and the Loss Allowance shall be paid by the Company
(net of any applicable tax withholdings) pursuant to this §5(g)(iii) as soon as
practicable after the date the sale closes but in no event later than the end of
the 30-day period which starts on the date the sale of the Residence closes or,
if the sale closes before June 1, 2010, as soon as practicable after June 1,
2010 but in no event later than June 30, 2010; provided, however, Executive
shall forfeit his right his Loss Allowance if the Loss Allowance is not paid
pursuant to this §5(g)(iii) before the later of (1) 2 1/2 months after the end
of the calendar year that includes the effective date of the binding contract
described in § 5(g)(i), or (ii) 2 1/2 months after the end of the Company’s
fiscal year that includes the effective date of the binding contract described
in § 5(g)(i).

(iv) Pay Back. If Executive’s employment terminates for any reason other than
his resignation for Good Reason, a termination by the Company without Cause, or
the death or Disability of the Executive before the first anniversary of the
closing of the sale of the Residence, Executive shall no later than the end of
the 30-day period which starts on the date his employment terminates pay an
amount equal to his Loss Allowance to the Company.

§ 6. Change in Control.

(1) For the purposes of this Agreement, a “Change in Control” shall mean:

(a) The acquisition by any individual, entity or group (within the meaning of
§ 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, or (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 meets the requirements of clauses (i) and (ii) of subsection
(b) of this § 6; or

 

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(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 shares of the
Company’s common stock (the “Outstanding Company Common Stock”) and Outstanding
Company Voting Securities immediately prior to such Business Combination
(individually a “Company Owner”) 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 substantially the same proportions as each Company Owner’s
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 any Company Owner, 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; or

(c) A majority of the individuals who, as of the Effective Date, constitute the
Board of Directors of the Company (the “Incumbent Directors”) are replaced
within a twelve (12) month period by directors whose appointment or election was
not approved by a majority of the Incumbent Board and who were elected as a
result of an election contest with respect to the election or removal of
directors (“Election Contest”) or other actual or threatened solicitation of
proxies or consents by or on behalf of any “person” (such term for purposes of
this definition being as defined in § 3(a)(9) of the Exchange Act, and as used
in § 13(d)(3) and 14(d)(2) of the Exchange Act) other than the Incumbent Board
(“Proxy Contest”); provided that any person becoming a director after the
Effective Date and whose election or nomination for election was approved by a
vote of at least a majority of the Incumbent Directors then on the Board shall
thereafter be an Incumbent Director.

(2) For purposes of this Agreement, a “§ 409A Change in Control” shall mean a
“Change in Control” which also constitutes a change in ownership or effective
control of the Company or a change in the ownership of a substantial portion of
the assets of the Company, all within the meaning of § 409A of the Internal
Revenue Code of 1986, as amended (the “Code”).

 

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§ 7. Termination of Employment.

(a) Death, Retirement or Disability. Executive’s employment and the Employment
Period shall terminate automatically upon Executive’s death or Retirement. For
purposes of this Agreement, “Retirement” shall mean normal retirement under the
Company’s then-current retirement plan, or if there is no such retirement plan,
“Retirement” shall mean voluntary resignation after age 65 with at least ten
years of service. If the Committee determines in good faith that the Disability
of Executive has occurred (pursuant to the definition of Disability set forth in
this § 7(a)), the Company 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 30th day after receipt of such
written notice by Executive (the “Disability Effective Date”), provided that,
within the 30 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 the inability of Executive, as determined by the
Committee, to substantially perform the essential functions of his regular
duties and responsibilities with or without reasonable accommodation, due to a
medically determinable physical or mental illness or other disability which has
lasted (or can reasonably be expected to last) for a substantially continuous
period of at least six consecutive months.

(b) Termination by the Company Prior to a Change in Control. Prior to a Change
in Control and on or after the second anniversary of the date of a Change in
Control, the Company may terminate Executive’s employment with or without Cause
and, in respect of such termination of employment occurring prior to a Change in
Control or on or after the second anniversary of the date of a Change in
Control, the following definition of “Cause” shall apply:

“Cause” shall mean a determination by the Committee that:

(i) Executive has failed to perform substantially Executive’s duties and
responsibilities under this Agreement (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 reasonable
performance expectations), after a written demand for substantial performance is
delivered to Executive by the Chief Executive Officer or the Chairman of the
Committee which specifically identifies the manner in which such person believes
that Executive has failed to substantially perform Executive’s duties and
responsibilities and which has not been cured to the satisfaction of such person
within ten business days of the written demand delivered to Executive; or

(ii) Executive engaged in any act of fraud, misappropriation, embezzlement or
similar dishonest or wrongful act, including, without limitation, any violation
of the Sarbanes-Oxley Act or similar laws or legal standards, but excluding for
this purpose any non-criminal violation of Sarbanes-Oxley

 

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or similar laws or legal standards that has no adverse impact on the Company or
its reputation and does not involve dishonesty or render Executive ineligible
for any licensing, bonding or insurance coverage or for employment or engagement
in any Company work or activity; or

(iii) Executive has engaged in the abuse of alcohol, prescription drugs or any
substance which materially interferes with Executive’s ability to perform
Executive’s duties and responsibilities under this Agreement or Executive has
engaged in the use of illegal drugs; or

(iv) Executive has violated any laws, agreements or Company policies or codes
prohibiting employment discrimination, harassment, conflicts of interest,
retaliation, competition with the Company, solicitation of Company customers or
employees on behalf of anyone other than Company, improper use or disclosure of
Trade Secrets, Confidential Information or other proprietary information of the
Company; or

(v) Executive has been convicted for, or entered a plea of guilty or nolo
contendere (or any plea of similar substance or effect) to, a felony.

(c) Resignation by Executive Prior to a Change in Control. Prior to a Change in
Control and on or after the second anniversary of the date of a Change in
Control, Executive may resign for “Good Reason” or no reason and, in respect of
any such resignation occurring prior to a Change in Control or on or after the
second anniversary of the date of a Change in Control, the following definition
of “Good Reason” shall apply:

“Good Reason” shall mean:

(i) without the written consent of Executive, the assignment to Executive to a
position materially different from the President of a publicly traded
corporation having a class of securities registered pursuant to the Exchange
Act; or

(ii) without the written consent of Executive, the Company changes its reporting
structure such that Executive no longer reports directly and exclusively to the
Chief Executive Officer; or

(iii) without the written consent of Executive, a reduction by the Company:
(a) in Executive’s Base Salary as in effect on the Effective Date or as the same
may be increased from time to time (unless a similar reduction is made in the
salary of similarly-situated senior executives); (b) in Executive’s Bonus
Opportunity at target level below the minimum set forth in § 5(b)(i) (unless a
similar reduction is made in the bonus opportunity of similarly-situated senior
executives); or (c) in the benefits pursuant to the Welfare Plans (unless a
similar reduction is made in the benefits of similarly-situated senior
executives); or

 

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(iv) any failure by the Company to comply with and satisfy § 16(c); or

(v) a requirement that Executive be based in any office or location other than
in the greater metropolitan area of Atlanta, Georgia.

Notwithstanding the foregoing, no event or act or omission shall constitute
“Good Reason” under this § 7(c) unless (i) Executive in accordance with § 17(f)
provides notice of such event or act or omission to the Committee no later than
30 days after Executive has knowledge of such event or act or omission, (ii) the
Committee fails to remedy such event or act or omission within 30 days of the
receipt of such notice (the “Cure Period”) and (iii) Executive resigns effective
no later than 90 days after the end of the Cure Period.

(d) Termination by the Company After a Change in Control. On or after a Change
in Control but before the second anniversary of the date of such Change in
Control, the Company may terminate Executive’s employment with or without Cause
and, in respect of such termination of employment occurring on or after a Change
in Control the following definition of “Cause” shall apply:

“Cause” shall mean:

(i) the willful and continued failure of Executive to perform substantially
Executive’s duties and responsibilities under this Agreement (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 reasonable performance expectations), after a written demand for
substantial performance is delivered to Executive by the Chief Executive Officer
or the Chairman of the Committee which specifically identifies the manner in
which such person believes that Executive has willfully and continually failed
to substantially perform Executive’s duties and responsibilities and which has
not been cured to the reasonable satisfaction of such person within ten business
days of the written demand delivered to Executive; or

(ii) any act of fraud, misappropriation, embezzlement or similar dishonest or
wrongful act by Executive, including, without limitation, any violation of the
Sarbanes-Oxley Act or similar laws or legal standards, but excluding for this
purpose any non-criminal violation of Sarbanes-Oxley or similar laws or legal
standards that has no impact on the Company or its reputation and does not
involve dishonesty or render Executive ineligible for any licensing, bonding or
insurance coverage or for employment or engagement in any Company work or
activity; or

(iii) Executive’s abuse of alcohol, prescription drugs or any substance which
materially interferes with Executive’s ability to perform Executive’s duties and
responsibilities under this Agreement or Executive’s use of illegal drugs; or

 

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(iv) Executive’s violation of any laws prohibiting employment discrimination,
harassment, or retaliation or Executive’s willful violation of any laws,
agreements, or Company policies or codes prohibiting conflicts of interest,
competition with the Company, solicitation of Company customers or employees on
behalf of anyone other than Company, improper use or disclosure of Trade
Secrets, Confidential Information or other proprietary information of the
Company; or

(v) Executive’s conviction for, or plea of guilty or nolo contendere (or any
plea of similar substance or effect) to, a felony.

(e) Resignation by Executive After a Change in Control. On or after a Change in
Control and before the second anniversary of the date of such Change in Control,
Executive may resign for Good Reason or no reason and, in respect of any such
resignation, the following definition of “Good Reason” shall apply:

“Good Reason” shall mean:

(i) the reason set forth in § 7(c)(i); or

(ii) without the written consent of Executive, the assignment to Executive of
duties inconsistent with Executive’s position (including, status, titles, and
reporting requirements), authority, duties or responsibilities as contemplated
by § 2, or any action by the Company that results in a diminution in such
position, authority, duties or responsibilities (whether or not occurring solely
as a result of the Company’s ceasing to be a publicly traded entity) which, in
either case, is not rescinded within ten (10) days after the Committee receives
written notice from Executive that he believes that the assignment or action
constitutes Good Reason and that he intends to resign if it is not rescinded; or

(iii) the reason set forth in § 7(c)(ii); or

(iv) a reduction by the Company without the written consent of Executive: (a) in
Executive’s Base Salary as in effect on the Effective Date or as the same may be
increased from time to time; (b) in Executive’s Bonus Opportunity at target
level as the same may be increased from time to time; (c) in Executive’s
long-term incentive opportunities, as determined by a third-party compensation
firm chosen by the Company using generally accepted methodologies, which may
include annualizing prior long-term incentive grants over more than one year and
ignoring prior special retention or sign-on grants; or (d) in the benefits
pursuant to the Welfare Plans, and which reduction set forth in

 

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(a), (b), (c) or (d) of this § 7(e)(iv) is not rescinded within ten (10) days
after the Company receives written notice from Executive that he believes that
the reduction constitutes Good Reason and that he intends to resign if it is not
rescinded; or

(v) the reason set forth in § 7(c)(iv); or

(vi) the reason set forth in § 7(c)(v).

(f) Notice of Termination. Any termination by the Company or resignation by
Executive shall be communicated by Notice of Termination to the other party
hereto given in accordance with § 17(f). For purposes of this Agreement, a
“Notice of Termination” means a written notice which (i) states 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) specifies the applicable Date of Termination. 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 Good Reason 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.

(g) Date of Termination, “Separation from Service” and Applicable Pay Date.

(i) “Date of Termination” means (1) if Executive resigns for Good Reason, the
date specified in the Notice of Termination, provided that (i) the Committee may
specify any earlier Date of Termination and (ii) the Date of Termination
specified in the notice shall not be less than 60 days after the date of
delivery of the notice if the resignation is for Good Reason following a Change
in Control, (2) if Executive’s employment is terminated by the Company other
than by reason of Disability, the date of receipt of the Notice of Termination,
or any later date specified therein, or (3) 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.

(ii) “Separation from Service” means a “separation from service” within the
meaning of § 409A of the Code which occurs in connection with Executive’s
termination of employment, and the Company and Executive acknowledge and agree
that such a “separation from service” may come before, after or coincide with
Executive’s Date of Termination.

(iii) “Applicable Pay Date” means the date that Executive has a Separation from
Service (which date shall be referred to as the “Immediate Pay Date”) or, if the
Company determines that making a payment or providing a

 

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benefit to Executive on the Immediate Pay Date would require the Company to
report all or any part of such payment or benefit to the Internal Revenue
Service as subject to taxation under § 409A of the Code, the date that is six
(6) months and one (1) day after the date Executive has a Separation from
Service (which date shall be referred to as the “Delayed Pay Date”).

§ 8. Obligations of the Company upon Termination.

(a) Prior to a Change in Control: Resignation by Executive for Good Reason;
Termination by the Company Other Than for Cause or Disability. If, prior to a
Change in Control or on or after the second anniversary of the date of a Change
in Control, the Company shall terminate Executive’s employment other than for
Cause or Disability or Executive shall resign for Good Reason, then (and with
respect to the payments and benefits described in clauses (ii) through (ix) of
this § 8(a), only if Executive executes (and does not revoke) a Release in
substantially the form of Exhibit A hereto (the “Release”) within 60 days of the
Date of Termination):

(i) the Company will 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 (as in effect on
the Date of Termination) earned through the Date of Termination to the extent
not theretofore paid, (B) Executive’s business expenses for which reimbursement
has been requested pursuant the Company’s expense reimbursement policy but which
have not been reimbursed before Executive’s applicable Date of Termination and
(C) Executive’s Annual Bonus, if any, earned for the fiscal year immediately
preceding the fiscal year in which the Date of Termination occurs, if such bonus
has been certified as payable by the Committee but has not been paid before the
Date of Termination (the sum of the amounts described in clauses (A), (B) and
(C) shall be referred to as the “Accrued Obligations”), and

(ii) (A) if the Applicable Pay Date is the Delayed Pay Date, the Company will
pay Executive on the Delayed Pay Date a lump sum equal to the amount of the Base
Salary (as in effect on the Date of Termination or, if Executive terminates
employment pursuant to § 7(c)(iii) upon a reduction in Executive’s Base Salary,
as in effect immediately prior to such reduction in Base Salary) Executive would
have earned if Executive had been continuously employed by Company from the Date
of Termination until the Delayed Pay Date or (B) if the Applicable Pay Date is
the Immediate Pay Date, the Company will continue to pay Executive an amount
equal to his monthly Base Salary (as in effect on the Date of Termination or, if
Executive terminates employment pursuant to § 7(c)(iii) upon a reduction in
Executive’s Base Salary, as in effect immediately prior to such reduction in
Base Salary) until payments begin under § 8(a)(iii) without any duplication of
payments between this § 8(a)(ii) and § 8(a)(iii); provided, however, that the
Company shall have no obligation to make any such payment or payments if
Executive has violated any of the Restrictive

 

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Covenants (as defined in § 13 of this Agreement) and failed to remedy such
violation to the satisfaction of the Board within 10 days of notice of such
violation; and

(iii) commencing on the seven (7) month anniversary of the date Executive has a
Separation from Service, the Company will continue to pay Executive an amount
equal to his monthly Base Salary (as in effect on the Date of Termination or, if
Executive terminates employment pursuant to § 7(c)(iii) upon a reduction in
Executive’s Base Salary, as in effect immediately prior to such reduction in
Base Salary) for a period of twelve (12) consecutive months, payable in equal
monthly or more frequent installments in accordance with the Company’s then
standard payroll practices; provided, however that the Company’s obligation to
make or continue such payments shall cease if Executive is or becomes employed
with a Competitor (as defined in § 13) during the eighteen (18) month period
following the Date of Termination or if Executive violates any of the
Restrictive Covenants (as defined in § 13) and fails to remedy such violation to
the satisfaction of the Board within 10 days of notice of such violation; and

(iv) Executive will have the right to elect continuation of health care coverage
under the Company’s group health plan in accordance with “COBRA,” and the
Company shall pay (and report as taxable income to Executive) all premiums for
such COBRA coverage for Executive and his covered dependents for the twelve
(12) month period immediately following the Date of Termination, provided,
however, that the obligation of the Company to pay the cost for such COBRA
coverage shall terminate upon Executive’s obtaining other employment if health
care coverage is provided by the new employer; and

(v) the Company will pay Executive a pro-rated annual bonus for the fiscal-year
in which the Date of Termination occurs equal to (i) the amount Executive would
have earned, if any, under § 5(b)(i) for the year of termination based on actual
financial performance for such fiscal year, times (ii) a fraction, the numerator
of which is the number of full months in the fiscal year preceding the Date of
Termination and the denominator of which is 12; provided that such bonus shall
be paid only if the pre-established performance targets are in fact certified by
the Committee to have been met, and such bonus shall be paid in a single lump
sum cash payment no later than 2 1/2 months after the end of the fiscal year in
which the bonus is earned; and

(vi) all grants of restricted Company Common Stock or units which represent
shares of Company Common Stock (“Restricted Stock”) held by Executive as of the
Date of Termination will become immediately vested as of the Date of
Termination; and

 

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(vii) all of Executive’s options to acquire Company Common Stock or appreciation
rights with respect to shares of Company Common Stock (“Options”) that would
have become vested (by lapse of time) within the 24-month period immediately
following the Date of Termination had Executive remained employed during such
period will become immediately vested as of the Date of Termination; and

(viii) all of Executive’s vested but unexercised Options as of the Date of
Termination (including those with accelerated vesting pursuant to § 8(a)(vii))
shall remain exercisable through the earlier of (A) the original expiration date
of the Option, (B) the 90 th day following the Date of Termination, or (C) the
date that is the 10th anniversary of the original date of grant of the Option;
and

(ix) as for any outstanding grant of performance-based restricted stock units
which represent a right to receive Company Common Stock contingent on the
satisfaction of the related performance requirements and for which the Date of
Termination falls during a Performance Cycle (as defined in the applicable award
agreement), the Committee shall certify the results and shall deliver to
Executive 50% of the number of whole number of the shares of Company Common
Stock, if any, that vested based on the actual satisfaction of such performance
requirements no later than 2 1/2 months after the last day of the period in
which such Performance Cycle ends; and,

(x) to the extent not theretofore paid or provided, the Company will timely pay
or provide to pursuant to the timing rules of the controlling terms of any plan,
program, policy, practice, contract or agreement of the Company any other
amounts or benefits, including but not limited to, previously earned but unpaid
annual incentive awards, previously earned but unpaid long-term incentive
awards, and properly documented and approved but unpaid business expenses,
required to be paid or provided or which Executive is eligible to receive under
any such 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) After or in Connection with a Change in Control: Resignation by Executive
for Good Reason; Termination by the Company Other Than for Cause or Disability.
If there occurs a Change in Control and the Company shall terminate Executive’s
employment other than for Cause or Disability before the second anniversary of
such Change in Control or Executive shall resign for Good Reason before the
second anniversary of such Change in Control, then (and with respect to the
payments and benefits described in clauses (ii) through (x) of this § 8(b), only
if Executive executes (and does not revoke) the Release within 60 days of the
Date of Termination):

(i) the Company (or its successor) shall pay to Executive the Accrued
Obligations in a lump sum in cash within 30 days after the Date of Termination;
and

 

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(ii) the Company (or its successor) will pay Executive two (2) times the amount
of Base Salary (as in effect on the Date of Termination or, if Executive
terminates employment pursuant to § 7(e)(iv) as in effect immediately prior to
such reduction in Base Salary), provided however, that the Company (or its
successor) shall have no obligation to make any payment under this § 8(b)(ii) if
Executive has violated any of the Restrictive Covenants (as defined in § 13) and
failed to remedy such violation to the satisfaction of the Board within 10 days
of notice of such violation. If the Change in Control is a § 409A Change in
Control, the two (2) times Base Salary amount payable under this § 8(b)(ii) will
be paid in a single lump sum on the Applicable Pay Date. However, if the Change
in Control is not a § 409A Change in Control, the two (2) times Base Salary
amount payable under this § 8(b)(ii) will be paid in three (3) parts—

(A) the first part will be paid in the amount and at the time and in form called
for in § 8(a)(ii),

(B) the second part will be paid in the amount and at the time and in the form
called for in § 8(a)(iii), and

(C) the balance will be paid in a single lump sum on the date that is nine
(9) months and one (1) day after the date of Executive’s Separation from Service
which is related to such termination of employment; and

(iii) as additional severance (and not in lieu of any bonus for the fiscal year
in which the Date of Termination occurs), the Company (or its successor) will
pay Executive a lump sum equal to two (2) times the amount of Executive’s target
Bonus Opportunity (as in effect on the Date of Termination or, if Executive
terminates employment pursuant to § 7(e)(iv) as in effect immediately prior to
such reduction in Bonus Opportunity) on the date that is nine (9) months and one
(1) day after the date of Executive’s Separation from Service which is related
to such termination of employment; provided however, that the Company shall have
no obligation to make any payment under this § 8(b)(iii) if Executive has
violated any of the Restrictive Covenants (as defined in § 13) and failed to
remedy such violation to the satisfaction of the Board within 10 days of notice
of such violation; and

(iv) Executive will have the right to elect continuation of health care coverage
under the Company’s group health plan in accordance with “COBRA,” and the
Company shall pay (as report as taxable income to Executive) all premiums for
such COBRA coverage for Executive and his covered

 

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dependents for the eighteen (18) month period immediately following the Date of
Termination, provided, however, that the obligation of the Company to pay the
cost for such COBRA coverage shall terminate upon Executive’s obtaining other
employment if such health care coverage is provided by the new employer; and

(v) Executive will be entitled to a pro-rated bonus under § 5(b)(i) for the
fiscal year in which the Date of Termination occurs, the amount and timing of
which shall depend upon when the Date of Termination occurs, as follows

(1) if the Date of Termination occurs before the end of the fiscal year in which
the Change in Control occurred, the pro-rated bonus will equal (a) 100% of
Executive’s then current target Bonus Opportunity, times (ii) a fraction, the
numerator of which is the number of full months in the fiscal year preceding the
Date of Termination and the denominator of which is 12, and such pro-rated bonus
shall be paid no later than 2 1/2 months after the end of the Company’s fiscal
year which includes Executive’s Date of Termination; or

(2) if the Date of Termination occurs during a fiscal year that began after the
Change in Control occurred, the pro-rated bonus (based on the number of full
months in the fiscal year preceding the Date of Termination as described in
§ 8(b)(v)(1)) will be based on actual performance results as certified by the
Committee at the end of the fiscal year and will be paid to Executive no later
than 2 1/2 months after the end of the Company’s fiscal year which includes
Executive’s Date of Termination; and

(vi) 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

(vii) all of Executive’s Options held by Executive as of the Date of Termination
will become immediately vested and exercisable as of the Date of Termination;
and

(viii) all of Executive’s vested but unexercised Options as of the Date of
Termination (including those with accelerated vesting pursuant to the
§ 8(b)(vii)) will remain exercisable through the earlier of (A) the original
expiration date of the Option, or (B) the 90th day following the Date of
Termination, or (C) the date that is the 10th anniversary of the original date
of grant of the Option; and

(ix) as for any outstanding grant of performance-based restricted stock units
for which the Date of Termination falls during a Performance Cycle (as defined
in the applicable award agreement), the Company will transfer to Executive fully
vested shares of Company Common Stock, the number and timing of which shall
depend upon when the Date of Termination occurs, as follows:

(1) if the Date of Termination occurs before the end of the Performance Cycle in
which the Change in Control occurred, Executive will be entitled at the Date of
Termination to receive shares of fully vested Company Common Stock equal to the
number of shares that would have been awarded assuming the performance goals had
been reached at target levels, which shares will be delivered to Executive no
later than 2 1/2 months after the end of the Performance Cycle which includes
the Date of Termination; or

 

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(2) if the Date of Termination occurs after the end of the Performance Cycle in
which the Change in Control occurred, but prior to the transfer of Restricted
Stock to Executive with respect to such Performance Cycle, Executive will be
entitled at the Date of Termination to receive shares of fully vested Company
Common Stock equal to the higher of (A) the number of shares that would have
been awarded assuming the performance goals had been reached at target levels,
or (B) the number of shares that would have been awarded based on actual
performance against the performance goal as certified by the Committee, which
shares will be delivered to Executive no later than 2 1/2 months after the end
of the Performance Cycle which included the Date of Termination; or

(3) if the Date of Termination occurs during a Performance Cycle that began
after the Change in Control occurred, Executive will be entitled to receive
shares of fully vested Company Common Stock equal to the number of shares that
would have been awarded based on the actual results as certified by the
Committee at the end of the Performance Cycle, which shares shall be delivered
to Executive no later than 2  1/2 months after the end of such Performance
Cycle; and

(x) to the extent not theretofore paid or provided, the Company will timely pay
or provide to Executive his Other Benefits pursuant to the timing rules of the
controlling terms of any plan, program, policy, practice, contract or agreement
of the Company.

(c) In Anticipation of a Change in Control: Termination by the Company Other
Than for Cause or Disability or Resignation by Executive for Good Reason. If
Executive’s employment is terminated by the Company other than for Cause (as
defined in § 7(d)) or Disability (as defined in § 7(a)) or Executive resigns for
Good Reason (as defined in § 7(e)) after the issuance of press release or a
filing is made with the Securities and Exchange Commission regarding a
transaction which could lead to a Change in Control and there is a Change in
Control as a result of the consummation of such transaction no later than nine
(9) months and one (1) day after the date of Executive’s Separation from Service
which is related to such termination of employment, then

 

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(A) Executive will continue to be eligible to receive his benefits under § 8(a)
in the amount and form and at the time provided in § 8(a), but

(B) Executive will in addition receive the benefits described in § 8(b), if
greater, as if his employment had been terminated without Cause (as defined in
§ 7(d)) or he had resigned for Good Reason (as defined in § 7(e)) at the
consummation of such Change in Control, provided Executive immediately following
the Change in Control shall have timely executed and not revoked the Release
described in § 8(b), and, further provided

(1) there will under no circumstances be any duplication whatsoever of any
payments or benefits between this § 8(c)(B) and § 8(c)(A),

(2) the additional severance benefits provided under § 8(b)(ii)(C) and the
severance benefits provided under § 8(b)(iii) will both be paid in a single lump
sum on the date that is nine (9) months and one (1) day after the date of
Executive’s Separation from Service which is related to such termination of
employment,

(3) if the Change in Control occurs before the date the pro-rated annual bonus
provided under § 8(a)(v) is scheduled to be paid, then Executive will be
entitled to the greater of either the pro-rated annual bonus determined and paid
under § 8(a)(v) or the pro-rated bonus determined under § 8(b)(v)(1) but paid in
the form and at the time called for under § 8(a)(v),

(4) any outstanding Options which failed to vest under § 8(a)(vii) will vest
under § 8(b)(vii) at the Change in Control, and the date of the Change of
Control will be treated under § 8(b)(viii) as Executive’s Date of Termination,

(5) if the Change in Control occurs before the date that shares of Company
Common Stock relating to any outstanding grant of performance-based restricted
stock units under § 8(a)(ix) are scheduled to be delivered, Executive will be
entitled to either the greater of the number of shares of Company Common Stock
to be delivered under § 8(a)(ix) or the number to be delivered under § 8(b)(ix),
which will be delivered in the form and at the time such shares of Company
Common Stock are otherwise scheduled to be delivered under § 8(a)(v),

(6) any amount payable under this § 8(c) that is deferred compensation under
§ 409A of the Code and that cannot be paid by the latest date on which such
amount could be paid without triggering taxation under § 409A of the Code shall
be forfeited, and

 

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(7) the Company’s obligation to make any payments under this § 8(c) shall cease
if Executive violates any of the Restrictive Covenants (as defined in § 13) and
fails to remedy such violation within ten business days of notice detailing such
violation to the reasonable satisfaction of the Board.

(d) Death, Disability or Retirement. Upon the Date of Termination due to
Executive’s death, Disability (as defined in § 7(a)), or Retirement (as defined
in § 7(a)), (i) all grants of Restricted Stock held by Executive as of the Date
of Termination will become immediately vested as of the Date of Termination;
(ii) all Options held by Executive as of the Date of Termination will become
immediately vested and exercisable as of the Date of Termination, (iii) in the
case of termination on account of Retirement, the number of performance-based
restricted stock units earned shall be determined at the end of the Performance
Cycle (as defined in the applicable award agreement) based on the actual
performance as of the end of the Performance Cycle as certified by the Committee
and, upon such certification (and in no event later than 2  1/2 months after the
end of the Performance Cycle), the Company shall deliver to Executive or
Executive’s beneficiary, as applicable, shares of fully vested Company Common
Stock in an amount equal to the number of shares that would have been awarded
based on the actual results; and (iv) in the case of termination on account of
death or Disability only, all performance-based restricted stock units held by
Executive as of the Date of Termination will vest at the target level and the
Company shall deliver to Executive or Executive’s beneficiary, as applicable,
within 60 days after the Date of Termination, fully vested Company Common Stock
equal to the number of shares that would have been awarded assuming the
performance goals had been reached at target levels. All of Executive’s vested
but unexercised Options as of the Date of Termination (including those with
accelerated vesting pursuant to the foregoing sentence) shall remain exercisable
through the earliest of (A) the original expiration date of the Option, (B) the
90th day following the Date of Termination or such longer period as specified in
the plan document governing the applicable award, or (C) the date that is the
10th anniversary of the original date of grant of the Option. For the period of
months required by COBRA after the Date of Termination due to Executive’s death,
Disability (as defined in § 7(a)), or Retirement (as defined in § 7(a)),
Executive or his dependents shall have the right to elect continuation of
healthcare coverage under the Company’s group plan (if allowed by the plan) in
accordance with “COBRA” provided Executive or his dependents shall pay the
entire cost of such coverage. Except as set forth in this § 8(d) and 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

 

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Agreement, other than for payment of Accrued Obligations and the timely payment
or provision of Other Benefits as provided in § 8(a)(x). Accrued Obligations
shall be paid to Executive’s estate or beneficiary, as applicable, in a lump sum
in cash within 30 days after the Date of Termination. With respect to the
provision of Other Benefits, the term Other Benefits as used in this § 8(d)
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.

(e) Cause or Voluntary Termination without Good Reason. 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 resigns without Good Reason,
the Company’s obligations under this Agreement to Executive shall terminate,
other than for payment of Accrued Obligations and the timely payment or
provision of Other Benefits. Accrued Obligations shall be paid to Executive in a
lump sum in cash within 30 days after the Date of Termination. For the period
required by COBRA after the Date of Termination for Cause or for the voluntary
termination by Executive, Executive shall have the right to elect continuation
of healthcare coverage under the Company’s group plan in accordance with “COBRA”
provided Executive shall pay the entire cost of such coverage.

§ 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 § 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) (i) If there is a “change in control” (within the meaning of § 280G of the
Code) before the fourth anniversary of the Effective Date and it shall be
determined pursuant to § 10(b) 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 § 10)
(collectively the “Payments”) would be subject to the excise tax imposed by
§ 4999 of the Code or any interest or penalties are incurred by 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
the

 

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Company shall (subject to § 10(a)(ii)) make a payment on Executive’s behalf to
the Internal Revenue Service or other applicable taxing authority (a “Gross-Up
Payment”) in an amount such that, if such payment had been made directly to
Executive and Executive had paid all taxes (including any interest or penalties
imposed with respect to such taxes), including, without limitation, any income
taxes (and any interest and penalties imposed with respect thereto) and Excise
Tax imposed upon the Gross-Up Payment, Executive would have retained an amount
of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments plus
any additional Excise Tax imposed on the Gross-Up Payment. The Company’s
obligation to make the Gross-Up Payment under this § 10 shall not be conditioned
upon Executive’s termination of employment.

(ii) No Gross-Up Payment shall be made under § 10(a)(i) if a determination is
made that the Payments are less than 110% of the “Safe Harbor Amount”, where the
Safe Harbor Amount is 2.99 times Executive’s “base amount” as determined under
§ 280G(b)(3) of the Code. The Payments instead shall be reduced so that the
present value as of the date of a Change in Control for purposes of § 280G of
the Code of the portion of all Payments that constitute “parachute payments”
under § 280G(2)(b) of the Code (the “Present Value”) equals in the aggregate the
Safe Harbor Amount. The cash Payments provided under this Agreement shall be
reduced under this § 10(a)(ii) on a pro rata basis in paying the Safe Harbor
Amount.

(iii) If there is a “change in control” (within the meaning of § 280G of the
Code) on or after the fourth anniversary of the Effective Date and it shall be
determined pursuant to § 10(b) that the receipt of all Payments would subject
Executive to tax under § 4999 of the Code, a further determination shall be made
pursuant to § 10(b) as to which would result in larger net payments to Executive
after paying all applicable taxes, including the tax under § 4999: (A) to
receive all of the Payments or (B) to receive the portion of all Payments that
equals in the aggregate the Safe Harbor Amount as determined in accordance with
§ 10(a)(ii). If the determination is that it would result in larger net payments
to Executive after paying all applicable taxes to receive all of the Payments,
then all Payments shall be made to Executive in accordance with the terms of
this Agreement, all subject to applicable tax withholdings. If the determination
is that it would result in larger net payments to Executive after paying all
applicable taxes to receive the Safe Harbor Amount, then only the Safe Harbor
Amount shall be paid to Executive in accordance with the terms of this
Agreement. Any reduction in the cash Payments provided under this Agreement
pursuant to this § 10(a)(iii) shall be made on a pro rata basis. Finally, in
connection with making any determinations under this § 10(a)(iii), it is the
intent of the Company and Executive that the Accounting Firm will take into
account the value of any reasonable compensation for services to be rendered by
Executive before or after the change in control, including any non-competition
provisions that may apply to Executive, the Company will not cause the
Accounting Firm not to take any such value into account and the Company will
cooperate with the Accounting Firm in the valuation of any such services,
including any non-competition provisions.

 

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(b) Subject to the provisions of § 10(c), all determinations required to be made
under this § 10, including (without limitation) the Safe Harbor Amount, whether
and when a Gross-Up Payment is required and the amount of such Gross-Up Payment
and what would result in larger net payments to Executive under § 10(a)(iii),
and the assumptions to be utilized in arriving at all such determinations, shall
be made by a nationally recognized 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 Executive is eligible to receive a Payment which is
subject to § 10(a)(i) and § 10(a)(ii) or that there has been or Executive is
eligible to receive a Payment which is subject to § 10(a)(iii), 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 reasonably acceptable to the Company 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 determination by the Accounting Firm shall
be binding upon the Company and Executive. As a result of the uncertainty in the
application of § 4999 of the Code at the time of the initial determination by
the Accounting Firm hereunder, it is possible that amounts will have been paid
or distributed by the Company to or for the benefit of Executive pursuant to
this Agreement which should not have been so paid or distributed by reason of
§ 10(a)(ii) or § 10(a)(iii) (each, an “Overpayment”) or that Gross-Up Payments
which will not have been made by the Company should have been made
(“Underpayment”), in each case, consistent with the determinations required to
be made hereunder. In the event that the Accounting Firm determines that an
Overpayment has been made, any such Overpayment paid or distributed by the
Company to or for the benefit of Executive shall be repaid by Executive to the
Company. In the event that the Accounting Firm determines that there is an
Underpayment after the Company exhausts its remedies pursuant to § 10(c), any
such Underpayment shall be promptly paid by the Company to or for the benefit of
Executive either as a reimbursement of an amount already paid by Executive or as
a payment directly to the appropriate taxing authority.

(c) 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. Such notification shall be given as soon as practicable
but no later than ten business days after Executive is informed in writing 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. Executive shall not

 

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pay such claim prior to the expiration of the 30-day period following the date
on which it 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,

(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) imposed as a result of such representation and
payment of costs and expenses. Without limitation of the foregoing provisions of
this § 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 pay such amount to the applicable
taxing authority and shall indemnify and hold Executive 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 payment or with
respect to any imputed income with respect to such payment; 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.

 

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(d) If, after the Company makes a Gross-Up Payment on Executive’s behalf or
makes a payment pursuant to § 10(c), Executive becomes entitled to receive any
refund with respect to the Excise Tax to which such Gross-Up Payment relates or
with respect to such claim, Executive shall (subject to the Company’s complying
with the requirements of § 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 a payment made by the
Company pursuant to § 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 the amount of such
payment shall offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.

(e) Any Gross-Up Payment, as determined pursuant to this § 10, shall be paid by
the Company on behalf of Executive to the Internal Revenue Service or other
applicable taxing authority within 30 business days of the receipt of the
Accounting Firm’s determination that a payment is due; provided that, the
Gross-Up Payment shall in all events be paid no later than the end of
Executive’s taxable year next following Executive’s taxable year in which the
Excise Tax (and any income or other related taxes or interest or penalties
thereon) on a Payment are remitted to the Internal Revenue Service or any other
applicable taxing authority or, in the case of amounts relating to a claim
described in § 10(c) that does not result in the remittance of any federal,
state, local and foreign income, excise, employment and other taxes, the
calendar year in which the claim is finally settled or otherwise resolved.

§ 11. Costs of Enforcement. In no event shall Executive be obligated to seek
other employment by way of mitigation of the amounts payable to Executive under
any of the provisions of this Agreement and such amounts shall not be reduced
whether or not Executive obtains other employment. In any action taken in good
faith relating to the enforcement of this Agreement or any provision herein,
including any arbitration provision in § 14, 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, and whether or not incurred in trial, bankruptcy or appellate proceedings,
but only if Executive is successful on at least one material issue raised in the
enforcement proceeding. Any costs or expenses that otherwise meet the
requirements for reimbursement under this § 11 shall be reimbursed within 120
days of submission by Executive for a request for reimbursement, but in no event
later than the last day of Executive’s taxable year following the taxable year
in which Executive becomes entitled to such reimbursement by reason of being
successful on at least one material issue (provided a request for reimbursement
has been made).

 

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§ 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 other than a contract with his
current employer, a copy of which has been provided to the Company.

§ 13. Restrictions on Conduct of Executive.

(a) General. Executive and the Company understand and agree that the purpose of
the provisions of this § 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 § 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 § 13. For the purposes of this § 13, “Company”
shall be deemed to include Company and all its parents, affiliates, subsidiaries
and successors.

(b) Definitions. The following terms used in this § 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
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 movement in electronic commerce of payment and
financial information, merchant processing, credit and debit transaction
processing, check guarantee and verification, electronic authorization and
capture, terminal management services, purchase card services, financial
electronic data interchange, cash management services, and wire transfer
services.

“Competitor” means any of the following companies, all of whom engage in
Competitive Services (and all of their parents, subsidiaries, or affiliates who
engage in Competitive Services) and all of the successors in interest to any of
the foregoing: TSYS Acquiring Solutions, Chase Paymentech Solutions, First Data
Corporation, Total System Services, Inc., Fifth Third Processing Solutions,
Wells Fargo Merchant Services, Heartland Payment Systems, First National
Merchant Solutions, RBS Lynk, TransFirst Holdings, iPayment, BA Merchant
Services, NPC, Elavon Merchant Services and Moneris Solutions.

 

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“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. “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 Person to whom the Company has sold or provided
its products or services during the twelve (12) months prior to the
Determination Date.

“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, Texas and Massachusetts.

 

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“Restrictive Covenants” means the restrictive covenants contained in § 13(c)
hereof.

“Trade Secret” means all information, without regard to form, including, but not
limited to, technical or non-technical 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 Employment Period or during the two (2) years immediately
following the end of the Employment Period for any reason 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 Employment Period or during the two (2) years immediately following the end
of the Employment Period for any reason 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.

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.

 

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(ii) Non-solicitation 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 with whom Executive worked or otherwise had
material contact through his employment with the Company 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 shall be deemed to have “Material
Contact” with a Protected Customer if he had business dealings with the
Protected Customer on the Company’s behalf.

(iv) Non-competition 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 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

 

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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; provided, however, that (1) 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 Exchange Act; (2) for purposes of this
§ 13(c)(iv) only, the Restricted Period shall be reduced to eighteen (18) months
if Executive’s employment is terminated by Company or Executive pursuant to
§ 8(a) (Prior to a Change in Control: Resignation by Executive for Good Reason;
Termination by the Company Other Than for Cause or Disability); and (3) this
§ 13(c)(iv) shall lapse and terminate at the end of the Employment Period if the
Company gives notice to Executive pursuant to § 3 that this Agreement will not
be extended.

(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 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

 

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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 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. This § 13 shall
survive the expiration or termination of this Agreement, provided, however, that
the non-competition covenants set forth in § 13(c)(iv) shall not survive and
shall terminate at the end of the Employment Period if the Company gives notice
to the Executive pursuant to § 3 that this Agreement will not be extended.

§ 14. Arbitration. Any claim or dispute arising under this Agreement (other than
under § 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. §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) shall also award attorney’s fees and
costs, without regard to any restriction on the amount of such award under
Georgia or other applicable law, as required under § 11. Such an award shall be
binding and conclusive upon the parties hereto, subject to 9 U.S.C. §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 § 14:      Company:            Executive:      
  

§ 15. Rabbi Trust. In order to ensure the payment of the severance benefit
provided for in § 8(b)(ii) and (iii) of this Agreement, immediately following
the commencement of any action by a third party with the aim of effecting a
Change in Control, or the publicly-announced threat by a third party to commence
any such action, the Company shall fully fund through the Global Payments Inc.
Benefit Security Trust, or similar “rabbi trust” the amount of the severance
payment that would have been paid to Executive under § 8(b)(ii) and (iii) 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;
provided, however, that the trust shall not be funded if the funding thereof
would result in taxable income to Executive by reason of § 409A(b) of the Code;
and provided, further, in no event shall any trust assets at any time be located
or transferred outside of the United States, within the meaning of § 409A(b) of
the Code. Amounts shall be paid to Executive from such trust as provided under
this Agreement and the trust. The right of Executive to receive payments under
this Agreement shall be an unsecured claim against the general assets of the

 

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Company and Executive shall have no rights in or against any specific assets of
the Company. Finally, nothing in this § 15 shall relieve the Company of any
liabilities under this Agreement to the extent such liabilities are not
satisfied by a trust described in this § 15.

§ 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 Executive’s legal representatives.

(b) This Agreement shall inure to the benefit of and be binding upon the Company
and its successors and assigns.

(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.

 

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(d) Entire Agreement. 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
(oral or written) between the Company and Executive with respect to the subject
matter hereof.

(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:    Global Payments Inc.      10 Glenlake Parkway- North Tower     
Atlanta, Georgia 30328      Office of the Corporate Secretary   To Executive:   
Jeffrey Sloan      At his current address or last known address

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) Indemnification. The Company shall indemnify Executive to the maximum extent
permitted under the Company’s bylaws. Subject to reasonable availability of such
insurance coverage and subject to applicable laws and regulations, a directors’
and officers’ liability insurance policy (or policies) shall be maintained,
during the Employment Period and for six (6) years thereafter, providing
coverage that is no less favorable to Executive than the coverage provided to
any other present officer or director of the Company and, following a Change in
Control, the coverage shall be no less favorable to Executive than the coverage
provided as of the date of the Change in Control.

(h) Amendments and Modifications. This Agreement may be amended or modified only
by a writing signed by the Company and Executive, which makes specific reference
to this Agreement.

(i) § 409A.

(i) The Company and Executive intend no payments to be made and no benefits to
be provided under this Agreement will be subject to

 

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taxation under § 409A of the Code and that the terms of this Agreement will be
interpreted in good faith in a manner which is intended to minimize the risk
that Executive will be subject to tax under § 409A of the Code with respect to
any such payments or benefits, and the Company and Executive agree to cooperate
fully and in good faith with one another to seek to minimize such risk.

(ii) Items eligible for expense reimbursement under the terms of this Agreement
shall be reimbursed in a manner intended to qualify for an exemption under
§ 409A of the Code, which shall include implementing the following limitations
with respect to reimbursements: (i) the amount of such expenses eligible for
reimbursement in any calendar year shall not affect the expenses eligible for
reimbursement in another calendar year, (ii) no such reimbursement may be
exchanged or liquidated for another payment or benefit, (iii) any reimbursements
of such expenses shall be made as soon as practicable under the circumstances
but in any event no later than the end of the calendar year following the
calendar in which the related expenses were incurred and (iv) the Company’s
obligation to make reimbursements or to provide in-kind benefits that constitute
deferred compensation under § 409A of the Code shall not extend beyond
Executive’s lifetime or, if later, the end of the 20 year period which starts on
the Effective Date.

(iii) The Company and Executive intend that each installment of payments and
benefits provided under this Agreement shall be treated as a separate identified
payment for purposes of § 409A of the Code and that neither the Company nor
Executive shall have the right to accelerate or defer the delivery of any such
payments or benefits if a determination is made in good faith that any such
acceleration or deferral would present a risk that Executive would be subject to
any tax under § 409A of the Code; provided, however, if the Applicable Pay Date
is the Delayed Pay Date and Executive dies before such Delayed Pay Date, then
any payments or benefits due on the Delayed Pay Date will be made before the end
of the 30 day period which starts on Executive’s date of death or on the Delayed
Pay Date, whichever comes first.

(iv) Executive acknowledges and agrees that nothing in this Agreement shall be
construed as a guarantee or indemnity by the Company for the tax consequences to
the payments and benefits called for under this Agreement, including any tax
consequences under § 409A of the Code, and Executive agrees that Executive shall
be responsible for paying all taxes due with respect to such payments made and
benefits provided to Executive.

(j) References. All references to sections (§) in this Agreement shall be to
sections (§) of this Agreement except as expressly set forth in this Agreement.

(k) Accounting Discrepancies. Executive shall be subject to any policy adopted
by the Company after the Effective Date which is applicable to

 

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senior executives of the Company generally and which requires restitution by
such an executive with respect to any payment made or benefit provided to, or on
behalf of, such an executive, the calculation of which is based in whole or in
part on accounting discrepancies or erroneous financial information.

IN WITNESS WHEREOF, the Company and Executive hereto have duly executed and
delivered this Employment Agreement as of the date first above written.

 

GLOBAL PAYMENTS INC. By:  

/s/ Paul R. Garcia

Name:   Paul R. Garcia Title:   Chief Operating Officer EXECUTIVE:

/s/ Jeffrey Sloan

Jeffrey Sloan

 

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EXHIBIT A

Form of Release

This Release is granted effective as of the 30 day of March 30, 2010, by Jeffrey
Sloan (“Executive”) in favor of Global Payments Inc. (the “Company”). This is
the Release referred to that certain Employment Agreement effective as of
June 1, 2010 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, without limitation, 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, whether known or unknown, of any nature
whatsoever, including those 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, and including but not limited to claims for employment
discrimination under federal or state law, except as provided in Paragraph 2;
claims arising under the Age Discrimination in Employment Act, 29 U.S.C. § 621,
et seq., Title VII of the Civil Rights Act, 42 U.S.C. § 2000(e), et seq. or the
Americans With Disabilities Act, 42 U.S.C. § 12101 et seq.; claims for statutory
or common law wrongful discharge, claims arising under the Fair Labor Standards
Act, 29 U.S.C. § 201 et seq.; claims for attorney’s fees, expenses and costs;
claims for defamation; claims for emotional distress; claims for wages or
vacation pay; claims for benefits, including any claims arising under the
Executive Retirement Income Security Act, 29 U.S.C. § 1001, et seq.; and claims
under any other applicable federal, state or local laws or legal concepts;
provided, however, that nothing herein shall release the Company of
(i) obligations to Executive to make termination payments or related Gross-Up
payments under§ 8 or § 10 of the Employment Agreement, (ii) any indemnification
obligations to Executive under the Company’s bylaws, certificate of
incorporation, Delaware law or otherwise; (iii) obligations with respect to
insurance coverage under any directors’ and officers’ liability insurance
policies; (iv) any rights that Executive may have as a stockholder of the
Company; or (iv) vested interests in any pension plan or other benefit or
deferred compensation plan.

 

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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. § 621, et seq. Executive
acknowledges and agrees Executive has been, and hereby is, advised by Company to
consult with an attorney prior to executing this Release. Executive further
acknowledges and agrees that Company has offered Executive the opportunity,
before executing this Release, to 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.

3. Non-Admission. It is understood and agreed by Executive that the payment made
to him is not to be construed as an admission of any liability whatsoever on the
part of the Company or any of the other Released Parties, by whom liability is
expressly denied.

4. Non-Disparagement. Executive agrees that he or she will not in any way
disparage Company, its affiliated and related companies, or their current and
former employees, officers, directors, agents and representatives, or make or
solicit any comments, statements, or the like to the media or to others that may
be considered to be derogatory or detrimental to the good name or business
reputation of any of the aforementioned parties or entities. This paragraph
shall not limit the rights of Executive to provide testimony pursuant to a valid
subpoena or in a judicial or administrative proceeding in which Executive is
required to testify or otherwise as required by law or legal process.

5. Acknowledgement and Revocation Period. 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.
In order to revoke this Release, Executive must deliver notice of the revocation
in writing to Company’s General Counsel before the expiration of the seven
(7) day period. 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.

 

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6. No Revocation After Seven Days. Executive acknowledges and agrees that this
Release may not be revoked at any time after the expiration of the seven (7) day
revocation period and that he/she will not institute any suit, action, or
proceeding, whether at law or equity, challenging the enforceability of this
Release. Executive further acknowledges and agrees that, with the exception of
an action to challenge the waiver of claims under the ADEA, Executive shall not
ever attempt to challenge the terms of this Release, attempt to obtain an order
declaring this Release to be null and void, or institute litigation against the
Company or any other Releasee based upon a claim that is covered by the terms of
the release contained herein, without first repaying all monies paid to him/her
under § 8 of the Employment Agreement. Furthermore, with the exception of an
action to challenge his waiver of claims under the ADEA, if Executive does not
prevail in an action to challenge this Release, to obtain an order declaring
this Release to be null and void, or in any action against the Company or any
other Releasee based upon a claim that is covered by the release set forth
herein, Executive shall pay to the Company and/or the appropriate Releasee all
their costs and attorneys’ fees incurred in their defense of Executive’s action.

7. Governing Law and Severability. This Release and the rights and obligations
of the parties hereto shall be governed and construed in accordance with the
laws of the State of Georgia. If any provision hereof is unenforceable or is
held to be unenforceable, such provision shall be fully severable, and this
document and its terms shall be construed and enforced as if such unenforceable
provision had never comprised a part hereof, the remaining provisions hereof
shall remain in full force and effect, and the court or tribunal construing the
provisions shall add as a part hereof a provision as similar in terms and effect
to such unenforceable provision as may be enforceable, in lieu of the
unenforceable provision.

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.

 

/s/ Jeffrey Sloan

Jeffrey Sloan Date:  

March 30, 2010

 

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