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EMPLOYMENT AGREEMENT BETWEEN
CATUITY INC. AND ALFRED H. (JOHN) RACINE
This
Employment Agreement is made and entered into as of October
31, 2007 between Catuity Inc. (the “Company”), a
Delaware corporation, and Alfred H. (John) Racine (the
“Executive”).
1.
Employment .
Company hereby employs Executive, and Executive hereby accepts
employment with Company, on the terms and conditions hereinafter
set forth.
2.
Term .
The term of this Agreement will commence on November 1, 2007 (the
“Commencement Date”) and end on March 31, 2008 and will
automatically renew for one more six-month term if the company has
not completed a material transaction or earlier terminated as
hereinafter set forth. This agreement shall have a final expiration
date of October 31, 2008, unless extended by act of the board of
Catuity.
3.
Duties and Responsibilities .
Executive shall serve with the duties of President, CEO and
Director (or in such other position as may be mutually agreed upon
by Executive and the Board) and shall have such responsibilities,
duties and authority as may be assigned to him by the
Board.
4.
Service on Board of Directors .
The Executive shall serve on the Board of Directors of the Company
and any of its subsidiaries, affiliates or divisions, and as an
officer of any subsidiary, affiliate or division, if elected. When
this Agreement terminates, Executive will, if requested by the
Board of Company, tender his resignation from any and all such
Board positions.
5.
Outside Activities .
During the term of this Agreement, Executive is free to advise,
volunteer or otherwise provide compensated services to other
companies or organizations so long as such activities do not
materially interfere with the completion of his duties and
responsibilities. This work may include work for shareholders and
lenders to the Company.
6.
Place of Employment .
Executive shall have him office, and perform him duties, within 75
miles of the center of Charlottesville, Virginia and he shall not
be required to move from the metropolitan Charlottesville, Virginia
area; provided that, he shall from time to time be required to
travel when necessary in carrying out Company’s business.
Executive acknowledges that travel will be required to dispatch his
normal duties.
7.
Reimbursement of Expenses and Furnishing of Services to
Executive .
During the term of this Agreement, Executive shall be entitled to,
including but without limitation, an office at the company’s
corporate headquarters, as well as reimbursement, upon proper
accounting, of reasonable expenses and disbursements incurred by
him in the course of his duties). All expense reimbursements will
be subject to compliance with IRS regulations so as to be
deductible as ordinary and necessary business expenses, and to
compliance with Company’s normal policies and
practices.
8.
Base Salary Compensation .
During the term of Executive’s employment, he shall be paid a
minimum base salary of One Hundred Thousand
Dollars
($100,000) per year. The Board shall review Executive’s
salary at least annually, and may increase Executive’s salary
from time to time in their discretion, and if so increased, such
salary shall not be decreased thereafter during the term of this
Agreement. The Executive has held his current position since
joining the Company on in September 2004. With this contract, the
Executive has accepted a reduced compensation package. The Company
confirms that, in addition to its ongoing obligations under this
contract, the Executive is owed Sixty-Seven Thousand Five Hundred
and Twenty-Five Dollars ($67,525.00) in unpaid
compensation.
9.
Other Benefits .
The Company will make timely reimbursement to the Executive for
100% of the cost of private health insurance.
10.
Non Disparagement of Executive.
Company
shall not disparage Executive’s reputation or good name
during or after the term of this Agreement.
(a)
Executive
may voluntarily terminate his employment hereunder at any
time, on 30 days’ notice with or without
cause.
(b)
Company
may terminate this Agreement and the employment of Executive
at any time, with or without “Cause” (as defined
below), on 30 days’ notice.
(c)
Either
Company or Executive may terminate this Agreement after the
“Disability” (as defined below) of Executive, on
30 days’ notice.
(d)
This
Agreement will terminate on Executive’s
death.
12.
Termination Definitions .
(a)
“Cause”
means
(i) the Executive’s commission of acts or omissions
constituting active and deliberate dishonesty as determined by
the Board of Directors, (ii) Executive’s actual receipt
of an improper benefit or profit in money, property or
services, or (iii) if the Executive continuously fails to
perform his duties under this Agreement in any material manner
after receipt of notice of such failure from the Company
specifying how he has so failed to perform. The Company may at
its option terminate this Agreement for Cause by giving
written notice of termination to the Executive without
prejudice to any other remedy to which the Company may be
entitled at law, in equity, or under this Agreement. The
notice of termination required by this Section shall specify
the ground for the termination and shall be supported by a
statement of all relevant facts. In the event of termination
of this Agreement for Cause, the Executive shall be entitled
to no further compensation or other benefits under this
Agreement, except as to that portion of any unpaid salary and
other benefits accrued and earned by him hereunder up to and
including the effective date of such termination.
(b)
For
purposes of this Agreement, a "Change in Control" shall be
deemed to have occurred:
(i)
if
any person or group of persons acting together (other than (a)
the Company or any person (I) who as of the date hereof was a
director or officer of the Company, or (II) whose shares of
Common Stock of the Company are treated as "beneficially
owned" by any such director or officer, or (b) any
institutional investor (filing reports under Section 13(g)
rather than 13(d) of the Securities Exchange Act of 1934, as
amended, including any employee benefit plan or employee
benefit trust sponsored by the Company)), becomes a beneficial
owner, directly or indirectly, of securities of the Company
representing fifty percent (50%) or more of either the
then-outstanding Common Stock of the Company or
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