Exhibit 10.1
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT
(“Agreement”) is entered into as of this 14 th day of
September 2007 (the “Effective Date”), by and
between S1 Corporation, a Delaware corporation (the
“Company”), and Jan Kruger , individual (the
“Employee”).
WHEREAS, the Company and the Employee
desire to enter into this Employment Agreement to set out the terms
and conditions for the employment relationship of the Employee with
the Company from and after the Effective Date; and
WHEREAS, the board of directors of
the Company (the “Board”) has approved and authorized
the Company’s execution, delivery and performance of this
Agreement.
NOW, THEREFORE, in consideration of
the mutual covenants and agreements set forth herein and other good
and valuable consideration, the receipt and sufficiency of which
hereby are acknowledged, the parties hereto agree as follows:
1. Employment Agreement
. On the terms and conditions set forth in this Agreement, the
Company agrees to employ the Employee and the Employee agrees to be
employed by the Company for the Employment Period set forth in
Section 2 hereof and in the position and with the duties set
forth in Section 3 hereof. Terms used herein with initial
capitalization not otherwise defined are defined in Section 20
below.
2. Term . The initial
term of employment under this Agreement shall be for a three-year
period commencing on the Effective Date (the “Initial
Term”). The term of employment shall be automatically renewed
for an additional consecutive 12-month period (the “Extended
Term”) as of the first and every subsequent anniversary of
the Effective Date, unless and until either party provides written
notice to the other party in accordance with Section 10 hereof
not less than 90 days before such anniversary date that such
party is terminating the term of employment under this Agreement
(“Non-Renewal”), which termination shall be effective
as of the end of such Initial Term or Extended Term, as the case
may be, or until such term of employment is otherwise sooner
terminated as hereinafter set forth. Such Initial Term and all such
Extended Terms are collectively referred to herein as the
“Employment Period.” A notice of Non-Renewal given by
either party to this Agreement shall not be deemed a termination of
the Employee’s employment for purposes of Section 9 of
this Agreement unless otherwise expressly provided in such notice
of Non-Renewal. The Company’s obligations under
Section 9 hereof shall survive the expiration or termination
of the Employment Period.
3. Position and Duties .
The Employee shall initially serve as the Group President,
Enterprise of the Company. The Employee acknowledges that the
Company may, at its sole discretion, change the Employee’s
title, job duties and responsibilities and reporting as the Company
sees fit in its sole discretion. In any role in which the Employee
is employed with the Company, the Employee shall render executive,
policy and other management services to the Company of the type
customarily performed by persons serving in such capacity. The
Employee shall report to the Chief Executive Officer of the Company
unless otherwise determined by the Company. The Employee shall also
perform such other duties with the Company and with any Subsidiary
as the CEO of the Company or the Board may from time to time
reasonably determine and assign to the Employee. The Employee shall
devote the Employee’s reasonable best efforts and
substantially full business time to the performance of the
Employee’s duties and the advancement of the business and
affairs of the Company. The Employee agrees that during the
Employment Period he or she will not be entitled to additional
compensation for serving as a member of the board of directors of
the Company or any Subsidiary if he or she is elected to serve
thereon.
4. Place of Performance
. In connection with the Employee’s employment by the
Company, the Employee shall be based at the offices of the Company
in Norcross, Georgia, except as otherwise agreed by the Employee
and the Company and except for reasonable travel on Company
business.
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5. Compensation and
Benefits; Stock Options .
(a)
Base Salary . During the Employment Period, the Company
shall pay to the Employee an annual base salary (the “Base
Salary”) at the rate of $275,000 per year. The Base Salary
will be reviewed annually and may be increased at the discretion of
the Company. The Base Salary shall be payable semi-monthly or in
such other installments as shall be consistent with the
Company’s payroll procedures.
(b)
Annual Bonus . The Employee will be eligible to receive an
annual bonus, payable no later than the end of the first fiscal
quarter of each calendar year during the Employment Period
(pro-rated for any period that is less than 12 months) of up
to $150,000 for such calendar year, based on the attainment of
specific Company and individual performance targets as may be
assigned by the Company annually.
(c)
Benefits . During the Employment Period, the Employee will
be entitled to participate in any fringe benefit welfare benefit
plan of the Company (on the same terms as provided to other
employees of the Company), including any plan providing for
employee stock purchases, pension or retirement income, retirement
savings, employee stock ownership, deferred compensation or
medical, prescription, dental, disability, employee life, group
life, accidental death or travel accident insurance benefits that
the Company may adopt for the benefit of employees, in accordance
with the terms of such plan. Nothing in this Agreement shall
restrict the right of the Company to change insurance carriers and
to adopt, amend, terminate or modify employee benefit plans and
arrangements at any time and without the consent of the
Employee.
(d)
Stock Options . The Company may grant options to purchase
the stock of the Company to the Employee in accordance with the
terms of the Company’s stock option plans.
(e)
Vacation; Holidays . The Employee shall be entitled to all
public holidays observed by the Company and to annual vacation for
such number of days as may be determined by the Company, and
otherwise in accordance with the applicable vacation policies for
senior executives of the Company, which shall be taken at a
reasonable time or times.
(f)
Withholding Taxes and Other Deductions . To the extent
required by law, the Company shall withhold from any payments due
Employee under this Agreement any applicable federal, state or
local taxes and such other deductions as are prescribed by law or
Company policy or are otherwise authorized by the Employee.
6. Expenses . The
Employee is expected and is authorized to incur reasonable expenses
in the performance of his duties hereunder. The Company shall
reimburse the Employee for all such expenses in accordance with the
Company’s expense reimbursement policy, upon periodic
presentation by the Employee of an itemized account, including
reasonable substantiation, of such expenses.
7. Confidentiality,
Non-Disclosure and Non-Competition Agreement .
Concurrently with the execution of
this Agreement, the parties are entering into an Employee Covenants
Agreement (the “Related Agreement”).
8. Termination of
Employment .
(a)
Permitted Terminations . The Employee’s employment
hereunder may be terminated during the Employment Period under the
following circumstances:
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i. |
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Death . The Employee’s employment hereunder shall
terminate upon
the Employee’s
death; |
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ii. |
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By the Company . The Company may terminate the
Employee’s employment: |
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A. |
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If the Employee shall have been substantially unable to perform
the Employee’s material duties hereunder by reason of
illness, physical or mental disability or |
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other similar incapacity, which inability shall continue for
three consecutive months (provided, that until such termination,
the Employee shall continue to receive his compensation and
benefits hereunder, reduced by any benefits payable to him or her
under any disability insurance policy or plan applicable to him or
her); or |
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iii. |
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By the Employee . The Employee may terminate his
employment for any reason or for no reason. |
(b)
Termination . Any termination of the Employee’s
employment by the Company or the Employee (other than because of
the Employee’s death) shall be communicated by written Notice
of Termination to the other party hereto in accordance with
Section 10 hereof. For purposes of this Agreement, a
“Notice of Termination” shall mean a notice which shall
indicate the specific termination provision in this Agreement
relied upon, if any, and shall set forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination
of the Employee’s employment under the provision so
indicated. Termination of the Employee’s employment shall
take effect on the Date of Termination.
9. Compensation Upon
Termination or Change in Control .
(a)
Death . If the Employee’s employment is terminated
during the Employment Period as a result of the Employee’s
death, the Company shall pay to the Employee’s estate, or as
may be directed by the legal representatives of such estate, the
Employee’s Base Salary due through the Date of Termination, a
pro rata portion of the annual bonus that would have been payable
for the calendar year of termination if the Employee’s
employment had not terminated (calculated based upon actual results
through the Date of Termination and based upon budget for the
remainder of the period and pro rated for the portion of the year
during which the Employee was employed) and all other unpaid
amounts, if any, to which the Employee is entitled as of the Date
of Termination, at the time such payments are due, and the Company
shall have no further obligation to the Employee under this
Agreement.
(b)
Disability . If the Company terminates the Employee’s
employment during the Employment Period because of the
Employee’s disability pursuant to Section 8(a)(ii)(A)
hereof, the Company shall pay the Employee the Employee’s
Base Salary due through the Date of Termination, a pro rata portion
of the annual bonus that would have been payable for the calendar
year of termination if the Employee’s employment had not
terminated (calculated based upon actual results through the Date
of Termination and based upon budget for the remainder of the
period and pro rated for the portion of the year during which the
Employee was employed) and all other unpaid amounts, if any, to
which the Employee is entitled as of the Date of Termination, at
the time such payments are due, and the Company shall have no
further obligations to the Employee under this Agreement;
provided , that payments so made to the Employee with
respect to any period that the Employee is substantially unable to
perform the Employee’s material duties hereunder by reason of
illness, physical or mental illness or other similar incapacity
shall be reduced by the sum of the amounts, if any, payable to the
Employee by reason of such disability, at or prior to the time of
any such payment, under any disability insurance policy or benefit
plan and which amounts have not previously been applied to reduce
any such payment.
(c)
Termination by the Company for Cause or by the Employee without
Good Reason . If, during the Employment Period, the Company
terminates the Employee’s employment for Cause pursuant to
Section 8(a)(ii)(B) hereof or the Employee terminates his
employment without Good Reason, the Company shall pay the Employee
the Employee’s Base Salary due through the Date of
Termination, and all other unpaid amounts, if any, to which the
Employee is entitled as of the Date of Termination, at the time
such payments are due, and the Company shall have no further
obligations to the Employee under this Agreement. In the event that
the Company intends to terminate the Employee for Cause, the
Employee shall have a reasonable opportunity, together with his
counsel, to be heard before the Board of Directors of the Company
before such termination.
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(d)
Termination by the Company without Cause or by the Employee with
Good Reason . Subject to Section 9(e) below, if the Company
terminates the Employee’s employment during the Employment
Period other than for Cause, disability or death pursuant to
Section 8(a)(i) or (ii) hereof or the Employee terminates
employment hereunder with Good Reason, the Company shall (i) pay
the Employee the Employee’s Base Salary due through the Date
of Termination, a pro rata portion of the annual bonus that would
have been payable for the calendar year of termination if the
Employee’s employment had not terminated (calculated based
upon actual results through the Date of Termination and based upon
budget for the remainder of the period and pro rated for the
portion of the year during which the Employee was employed) and all
other unpaid amounts, if any, to which the Employee is entitled as
of the Date of Termination, at the time such payments are due,
(ii) pay, during the 12-month period commencing on the Date of
Termination (the “Severance Period”), to the Employee
an aggregate amount equal to Employee’s Base Salary, payable
in equal installments on the Company’s regular salary payment
dates, (iii) make a one time payment to the Employee equal to
the average of the prior three calendar years’ bonus paid to
the Employee; provided if the Employee has been employed at the
Company for a shorter period than would allow the calculation under
this subsection, the payment under the subsection shall be
calculated by taking the average bonus paid to the employee in the
actual calendar years prior to the calendar year in which the
Employee is terminated, divided by the number of such years;
(iv) shall continue in effect during the Severance Period the
employee benefits provided to the Employee under Section 5(c)
hereof immediately before the Date of Termination (except to the
extent such benefits are provided pursuant to a qualified plan
under Section 401(a) of the Code, the Company shall provide a
substantially equivalent nonqualified benefit), and (v) if
such termination occurs within two years after a Change in Control
(or before a Change in Control has occurred, but after the Company
has commenced negotiations of a transaction that results in a
Change in Control), shall cause all of the outstanding options then
held by the Employee to purchase stock of the Company to be fully
vested and exercisable; provided, notwithstanding anything herein
to the contrary, the provision for acceleration of options
described in this paragraph will not apply to any options,
restricted stock, SAR or other awards approved by the S1 Board of
Directors and/or granted to Employee on or about November 1,
2006; provided further, that no notice of Non-Renewal shall be
deemed to be a termination of the Employee’s employment for
such purposes unless otherwise expressly provided in such notice of
Non-Renewal. As a condition precedent to the receipt of the
foregoing payments and benefits, if requested by the Company, the
Employee shall enter into an agreement with the Company confirming
the Company’s right to continued performance by the Employee
of the Employee’s obligations under the Related Agreement
during the period following termination of the Employee’s
employment.
(e)
Limitation on Parachute Payments . Notwithstanding any other
provision of this Agreement or of any other agreement, contract, or
understanding heretofore or hereafter entered into by the Employee
with the Company or any subsidiary or affiliate, except an
agreement, contract, or understanding hereafter entered into that
expressly modifies or excludes application of this paragraph (an
“Other Agreement”), and notwithstanding any formal or
informal plan or other arrangement for the direct or indirect
provision of compensation to the Employee (including groups or
classes of participants or beneficiaries of which the Employee is a
member), whether or not such compensation is deferred, is in cash,
or is in the form of a benefit to or for the Employee (a
“Benefit Arrangement”), if the Employee is a
“disqualified individual,” as defined in Section
280G(c) of the Code, no payment or benefit shall be made or
provided to the Employee or become vested, exercisable or payable,
as applicable, (i) to the extent that such payment, right to
exercise, vesting, or other benefit, taking into account all other
payments, rights, or benefits to or for the Employee, or becoming
vested, exercisable or payable, as the case may be, under this
Agreement, all Other Agreements and all Benefit Arrangements, would
cause any such payment, right to exercise, vesting or other benefit
to which the Employee is or would be entitled under this Agreement
to be considered a “parachute payment” within the
meaning of Section 280G(b)(2) of the Code as then in effect (a
“Parachute Payment”) and (ii) if, as a
result of receiving a Parachute Payment, the aggregate after-tax
amounts received by the Employee under this Agreement, all Other
Agreements, and all Benefit Arrangements would be less than the
maximum after-tax amount that could be received by the Employee
without causing any such payment, right to exercise, vesting or
other benefit to be considered a Parachute Payment. In the event
that the receipt of any such payment, right to exercise, vesting,
or other benefit under this Agreement, in conjunction with all
other rights, payments, or benefits to or for the Employee under
any Other Agreement or any Benefit Arrangement would cause the
Employee to be considered to have received a Parachute Payment
under this Agreement that would have the effect of decreasing the
after-tax amount received by the Employee as described in clause
(ii) of the preceding sentence, then the Employee shall have
the right, in the Employee’s sole discretion, to designate
those rights, payments or benefits (or the vesting or
exercisability thereof) under this Agreement, any Other Agreements
and any Benefit Arrangements that should be reduced or eliminated
so as to avoid having the right, payment or benefit to the Employee
(or the vesting or exercisability thereof) under this Agreement be
deemed to be a Parachute Payment. All determinations required to be
made under this Section 9(e), including whether and when a
reduction in rights, payments or benefits (or the vesting or
exercisability thereof) is required and the amount of such
reduction and the assumptions to be utilized in arriving at such
determination, shall be made by PricewaterhouseCoopers LLP or such
other certified public accounting firm reasonably acceptable to the
Company
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as may
be designated by the Employee in writing (the “Accounting
Firm”) which shall provide detailed supporting calculations
both to the Company and the Employee within 15 business days of the
receipt of notice from the Employee or the Company. In the event
that the Accounting Firm is serving as accountant or auditor for
the Company or any individual, entity or group effecting a change
in the owners
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