Document:

exv10w18

 

EXHIBIT 10.18

AMENDMENT NO. 1

TO THE

FIRSTAR CORPORATION

DEFERRED COMPENSATION PLAN

     WHEREAS, effective as of December 1, 1999, Firstar Corporation amended and
restated the Firstar Corporation Deferred Compensation Plan (formerly known as
the Star Banc Corporation Deferred Compensation Plan (the “Plan”)); and

     WHEREAS, Firstar Corporation merged with U.S. Bancorp on February 27,
2001, to form a combined entity known as U.S. Bancorp (the “Corporation”); and

     WHEREAS, the Corporation desires to amend the title of the Plan to reflect
the Corporation’s current name; and

     WHEREAS, the Corporation desires to amend the Plan to allow for the
deferral of profit shares realized upon the exercise of stock options as
approved by its Board of Directors;

     NOW, THEREFORE, effective as of June 18, 2002, the Plan is amended as
follows.

1.     The title of the Plan is hereby amended to be the “U.S. Bancorp Deferred
Compensation Plan.”

2.     Section 4 of the Plan is hereby deleted in its entirety and replaced with
the following language:

		
	 	     Section 4. Deferral Election. (a) Each eligible
officer, employee and Director may elect, in writing, no
later than the applicable date set forth in the table below,
to defer under the Plan: (i) any portion up to 100% of his
annual salary or Director’s fees to be earned in any
calendar year; (ii) any portion up to 100% of his incentive
compensation to be earned in any calendar year; and (iii)
the receipt of profit shares realized upon the exercise of
stock options granted under a stock incentive compensation
plan maintained by the Corporation (“Option Gains”).
“Profit shares” represent the pre-tax gain upon exercise of
a stock option divided by the fair market value of U.S.
Bancorp stock on the date of exercise.

	 	 	 	 
	Type of Compensation Deferred	 	Applicable Date	 
	

	Annual Salary or Director’s Fees	 	
On or before December 31 of the preceding	 
	 	 	
calendar year, or with respect to a newly	 
	 	 	
designated Participant, the end of the	 
	 	 	
two-week period following such	 
	 	 	
designation.	 
	 
	Incentive Compensation	 	
On or before December 31 of the preceding
	 	 	
calendar year, or with respect to a newly
	 	 	
designated Participant, the end of the
	 	 	
two-week period following such
	 	 	
designation.
	 	 	 
	Option Gains	 	
Six months plus 1 day prior to the
	 	 	
exercise date of a stock option granted
	 	 	
to the Participant under a stock
	 	 	
incentive plan of the Corporation.

 

 

		
	 	In no event shall the deferrals of a Participant for any
calendar year be less than $1,000.00.

		
	 	     (b) A Participant’s deferral election under Section
4(a) with respect to his annual salary, Director’s fees,
incentive compensation or Option Gains shall be effective
and irrevocable upon delivery of an applicable written
election to the Plan Administrator or the Corporation. In
addition, at the time of making a deferral election under
Section 4(a), the Participant shall elect, consistent with
procedures adopted by the Plan Administrator, to have the
amount of deferrals attributable to salary, Director’s fees,
or incentive compensation deemed to be invested in shares of
the Corporation (a “Share Election”), certain mutual funds
(the “Mutual Funds Portion”) or interest bearing assets (the
“Cash Portion”). Notwithstanding any other provision of the
Plan, in no event may a Participant elect to transfer Option
Gains to the Cash Portion, the Mutual Fund Portion, or the
Share Election Account. Option Gains shall be credited with
dividends that would otherwise be payable on Corporation
shares, which shall be deemed reinvested in additional
shares of the common stock of the Corporation. Option Gains
credited to a Participant’s Deferred Compensation Account
shall be appropriately adjusted for all stock dividends,
stock splits or other changes in the Corporation’s common
shares, and shall be distributed only in shares of the
Corporation’s common stock.

3.     Sections 11 (a) and (b) are each hereby amended to add the following
language as the final sentence:

		
	 	Notwithstanding the foregoing, Option Gains credited to a
Participant’s Deferred Compensation Account shall be
distributed to the Participant only in shares of the
Corporation’s common stock and shall not be included in any
lump-sum payment.

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	4. 	Section 11(c) is hereby amended to add the following language as the final
sentence:

		
	 	Option Gains credited to a Participant’s Deferred
Compensation Account shall be distributed to the Participant
in shares of the Corporation’s common stock under the
applicable stock incentive compensation plan of the
Corporation.

	 	
Executed this 21st day of February, 2003.

	 	 	 	 	 
	 	 	U.S. BANCORP
	 	 	 	 	 
	 	 	 	 	 
	 	 	
By:
	 	/s/ Jennie P. Carlson
	 	 	 	 	

	 	 	 	 	Jennie P. Carlson
	 	 	 	 	Executive Vice President

3exv10w22

 

Exhibit 10.22

EDWARD GRZEDZINSKI

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made this 7th day of May,
2001 by and among EDWARD GRZEDZINSKI (hereinafter referred to as “Employee”),
NOVA CORPORATION, a Georgia corporation (“NOVA Corp”), NOVA INFORMATION
SYSTEMS, INC., a Georgia corporation (“NOVA”) and U.S. BANCORP, a Delaware
corporation (“Parent”).

WITNESSETH:

     WHEREAS, NOVA Corp, through its direct and indirect subsidiaries, and
Parent are in the business of providing credit card and debit card transaction
processing services and settlement services (including the related products and
services of automated teller machines and check guarantee services) to
merchants, financial institutions, independent sales organizations (“ISOs”),
and other similar customers (collectively, the “Business”) throughout the
United States and in Europe;

     WHEREAS, Employee currently serves as Chairman of the Board of Directors,
President and Chief Executive Officer of NOVA Corp pursuant to an Employment
Agreement between Employee and NOVA Corp effective February 22, 2001 (the
“Prior Agreement”);

     WHEREAS, Parent and NOVA Corp have entered into the Agreement and Plan of
Merger dated as of May 7, 2001 (the “Merger Agreement”), pursuant to which NOVA
Corp will merge with and into Parent (the “Merger”) on the terms and subject to
the conditions of the Merger Agreement;

     WHEREAS, NOVA and Parent, or their assigns, will continue to engage in the
Business throughout the United States and Europe (the “Territory”);

     WHEREAS, NOVA Corp and Employee desire to terminate the Prior Agreement,
which termination shall be contemporaneous with the effectiveness of this
Agreement;

     WHEREAS, Parent desires to retain the services of Employee on the terms
and conditions set forth in this Agreement, and Employee desires to be employed
by Parent on such terms and conditions;

     NOW, THEREFORE, for and in consideration of the Confidential Information
and Trade Secrets (as hereafter defined) furnished to Employee by NOVA and
Parent in order that he may perform his duties under this Agreement, the mutual
covenants and agreements herein contained, and other valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:

     1.     Employment of Employee. Parent hereby employs Employee for a period
beginning as of the effective date of the Merger (the “Effective Date”) and
ending five (5) years thereafter (the “Initial Term”), unless Employee’s
employment by Parent is sooner terminated or automatically renewed pursuant to
the terms of this Agreement (Employee’s employment by Parent pursuant to the
terms of this Agreement shall hereinafter be referred to as “Employment”).

		
	 	     (a) Employee agrees to such Employment on the terms and conditions
herein set forth and agrees to devote his reasonable best efforts to his
duties under this Agreement and to perform such duties diligently and
efficiently and in accordance with the directions of Parent.
	 
	 	     (b) During the term of Employee’s Employment, Employee shall be
employed as Chairman of the Board of Directors, President and Chief
Executive Officer of NOVA and a Vice Chairman of Parent. Employee shall
be responsible primarily for such duties as are assigned to

 

 

		
	 	him from time to time by the Chief Executive Officer of Parent,
which in any event shall be such duties as are customary for an officer
in those positions.
	 
	 	     (c) Employee shall devote substantially all of his business time,
attention, and energies to the business and affairs of Parent, shall act
at all times in the best interests of Parent, and shall not during the
term of his Employment be engaged in any other business activity, whether
or not such business is pursued for gain, profit, or other pecuniary
advantage, or permit such personal interests as he may have to interfere
with the performance of his duties hereunder. Notwithstanding the
foregoing, Employee may participate in industry, civic and charitable
activities so long as such activities do not materially interfere with
the performance of his duties hereunder. Further, Employee may engage in
passive investments so long as the same are passive, are not inconsistent
with Employee’s duties hereunder and do not involve the development,
ownership, management or provision of credit and debit card processing
and settlement services, including the related products and services of
automatic teller machines and check guarantee services. Employee’s
rights to make certain investments hereunder are in addition to and not
in degradation of investments of less than 5% in a corporation as
described in Section 12(a).

     2.     Compensation. During the term of Employee’s Employment and in
accordance with the terms hereof, Parent shall pay or otherwise provide to
Employee the following compensation:

		
	 	     (a) Employee’s annual salary during the term of his Employment shall
be Five Hundred Forty Thousand and No/100 Dollars ($540,000) (or such
increased base salary as approved by NOVA Corp prior to the Merger, not
to exceed 120% of such amount) (“Base Salary”), with such increases
(each, a “Merit Increase”) as may from time to time be deemed appropriate
by the Chief Executive Officer of Parent; provided, however, that so long
as this Agreement remains in effect, Employee’s Base Salary shall be
reviewed annually by the Chief Executive Officer of Parent at the
beginning of each fiscal year. The Base Salary shall be paid by Parent
monthly in arrears or in accordance with Parent’s regular payroll
practice. As used herein, the term “Base Salary” shall be deemed to
include any Merit Increases granted to Employee.
	 
	 	     (b) In addition to the Base Salary, Employee shall be eligible to
receive annual bonus compensation pursuant to the schedule set forth as
Exhibit A (“Bonus Compensation”) provided, however, that if Employee no
longer is working primarily in the Business, Parent shall provide
Employee with a different incentive compensation plan under which
Employee will have a substantially similar opportunity to achieve annual
bonus compensation in a substantially similar amount. Employee shall be
eligible annually to receive restricted stock awards of shares of Parent
Stock or stock options under the stock incentive plan of Parent. The
amount of shares of restricted stock or options to be granted each year
shall be determined by the Compensation Committee of the Board of
Directors of Parent.
	 
	 	     (c) Employee will be granted on the Effective Date the option to
purchase 500,000 shares of Parent common stock at a price per share equal
to the closing price of Parent common stock on the Effective Date (the
“Option”). The Option will vest in four (4) equal increments of 25%.
The first increment will vest on the first anniversary of the Effective
Date. Another increment of the Option will vest every year thereafter
until 100% of the Option is vested.
	 
	 	     (d) Parent may withhold from any benefits payable under this
Agreement all federal, state, city or other taxes as shall be required
pursuant to any law or governmental regulation or ruling.

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     3.     Benefits. During the term of Employee’s employment, and for such time
thereafter as may be required by Section 8 hereof, Parent shall provide to
Employee the following benefits (or in lieu thereof for a transitional period
immediately following the Merger, benefits equivalent to those provided to
Employee by NOVA Corp immediately prior to the Merger):

		
	 	     (a) Medical Insurance. Employee and his dependents shall be
entitled to participate in such medical, dental, vision, prescription
drug, wellness, or other health care or medical coverage plans as may be
established, offered or adopted from time to time by Parent for the
benefit of its similarly situated employees, pursuant to the terms set
forth in such plans.
	 
	 	     (b) Life Insurance. Employee shall be entitled to participate in
any life insurance plans established, offered, or adopted from time to
time by Parent for the benefit of its similarly situated employees.
	 
	 	     (c) Disability Insurance. Employee shall be entitled to participate
in any disability insurance plans established, offered, or adopted from
time to time by Parent for the benefit of its similarly situated
employees.
	 
	 	     (d) Vacations, Holidays. Employee shall be entitled to at least
four (4) weeks of paid vacation each year and all holidays observed by
Parent.
	 
	 	     (e) Stock Option Plans. Employee shall be eligible for participation
in any stock option plan or restricted stock plan adopted by Parent’s
Board of Directors or the Compensation Committee for the benefit of
similarly situated employees.
	 
	 	     (f) Other Benefits. In addition to and not in any way in limitation
of the benefits set forth in this Section 3, Employee shall be eligible
to participate in all additional employee benefits provided by Parent
(including, without limitation, all tax-qualified retirement plans,
non-qualified retirement and/or deferred compensation plans, incentive
plans, other stock option or purchase plans, and fringe benefits) on
terms at least as favorable as the terms of any benefits that are
afforded to other similarly situated employees during the term of this
Agreement.
	 
	 	     (g) Terms and Provisions of Plans. Parent agrees that it shall not
take action (during the term of this Agreement or the “Election Period,”
as defined in Section 8(a)) to modify the terms and provisions of any
such plan or arrangement so as to exclude only Employee and/or his
dependents, either by excluding Employee and/or his dependents explicitly
by name or by modifying provisions generally applicable to all employees
and dependents so that only Employee and/or his dependents would ever
possibly be affected.
	 
	 	     (h) Vesting of Rights Upon Change In Control. Upon the occurrence
of a “Change in Control” (as defined in Section 8(h)) during the term of
this Agreement, and regardless of whether Employee terminates this
Agreement following such Change in Control, and notwithstanding any
provision to the contrary in any other agreement or document (including
Parent’s applicable plan documents), all stock options, restricted stock,
and other similar rights that have been granted to Employee and are not
vested on the date of such Change in Control, as well as any
non-qualified retirement benefit or deferred compensation plan balance
(collectively, the “Rights”) that is not vested on the date of occurrence
of such an event, shall become vested and exercisable immediately and as
provided under the applicable plan or agreement, Employee shall have the
continuing right to exercise any or all of the Rights until such rights
expire in accordance with their original terms (without regard to any
provision thereof requiring earlier expiration upon termination of
employment). Upon the Effective Date, the Rights of Employee existing on
the Effective Date shall be and become fully vested, nonforfeitable and
immediately exercisable.

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     4.     Personnel Policies. Employee shall conduct himself at all times in a
businesslike and professional manner as appropriate for a person in his
position and shall represent Parent in all respects as complies with good
business and ethical practices. In addition, Employee shall be subject to and
abide by the good faith policies and procedures of Parent applicable generally
to personnel of Parent, as adopted from time to time.

     5.     Reimbursement for Business Expenses. Employee shall be reimbursed, on
a no less frequently than monthly basis, for all out-of-pocket business
expenses incurred by him in the performance of his duties hereunder, provided
that Employee shall first document and substantiate said business expenses in
the manner generally required by Parent under its policies and procedures.

     6.     Settlement Payments. In consideration for Employee’s agreement to
terminate the Prior Agreement and waive the right to receive cash payments or
other benefits under the Prior Agreement upon termination of employment
following a change in control by reason of consummation of the Merger, Parent
shall provide on the Effective Date the compensation described in this Section
6 (provided this Agreement is not terminated prior to the Effective Date), and
Employee shall have no other right to receive payments or other benefits under
this Agreement or the Prior Agreement by reason of the Merger:

		
	 	     (a) Parent shall pay Employee in cash the sum of Two Million Eight
Hundred Eighty Thousand Dollars ($2,880,000.00) (the “Cash Settlement
Payment”). The Cash Settlement Payment shall be paid in one lump sum on
the Effective Date.
	 
	 	     (b) The provisions of Section 8(g) of this Agreement shall be
applicable to the payments provided for in this Section 6. All payments
under this Section 6 are in addition to, and not in lieu of, any payment
due under this Agreement following termination of Employee’s Employment.
	 
	 	     (c) At the election of Employee, with respect to up to 80% of the
aggregate number of shares subject to stock option agreements outstanding
as of the Effective Date (“Option Shares”), Employee shall be entitled to
receive from Parent in exchange for cancellation of the stock option
agreements (or portion thereof) relating to such Option Shares for which
Employee elects, a cash payment in an amount equal to (1) the Cash
Consideration (as defined in the Merger Agreement) multiplied by the
aggregate number of Option Shares subject to the option agreements (or
portion thereof) to be cancelled less (2) the aggregate exercise price
set forth in the stock option agreements (or portion thereof) being
cancelled. Employee shall notify Parent no later than three (3) business
days prior to the Effective Date with respect to the number of Option
Shares subject to the stock option agreements Employee wishes to make the
election pursuant to this Section 6(c). In exchange for such cash
payments, Employee agrees to execute a cancellation agreement with
respect to the Option Shares subject to the stock option agreements (or
portion thereof) being cancelled, which cancellation agreement shall be
in a form reasonably acceptable to Parent. The remaining Option Shares
subject to stock option agreements (or portions thereof) not being
cancelled hereunder shall be converted into the right to acquire shares
of Parent’s common stock in accordance with Section 3.06 of the Merger
Agreement and Employee shall have the continuing right to exercise any or
all of the remaining Option Shares until such rights expire in accordance
with their original terms (without regard to any provisions thereof
requiring earlier expiration upon termination of employment).
	 
	 	     (d) Employee acknowledges and agrees that upon the Effective Date,
the Prior Agreement is terminated, cancelled and of no further force and
effect; provided, however, that this Agreement shall terminate upon any
termination of the Merger Agreement (and, in case of any such termination
hereof, this Agreement shall be deemed to be void ab initio and the Prior
Agreement shall be deemed to have remained in full force and effect);
provided further, that the termination of this Agreement shall only
become effective if the Merger Agreement terminates

4

 

		
	 	prior to the Effective Date. Until the Effective Date, the Prior
Agreement remains in full force and effect.

     7.     Term and Termination of Employment.

		
	 	     (a) This Agreement shall be effective as of the Effective Date.
	 
	 	     (b) Employee’s Employment shall terminate immediately upon the
discharge of Employee by Parent for “Cause.” For the purposes of this
Agreement, the term “Cause,” when used with respect to termination by
Parent of Employee’s Employment hereunder, shall mean termination as a
result of: (i) Employee’s material violation of the covenants set forth
in Section 11 or 12, (ii) Employee’s willful, intentional, or grossly
negligent failure to perform his duties under this Agreement diligently
and in accordance with the directions of Parent; (iii) Employee’s
willful, intentional, or grossly negligent failure to comply with the
good faith decisions or policies of Parent; or (iv) final conviction of
Employee of a felony materially adversely affecting Parent; provided,
however, that in the event Parent desires to terminate Employee’s
Employment pursuant to subsections (i), (ii), or (iii) of this Section
7(b), Parent shall first give Employee written notice of such intent,
detailed and specific description of the reasons and basis therefor, and
thirty (30) days to remedy or cure such perceived breach or deficiency
(the “Cure Period”); provided, however, that with respect only to a
breach that it is not possible to cure within such thirty (30) day
period, so long as Employee is diligently using his best efforts to cure
such breach or deficiency within such period and thereafter, the Cure
Period shall be automatically extended for an additional period of time
(not to exceed sixty (60) additional days) to enable Employee to cure
such breach or deficiency, provided, further, that Employee continues to
diligently use his best efforts to cure such breach or deficiency. If
Employee does not cure the perceived breach or deficiency within the Cure
Period, Parent may discharge Employee immediately upon written notice to
Employee. If Parent desires to terminate Employee’s Employment pursuant
to subsection (iv) of this Section 7(b), Parent shall first give Employee
three (3) days prior written notice of such intent.
	 
	 	     (c) Employee’s Employment shall terminate immediately upon the death
of Employee.
	 
	 	     (d) Employee’s Employment shall terminate immediately upon ninety
(90) days prior written notice to Employee if Employee shall at any time
be incapacitated by reason of physical or mental illness or otherwise
become incapable of performing the duties under this Agreement for a
continuous period of one hundred eighty (180) consecutive days; provided,
however, to the extent Parent could, with reasonable accommodation and
without undue hardship, continue to employ Employee in some other
capacity after such one hundred eighty (180) day period, Parent shall, to
the extent required by the Americans With Disabilities Act, offer to do
so, and, if such offer is accepted by Employee, Employee shall be
compensated accordingly.
	 
	 	     (e) Employee may terminate this Agreement, upon thirty (30) days
prior written notice to Parent (the “Notice Period”), in the event (i)
there is a material diminution in Employee’s duties and responsibilities,
or such duties and responsibilities are otherwise diminished from the
duties and responsibilities held by Employee immediately prior to the
Merger, or such greater duties and responsibilities, as may be assigned
to Employee from time to time; provided, however, that the change in
Employee’s duties and responsibilities resulting from Employee no longer
being an officer of a publicly traded company shall not, by itself, be
sufficient to qualify as a “Responsibility Breach”; (ii) Employee is
required to relocate to an office that is more than thirty-five (35)
miles from Employee’s current office located at One Concourse Parkway,
Suite 300, Atlanta, Georgia 30328; (iii) there is a reduction in
Employee’s Base Salary payable under Section 2, a materially adverse
change in the terms of Exhibit A

5

 

		
	 	attached hereto or a material reduction in benefits provided to
Employee under Section 3 (whether occurring at once or over a period of
time); or (iv) Parent materially breaches this Agreement, (each of (i),
(ii), (iii) and (iv) being referred to as a “Responsibilities Breach”),
Parent fails to cure said Responsibilities Breach within the Notice
Period; provided, however, that with respect only to breaches that it is
not possible to cure within the Notice Period, so long as Parent is
diligently using its best efforts to cure such breaches within such
Notice Period, the Notice Period shall be automatically extended for an
additional period of time (not to exceed sixty (60) additional days) to
enable Parent to cure such breaches, provided, further, that Parent
continues to diligently use its best efforts to cure such breaches.
Notwithstanding anything to the contrary in this Section 7(e), the Notice
Period for failure to pay compensation shall be five (5) days.
	 
	 	     (f) This Agreement shall automatically renew for successive three
(3) year terms (each a “Renewal Term”) unless either Parent or Employee
gives the other party hereto written notice of its or his intent not to
renew this Agreement no later than ninety (90) days prior to the date the
Initial Term, or the then-current Renewal Term, is scheduled to expire.
Employee’s employment shall terminate upon termination or expiration of
this Agreement.
	 
	 	     (g) Parent may terminate this Agreement at any time, without cause,
upon ninety (90) days prior written notice to Employee.
	 
	 	     (h) Employee may terminate this Agreement at any time, without
cause, upon ninety (90) days prior written notice to Parent.
	 
	 	     (i) Other than as specifically provided in and in strict compliance
with this Section 7, this Agreement and/or Employee’s Employment may not
be terminated.

     8.     Termination Payments.

		
	 	     (a) Upon (1) the termination of Employee’s Employment by Parent
pursuant to Section 7(g) or (2) the termination or expiration of this
Agreement, for whatever reason, provided that in the case of this
subsection (2), the earlier of (x) such termination or expiration or (y)
notice of such termination or non-renewal occurs within three years after
a Change in Control (the effective date of such termination or
expiration being referred to as the “Termination Date”), Employee shall
receive the payments and benefits set forth below.

		
	 	     (i) Parent shall pay Employee accrued but unpaid Base Salary
through the Termination Date, Bonus Compensation due and owing to
Employee (as further set forth in Section 8(d)) and any other
benefits required to be provided to Employee and his dependents
under contract and applicable law.
	 
	 	     (ii) Parent shall pay Employee in cash an amount equal to his
“Annual Compensation” (as defined in Section 8(h)(ii)) multiplied
by three (3), which amount will be paid in one lump sum within
fifteen (15) days of the Termination Date.
	 
	 	     (iii) All stock options, restricted stock, and other similar
rights, including any nonqualified retirement plan benefit or
deferred compensation plan balance (“Nonqualified Plan Benefit”)
that is not vested on the Termination Date, that have been granted
to Employee shall become vested and exercisable immediately, and as
provided under the applicable plan or agreement, Employee shall
have the continuing right to exercise such rights until such rights
expire in accordance with their original terms (without regard to
any provision thereof requiring earlier expiration upon termination
of employment).

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	 	     (iv) Until the earlier to occur of: (x) the date which is
three (3) years after the Termination Date, or (y) Employee’s
accepting employment with another employer or otherwise obtaining
coverage (the “Election Period”), Parent shall use commercially
reasonable efforts to provide to Employee and his dependents the
coverage for the benefits described in Sections 3(a), (b) and (c).
	 
	 	     (v) To the extent required, Parent shall pay to Employee the
“Gross-Up Payment” as set forth in Section 8(g).

		
	 	     (b) Upon termination of Employee’s Employment or the termination or
expiration of this Agreement, which termination or expiration occurs: (1)
as a result of Employee terminating this Agreement pursuant to Section
7(e), (2) this Agreement being terminated pursuant to Section 7(c) or
7(d), or (3) this Agreement not being renewed by Parent, and which
termination or expiration is not covered by Section 8(a) hereof (the
effective date of such termination or expiration being referred to herein
as the “Termination Date”), Employee shall receive the payments and
benefits set forth below.

		
	 	     (i) Parent shall pay Employee accrued but unpaid Base Salary
through the Termination Date, Bonus Compensation due and owing to
Employee (as further set forth in Section 8(e)) and any other
benefits required to be provided to Employee and his dependents
under contract and applicable law.
	 
	 	     (ii) Parent shall pay Employee in cash an amount equal to his
Annual Compensation multiplied by three (3), which amount will be
paid in twenty-four (24) equal monthly installments beginning on
the first day of the calendar month following the calendar month in
which the Termination Date occurs.
	 
	 	     (iii) All stock options, restricted stock, and other similar
rights, including any Nonqualified Plan Benefits that are not
vested on the Termination Date, that have been granted to Employee
shall become vested and exercisable immediately, and as provided
under the applicable plan or agreement, Employee shall have the
continuing right to exercise such rights until such rights expire
in accordance with their original terms (without regard to any
provision thereof requiring earlier expiration upon termination of
employment).
	 
	 	     (iv) For the duration of the Election Period, Parent shall use
commercially reasonable efforts to provide to Employee and his
dependents the coverage for the benefits described in Sections
3(a), (b) and (c).

		
	 	     (c) Upon termination of Employee’s Employment or the termination or
expiration of this Agreement, which termination or expiration occurs: (1)
as a result of Parent terminating this Agreement pursuant to Section
7(b), (2) as a result of this Agreement not being renewed by Employee, or
(3) as a result of Employee terminating this Agreement pursuant to
Section 7(h), and which termination or expiration is not covered by
Sections 8(a) or 8(b)(the effective date of such termination or
expiration being referred to herein as the “Termination Date”), Employee
shall receive the payments and benefits set forth below.

		
	 	     (i) Parent shall pay Employee accrued but unpaid Base Salary
through the Termination Date, Bonus Compensation due and owing to
Employee (as further set forth in Section 8(d)) and any other
benefits required to be provided to Employee and his dependents
under contract and applicable law.

7

 

		
	 	     (ii) Parent shall pay Employee in cash an amount equal to his
“Termination Base Salary” (as defined herein) in twelve (12) equal
monthly installments beginning on the first day of the calendar
month following the calendar month in which the Termination Date
occurs; provided, however, that Parent shall not be obligated to
make any such monthly payments covering the portion of the
above-referenced twelve month occurring prior to the second
anniversary of the Effective Date and such payments shall be
waived. “Termination Base Salary” shall be the greater of
Employee’s Base Salary in effect on the Termination Date or the
greatest Base Salary in effect during the calendar year immediately
prior to the calendar year in which the Termination Date occurs.
	 
	 	     (iii) To the extent that Employee and/or any of his dependents
is eligible to, and timely elects to, receive continuation coverage
under any group health plan providing medical, dental, vision,
prescription drug, wellness or other health care or medical
coverage which is subject to the provisions of part 6 of Title I of
ERISA (“COBRA”), Parent shall timely pay any premiums required for
such coverage. This payment of premiums by Parent is not intended
to alter in any way the provisions of any group health plan of
Parent, and all time limits, effects of subsequent coverage and all
other relevant provisions of any such plan remain unchanged and
shall control Employee’s (and his dependents’) entitlement to
coverage or benefits under such plan.

		
	 	     (d) For the purposes of payments to be made under this Section 8:

		
	 	     (i) Any accrued but unpaid Base Salary shall be paid to
Employee within five (5) business days of the Termination Date.
	 
	 	     (ii) For purposes of calculating Bonus Compensation due and
owing to Employee:

		
	 	     (A) Regardless of the reason for termination or
expiration of this Agreement, in the event that Bonus
Compensation for the calendar year preceding the calendar
year in which the Termination Date occurs has not been paid
by the Termination Date, such Bonus Compensation shall be
paid to Employee concurrently with Parent’s payment of Bonus
Compensation generally for such calendar year.

		
	 	     (B) In the case of a termination or expiration of this
Agreement governed by Sections 8(a) or 8(b) hereof, Employee
shall receive an amount of Bonus Compensation for the
calendar year in which the Termination Date occurs equal to
(x) the amount of Bonus Compensation which Employee would
have been entitled to receive had termination or expiration
not occurred in such calendar year multiplied by (y) a
fraction, the numerator of which is the number of days
beginning on January 1st of the calendar year in which the
Termination Date occurs and ending on the Termination Date,
and the denominator of which is 365. This payment shall be
paid to Employee concurrently with Parent’s payment of Bonus
Compensation generally for such calendar year.

		
	 	     (C) In the case of a termination or expiration of this
Agreement governed by Section 8(c) hereof, Employee shall not
receive any Bonus Compensation for the calendar year in which
the Termination Date occurs.

		
	 	     (iii) For purposes of calculating the amount of payments made
using the Annual Compensation formula, Parent shall initially
compute the Annual Compensation under Section 8(h)(ii)(B) using the
Prior Bonus Amount or $420,000, whichever is

8

 

		
	 	higher. However, in the event the Current Bonus Amount, when
awarded, exceeds the higher of the Prior Bonus Amount or $420,000,
then Parent will pay the difference to Employee, either in equal
amounts over the remainder of the term over which such payments are
to be made, or in one lump sum, as the case may be.

		
	 	     (e) Following the termination or expiration of this Agreement,
Employee shall be bound by the covenants not to solicit or compete set
forth in Section 12 hereof as set forth below.

		
	 	     (i) In the event of a termination or expiration of this
Agreement which is governed by Sections 8(a) or 8(b) hereof,
Employee shall comply with the covenants not to solicit or compete
set forth in Section 12 hereof for a period of two (2) years
immediately following the Termination Date.
	 
	 	     (ii) In the event of a termination or expiration of this
Agreement which is governed by Section 8(c) hereof, Employee shall
comply with the covenants not to solicit or compete set forth in
Section 12 hereof for a period of one (1) year immediately
following the Termination Date; provided, however, that if within
ninety (90) days after the Termination Date, Parent provides
Employee with written notice of such election (the “Extension
Notice”), Employee shall comply with the covenants not to solicit
or compete set forth in Section 12 below for a period of two (2)
years immediately following the Termination Date. In the event
that Parent provides Employee with the Extension Notice in the time
provided, and in addition to the payment to be made pursuant to
Section 8(c)(ii) hereof, Parent shall pay Employee in cash an
amount equal to his Annual Compensation, which shall be paid in
twelve (12) equal monthly installments beginning on the first day
of the calendar month following the calendar month of the final
payment to be made pursuant to Section 8(c)(ii), above.

		
	 	     (f) In the event of the death of Employee, all benefits and
compensation hereunder shall, unless otherwise specified by Employee, be
payable to, or exercisable by, Employee’s estate.
	 
	 	     (g) Gross-Up Payment.

		
	 	     (i) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any
payment, grant, acceleration or distribution by or on behalf of
Parent to or for the benefit of Employee as a result of any change
in control (within the meaning of Section 280 G of the internal
revenue code) or as otherwise payable under Sections 3(h), 6 or
8(a) (whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under
this Section 8(g) (a “Payment”)) would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended (the “Code”), or any interest or penalties are incurred by
Employee with respect to such excise tax (such excise tax, together
with any such interest and penalties, are hereinafter collectively
referred to as the “Excise Tax”), then Employee shall be entitled
to receive an additional payment (a “Gross-Up Payment”) in an
amount such that, after payment by Employee of all taxes upon the
Gross-Up Payment (such taxes including, without limitation, any
income taxes and Excise Tax imposed upon the Gross-Up Payment, and
any interest or penalties imposed with respect to such taxes),
Employee retains an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the Payment.
	 
	 	     (ii) Subject to the provisions of Section 8(g)(iii), all
determinations required to be made under this Section 8, including
whether and when a Gross-Up Payment is

9

 

		
	 	required and the amount of such Gross-Up Payment and the
assumptions to be utilized in arriving at such determination, shall
be made by a nationally recognized accounting firm or law firm
selected by Employee and reasonably acceptable to Parent (the “Tax
Firm”); provided, however, that the Tax Firm shall not determine
that no Excise Tax is payable by Employee unless it delivers to
Employee a written opinion (the “Accounting Opinion”) that failure
to pay the Excise Tax and to report the Excise Tax and the payments
potentially subject thereto on or with Employee’s applicable
federal income tax return will not result in the imposition of an
accuracy-related or other penalty on Employee. All fees and
expenses of the Tax Firm shall be borne solely by Parent. Within
15 business days of the receipt of notice from Employee that there
has been a Payment, the Tax Firm shall make all determinations
required under this Section 8, shall provide to Parent and Employee
a written report setting forth such determinations, together with
detailed supporting calculations, and, if the Tax Firm determines
that no Excise Tax is payable, shall deliver the Accounting Opinion
to Employee. Any Gross-Up Payment, as determined pursuant to this
Section 8, shall be paid by Parent to Employee within fifteen days
of the receipt of the Tax Firm’s determination. Subject to the
remainder of this Section, any determination by the Tax Firm shall
be binding upon Parent and Employee; provided, however, that
Employee shall only be bound to the extent that the determinations
of the Tax Firm hereunder, including the determinations made in the
Accounting Opinion, are reasonable and reasonably supported by
applicable law. As a result of the uncertainty in the application
of Section 4999 of the Code at the time of the initial
determination by the Tax Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by Parent should
have been made (“Underpayment”), consistent with the calculations
required to be made hereunder. In the event that it is ultimately
determined in accordance with the procedures set forth in Section
8(g)(iii) that Employee is required to make a payment of any Excise
Tax, the Tax Firm shall reasonably determine the amount of the
Underpayment that has occurred and any such Underpayment shall be
promptly paid by Parent to or for the benefit of Employee. In
determining the reasonableness of Tax Firm’s determinations
hereunder, and the effect thereof, Parent and Employee shall be
provided a reasonable opportunity to review such determinations
with Tax Firm and their respective tax counsel, if separate from
the Tax Firm. Tax Firm’s determinations hereunder, and the
Accounting Opinion, shall not be deemed reasonable until Employee’s
reasonable objections and comments thereto have been satisfactorily
accommodated by Tax Firm.
	 
	 	     (iii) Employee shall notify Parent in writing of any claims by
the Internal Revenue Service that, if successful, would require the
payment by Parent of the Gross-Up Payment. Such notification shall
be given as soon as practicable, but no later than 30 calendar days
after Employee actually receives notice in writing of such claim,
and shall apprise Parent of the nature of such claim and the date
on which such claim is requested to be paid; provided, however,
that the failure of Employee to notify Parent of such claim (or to
provide any required information with respect thereto) shall not
affect any rights granted to Employee under this Section except to
the extent that Parent is materially prejudiced in the defense of
such claim as a direct result of such failure. Employee shall not
pay such claim prior to the expiration of the thirty (30) day
period following the date on which he gives such notice to Parent
(or such shorter period ending on the date that any payment of
taxes with respect to such claim is due). If Parent notifies
Employee in writing prior to the expiration of such period that it
desires to contest such claim, Employee shall do all of the
following:

		
	 	     (A) give Parent any information reasonably requested by
Parent relating to such claim;

10

 

		
	 	     (B) take such action in connection with contesting such
claim as Parent shall reasonably request in writing from time
to time, including, without limitation, accepting legal
representation with respect to such claim by an attorney
selected by Parent and reasonably acceptable to Employee;

		
	 	     (C) cooperate with Parent in good faith in order
effectively to contest such claim;

		
	 	     (D) if Parent elects not to assume and control the
defense of such claim, permit Parent to participate in any
proceedings relating to such claim; provided, however, that
Parent shall bear and pay directly all costs and expenses
(including additional interest and penalties) incurred in
connection with such contest and shall indemnify and hold
Employee harmless, on an after-tax basis, for any Excise Tax
or income tax (including interest and penalties with respect
thereto) imposed as a result of such representation and
payment of costs and expenses. Without limiting the
foregoing provisions of this Section 8, Parent shall have the
right, at its sole option, to assume the defense of and
control all proceedings in connection with such contest, in
which case it may pursue or forego any and all administrative
appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may either
direct Employee to pay the tax claimed and sue for a refund
or contest the claim in any permissible manner, and Employee
agrees to prosecute such contest to a determination before
any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as Parent
shall determine; provided, however, that if Parent directs
Employee to pay such claim and sue for a refund, Parent shall
advance the amount of such payment to Employee, on an
interest-free basis and shall indemnify and hold Employee
harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties with respect
thereto) imposed with respect to such advance or with respect
to any imputed income with respect to such advance; and
further provided that any extension of the statute of
limitations relating to payment of taxes for the taxable year
of Employee with respect to which such contested amount is
claimed to be due is limited solely to such contested amount.
Furthermore, Parent’s right to assume the defense of and
control the contest shall be limited to issues with respect
to which a Gross-Up Payment would be payable hereunder and
Employee shall be entitled to settle or contest, as the case
may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.

		
	 	     (iv) If, after the receipt by Employee of an amount advanced
by Parent pursuant to this Section 8(g), Employee becomes entitled
to receive any refund with respect to such claim, Employee shall
(subject to Parent’s complying with the requirements of Section
8(g)(iii)) promptly pay to Parent the amount of such refund
(together with any interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by Employee of an
amount advanced by Parent pursuant to Section 8(g)(iii), a
determination is made that Employee is not entitled to a refund
with respect to such claim and Parent does not notify Employee in
writing of its intent to contest such denial of refund prior to the
expiration of 30 days after such determination, then such advance
shall, to the extent of such denial, be forgiven and shall not be
required to be repaid and the amount of forgiven advance shall
offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.

		
	 	     (h) For purposes of this Agreement, the following terms shall be
defined as follows:

11

 

		
	 	     (i) “Change in Control” shall mean:

		
	 	     (A) The acquisition (other than from Parent) by any
person, entity or “group”, within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934
(the “Exchange Act”) (excluding, for this purpose, any
employee benefit plan of Parent or its subsidiaries which
acquires beneficial ownership of voting securities of Parent)
of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 25% or more of either
the then outstanding shares of Parent’s stock or the
combined voting power of Parent’s then outstanding voting
securities entitled to vote generally in the election of
directors; or

		
	 	     (B) The consummation by Parent of a reorganization,
merger, consolidation, in each case, with respect to which
the shares of the company voting stock outstanding
immediately prior to such reorganization, merger or
consolidation do not constitute or become exchanged for or
converted into more than 50% of the combined voting power
entitled to vote generally in the election of directors of
the reorganized, merged or consolidated company’s then
outstanding voting securities, or a liquidation or
dissolution of Parent or the sale of all or substantially all
of the assets of Parent; or

		
	 	     (C) The failure for any reason of individuals who
constitute the Incumbent Board to continue to constitute at
least a majority of the board of directors of Parent; or

		
	 	     (D) The sale, assignment or transfer of the Business to
an unaffiliated third party, whether by sale of all or
substantially all the assets of the Business, sale of stock
or merger.

		
	 	     (ii) “Annual Compensation” means the sum of the following
amounts:

		
	 	     (A) the greater of Employee’s Base Salary in effect on
the Termination Date, or the greatest Base Salary in effect
during the calendar year immediately prior to the calendar
year in which the Termination Date occurs; and

		
	 	     (B) the greater of the Bonus Compensation which Employee
would have received for the calendar year in which the
Termination Date occurs had Employee’s Employment not been
terminated (the “Current Bonus Amount”), or such Bonus
Compensation for the calendar year immediately prior to the
calendar year in which the Termination Date occurs (the
“Prior Bonus Amount”); provided, however, in no event shall
the Bonus Compensation be less than $420,000 for purposes of
calculating Employee’s Annual Compensation. For purposes of
calculating Employee’s Annual Compensation only, Employee
shall be deemed to have met all conditions, including
employment conditions, necessary for the receipt of the
Current Bonus Amount.

		
	 	     (iii) “Incumbent Board” shall mean the members of the
board of directors of Parent as of the date hereof and any
person becoming a member of the board of directors of Parent
hereafter whose election, or nomination for election by
Parent’s shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board
(other than an election or nomination of an individual whose
initial assumption of office is in connection with an actual
or threatened election contest relating to the election of
the

12

 

		
	 	directors of Parent, as such terms are used in Rule
14a-11 of Regulation 14A promulgated under the Exchange Act).

     9.     Products, Notes, Records and Software. Employee acknowledges and
agrees that all memoranda, notes, records and other documents and computer
software created, developed, compiled, or used by Employee or made available to
him during the term of his Employment concerning or relative to the Business,
including, without limitation, all customer data, billing information, service
data, and other technical material of NOVA or Parent is and shall be NOVA’s or
Parent’s, as the case may be, property. Employee agrees to deliver all such
materials to NOVA or Parent, as applicable, thirty (30) days after Employee
receives a written request therefor from NOVA or Parent. Employee further
agrees not to use such materials for any reason after said termination.

     10.     Arbitration.

		
	 	     (a) Parent and Employee acknowledge and agree that (except as
specifically set forth in Section 10(d)) that any claim or controversy
arising out of or relating to this Agreement shall be settled by binding
arbitration in Atlanta, Georgia, in accordance with the National Rules of
the American Arbitration Association for the Resolution of Employment
Disputes in effect on the date of the event giving rise to the claim or
controversy. Parent and Employee further acknowledge and agree that
either party must request arbitration of any claim or controversy within
one (1) year of the date of the event giving rise to the claim or
controversy by giving written notice of the party’s request for
arbitration. Failure to give notice of any claim or controversy within
one (1) year of the event giving rise to the claim or controversy shall
constitute waiver of the claim or controversy.
	 
	 	     (b) All claims or controversies subject to arbitration pursuant to
Section 10(a) above shall be submitted to arbitration within six (6)
months from the date that a written notice of request for arbitration is
effective. All claims or controversies shall be resolved by a panel of
three arbitrators who are licensed to practice law in the State of
Georgia and who are experienced in the arbitration of labor and
employment disputes. These arbitrators shall be selected in accordance
with the National Rules of the American Arbitration Association for the
Resolution of Employment Disputes in effect at the time the claim or
controversy arises. Either party may request that the arbitration
proceeding be stenographically recorded by a Certified Shorthand
Reporter. The arbitrators shall issue a written decision with respect to
all claims or controversies within thirty (30) days from the date the
claims or controversies are submitted to arbitration. The parties shall
be entitled to be represented by legal counsel at any arbitration
proceedings.
	 
	 	     (c) Parent and Employee acknowledge and agree that the arbitration
provisions in this Agreement may be specifically enforced by either
party, and that submission to arbitration proceedings may be compelled by
any court of competent jurisdiction. Parent and Employee further
acknowledge and agree that the decision of the arbitrators may be
specifically enforced by either party in any court of competent
jurisdiction.
	 
	 	     (d) Notwithstanding the arbitration provisions set forth herein,
Employee and Parent acknowledge and agree that nothing in this Agreement
shall be construed to require the arbitration of any claim or controversy
arising under Sections 11 and 12 of this Agreement, nor shall such
provisions prevent Parent from seeking equitable relief from a court of
competent jurisdiction for violations of Sections 11 and 12 of this
Agreement. These provisions shall be enforceable by any court of
competent jurisdiction and shall not be subject to arbitration except by
mutual written consent of the parties signed after the dispute arises,
any such consent, and the terms and conditions thereof, then becoming
binding on the parties. Employee and Parent further acknowledge and
agree that nothing in this Agreement shall be construed to require
arbitration of any claim for workers’ compensation or unemployment
compensation.

13

 

     11.     Nondisclosure.

		
	 	     (a) Confidential Information. Employee acknowledges and agrees that
because of his Employment, he will have access to proprietary information
of NOVA and Parent concerning or relative to the Business of NOVA and
Parent which is of a special and unique value (collectively,
“Confidential Information”) which includes, without limitation, technical
material of NOVA and Parent, sales and marketing information, customer
account records, billing information, training and operations
information, materials and memoranda, personnel records, pricing and
financial information relating to the business, accounts, customers,
prospective customers, employees and affairs of NOVA and Parent, and any
information marked “Confidential” by NOVA or Parent. Employee
acknowledges and agrees that Confidential Information is and shall be
NOVA’s or Parent’s property, as the case may be, prior to and after the
Merger. Employee recognizes and acknowledges that this Agreement
furthers Parent’s interest in connection with entering into the Merger
Agreement and the consummation of the transactions contemplated thereby.
Employee agrees that except as required by Employee’s duties with NOVA
or, following the Merger, Parent, Employee shall keep NOVA’s or Parent’s
Confidential Information confidential, and Employee shall not use
Confidential Information for any reason other than on behalf of NOVA and
Parent pursuant to, and in strict compliance with, the terms of this
Agreement. Employee further agrees that for a period beginning on the
Termination Date and ending two (2) years thereafter, Employee shall
continue to keep Confidential Information confidential, and Employee
shall not use Confidential Information for any reason or in any manner.
	 
	 	     (b) Notwithstanding the foregoing, Employee shall not be subject to
the restrictions set forth in subsection (a) of this Section 11 with
respect to information which:

		
	 	     (i) becomes generally available to the public other than as a
result of disclosure by Employee or the breach of Employee’s
obligations under this Agreement;
	 
	 	     (ii) becomes available to Employee from a source which is
unrelated to his Employment or the exercise of his duties under
this Agreement, provided that such source lawfully obtained such
information and is not bound by a confidentiality agreement with
Parent or NOVA; or
	 
	 	     (iii) is required by law to be disclosed.

		
	 	     (c) Trade Secrets. Employee acknowledges and agrees that because of
his Employment, he will have access to “trade secrets” (as defined in the
Uniform Trade Secrets Act, O.C.G.A. § 10-1-760, et seq. (the “Uniform
Trade Secrets Act”)) of NOVA (“Trade Secrets”). Nothing in this
Agreement is intended to alter the applicable law and remedies with
respect to information meeting the definition of “trade secrets” under
the Uniform Trade Secrets Act, which law and remedies shall be in
addition to the obligations and rights of the parties hereunder.

     12.     Covenants Not to Solicit or Compete. Employee acknowledges and agrees
that, because of his Employment and the anticipated Merger, he does and will
continue to have access to confidential or proprietary information concerning
merchants, associate banks and ISOs of Parent and shall have established
relationships with such merchants, associate banks and ISOs as well as with the
vendors, consultants, and suppliers used to service such merchants, associate
banks and ISOs. As an inducement to Parent to enter into, complete and close
the Merger and in consideration for Parent’s agreement to employ Employee with
the compensation and benefits described herein, Employee agrees that from and
after the Effective Date, and continuing thereafter for the period specified in
Section 8(e) (provided NOVA complies with its obligations set forth in Section
8 hereof), except as permitted or contemplated by this Agreement, Employee
shall not, directly or indirectly, either individually, in

14

 

 partnership, jointly, or in conjunction with, or on behalf of, any person,
firm, partnership, corporation, or unincorporated association or entity of any
kind:

		
	 	     (a) obtain any interest (except as a shareholder holding less than
five percent (5%) interest in a corporation) in any person, firm,
partnership, corporation, or unincorporated association of any kind which
provides credit card or debit card transaction processing services within
the Territory;
	 
	 	     (b) provide managerial, executive, advisory, consulting, sales or
marketing services relating to credit card or debit card transaction
processing to any person, firm, partnership, corporation, or
unincorporated association of any kind which provides credit card or
debit card transaction processing services within the Territory;
	 
	 	     (c) solicit or contact, for the purpose of providing products or
services competing with those provided by the Business (or any other
business of Parent in which Employee was engaged), any person or entity
that during the term of Employee’s Employment was a merchant, associate
bank, ISO or customer (including any actively-sought prospective
merchant, associate bank, ISO or customer) with whom Employee had
material contact or about whom Employee learned material confidential
information during the last twelve (12) months of his Employment;
	 
	 	     (d) persuade or attempt to persuade any merchant, associate bank,
ISO, customer, or supplier of Parent to terminate or modify such
merchant’s, associate bank’s, ISO’s, customer’s, or supplier’s
relationship with Parent if Employee had material contact with or learned
material confidential information about such merchant, associate bank,
ISO, customer or supplier during the last twelve (12) months of his
Employment; or
	 
	 	     (e) persuade or attempt to persuade any person who was employed by
Parent or any of its subsidiaries as of the date of the termination of
Employee’s Employment to terminate or modify his employment relationship,
whether or not pursuant to a written agreement, with Parent or any of its
subsidiaries, as the case may be.

     13.     New Developments. Any discovery, invention, process or improvement
made or discovered by Employee during the term of his Employment in connection
with or in any way affecting or relating to the Business (as then carried on or
under active consideration) shall forthwith be disclosed to Parent and shall
belong to and be the absolute property of Parent; provided, however, that this
provision does not apply to an invention for which no equipment, supplies,
facility, trade secret information of Parent was used and which was developed
entirely on Employee’s own time, unless (a) the invention relates (i) directly
to the Business or (ii) to Parent’s actual or demonstrably anticipated research
or development; or (b) the invention results from any work performed by
Employee for Parent.

     14.     Remedy for Breach. Employee acknowledges and agrees that his breach
of any of the covenants contained in Sections 9, 11, 12 and 13 of this
Agreement would cause irreparable injury to Parent and that remedies at law of
Parent for any actual or threatened breach by Employee of such covenants would
be inadequate and that Parent shall be entitled to specific performance of the
covenants in such sections or injunctive relief against activities in violation
of such sections, or both, by temporary or permanent injunction or other
appropriate judicial remedy, writ or order, without the necessity of proving
actual damages. This provision with respect to injunctive relief shall not
diminish the right of Parent to claim and recover damages against Employee for
any breach of this Agreement in addition to injunctive relief. Employee
acknowledges and agrees that, subject to Parent’s compliance with the
provisions of Section 8 hereof, the covenants contained in Sections 9, 11, 12
and 13 of this Agreement shall be construed as agreements independent of any
other provision of this or any other contract between the parties hereto, and
that the existence of any claim or cause of action by Employee against Parent,

15

 

 whether predicated upon this or any other contract, shall not constitute a
defense to the enforcement by Parent of said covenants.

     15.     Reasonableness. Employee has carefully considered the nature and
extent of the restrictions upon him and the rights and remedies conferred on
Parent under this Agreement, and Employee hereby acknowledges and agrees that:

		
	 	     (a) the restrictions and covenants contained herein, and the rights
and remedies conferred upon Parent, are necessary to protect the goodwill
and other value of the Business;

		
	 	     (b) the restrictions placed upon Employee hereunder are narrowly
drawn, are fair and reasonable in time and territory, will not prevent
him from earning a livelihood, and place no greater restraint upon
Employee than is reasonably necessary to secure the Business and goodwill
of Parent;
	 
	 	     (c) Parent is relying upon the restrictions and covenants contained
herein in continuing to make available to Employee information concerning
the Business; and
	 
	 	     (d) Employee’s Employment places him in a position of confidence and
trust with Parent and its employees, merchants, associate banks, ISOs,
customers, vendors and suppliers.

     16.     Invalidity of Any Provision. It is the intention of the parties
hereto that the provisions of this Agreement shall be enforced to the fullest
extent permissible under the laws and public policies of each state and
jurisdiction in which such enforcement is sought, but that the unenforceability
(or the modification to conform with such laws or public policies) of any
provision hereof shall not render unenforceable or impair the remainder of this
Agreement which shall be deemed amended to delete or modify, as necessary, the
invalid or unenforceable provisions. The parties further agree to alter the
balance of this Agreement in order to render the same valid and enforceable.
The terms of the non-competition provisions of this Agreement shall be deemed
modified to the extent necessary to be enforceable and, specifically, without
limiting the foregoing, if the term of the non-competition is too long to be
enforceable, it shall be modified to encompass the longest term which is
enforceable and, if the scope of the geographic area of non-competition is too
great to be enforceable, it shall be modified to encompass the greatest area
that is enforceable. The parties further agree to submit any issues regarding
such modification to a court of competent jurisdiction if they are unable to
agree and further agree that if said court declines to so amend or modify this
Agreement, the parties will submit the issue of amendment or modification of
the non-competition covenants in this Agreement to binding arbitration in
accordance with Section 10 hereof.

     17.     Indemnification; Full Settlement and Legal Expenses.

		
	 	     (a) At all times during and after Employee’s Employment and the
effectiveness of this Agreement, Parent shall indemnify Employee (as a
director, officer, employee and otherwise) to the fullest extent
permitted by law and shall at all times maintain appropriate provisions
in its Articles of Incorporation and Bylaws which mandate that Parent
provide such indemnification.
	 
	 	     (b) Parent’s obligation to make the payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall not be
affected by any set-off, counter-claim, recoupment, defense or other
claim, right or action which Parent may have, or claim to have, against
Employee or others. In no event shall Employee be obligated to seek
other employment or take any other action by way of mitigation of the
amounts payable to Employee under any of the provisions of this
Agreement. Parent agrees to pay, to the full extent permitted by law,
all legal fees and expenses which Employee may reasonably incur as a
result of any legitimate, non-frivolous contest (regardless of the
outcome thereof) by Parent or others of the validity or

16

 

		
	 	enforceability of, or liability under, any provision of this
Agreement or any guarantee of performance thereof (including as a result
of any legitimate, non-frivolous contest by Employee concerning the
amount of any payment pursuant to Section 8 of this Agreement), plus in
each case interest at the applicable federal rate provided for in Section
7872(f)(2) of the Code. Parent will not be bound to pay any legal fees
or expenses arising out of baseless, meritless or frivolous contests
brought hereunder by Employee or others. A contest will be deemed
baseless, meritless and/or frivolous if a court or other arbiter assesses
penalties or sanctions for bringing said contest, or a court or other
arbiter dismisses said contest for failure to state a colorable claim.
	 
	 	     (c) As a condition to receiving payments under Sections 8(a), (b) or
(c), Employee must execute a release in the form attached hereto as
Exhibit B.

     18.     Applicable Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Georgia.

     19.     Waiver of Breach. The waiver by Parent of a breach of any provision
of this Agreement by Employee shall not operate or be construed as a waiver of
any subsequent breach by Employee.

     20.     Successors and Assigns. This Agreement shall inure to the benefit of
Parent, its subsidiaries and affiliates, and their respective successors and
assigns. This Agreement is not assignable by Employee or by Parent, except
that Parent may assign its rights (but not its obligations) under this
Agreement to any affiliated or subsidiary corporation, and Parent may assign
this Agreement to any successor to Parent in any reorganization, merger or
consolidation, or transfer of all or substantially all of Parent’s business or
properties.

     21.     Notices. All notices, demands and other communications hereunder
shall be in writing and shall be delivered in person or deposited in the United
States mail, certified or registered, with return receipt requested, as
follows:

	 	 	 	 	 
	 	 	
(i)
	 	If to Employee, to:
	 	 	 	 	 
	 	 	 	 	Edward Grzedzinski
	 	 	 	 	Chief Executive Officer
	 	 	 	 	NOVA Corporation
	 	 	 	 	One Concourse Parkway, Suite 300
	 	 	 	 	Atlanta, Georgia 30328
	 	 	 	 	 
	 	 	 	With a copy (which shall not constitute notice) to:
	 	 	 	 	 
	 	 	 	 	Edward Grzedzinski
	 	 	 	 	695 Peace Creek Trace
	 	 	 	 	Alpharetta, Georgia 30005
	 	 	 	 	 
	 	 	
(ii)
	 	If to NOVA, to:
	 	 	 	 	 
	 	 	 	 	NOVA Corporation
	 	 	 	 	One Concourse Parkway
	 	 	 	 	Suite 300
	 	 	 	 	Atlanta, Georgia 30328
	 	 	 	 	Attention: Cherie Fuzzell

     
     
     General Counsel
	 
	 	 	 	With a copy (which shall not constitute notice) to:

17

 

	 	 	 	 	 
	 	 	 	 	Long Aldridge & Norman LLP
	 	 	 	 	SunTrust Plaza
	 	 	 	 	303 Peachtree Street
	 	 	 	 	Suite 5300
	 	 	 	 	Atlanta, Georgia 30308
	 	 	 	 	Attention: David M. Ivey, Esq.
	 	 	 	 	 
	 	 	
(iii)
	 	If to Parent, to:
	 	 	 	 	 
	 	 	 	 	U.S. Bancorp
	 	 	 	 	U.S. Bank Place
	 	 	 	 	201 Second Avenue South
	 	 	 	 	Minneapolis, Minnesota 55402
	 	 	 	 	Attention: General Counsel

     22.     Entire Agreement. This Agreement contains the entire agreement of the
parties, and as of the Effective Date, supersedes all other prior negotiations,
commitments, agreements and understandings (written or oral) between the
parties with respect to the subject matter hereof, including but not limited to
the Prior Agreement, which is hereby terminated as of the Effective Date. It
may not be changed orally but only by an agreement in writing signed by the
party against whom enforcement of any waiver, change, modification, extension,
or discharge is sought.

     23.     Indemnification. At all times during and after Employee’s Employment
and the effectiveness of this Agreement, Parent shall indemnify Employee (as a
director, officer, employee and otherwise) to the fullest extent permitted by
law and shall at all times maintain appropriate provisions in its Articles of
Incorporation and Bylaws which mandate that Parent provide such
indemnification.

     24.     Survival. The provisions of Sections 8, 9, 10, 11, 12, 13, 14, 15,
16, 17, 18, 21 and 23 shall survive termination of Employee’s Employment and
termination of this Agreement.

     25.     Withholding; No Offset. All payments required to be made by Parent
under this Agreement will be subject to the withholding of such amounts, if
any, relating to federal, state and local taxes as may be required by law. No
payment under this Agreement will be subject to offset or reduction
attributable to any amount Employee may owe to Parent or any other person, as
permitted by law. Nothing in this Section shall be construed to reduce
Employee’s right to the payments described in Section 8(g).

(Signatures Begin on Next Page)

18

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement under
seal as of the date first above shown.

	 	 	 	 	 
	 	 	 	“EMPLOYEE”:
	 	 	 	 	 
	 	 	 	
By:
	/s/ Edward Grzedzinski
	 	 	 	 	

	 	 	 	 	Edward Grzedzinski
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	“NOVA CORP”:
	 	 	 	 	 
	 	 	 	NOVA CORPORATION
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	
By:
	/s/ Stephen M. Scheppmann
	 	 	 	 	

	 	 	 	
Name: 
	Stephen M. Scheppmann
	 	 	 	 	

	 	 	 	
Title:
	Chief Financial Officer
	 	 	 	 	

	 	 	 	 	 
	 	 	 	 	[CORPORATE SEAL]
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	“NOVA”
	 	 	 	 	 
	 	 	 	NOVA INFORMATION SYSTEMS, INC
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	
By:
	/s/ Stephen M. Scheppmann
	 	 	 	 	

	 	 	 	
Name: 
	Stephen M. Scheppmann
	 	 	 	 	

	 	 	 	
Title:
	Chief Financial Officer
	 	 	 	 	

	 	 	 	 	 
	 	 	 	 	[CORPORATE SEAL]
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	PARENT:
	 	 	 	 	 
	 	 	 	U.S. BANCORP
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	
By:
	/s/ Lee R. Mitau
	 	 	 	 	

	 	 	
 
	 	Name: Lee R. Mitau
	 	 	 	 	

	 	 	
 
	 	Title: Executive Vice President

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