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EXHIBIT 10.54
SPLIT-DOLLAR AGREEMENT
THIS AGREEMENT made and entered into as of this 3rd day of April, 2000, by and
among NOVA Corporation, a corporation, with principal offices and place of
business in the State of Georgia (hereinafter referred to as the "Corporation"),
Edward Grzedzinski, an individual residing in the State of Georgia (hereinafter
referred to as the "Employee"), and Donald E. Hall, an individual residing in
the State of Georgia, Trustee of the Edward Grzedzinski Trust U/A dated March 7,
2000 (hereinafter referred to as the "Owner").
WITNESSETH THAT:
WHEREAS, the Employee is employed by the Corporation; and
WHEREAS, the Employee wishes to provide life insurance protection for his family
in the event of his death, under a policy of life insurance insuring his life
(hereinafter referred to as the Policy), which is described in Exhibit A
attached hereto and by this reference made a part hereof, and which is being
issued by John Hancock Life Insurance Company (hereinafter referred to as the
"Insurer"); and
WHEREAS, the Corporation is willing to pay the premiums due on the Policy as an
additional employment benefit for the Employee, on the terms and conditions
hereinafter set forth; and
WHEREAS, Owner is the owner of the Policy and, as such, possesses all incidents
of ownership in and to the Policy; and
WHEREAS, the Corporation wishes to have the Policy collaterally assigned to it
by the Owner, in order to secure the repayment of the amounts which it will pay
toward the premiums on the Policy; and
NOW, THEREFORE, in consideration of the premises and of the mutual promises
contained herein, the parties hereto agree as follows:
1) Purchase of Policy. The Owner has purchased the Policy from the Insurer in
the total face amount of $9,923,000. The parties hereto agree that they will
take all necessary action to cause the Insurer to issue the Policy, and
shall take any further action which may be necessary to cause the Policy to
conform to the provisions of this Agreement. The parties hereto agree that
the Policy shall be subject to the terms and conditions of this Agreement
and of the collateral assignment filed with the Insurer relating to the
Policy.
2) Ownership of Policy. The Owner shall be the sole and absolute owner of the
Policy, and may exercise all ownership rights granted to the owner thereof
by the terms of the Policy, except as may otherwise be provided herein.
3) Payment of Premiums. On or before the due date of each Policy premium, or
within the grace period provided therein, the Corporation shall pay the full
amount of the premium to the Insurer and shall, upon request, promptly
furnish the Employee evidence of timely payment of such premium. The
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Corporation's obligation to pay the Policy premiums shall continue until
this Agreement is terminated and shall not be modified or otherwise affected
by a Change of Control as defined under Section 4 of this Agreement. The
Corporation shall annually furnish the Employee a statement of the amount of
income reportable by the Employee for federal and state income tax purposes
as a result of the Insurance protection provided the Owner as the Policy
beneficiary.
4) Change of Control. "Change of Control (COC)" means the following:
a) The acquisition (other than from NOVA Corporation) 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
NOVA Corporation or its subsidiaries that acquires beneficial
ownership of voting securities of NOVA Corporation) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 25% or more of either the then outstanding shares
of NOVA Corporation stock or the combined voting securities
entitled to vote generally in the election of directors; or
b) i. The consummation by NOVA Corporation of a reorganization,
merger or consolidation with respect to which the shares of
NOVA Corporation voting securities outstanding immediately
prior to the reorganization, merger or consolidation do not
constitute or become exchanged for or converted into more than
50% of the combined voting power entitled to vote generally in
the election of directors of the reorganized, merged or
consolidated company's then outstanding voting securities, or
a liquidation or dissolution of NOVA Corporation, or of the
sale of all or substantially all of the assets of NOVA
Corporation; and
ii. The failure for any reason of individuals who constitute the
Incumbent Board to continue to constitute at least a majority
of the Board. For this purpose, the Incumbent Board means the
members of the Board as of the date hereof and any person
becoming a member of the Board hereafter whose election, or
nomination for election by NOVA Corporation'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 directors of NOVA Corporation,
as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act).
5) Collateral Assignment of Policy.
To secure the repayment to the Corporation of the amount of the premiums on
the Policy paid by it hereunder, the Owner has, contemporaneously herewith,
assigned the Policy to the Corporation as collateral, under the form used by
the Insurer for such assignments. The collateral assignment of the Policy to
the Corporation hereunder shall not be terminated, altered or amended by the
Owner, without the express written consent of the Corporation. The parties
hereto agree to take all action necessary to cause such collateral
assignment to conform to the provisions of this Agreement.
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6) Limitations on Owner's Rights in Policy.
Except as otherwise provided herein, the Owner shall not sell, assign,
transfer, borrow against, surrender or cancel the Policy, change the
beneficiary designation provision thereof, nor terminate the dividend
election thereof without, in any such case, the express written consent of
the Corporation.
7) Collection of death proceeds.
a) Upon the death of the Employee, the Corporation shall cooperate
with the Owner to take whatever action is necessary to collect the
death benefit provided under the Policy; when such benefit has
been collected and paid as provided herein, this Agreement shall
thereupon terminate.
b) Under the death of the Employee, the Corporation shall have the
unqualified right to receive a portion of such death benefit equal
to the total amount of the premiums paid by it hereunder plus
interest at a rate to be determined annually by the Corporation on
the anniversary of the date of this Agreement, such rate not to
exceed 8.0%, reduced by any outstanding indebtedness which was
incurred by the Corporation and secured by the Policy, including
any interest due on such indebtedness. The balance of the death
benefit provided under the Policy, if any, shall be paid directly
to the Owner, in the manner and in the amount or amounts provided
in the beneficiary designation provision of the Policy. In no
event shall the amount payable to the Corporation hereunder exceed
the Policy proceeds payable at the death of the Employee. No
amount shall be paid from such death benefit to the Owner until
the full amount due the Corporation hereunder has been paid. The
parties hereto agree that the beneficiary designation provision of
the Policy shall conform to the provisions hereof.
c) Notwithstanding any provision hereof to the contrary, in the event
that, for any reason whatsoever, no death benefit is payable under
the Policy upon the death of the Employee and in lieu thereof the
Insurer refunds all or any part of the premiums paid for the
Policy, the Corporation and the Owner shall have the unqualified
right to share such premiums based on their respective cumulative
contributions thereto.
8) Termination of the Agreement during the Employee's Lifetime.
a) This agreement cannot be terminated due to a Change of Control as
defined under Section 4 of this Agreement.
b) This Agreement shall terminate during the Employee's lifetime,
without notice, upon the occurrence of any of the following
events: (i) total cessation of the Corporation's business; (ii)
bankruptcy, receivership or dissolution of the Corporation; or
(iii) termination of Employee's employment by the Corporation
(other than by reason of his death).
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c) In addition, the Owner may terminate this Agreement, while no
premium under the Policy is overdue, by written notice to the
other parties hereto. Such termination shall be effective as of
the date of such notice.
9. Disposition of the Policy on Termination of the Agreement during the
Employee's Lifetime.
a) For ninety (90) days after the date of the termination of this
Agreement during the Employee's lifetime, the Owner shall have the
option of obtaining the release of the collateral assignment of the
Policy to the Corporation. To obtain such release, the Owner shall
repay to the Corporation the total amount of the premium payments made
by the Corporation hereunder plus interest at the rate which is
determined by the Corporation under Section 7(b) of this Agreement,
less any indebtedness secured by the Policy which was incurred by the
Corporation and remains outstanding as of the date of such
termination, including any interest due on such indebtedness. Upon
receipt of such amount, the Corporation shall release the collateral
assignment of the Policy by the execution and delivery of an
appropriate instrument of release.
b) If the Owner fails to exercise such option within such ninety (90) day
period, then, at the request of the Corporation, the Owner shall
execute any document or documents required by the Insurer to transfer
the interest of the Owner in the Policy to the Corporation.
Thereafter, neither the Owner nor the Owner's successors, assigns or
beneficiaries shall have any further interest in and to the Policy,
either under the terms thereof or under this Agreement. Alternatively,
the Corporation may enforce its right to be repaid the amount of the
premiums on the Policy paid by it from the cash surrender value of the
Policy under the collateral assignment of the Policy; provided that in
the event the cash surrender value of the Policy exceeds the amount
due the Corporation, such excess shall be paid to the Owner.
10. Insurer Not a Party. The Insurer shall be fully discharged from its
obligations under the Policy by payment of the Policy death benefit to the
beneficiary or beneficiaries named in the Policy, subject to the terms and
conditions of the Policy. In no event shall the Insurer be considered a party to
this Agreement, or any modification or amendment hereof. No provision of this
Agreement, nor any modification or amendment hereof, shall in any way be
construed as enlarging, changing, varying, or in any other way affecting the
obligations of the Insurer as expressly provided in the Policy, except insofar
as the provisions hereof are made a part of the Policy by the collateral
assignment executed by the Owner and filed with the Insurer in connection
herewith.
11. Named Fiduciary, Determination of Benefits, Claims Procedure and
Administration.
a) The Corporation is hereby designated as the named fiduciary under
this Agreement. The named fiduciary shall have authority to
control and manage the operation and administration of this
Agreement, and it shall be responsible for establishing and
carrying out a funding policy and method consistent with the
objectives of this Agreement.
b) (1) Claim.
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A person who believes that he or she is being denied a benefit to
which he or she is entitled under this Agreement (hereinafter
referred to as a "Claimant") may file a written request for such
benefit with the Corporation, setting forth his or her claim. The
request must be addressed to the Chief Financial Officer of the
Corporation at its then principal place of business.
(2) Claim Decision.
Upon receipt of a claim, the Corporation shall advise the Claimant
that a reply will be forth coming within ninety (90) days and
shall, in fact, deliver such reply within such period. The
Corporation may, however, extend the reply period for an
additional ninety (90) days for reasonable cause.
If the claim is denied in whole or in part, the Corporation shall
adopt a written opinion, using language calculated to be
understood by the Claimant, setting forth: (a) the specific reason
or reasons for such denial; (b) the specific reference to
pertinent provisions of this Agreement on which such denial is
based; (c) a description of any additional material or information
necessary for the Claimant to perfect his or her claim and an
explanation why such material or such information is necessary;
(d) appropriate information as to the steps to be taken if the
Claimant wishes to submit the claim for review; and (e) the time
limits for requesting a review under subsection (3) and for review
under subsection (4) hereof.
(3) Request for Review.
Within sixty (60) days after the receipt by the Claimant of the
written opinion described above, the Claimant may request in
writing that the Secretary of the Corporation review the
determination of the Corporation. Such request must be addressed
to the Secretary of the Corporation, at its then principal place
of business. The Claimant or his or her duly authorized
representative may, but need not, review the pertinent documents
and submit issues and comments in writing for consideration by the
Corporation. If the Claimant does not request a review of the
Corporation's determination by the Secretary of the Corporation
within such sixty (60) day period, he or she shall be barred and
estopped from challenging the Corporation's determination.
(4) Review of Decision.
Within sixty (60) days after the Secretary's receipt of a request
for review, he will review the Corporation's determination. After
considering all materials presented by the Claimant, the Secretary
will render a written opinion, written in a manner calculated to
be understood by the Claimant, setting forth the specific reasons
for the decision and containing specific references to the
pertinent provisions of this Agreement on which the decision is
based. If special circumstances require that the sixty (60) day
time period be extended, the Secretary will so notify the Claimant
and will render the decision as soon as
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possible, but no later than one hundred twenty (120) days after
receipt of the request for review.
12. Amendment. This Agreement may not be amended, altered or modified, except by
a written instrument signed by the parties hereto, or their respective
successors or assigns, and may not be otherwise terminated except as
provided herein.
13. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the Corporation and its successors and assigns, and the Employee,
the Owner, and their respective successors, assigns, heirs, executors,
administrators and beneficiaries.
14. Notice. Any notice, consent or demand required or permitted to be given
under the provisions of this Agreement shall be in writing, and shall be
signed by the party giving or making the same. If such notice, consent or
demand is mailed to a party hereto, it shall be sent by United States
certified mail, postage prepaid, addressed to such party's last known
address as shown on the records of the Corporation. The date of such mailing
shall be deemed the date of notice, consent or demand.
15. Governing Law. This Agreement, and the rights of the parties hereunder,
shall be governed by and construed in accordance with the laws of the State
of Georgia.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, in
triplicate, as of the day and year first above written.
NOVA Corporation
Attest: /s/ Carole A. Loftin By: /s/ Cherie M. Fuzzell
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Carole A. Loftin Cherie M. Fuzzell
Assistant Secretary Senior Vice President and
General Counsel
"Employee"
/s/ Edward Grzedzinski
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Edward Grzedzinski
"Owner"
/s/ Donald E. Hall
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Edward Grzedzinski Trust U/A dated March 7, 2000,
by Donald E. Hall, Trustee
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