<PAGE>
As filed with the Securities and Exchange Commission on May 23, 1996
Registration No. 333- ________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_______________
NOVA CORPORATION
(Exact name of registrant as specified in its charter)
GEORGIA 58-2209575
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
FIVE CONCOURSE PARKWAY, SUITE 700, ATLANTA, GEORGIA 30328
(Address of principal executive offices, including zip code)
NOVA CORPORATION 1991 EMPLOYEES' STOCK OPTION AND STOCK APPRECIATION RIGHTS PLAN
NOVA CORPORATION 1996 EMPLOYEES STOCK INCENTIVE PLAN
(Full title of the plans)
_______________
CATHY A. HARPER, ESQ. COPY TO:
NOVA CORPORATION
FIVE CONCOURSE PARKWAY LEONARD A. SILVERSTEIN, ESQ.
SUITE 700 LONG, ALDRIDGE & NORMAN, LLP
ATLANTA, GEORGIA 30328 ONE PEACHTREE CENTER, SUITE 5300
(Name and address of agent for service) 303 PEACHTREE STREET
(770) 396-1456 ATLANTA, GEORGIA 30308
(Telephone number, including area code, (404) 527-4000
of agent for service)
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Securities Amount to Proposed Maximum Proposed Maximum Amount of
to be Registered be Offering Price Per Share Aggregate Offering Price Registration Fee
Registered (2) (2) (2)
(1)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
$.01 par value per
share
- -----------------------------------------------------------------------------------------------------------
1991 Employees'
Stock Option and
Stock Appreciation
Rights Plan 1,225,020 $ 1.18 $ 1,445,523.60 $ 498.46
- -----------------------------------------------------------------------------------------------------------
25,600 2.34 59,904.00 20.66
- -----------------------------------------------------------------------------------------------------------
763,732 36.125 27,589,818.50 9,513.73
- -----------------------------------------------------------------------------------------------------------
1,292,076 36.125 46,676,245.50 16,095.26
- -----------------------------------------------------------------------------------------------------------
1996 Employees
Stock Incentive 488,200 19.00 9,275,800.00 3,198.55
Plan
- -----------------------------------------------------------------------------------------------------------
1,511,800 36.125 54,613,775.00 18,832.34
- -----------------------------------------------------------------------------------------------------------
Total: 5,306,428 139,601,162.60 48,159.00
==========================================================================================================
</TABLE>
(1) The shares of Common Stock being registered represent (i) 1,250,620 shares
of Common Stock which may be acquired pursuant to options outstanding
under the NOVA Corporation 1991 Employees' Stock Option and Stock
Appreciation Rights Plan (the "1991 Plan"); (ii) 763,732 shares of Common
Stock which may be acquired pursuant to options and stock appreciation
rights available for grant in the future under the 1991 Plan; (iii)
1,292,076 shares of Common Stock which have been issued pursuant to the
exercise of options granted under the Plan and are offered for the account
of certain selling shareholders pursuant to the reoffer prospectus filed
as an exhibit to this Registration Statement; (iv) 488,200 shares of
Common Stock which may be acquired pursuant to options outstanding under
the NOVA Corporation 1996 Employees Stock Incentive Plan (the "1996
Plan"); and (v) 1,511,800 shares of Common Stock which may be acquired
pursuant to options available for grant in the future under the 1996 Plan.
An undetermined number of additional shares may be issued, or the shares
registered hereunder may be combined into an undetermined lesser number of
shares, if the antidilution provisions of the 1991 Plan or the 1996 Plan
become operative.
(2) The offering prices for the 1,250,620 shares subject to currently
outstanding options under the 1991 Plan and the 488,200 shares subject to
currently outstanding options under the 1996 Plan are the applicable
option exercise prices for each currently outstanding option. The offering
price of the 763,732 shares which may be acquired pursuant to options
available for grant in the future under the 1991 Plan, the 1,511,800
shares which may be acquired pursuant to options available for grant in
the future under the 1996 Plan, and the 1,292,076 shares offered for the
account of certain selling shareholders is not presently determinable. The
offering price for such shares is estimated pursuant to Rule 457(c) and
(h) solely for the purpose of calculating the registration fee and is
based upon the average of the high and low prices of the Registrant's
Common Stock on May 16, 1996 as quoted on the New York Stock Exchange,
Inc.
2
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
---------------------------------------
The following documents heretofore filed by NOVA Corporation (the
"Company" or the "Registrant") with the Securities and Exchange Commission (the
"Commission") hereby are incorporated herein by reference as of their respective
dates:
(1) The Company's prospectus dated May 7, 1996 filed with the
Commission pursuant to the Commission's Rule 424(b)(1); and
(2) The description of the Company's Common Stock as contained in the
Company's Registration Statement on Form 8-A (Registration No. 1-14342) as
declared effective by the Commission on May 7, 1996.
In addition, all reports and documents subsequently filed by the
Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "1934 Act") subsequent to the date hereof
and prior to the filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which deregisters all securities
then remaining unsold, shall be deemed to be incorporated by reference herein
and made a part hereof from the date of the filing of such documents.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
-----------------------------------------
Article IX of the Bylaws of the Registrant sets forth the extent to
which the Registrant's directors and officers may be indemnified against
liabilities they may incur while serving in such capacities. Such
indemnification will be provided to the fullest extent allowed by the Georgia
Business Corporation Code, as amended from time to time. Under these
indemnification provisions, the Registrant is required to indemnify any of its
directors and officers against any reasonable expenses (including attorneys'
fees) incurred by him or her in the defense of any action, suit or proceeding,
whether civil, criminal, administrative or investigative, to which he or she was
made a party, or in defense of any claim, issue or matter therein, by reason of
the fact that he or she is or was a director or officer of the Registrant or
who, while a director or officer of the Registrant, is or was serving at the
Registrant's request as a director, officer, partner, trustee, employee or agent
of another corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise to the extent that such director or officer has been
successful, on the merits or otherwise, in such defense. The Registrant is also
required to indemnify any of its directors or officers against any liability
incurred in connection with any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of the Registrant, in which event, additional
determinations must be made before indemnification is provided) by reason of the
fact that he or she is or was a director or officer of the Registrant or who,
while a director or officer of the Registrants, is or was serving at the
Registrant's request as a director, officer, partner, trustee, employee or agent
of another corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise, if such director or officer acted in a manner he or she
believed in good faith to be in, or not opposed to, the best interests of the
Registrant, and with respect to any criminal proceeding, had no reasonable cause
to believe his or her conduct was unlawful. The Registrant may not indemnify
any of its directors and officers, however, against any liability incurred in
connection with a proceeding by or in the right of the Registrant in which the
director or officer was adjudged liable to the Registrant or in connection with
a proceeding in which the director or officer was adjudged liable on the basis
that personal benefit was improperly received by him or her. The Registrant may
also provide advances of expenses incurred by a director or officer in defending
any such action, suit or proceeding upon receipt of (i) a written affirmation of
such officer or director that he or she has met certain standards of conduct and
that his or her conduct does not constitute certain identified behavior, and
(ii) a written undertaking by or on behalf of such officer or director to repay
such advances if it is ultimately determined that he or she is not entitled to
indemnification by the Registrant.
3
<PAGE>
The Registrant's Articles of Incorporation contain a provision which
eliminates, to the fullest extent permitted by law, director liability for
monetary damages for breaches of the fiduciary duty of care or any other duty as
a director.
The Registrant currently maintains an insurance policy which insures
the directors and officers of the Registrant against certain liabilities,
including liabilities under the Securities Act. The Registrant currently is
negotiating to obtain an insurance policy insuring the directors and officers of
the Registrant against certain liabilities, including liabilities under the
Securities Act.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
-----------------------------------
The 1,292,076 shares of Common Stock being registered pursuant to this
Registration Statement and offered for the account of certain selling
shareholders were issued directly to such selling shareholders as employees of
the Company pursuant to the Company's 1991 Employees' Stock Option and Stock
Appreciation Rights Plan in reliance upon the exemption from registration set
forth in Section 4(2) of the Securities Act of 1933, as amended (the "1933
Act").
ITEM 8. EXHIBITS
--------
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
5 Opinion of Long, Aldridge & Norman.
23(a) Consent of Ernst & Young LLP
23(b) Consent of Long, Aldridge & Norman (included in
Exhibit 5).
24 Powers of Attorney.
99 Reoffer prospectus prepared in accordance with the
requirements of Part I of Form S-3.
ITEM 9. UNDERTAKINGS
------------
A. RULE 415 OFFERING.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement.
(2) That, for the purpose of determining any liability under the 1933
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
4
<PAGE>
B. SUBSEQUENT DOCUMENTS INCORPORATED BY REFERENCE.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the 1933 Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the 1934 Act that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. INDEMNIFICATION OF OFFICERS, DIRECTORS AND CONTROLLING PERSONS.
Insofar as indemnification for liabilities arising under the 1933 Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 6 above, or
otherwise, the Registrant has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the 1933 Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the 1933 Act and will be governed by the final
adjudication of such issue.
5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Atlanta, State of Georgia, on May 22, 1996.
NOVA CORPORATION
(Registrant)
By:/s/ James M. Bahin
------------------------------------
James M. Bahin
Chief Financial Officer and Secretary
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated as of May 22, 1996.
Signatures Title
- ---------- -----
/s/ Edward Grzedzinski Director, Chairman of the Board,
- ----------------------------- President and Chief Executive Officer
Edward Grzedzinski (principal executive officer)
/s/ James M. Bahin Director, Vice Chairman of the
- ----------------------------- Board, Chief Financial
James M. Bahin Officer and Secretary (principal accounting
officer)
/s/ Charles T. Cannada Director
- -----------------------------
Charles T. Cannada
/s/ Dr. Henry Kressel Director
- -----------------------------
Dr. Henry Kressel
/s/ Joseph P. Landy Director
- -----------------------------
Joseph P. Landy
/s/ Maurice F. Terbrueggen, Jr. Director
- ------------------------------
Maurice F. Terbrueggen, Jr.
/s/ Fred Martin Winkler Director
- ------------------------------
Fred Martin Winkler
*By:
-------------------------
as Attorney-in-Fact
6
<PAGE>
EXHIBIT INDEX
Exhibit Page No.
- -------- -------
5 Opinion of Long, Aldridge & Norman.
23(a) Consent of Ernst & Young LLP
23(b) Consent of Long, Aldridge & Norman (included in Exhibit 5).
24 Powers of Attorney.
99 Reoffer prospectus prepared in accordance with the
requirements of Part I of Form S-3.
<PAGE>
EXHIBIT 5
[LETTERHEAD OF LONG, ALDRIDGE & NORMAN]
May 22, 1996
Board of Directors
NOVA Corporation
Five Concourse Parkway
Suite 700
Atlanta, Georgia 30328
Re: NOVA Corporation (Commission File No. 1-14342):
Registration Statement on Form S-8
Gentlemen:
We have acted as counsel to NOVA Corporation, a Georgia corporation (the
"Company"), in connection with the preparation of a Registration Statement on
Form S-8 (the "Registration Statement") and the filing thereof with the
Securities and Exchange Commission (the "Commission"). Pursuant to the
Registration Statement, the Company intends to register under the Securities Act
of 1933, as amended, a total of 5,306,428 shares of Company Common Stock, par
value $.01 per share (the "Shares"). The Shares represent (i) 1,250,620 shares
of Common Stock which are issuable upon the exercise of options which have been
granted pursuant to the NOVA Corporation 1991 Employees' Stock Option and Stock
Appreciation Rights Plan (the "1991 Plan"); (ii) 763,732 shares of Common Stock
which are issuable upon the exercise of options and stock appreciation rights
which may be granted in the future pursuant to the 1991 Plan (that number of
shares referred to in (i) and (ii) above hereinafter are referred to as the
"1991 Plan Shares"); (iii) 1,292,076 shares of Common Stock which have been
issued pursuant to the exercise of options granted under the 1991 Plan and which
are offered for the account of certain selling shareholders (the "Resale
Shares") pursuant to the reoffer prospectus filed as an exhibit to the
Registration Statement (the "Reoffer Prospectus"); (iv) 488,200 shares of Common
Stock are issuable upon the exercise of options which have been granted pursuant
to the NOVA Corporation 1996 Employees Stock Incentive Plan (the "1996 Plan");
and (v) 1,511,800 shares of Common Stock which are issuable upon the exercise of
options which may be granted in the future pursuant to the 1996 Plan (that
number of shares referred to in (iv) and (v) above hereinafter referred to as
the "1996 Plan Shares").
<PAGE>
The opinions hereinafter set forth are given to the Commission at the
request of the Company pursuant to Item 8 of Form S-8 and Item 601(b)(5) of
Regulation S-K. The only opinions rendered by this firm consist of the matters
set forth in numbered paragraphs (1) through (3) below (our "Opinions"), and no
opinion is implied or to be inferred beyond such matters. Additionally, our
Opinions are based upon and subject to the qualifications, limitations and
exceptions set forth in this letter.
Our Opinions are furnished for the benefit of the Company solely with
regard to the Registration Statement, may be relied upon by the Company only in
connection with the Registration Statement and may not otherwise be relied upon,
used, quoted or referred to by or filed with any other person or entity without
our prior written permission.
In rendering our Opinions, we have examined such agreements, documents,
instruments and records as we deemed necessary or appropriate under the
circumstances for us to express our Opinions, including, without limitation, the
1991 Plan and the 1996 Plan. In making all of our examinations, we assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals, the conformity to the original documents of all documents
submitted to us as copies, and the due execution and delivery of all documents
by any persons or entities other than the Company where due execution and
delivery by such persons or entities is a prerequisite to the effectiveness of
such documents.
As to various factual matters that are material to our Opinions, we have
relied upon the factual statements set forth in a certificate of officers of the
Company and a certificate of a public official. We have not independently
verified or investigated, nor do we assume any responsibility for, the factual
accuracy or completeness of such factual statements.
The members of this firm are admitted to the Bar of the State of Georgia
and are duly qualified to practice law in that state. We do not herein express
any opinion concerning any matter respecting or affected by any laws of any
other state. The Opinions hereinafter set forth are based upon pertinent laws
and facts in existence as of the date hereof, and we expressly disclaim any
obligation to advise you of changes to such pertinent laws or facts that
hereafter may come to our attention.
Based upon and subject to the foregoing, we are of the following opinions:
(1) the 1991 Plan Shares, when issued in accordance with the terms of the
Plan against payment in full of the purchase price therefor set forth in the
Plan, if any, will be validly issued, fully paid and nonassessable.
(2) the Resale Shares to be offered and sold pursuant to the Reoffer
Prospectus are validly issued, fully paid and nonassessable.
(3) The 1996 Plan Shares, when issued in accordance with the terms of the
Plan against payment in full of the purchase price therefor set forth in the
Plan, will be validly issued, fully paid and nonassessable.
<PAGE>
We hereby consent to the filing of this letter as an exhibit to the
Registration Statement and to the reference to our name under the caption "Legal
Matters" in the Reoffer Prospectus.
Very truly yours,
LONG, ALDRIDGE & NORMAN, LLP
<PAGE>
EXHIBIT 23(A)
CONSENT OF ERNST & YOUNG LLP
CONSENT OF INDEPENDENT AUDITORS
WE CONSENT TO THE INCORPORATION BY REFERENCE IN THE REGISTRATION STATEMENT
ON FORM S-8 PERTAINING TO THE NOVA CORPORATION 1991 EMPLOYEES' STOCK OPTION AND
STOCK APPRECIATION RIGHTS PLAN AND THE NOVA CORPORATION 1996 EMPLOYEES STOCK
INCENTIVE PLAN OF OUR REPORT DATED FEBRUARY 19, 1996, WITH RESPECT TO THE
CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE OF NOVA CORPORATION INCLUDED IN
THE REGISTRATION STATEMENT ON FORM S-1 (NO. 333-1788), AS AMENDED, AND RELATED
PROSPECTUS OF NOVA CORPORATION, FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.
/s/ ERNST & YOUNG LLP
ATLANTA, GEORGIA
MAY 22, 1996
<PAGE>
EXHIBIT 24
POWERS OF ATTORNEY
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints James M. Bahin and Cathy A. Harper, and each of them, his true and
lawful attorneys-in-fact and agents, with full power of substitution, for him
and in his name, place and stead, in any and all capacities, to sign the
Registration Statement on Form S-8 under the provisions of the Securities Act of
1933, as amended, for the registration of shares of Common Stock of NOVA
Corporation relating to the Company's 1991 Employees' Stock Option and Stock
Appreciation Rights Plan and the 1996 Employees Stock Incentive Plan and to sign
any and all amendments (including post-effective amendments) thereto, and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
This 3rd day of May 1996.
/s/ Edward Grzedzinski
---------------------------------
Edward Grzedzinski
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints James M. Bahin and Cathy A. Harper, and each of them, his true and
lawful attorneys-in-fact and agents, with full power of substitution, for him
and in his name, place and stead, in any and all capacities, to sign the
Registration Statement on Form S-8 under the provisions of the Securities Act of
1933, as amended, for the registration of shares of Common Stock of NOVA
Corporation relating to the Company's 1991 Employees' Stock Option and Stock
Appreciation Rights Plan and the 1996 Employees Stock Incentive Plan and to sign
any and all amendments (including post-effective amendments) thereto, and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
This 3rd day of May 1996.
/s/ James M. Bahin
--------------------------------------
James M. Bahin
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints James M. Bahin and Cathy A. Harper, and each of them, his true and
lawful attorneys-in-fact and agents, with full power of substitution, for him
and in his name, place and stead, in any and all capacities, to sign the
Registration Statement on Form S-8 under the provisions of the Securities Act of
1933, as amended, for the registration of shares of Common Stock of NOVA
Corporation relating to the Company's 1991 Employees' Stock Option and Stock
Appreciation Rights Plan and the 1996 Employees Stock Incentive Plan and to sign
any and all amendments (including post-effective amendments) thereto, and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
This 3rd day of May 1996.
/s/ Charles T.Cannada
---------------------------------
Charles T. Cannada
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints James M. Bahin and Cathy A. Harper, and each of them, his true and
lawful attorneys-in-fact and agents, with full power of substitution, for him
and in his name, place and stead, in any and all capacities, to sign the
Registration Statement on Form S-8 under the provisions of the Securities Act of
1933, as amended, for the registration of shares of Common Stock of NOVA
Corporation relating to the Company's 1991 Employees' Stock Option and Stock
Appreciation Rights Plan and the 1996 Employees Stock Incentive Plan and to sign
any and all amendments (including post-effective amendments) thereto, and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
This 2nd day of May 1996.
/s/ Dr. Henry Kressel
---------------------
Dr. Henry Kressel
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints James M. Bahin and Cathy A. Harper, and each of them, his true and
lawful attorneys-in-fact and agents, with full power of substitution, for him
and in his name, place and stead, in any and all capacities, to sign the
Registration Statement on Form S-8 under the provisions of the Securities Act of
1933, as amended, for the registration of shares of Common Stock of NOVA
Corporation relating to the Company's 1991 Employees' Stock Option and Stock
Appreciation Rights Plan and the 1996 Employees Stock Incentive Plan and to sign
any and all amendments (including post-effective amendments) thereto, and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
This 3rd day of May 1996.
/s/ Joseph P. Landy
-------------------
Joseph P. Landy
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints James M. Bahin and Cathy A. Harper, and each of them, his true and
lawful attorneys-in-fact and agents, with full power of substitution, for him
and in his name, place and stead, in any and all capacities, to sign the
Registration Statement on Form S-8 under the provisions of the Securities Act of
1933, as amended, for the registration of shares of Common Stock of NOVA
Corporation relating to the Company's 1991 Employees' Stock Option and Stock
Appreciation Rights Plan and the 1996 Employees Stock Incentive Plan and to sign
any and all amendments (including post-effective amendments) thereto, and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
This 3rd day of May 1996.
/s/ Maurice F. Terbrueggen, Jr.
-------------------------------
Maurice F. Terbrueggen, Jr.
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and
appoints James M. Bahin and Cathy A. Harper, and each of them, his true and
lawful attorneys-in-fact and agents, with full power of substitution, for him
and in his name, place and stead, in any and all capacities, to sign the
Registration Statement on Form S-8 under the provisions of the Securities Act of
1933, as amended, for the registration of shares of Common Stock of NOVA
Corporation relating to the Company's 1991 Employees' Stock Option and Stock
Appreciation Rights Plan and the 1996 Employees Stock Incentive Plan and to sign
any and all amendments (including post-effective amendments) thereto, and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
This 3rd day of May 1996.
/s/ Fred Martin Winkler
-----------------------
Fred Martin Winkler
<PAGE>
EXHIBIT 99
REOFFER PROSPECTUS PREPARED IN ACCORDANCE
WITH THE REQUIREMENTS OF PART I OF FORM S-3
PROSPECTUS
1,292,076 SHARES [LOGO]
NOVA CORPORATION
COMMON STOCK
The 1,292,076 shares (the "Shares") of Common Stock (the "Common Stock") of
NOVA Corporation (the "Company"or "NOVA") offered hereby are being offered for
the account of certain selling stockholders of the Company (the "Selling
Stockholders"). The Company will not receive any proceeds from the sale of the
Shares. See "Selling Stockholders."
Each of the Selling Stockholders may sell the Shares offered hereby from
time to time on the New York Stock Exchange or such other national securities
exchange or automated interdealer quotation system on which shares of the
Company's Common Stock are then listed, through negotiated transactions or
otherwise at market prices prevailing at the time of the sale or at negotiated
prices. The Selling Stockholders must effect such transactions by notifying the
Company in advance of any intended transaction in order for the Company to
determine compliance with applicable federal and state securities laws, and then
upon receipt of notice from the Company that such transaction may proceed, by
selling the Shares only to or through brokers or dealers. Such brokers or
dealers may receive compensation in the form of commissions or otherwise in such
amounts as may be negotiated by them. As of the date of this Prospectus, no
agreements have been reached for the sale of the Shares or the amount of any
compensation to be paid to brokers or dealers in connection therewith. The
Company will bear all expenses in connection with the registration and sale of
the Shares being offered by the Selling Stockholders, other than commissions,
concessions or discounts to brokers or dealers and fees and expenses of counsel
or other advisors to the Selling Stockholders. See "Plan of Distribution."
The Common Stock of the Company is traded on the New York Stock Exchange
under the trading symbol "NIS." On May 21, 1996, the last reported sale price
of the Company's Common Stock on the New York Stock Exchange was $37.375 per
share.
_____________
PROSPECTIVE INVESTORS SHOULD CONSIDER CAREFULLY THE INFORMATION
DISCUSSED UNDER THE CAPTION "RISK FACTORS."
_____________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is May 23, 1996
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No person has been authorized in connection with this offering to give any
information or to make any representation not contained or incorporated by
reference in this Prospectus, and, if given or made, such information or
representation must not be relied upon as having been authorized by the Company.
Neither the delivery of this Prospectus nor any sales hereunder shall under any
circumstances create any implication that the information contained herein is
correct as of any time subsequent to the date hereof or the dates as of which
information is otherwise set forth or incorporated by reference herein. This
Prospectus does not constitute an offer to sell or a solicitation of an offer to
purchase any securities other than those to which it relates or an offer to any
person in any jurisdiction where such offer or solicitation would be unlawful.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
Available Information............................ 2
Incorporation of Certain Documents by Reference.. 2
The Company...................................... 3
Risk Factors..................................... 5
Selling Stockholders............................. 11
Plan of Distribution............................. 12
Legal Matters.................................... 13
Experts.......................................... 13
</TABLE>
AVAILABLE INFORMATION
Additional information regarding the Company and the Shares offered
hereby is contained in the Registration Statement (of which this Prospectus
forms a part) and the exhibits relating thereto filed by the Company with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended (the "1933 Act"). The Company is subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "1934 Act"), and in accordance therewith files reports, proxy statements,
information statements and other information with the Commission. Such reports,
proxy statements, information statements and other information can be inspected
and copied at the public reference facilities of the Commission at Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's regional
offices at CitiCorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511 and 7 World Trade Center, 13th Floor, New York, New York
10048. Copies of such material can be obtained from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. Such reports, proxy statements and other information also may
be inspected at the offices of the New York Stock Exchange, 20 Broad Street, New
York, New York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by NOVA Corporation (the
"Company" or the "Registrant") with the Commission hereby are incorporated
herein by reference as of their respective dates:
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(1) The Company's prospectus dated May 7, 1996 filed with the
Commission pursuant to the Commission's Rule 424(b)(1); and
(2) The description of the Company's Common Stock as contained in the
Company's Registration Statement on Form 8-A (Registration No. 1-14342), as
declared effective by the Commission on May 7, 1996.
In addition, all reports and documents filed by the Company pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the 1934 Act subsequent to the date
hereof and prior to the filing of a post-effective amendment which indicates
that all securities offered hereby have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference herein and made a part hereof from the date of the filing of such
documents.
The Company will provide without charge to each person to whom this
Prospectus is delivered, at the written or oral request of such person, a copy
of any or all of the foregoing documents incorporated herein by reference, other
than exhibits to such documents (unless such exhibits are specifically
incorporated by reference into the foregoing documents). The Company also will
provide without charge upon request a copy of the Company's latest Annual
Report. Written or telephonic requests should be directed to Cathy A. Harper,
Vice President and General Counsel, NOVA Corporation, Five Concourse Parkway,
Suite 700, Atlanta, Georgia 30328; (770) 396-1456.
THE COMPANY
The Company is an integrated provider of transaction processing
services, related software application products and value-added services
primarily to small-to-medium sized merchants. The Company believes that at
December 31, 1995 it was the nation's eighth largest bankcard processor. The
Company provides transaction processing support for all major credit and charge
cards, including VISA, MasterCard, American Express, Discover, Diner's Club and
JCB, and also provides access to debit card processing and check verification
services. The Company provides merchants with a broad range of transaction
processing services, including authorizing card transactions at the point-of-
sale, capturing and transmitting transaction data, effecting the settlement of
payments and assisting merchants in resolving billing disputes with their
customers. In addition, the Company has developed several value-added software
applications that can be delivered to its customers and updated via its
proprietary telecommunications network (the "NOVA Network"). The NOVA Network
was developed in conjunction with WorldCom, Inc. ("WorldCom"), the nation's
fourth-largest long-distance telecommunications provider, and is the principal
conduit through which the Company provides its services. The capabilities of
the NOVA Network result in rapid response time and its substantial bandwidth
facilitates the delivery of sophisticated value-added services. The Company's
ability to effectively employ technology, together with the capabilities of the
NOVA Network, enable the Company to respond quickly and effectively to the
changing and diverse needs of its merchant customers.
The Company's objective is to maintain its leadership in the
transaction processing industry by delivering transaction processing services
and related software application products and services to its merchant customers
on a cost-effective basis and by increasing the size of its customer base
through its marketing and acquisition programs. The Company seeks to accomplish
this objective through the following strategies: (i) focusing on small-to-medium
sized merchants; (ii) leveraging available technologies to develop and deliver
software application products and value-added services; (iii) providing high-
quality, reliable service and support; (iv) utilizing multiple channels to cost-
effectively market its services; and (v) pursuing acquisitions to create
greater economies of scale. Management believes the quality and
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reliability of its products and services enhance the Company's ability to
attract and retain merchant customers.
Card-based payment processing for merchants has emerged as one of the
fastest growing segments of the transaction processing industry. The
proliferation in the uses and types of credit, charge and debit cards, rapid
technological advances in transaction processing and financial incentives
offered by credit card associations and issuers have contributed greatly to
wider merchant acceptance and increased consumer use of such cards. For
example, industry sources indicate that consumer usage of VISA and MasterCard
credit cards for purchases and cash advances in the United States was
approximately $440.7 billion in 1994 compared to approximately $351.7 billion in
1993, an increase of approximately 25.3%. From 1984 to 1994, charge volume of
VISA and MasterCard credit cards has grown at a compounded annual growth rate of
approximately 15.6%. This growth in card transactions, combined with the
transition from paper-based to electronic transaction processing, has caused
small-to-medium sized merchants increasingly to demand the same level of
sophisticated transaction processing and information services historically
provided only to large merchants.
In addition to experiencing growth in the dollar volume of
transactions processed, the industry has undergone rapid consolidation over the
last several years because of the increased demand for sophisticated products
and services and the requirements for capital expenditures necessary to support
the technical infrastructure to deliver these products and services. According
to industry sources, the ten largest bankcard processors accounted for
approximately 69% of the total charge volume processed in 1994, and the Company
processed approximately 3% of the total charge volume for the same period. Two
of the three largest bankcard processors merged in 1995 and, according to
industry sources, the combined entity would have processed approximately 25% of
total charge volume in 1994. Despite this ongoing consolidation, the industry
remains fragmented with over 400 registered service providers as well as
regional and community banks marketing and selling transaction processing
services. Accordingly, acquisition and other consolidation opportunities
continue to be numerous. Management believes that continuing technological
advances, together with increased merchant demand for more sophisticated
transaction processing, related information services and more responsive and
capable customer service, will cause many service providers to exit the
transaction processing business or seek alliance partners to provide transaction
processing for their customers.
Since inception, the Company has consummated 58 transactions
consisting of 54 merchant portfolio acquisitions, three operating business
acquisitions and a transaction with First Union Corporation and each of its
principal banking subsidiaries (collectively, the "First Union Banks") (First
Union Corporation and the First Union Banks are collectively referred to herein
as "First Union"). The transaction with First Union (the "First Union
Alliance"), which was effective as of December 1, 1995, is the Company's most
significant transaction to date and represented approximately $4.6 billion in
1995 credit card charge volume. The First Union Alliance resulted in the
transfer by First Union of its transaction processing assets to the Company,
increasing the Company's merchant customer base by 66.9% and increasing the
annual credit card charge volume processed by the Company by 71.8%. In
addition, the First Union Alliance enhanced significantly the Company's ability
to further its market penetration and increase the size of its customer base
through the marketing assistance, support and exclusive merchant referrals
provided by the First Union Banks. The First Union Alliance also may create
additional acquisition opportunities for the Company, as the Company and First
Union have agreed that the Company generally may, at its option, purchase from
First Union any merchant portfolios acquired by First Union through whole-bank
or other acquisitions. First Union became a significant shareholder of the
Company in connection with the First Union Alliance and currently owns 9,149,209
shares of the Company's Common Stock. At January 1, 1996, First Union was the
nation's sixth largest bank in terms of total assets.
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The Company generates revenues principally by charging a fee based on
a percentage of the dollar volume of each transaction processed and by charging
fees for related credit card services. In calendar 1995, the aggregate dollar
volume of VISA and MasterCard credit card transactions processed by the Company
and First Union was approximately $11.0 billion. At January 31, 1996, the
Company provided transaction processing services to approximately 80,000
merchant locations nationwide.
On May 13, 1996, the Company completed an initial public offering of
3,793,415 Common Stock which resulted in net proceeds to the Company of
approximately $65,719,643. The Company's Common Stock trades on the New York
Stock Exchange under the symbol "NIS."
Executive officers and directors of the Company, together with their
affiliates, will beneficially own approximately 81.2% of the Common Stock
outstanding after this offering. See "Selling Shareholders." In addition,
certain affiliates of the Company will receive immediate and substantial
financial benefits as a result of this offering. See "Risk Factors-Offering
Benefits to Certain Affiliates."
NOVA Corporation was incorporated in Georgia in December 1995 in
connection with the First Union Alliance. NOVA Information Systems, Inc., a
wholly-owned subsidiary and predecessor to the Company ("NOVA Information
Systems"), was incorporated in Georgia in February 1991. Unless the context
otherwise requires, references in this Prospectus to "NOVA" and the "Company"
refer to NOVA Corporation and its subsidiaries. The Company's executive offices
are located at Five Concourse Parkway, Suite 700, Atlanta, Georgia 30328, and
its telephone number is (770) 396-1456.
RISK FACTORS
In addition to the other information contained in this Prospectus,
prospective investors should carefully consider the following information in
evaluating an investment in the shares of Common Stock offered hereby.
Visa and MasterCard Registration Termination. The Company, along with
all other nonbank transaction processors, must be sponsored by a financial
institution that is a principal member of the VISA and MasterCard credit card
associations in order to process bankcard transactions. Through each of First
Alabama Bank, Bank of the West and Mellon Bank, N.A. ("Mellon Bank"), which
serve as member clearing banks for the Company, the Company is registered with
VISA and MasterCard as a certified processor and member service provider. First
Union National Bank of North Carolina ("FUNB-NC") also serves as a clearing bank
for the Company, but currently does not sponsor the Company as a member service
provider. The Company's designation as a certified processor and its status as
a member service provider are dependent upon the Company's continuing adherence
to the standards of the VISA and MasterCard credit card associations. In the
event the Company fails to comply with these standards, the Company's
designation as a certified processor or status as a member service provider
could be suspended or terminated. While the Company attempts to adhere to the
standards of the VISA and MasterCard associations, as they may be amended from
time to time, there can be no assurance that VISA and MasterCard will maintain
the Company's registrations or that the current VISA and MasterCard rules
allowing the Company and other nonbank transaction processors to market and
provide transaction processing services will remain in effect. Moreover, VISA
and MasterCard rules are set by the respective member financial institutions of
VISA and MasterCard, some of which are competitors of the Company. The
termination of the Company's member service provider registrations or the
Company's status as a certified processor, or any changes in the VISA or
MasterCard rules that prevent the Company's registration or otherwise limit the
Company's ability to provide transaction processing and marketing
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<PAGE>
services for VISA or MasterCard, would have a material adverse effect on the
Company's financial condition and results of operations.
Competition. The market for credit, charge and debit card transaction
processing services is highly competitive. The level of competition has
increased significantly in recent years and this trend is expected to continue.
According to industry sources, the ten largest bankcard processors accounted for
approximately 69% of the total charge volume processed in 1994, and the Company
processed approximately 3% of the total charge volume for the same period. Two
of the three largest bankcard processors merged in 1995 and, according to
industry sources, this entity would have processed approximately 25% of total
charge volume in 1994. The Company's principal competitors in its primary
market segment are other smaller vertically integrated transaction processors,
community and regional banks, and independent sales organizations ("ISOs") and,
increasingly, the ten largest bankcard processors. ISOs are independent agents
that typically market and sell the full range of transaction processing services
to merchants, with such services primarily being outsourced on a non-exclusive
basis. Several of the Company's competitors and potential competitors have
greater financial, technological, marketing and personnel resources than the
Company, and there can be no assurance that the Company will continue to be able
to compete successfully with such entities. In addition, the competitive
pricing pressures that would result from any increase in competition would
adversely affect the Company's margins and may have a material adverse effect on
the Company's financial condition and results of operations.
Dependence on Merchant Accounting Relationships. The Company
outsources certain merchant accounting services to Total System Services, Inc.
("Total System Services") and Mellon Bank. These services consist of
reorganizing and accumulating daily transaction data on a merchant-by-merchant
and card issuer-by-card issuer basis, and forwarding this data to the credit
card associations for ultimate payment. The failure of Total System Services
and Mellon Bank to continue to perform these services efficiently and
effectively may adversely affect the Company's relationships with its merchant
customers and may result in the termination by merchants of their agreements
with the Company. Termination of its agreements with Total System Services and
Mellon Bank, which are scheduled to expire April 30, 1997 and May 31, 1997,
respectively, would require the Company either to seek alternative outsourcing
arrangements or to make significant capital expenditures to develop internal
systems to provide these merchant accounting services. Although management
believes that in the event of termination of either or both of these agreements
the Company could locate alternative outsourcing arrangements, there can be no
assurance that such arrangements will be available on terms at least as
favorable to the Company as the existing contracts. Accordingly, either event
may have a material adverse effect on the Company's financial condition and
results of operations.
Risks Associated with Acquisition Strategy. The Company's growth
strategy includes the acquisition of additional merchant portfolios, operating
businesses and transaction processing assets in order to achieve greater
economies of scale. The Company faces increasing competition from other
transaction processors for available acquisition opportunities. In addition,
community and regional banks, whose transaction processing businesses have been
the Company's primary source of acquisition opportunities have in recent years
been undergoing extensive consolidation reflective of underlying trends in the
financial institutions industry and unrelated to their transaction processing
businesses. As a result, smaller banks that may have sought to divest
themselves of their transaction processing businesses may be acquired by a
competitor of the Company, thus depriving the Company of an acquisition
opportunity. There can be no assurance that the current level of acquisition
opportunities will continue to exist, that the Company will be able to acquire
merchant portfolios, operating businesses and transaction processing assets that
satisfy the Company's criteria, or that any such acquisition will be on terms
favorable to the Company.
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In evaluating any potential acquisition, the Company conducts a due
diligence review of the merchant portfolio it proposes to acquire. The review
process includes analyzing the composition of the merchant portfolio, applying
uniform standards and underwriting guidelines developed by the Company to the
merchant portfolio and attempting to identify high-risk merchants contained in
the merchant portfolio. Notwithstanding these due diligence efforts, however,
there can be no assurance that the Company will assess properly the risk
attributes associated with an acquired portfolio or otherwise identify high-risk
merchants, which may cause the Company to experience excessive losses from
chargebacks or merchant fraud in connection with any acquired portfolio.
At the time of consummation of acquisitions, merchants in an acquired
portfolio typically are not operating on the NOVA Network and may not use the
merchant accounting processors used by the Company. Until the Company converts
each newly-acquired merchant to the NOVA Network and the Company's merchant
accounting processors, the Company has little, if any, control over the
performance of such other networks and processors and typically is unable to
apply fully its risk management and fraud avoidance practices to such merchants.
Moreover, the merchant customers that comprise an acquired portfolio may have
been sold transaction processing services by ISOs and financial institutions
sponsored by a principal member of the VISA and MasterCard credit card
associations. Certain of these ISOs and financial institutions may be unwilling
to assist the Company in converting the merchants to the NOVA Network and the
Company's merchant accounting processors and, in some cases, may solicit these
merchants on behalf of a competing processor. Further, the conversion of
merchants may require that merchants learn new operating procedures and could
result in problems causing merchants to seek verbal authorization of credit and
debit card transactions. As a condition to conversion, merchants also may seek
to negotiate lower fees. Finally, because the Company's acquisitions often
involve the hiring by the Company of certain management and sales personnel
affiliated with the acquired portfolio, the failure to integrate successfully
such personnel into the Company's operations and business culture may affect
adversely the conversion process and the realization of the economic benefits
associated with the acquired portfolio. The foregoing factors could lead to
merchant attrition following an acquisition, managerial or other operational
difficulties relative to an acquired portfolio, or result in lower than expected
revenues being generated by the acquired portfolio. As a result of any of these
events, the Company may not realize the expected economic benefits associated
with its acquisitions, which may have a material adverse effect on the Company's
financial condition and results of operations.
The conversion and integration of the First Union transaction
processing assets (the "First Union Conversion") are expected to be completed in
the Fall of 1997 at a cost of approximately $7.0 million. The magnitude, scope,
duration and expense of the First Union Conversion will be much greater than any
conversion previously undertaken by the Company, and there can be no assurance
that the Company can successfully complete this conversion. Failure to
successfully complete the First Union Conversion would have a material adverse
effect on the Company's financial condition and result of operations.
There can be no assurance that future acquisitions will not have an
adverse effect upon the Company's operating results, particularly in the fiscal
quarters immediately following the completion of such transactions, while the
operations of the acquired entities are converted and integrated into the
Company's operations. The Company's acquisition strategy will require
substantial capital resources, and is likely to result in the Company incurring
additional indebtedness. There can be no assurance that financing for future
acquisitions will be available or will be obtained on terms favorable to the
Company. Further, the Company's acquisition strategy and the growth resulting
therefrom will require that the Company continue to hire, train and retain
qualified personnel, while concurrently expanding its managerial and operational
infrastructure. There can be no assurance that the Company will be able to hire
and retain qualified personnel or that the Company will be able to expand
successfully its infrastructure as appropriate to accommodate future
acquisitions or growth.
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Merchant Attrition. The Company experiences attrition of its merchant
base in the ordinary course of business due to several factors, including
business closures, losses to competition and conversion-related losses. In
addition, substantially all of the Company's contracts with its merchants may be
terminated by either party upon 30 days prior notice. There can be no assurance
that the Company will not experience higher rates of attrition in the future,
particularly in connection with acquired merchant portfolios. Increased merchant
attrition may have a material adverse effect on the Company's financial
condition and results of operations.
Chargeback Risk. In the event a billing dispute between a cardholder
and a merchant is not resolved in favor of the merchant, the transaction is
"charged back" to the merchant and that amount is credited or otherwise refunded
to the cardholder. If the Company or its clearing banks are unable to collect
such amounts from the merchant's account, and if the merchant refuses or is
unable due to bankruptcy or other reasons to reimburse the Company for the
chargeback, the Company bears the loss for the amount of the refund paid to the
cardholder. The risk of chargebacks is greater with certain merchants that do
not deliver goods or render services at the time of payment, but promise future
delivery of such goods or services. If a merchant fails to deliver
satisfactorily the goods or services promised, the Company ultimately is liable
to the cardholder for a chargeback. There can be no assurance that the Company
will not experience significant losses from chargebacks in the future.
Increases in chargebacks not paid by merchants may have a material adverse
effect on the Company's financial condition and results of operations.
Merchant Fraud. The Company is responsible for fraudulent credit card
transactions initiated by its merchant customers in the event the Company is
unable to collect such amounts from the merchant. Examples of merchant fraud
include inputting false sales transactions or false credits. The Company
monitors merchant transactions against a series of standards it has developed to
detect merchant fraud. Notwithstanding these measures, however, there can be no
assurance that the Company will not experience significant amounts of merchant
fraud in the future, which may have a material adverse effect on the Company's
financial condition and results of operations.
Telecommunications Network. The Company has developed a proprietary
telecommunications network, the NOVA Network, and maintains an operating
relationship with WorldCom. Pursuant to its agreement with the Company,
WorldCom provides long-distance and local telecommunications access, as well as
technical support, to the Company in connection with the NOVA Network. This
agreement expires February 28, 1999, subject to earlier termination by the
Company if WorldCom fails to meet certain agreed-upon performance objectives.
If the WorldCom agreement is terminated or not renewed, the Company would be
required to utilize the long-distance and local telecommunications access of
another long-distance provider, which may increase the Company's expenses for
network services, resulting in a material adverse effect on the financial
condition and results of operations of the Company. As of May 13, 1996,
WorldCom owns approximately 8.3% of the Company's outstanding Common Stock and
has a designee on the Company's Board of Directors. There can be no assurance
that conflicts of interests between WorldCom and the Company will not arise or
that any such conflicts will be resolved in a manner favorable to the Company.
Limited History of Profitability; Certain State Tax Issues. From the
Company's inception through fiscal 1994, the Company incurred losses as the
expenditures for the development of its infrastructure combined with the cost of
providing service exceeded revenues from its merchant portfolio. In addition,
the Company developed the marketing, customer support and managerial expertise
necessary to execute its business strategy. The Company's ongoing expansion of
its merchant customer base resulted in the Company achieving profitability for
the first time in the ten month year ended December 31, 1995. There can be no
assurance, however, that the Company will continue to operate profitably.
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Transaction processing companies like the Company may be subject to
state taxation of certain portions of their fees charged to merchants for their
services. Application of this tax is an emerging issue in the industry and the
states have not yet adopted uniform guidelines implementing these regulations.
In the event the Company is required to bear all or a portion of these costs,
and is unable to pass such costs through to its merchant customers, the
financial condition and results of operations of the Company could be adversely
affected.
Development and Market Acceptance of New Products. The market for
transaction processing and related software application products and value-added
services has been characterized by rapidly changing technology, the improvement
of services and products, and the development of new services and products for
merchant customers. Because of continual changes in this market, management
believes that the future success of the Company will depend, in part, on the
Company's ability to continue to improve its products and services and to offer
its merchant customers new products and services. The Company has recently
introduced a number of new products, including NOVA Perks, NOVA Time and NOVA
Shadow Pay. To date, only a small number of the Company's merchant customers
have subscribed to these products. There can be no assurance that NOVA Perks,
NOVA Time, NOVA Shadow Pay and the Company's other newly-developed products and
services will perform satisfactorily or be widely accepted in the marketplace.
Fluctuation in Quarterly Operating Results. The Company has
experienced and expects to continue to experience significant seasonality in its
business. The Company typically realizes higher revenues in the third calendar
quarter and lower revenues in the first calendar quarter, reflecting increased
transaction volumes during the Summer months and a significant decrease in
transaction volume during the period immediately following the holiday season.
Quarterly results are also affected by the timing of acquisitions and the timing
and magnitude of expenses for merchant portfolio conversions. Fluctuations in
operating results may result in volatility in the price of the Common Stock.
Dependence of Key Management. The development of the Company's
business and its operations have been materially dependent upon the active
participation of its executive officers and other key employees. The loss of
one or more of the Company's executive officers or other key employees may have
a material adverse effect on the Company's financial conditions and results of
operations.
Significant Intangible Assets. A substantial portion of the Company's
assets are intangible assets related to acquired merchant portfolios or business
operations. In the event of a material decline in revenues generated from any
of such merchant portfolios or business operations which would not be recovered
from future cash flows, the carrying value of the related intangible asset will
be reduced to fair value.
Banking and Territorial Restrictions. First Union currently
beneficially owns 9,149,209 shares of Common Stock of the Company. To
facilitate First Union's compliance with applicable banking laws, regulations
and orders (collectively, the "Banking Laws"), and to allow First Union to
obtain any required consents or approvals, the Company has agreed to notify
First Union before it enters into any business activities substantially
different from the business activities the Company currently conducts. If the
required consents and approvals are not received, the Company may not engage in
the new business activity (such restrictions being collectively referred to
herein as the "Banking Restrictions"). The First Union Alliance also generally
provides that the Company may not, without the prior consent of First Union,
enter into certain marketing agreements with third parties generally located in
specified areas where First Union currently maintains a significant banking
presence (such restrictions being collectively referred to herein as the
"Territorial Restrictions"). The effect of the Banking Restrictions and the
Territorial Restrictions is to limit in certain respects the Company's ability
to seek or take advantage of certain
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business or marketing opportunities, which may have a material adverse effect on
the Company's financial condition and results of operations.
Certain Anti-Takeover Provisions. The Company's Articles of
Incorporation authorize the Company to issue up to 5,000,000 shares of preferred
stock with such designations, powers, preferences and rights as may be fixed by
the Board or Directors, without any further vote or action by the shareholders.
The issuance of Preferred Stock could have the effect of delaying, deferring or
preventing a change in control of the Company.
Controlling Shareholders. After giving effect to the sale of the
shares of Common Stock offered hereby, Warburg, Pincus Investors, L.P. and its
affiliates ("Warburg"), First Union, executive officers and directors of the
Company and their affiliates, and WorldCom beneficially will own 38.7%, 31.9%,
81.2%, and 8.3%, respectively, of the Company's outstanding Common Stock. See
"Selling Shareholders." As a result of such stock ownership, these
shareholders, if acting together or in certain combinations, would be able to
control most matters requiring approval by the Company's shareholders, including
the election of directors. Under the terms of a Shareholders Agreement dated
January 31, 1996 (the "Shareholders Agreement"), during the six months following
the consummation of this offering, (i) each of Warburg, WorldCom and First Union
has the right to designate a specified number of director nominees, depending
upon such shareholder's percentage ownership of the Company's Common Stock, and
(ii) the chief executive officer of the Company has the right to designate two
nominees for director. Each party to the Shareholders Agreement has agreed to
vote such shareholder's shares of capital stock of the Company entitled to vote
in the election of directors in favor of such director nominees. Such voting
provisions expire automatically six months after an initial public offering of
Common Stock of the Company.
Possible Volatility of Stock Price. Commencing May 8, 1996, the
Common Stock is listed and traded on the New York Stock Exchange. Nevertheless,
there can be no assurance that an active public trading market for the Common
Stock will develop or be sustained. The stock market has from time to time
experienced extreme price and volume fluctuations, which often have been
unrelated to the operating performance of particular companies. Any
announcement with respect to any variance in the Company's revenue or earnings
from levels generally expected by securities analysts for a given period could
have an immediate and significant effect on the trading price of the Common
Stock.
Shares Eligible for Future Sale. Sales of a substantial number of
shares of Common Stock in the public market following this offering could
adversely affect the prevailing market price of the Common Stock and could
impair the Company's ability to raise additional equity capital. As of May 21,
1996, the Company has outstanding 28,683,401 shares of Common Stock. Of these
shares, 5,317,076 shares, including the 1,292,076 shares offered hereby, will be
freely tradeable without restriction or further registration under the 1933 Act,
unless purchased by "affiliates" of the Company as that term is defined in Rule
144 under the Securities Act ("Rule 144"). The remaining 23,366,325 shares of
Common Stock outstanding upon completion of this offering are "restricted
securities" as that term is defined in Rule 144. Pursuant to the registration
statement of which this Prospectus forms a part, the Company has registered for
offer and sale under the Securities Act a total of 5,306,428 shares of Common
Stock issued or reserved for issuance under the Company's various stock option
plans, of which 71,960 shares are held by or issuable to persons not subject to
lock-up agreements, and of which 1,284,879 shares are held by or issuable to
persons that are subject to lock-up agreements and that may be sold on November
3, 1996 (or earlier with the consent of Alex. Brown & Sons Incorporated). In
addition, the holders of a total of 24,279,016 shares of Common Stock have the
right under certain circumstances to require the Company to register under the
Securities Act their shares for resale to the public.
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<PAGE>
SELLING STOCKHOLDERS
The Shares offered hereby are owned and offered for the account of the
Selling Stockholders and represent shares of Common Stock of the Company
acquired by the Selling Stockholders in connection with the exercise of options
under the 1991 NOVA Corporation Employees' Stock Option and Stock Appreciation
Rights Plan (the "Plan"). The table below sets forth the name of each Selling
Stockholder, the Selling Stockholder's position with the Company, and
information with respect to all shares of Common Stock beneficially owned by the
Selling Stockholder. Information with respect to ownership has been determined
from the Company's records. Upon completion of this offering, assuming all the
Shares being offered hereby are sold and that no other changes in the Selling
Stockholders' beneficial ownership occur prior to completion of this offering,
none of the Selling Stockholders will beneficially own more than one percent of
the Company's outstanding shares of Common Stock.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
PLAN SHARES OWNED OWNED UPON COMPLETION
NAME POSITION WITH THE COMPANY AND OFFERED OF THE OFFERIN
- ---- ------------------------- ----------------- ---------------------
<S> <C> <C> <C>
Richard Anthony Employee 8,960 0
Elmer F. Arnold Employee 43,212 (1) 17,792 (1)
James M. Bahin Vice Chairman of the Board, 286,834 (1) 256,466 (1)
Chief Financial Officer and
Secretary
Susan Bahraini Employee 2,764 0
Rodney Beegle Employee 27,852 (1) 22,392 (1)
Diane R. Bigley Employee 6,912 0
Paul W. Bowers Senior Vice President, 174,371 (1) 54,912 (1)
Systems Support Services
Joseph Cohane Employee 17,920 (1) 0
Howard Falcon Employee 6,144 0
John Fasano Employee 9,728 0
Edward Grzedzinski Chairman of the Board, 286,834 (1) 262,706 (1)
President and Chief Executive
Officer
Cynthia R. Gunn Employee 6,144 0
Donna S. Hall Vice President, 30,566 (1) 48,412 (1)
Business Analysis
</TABLE>
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<PAGE>
<TABLE>
<S> <C> <C> <C>
Cathy A. Harper Vice President and 10,240 (1) 0
General Counsel
Steve A. Hughes Senior Vice President, 167,459 (1) 31,717 (1)
Network Support Services
Pamela A. Joseph Senior Vice President, Business 8,000 (1) 26,979 (1)
Development
Michael Kopp Employee 11,008 (1) 0
Barbara Kuhn Employee 9,216 0
Suzanne Laferriere Employee 8,576 0
John Macht Employee 12,800 (1) 0
Rebecca L. Powell Senior Vice President, 38,870 (1) 20,042 (1)
Program Management
Grant Putre Employee 3,584 0
Stephanie R. Sharp Vice President and 15,564 (1) 0
Corporate Controller
Robert K. Walker Empoyee 10,240 (1) 0
Tammy C. Zimmerman Senior Vice President, Sales 88,278 (1) 24,492 (1)
----------
Total 1,292,076
==========
</TABLE>
(1) Shares are subject to lockup agreement and may be sold on November 3, 1996
(or earlier with the consent of Alex. Brown & Sons Incorporated).
PLAN OF DISTRIBUTION
The Shares may be sold from time to time by any of the Selling
Stockholders, or by pledgees, donees, transferees or other successors in
interest. Such sales may be made on the New York Stock Exchange or such other
national securities exchange or automated interdealer quotation system on which
shares of Common Stock are then listed, through negotiated transactions or
otherwise at prices and at terms then prevailing or at prices related to the
then current market price or in negotiated transactions. The Shares may be sold
by one or more of the following: (a) ordinary brokerage transactions and
transactions in which the broker solicits purchasers; (b) purchases by a broker
or dealer as principal and resale by such broker or dealer for its account
pursuant to this Prospectus; (c) a block trade in which the broker or dealer so
engaged will attempt to sell the Shares as agent but may position and resell a
portion of the block as principal to facilitate the transaction; (d) an exchange
distribution in accordance with the rules of such exchange; and (e) through the
writing of options on the Shares. The Selling Stockholders must effect such
transactions by notifying the Company in advance of any intended transaction in
order for the Company
-12-
<PAGE>
to determine compliance with applicable federal and state securities laws, and
then upon receipt of notice from the Company that such transaction may proceed,
by selling the Shares only to or through brokers or dealers. If necessary, a
supplemental prospectus which describes the method of sale in greater detail may
be filed by the Company with the Commission pursuant to Rule 424(c) under the
1933 Act under certain circumstances. In effecting sales, brokers or dealers
engaged by the Selling Stockholders and/or the purchasers of the Shares may
arrange for other brokers or dealers to participate. Brokers or dealers will
receive commissions, concessions or discounts from the Selling Stockholders
and/or the purchasers of the Shares in amounts to be negotiated prior to the
sale. In addition, any Shares covered by this Prospectus which qualify for sale
pursuant to Rule 144 under the 1933 Act may be sold under Rule 144 rather than
pursuant to this Prospectus.
The Company will bear all expenses in connection with the registration and
sale of the Shares, other than commissions, concessions or discounts to brokers
or dealers and fees and expenses of counsel or other advisors to the Selling
Stockholders.
The Selling Stockholders and any broker or dealer who acts in connection
with the sale of the Shares hereunder may be deemed to be "underwriters" within
the meaning of Section 2(11) of the 1933 Act, and any compensation received by
them and any profit on any resale of the Shares as principals might be deemed to
be underwriting discounts and commissions under the 1933 Act.
LEGAL MATTERS
The legality of the Shares offered hereby has been passed upon for the
Company by Long, Aldridge & Norman, LLP, Atlanta, Georgia.
EXPERTS
The consolidated financial statements and schedule of NOVA Corporation at
February 28, 1995 and December 31, 1995 and for each of the two years in the
period ended February 28, 1995 and for the ten months ended December 31, 1995,
incorporated by reference in this Prospectus, have been incorporated herein in
reliance on the report of Ernst & Young LLP, independent auditors, given on the
authority of that firm as experts in accounting and auditing. The statements of
operations and cash flows of the Bank of Boulder bankcard processing operations
for the ten-month period ended October 31, 1994 and for the year ended December
31, 1993, incorporated by reference in this Prospectus, have been incorporated
herein in reliance on the report of Ernst & Young LLP, independent auditors,
given on the authority of that firm as experts in accounting and auditing.
-13-
