Exhibit 10.7
eFunds Corporation
Executive Retention Agreement
EXECUTIVE RETENTION AGREEMENT by and between eFunds Corporation, a Delaware
corporation (collectively with any successor entity, the "Company"), and Xxxxx
X. Xxxxxx ("Employee") dated as of the 17th day of June, 2002.
WHEREAS, Employee is employed as an officer of the Company;
WHEREAS, the Chief Executive Officer ("CEO") of the Company has
determined that it is in the best interests of the Company and its stockholders
to ensure that the Company will have Employee's full support of and
participation in implementing the Company's business strategies;
WHEREAS, the CEO has therefore determined to provide Employee with
assurances regarding the transition benefits to be received by Employee during
the transition period following the expected departure of the Employee from
employment with the Company;
WHEREAS, the CEO further believes it is important to secure Employee's
commitment not to compete with the Company following the termination of
Employee's employment as set forth below;
WHEREAS, it shall further be a condition to Employee's entitlement to
any payments hereunder that Employee release any claims against the Company and
its affiliates as of the Separation Date; and
WHEREAS, it is the intention of the parties that this Agreement is not
an employment agreement and that Employee's employment with the Company shall
continue to remain "at-will" and terminable by the Company at any time for any
reason or no reason, although the payments to Employee described herein may
become payable under certain termination scenarios hereinafter described.
NOW, THEREFORE, the parties hereto hereby agree as follows:
I. Retention Incentive and Non-Competition Payments.
(a) Subject to the terms and conditions set forth in this Agreement, in
the event that the Employee remains in the employ of the Company through
September 30, 2002 (the "Separation Date") and his resignation from further
employment with the Company remains effective as of such date or if Employee
accelerates the date of his resignation from further employment by the Company
prior to such date for "Good Reason," Employee shall be entitled to a lump-sum
transition and non-competition payment in the amount of $172,500 (less any
applicable withholdings). Payments shall not be owing hereunder unless Employee
shall execute the Release attached as Exhibit A and the seven day rescission
period (the "Rescission Period") referenced in Section 1(c) thereof shall have
expired without Employee having sent a notice of revocation or rescission to the
Company, at which point any accrued amounts which are then payable hereunder
shall be paid to Employee as soon as administratively feasible (any amounts
owing hereunder shall, however, be paid no later than October 31, 2002). As used
herein, "Good Reason" shall mean that Employee resigns from the Company prior to
the Separation Date due to a material diminution in his duties (other than as
may be occasioned by changes instituted to address succession issues) or his
base compensation by the Company.
(b) No amounts shall be payable under this Section 1 if (i) the Company
terminates Employee's employment with the Company for "Cause" prior to the
Separation Date, (ii) Employee's employment with the Company is terminated prior
to the Separation Date due to the death or disability of Employee or (iii)
Employee resigns from employment with the Company prior to the Separation Date
without Good Reason.
(c) As used herein, "Cause" shall mean a termination by the Company of
Employee's employment with the Company by reason of:
(i) Employee's engagement in illegal conduct or willful
misconduct that is demonstrably injurious to the
business of the Company or any entity controlling,
controlled by or under common control with the
Company (collective, the "Controlled Group");
(ii) a failure by Employee to substantially perform
Employee's material duties which continues for five
days after the CEO delivers a written demand for
substantial performance to Employee;
(iii) Employee commits an act, or omits to take action, in
bad faith which action or inaction results in a
material detriment to one or more members of the
Controlled Group;
(iv) Employee commits an act of fraud, misappropriation,
embezzlement or other acts of dishonesty in
connection with any member of the Controlled Group or
their customers or vendors;
(v) Employee is convicted or pleads guilty or nolo
contendre to criminal misconduct constituting a
felony or gross misdemeanor involving a breach of
ethics, moral turpitude or other immoral conduct
reflecting adversely upon the reputation or interests
of any member of the Controlled Group or their
customers or vendors or Employee becomes subject to
criminal sanctions that will prevent Employee from
performing his or her duties in the ordinary course
for a period of time that is likely to exceed 30
days;
(vi) Employee's use of narcotics, liquor or illicit drugs
has had a continuing and demonstrable negative effect
on Employee's ability to perform his or her duties or
responsibilities to the members of the Controlled
Group; or
(vii) Employee is in default under any agreement between
Employee and the members of the Controlled Group or
Employee refuses to execute and deliver any lawful
agreement that the Company generally requires
Employee's peer employees to sign.
II. Conditions.
The Company's obligations under Section 1 are subject to the following
conditions:
(i) Until the Separation Date and during the
"Non-Competition Period," Employee must exhibit
appropriate professionalism in support of the
Company's goals when dealing with the Company's
employees, the customers and potential customers of
the Controlled Group and Employee's acquaintances;
(ii) Employee must not materially disparage the members of
the Controlled Group or their management prior to the
Separation Date or during the Non-Competition Period;
(iii) Employee must comply with this Agreement; and
(iv) Employee must execute the Release form attached as
Exhibit A within five days after the Separation Date
and must not rescind the same during the Rescission
Period.
2
III. Fringe Benefits.
Any and all benefits or other forms of compensation to Employee (such as the
disposition of any options held by Employee, the balance of Employee's account
under the Employee Stock Purchase or Deferred Compensation PlanS, 401(k) account
and accrued vacation pay) shall be governed by the rules applicable to such
plans and programs, as the same are in effect on the Separation Date; provided,
however, that, except with regard to the foregoing, the payments set forth in
this Agreement are Employee's sole entitlement to payments following the
termination of Employee's employment and Employee shall not also be entitled to
receive payment under the Company's standard severance programs, although this
Agreement shall not impair Employee's entitlement to supplemental commissions
that may be earned by Employee pursuant to that certain supplemental commission
memorandum, dated June 25, 2002.
IV. Non-Competition.
(a) As an essential inducement to the Company to enter into this
Agreement, and as partial consideration for the payment obligations of the
Company pursuant to Section 1, Employee agrees that during the six month period
following the Separation Date (the "Non-Competition Period"), Employee will not:
(i) Control or own (directly or indirectly) more than two
percent of the outstanding capital stock of or other
equity interest in any "Competitor;" or
(ii) Serve as an officer, member, director, contractor,
agent, consultant, advisor or employee of or to any
Competitor wherever located.
(iii) As used herein, "Competitor" shall mean First Data
Corporation, Concord EFS, Inc., Electronic Data
Systems Corporation, Total System Services, Inc. and
any person or entity controlling, controlled by or
under common control with any of the foregoing
persons or entities.
(b) Employee agrees that a breach by Employee of any of the terms of
this Agreement will cause great and irreparable injury and damage to the
Controlled Group and that the members of the Controlled Group shall have a right
to equitable relief, including, but not limited to, a temporary restraining
order, preliminary injunction, permanent injunction and/or order of specific
performance, as a remedy to enforce this Agreement or prevent a threatened or
potential breach of this Agreement by Employee. In addition, the Company will be
immediately relieved of any further obligations under Section 1 if Employee
should breach this Section 4.
V. Miscellaneous.
(a) Employee may not assign or delegate any of Employee's rights or
obligations in respect of this agreement and any attempted assignment or
delegation shall be void and of no effect. This Agreement is binding upon and
enforceable by the Company and the other members of the Controlled Group and
their respective successors and assigns. This Agreement (but not the Release),
including the Company's payment obligations hereunder, will terminate upon the
death of Employee. This Agreement is governed by the substantive laws of the
State of Delaware, without regard to its conflicts of law rules.
(b) From and after the Separation Date, this Agreement will supercede
and replace any other prior severance agreements or arrangements between the
parties, including, without limitation, those contained in that certain
Executive Transition Assistance Agreement, dated as of December 18, 2001 (the
"Transition Agreement"), and that certain Change in Control Agreement, dated
September 1, 2001 (collectively with the Transition Agreement, the "Existing
Agreements"), by and between Employee and the Company. Each of the Existing
Agreements will, as of the Separation Date and without further action by
Employee or the Company, be null and void and of no further force and effect
from and after the Separation Date. In no event shall any amounts be payable to
Employee under this Agreement if any
3
amounts shall become payable to Employee under either of the Existing
Agreements. This Agreement shall not, however, supercede or replace any
Confidentiality Agreement between Employee and any member of the Controlled
Group and each such agreement shall remain in full force and effect.
(c) The failure of a party to insist upon strict compliance with any of
the terms, conditions or covenants expressed in this Agreement shall not be
deemed a waiver of such term, condition or covenant, or any other term,
condition or covenant, nor shall any waiver or relinquishment of any right or
power under this Agreement on one or more times be deemed a waiver or
relinquishment of such right or power or any other right or power at any other
time or times. This Agreement may be amended or modified only through a written
agreement executed by each of the parties hereto.
(d) Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited by or invalid
under applicable law, such provision will be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
(e) This Agreement may be executed in one or more counterparts, any one
of which need not contain the signatures of more than one party, but all such
counterparts taken together will constitute one and the same instrument.
(f) Employee has been informed that the terms of this Agreement will be
open for acceptance and execution by Employee until July 9, 2002 during which
time Employee may consider whether or not to accept this Agreement and consult
with an attorney of Employee's choosing to advise Employee regarding the same.
If Employee does not execute and deliver this Agreement by such date, the offer
contained herein shall be wholly null and void. Employee acknowledges and agrees
that the execution by him of this Agreement shall constitute his voluntary
resignation from employment by the Company and the other members of the
Controlled Group and from any and all offices he holds with such persons, such
resignation to be effective on the Separation Date.
(g) The Company agrees not to materially disparage Employee prior to
the Separation Date or during the Non-Competition Period
IN WITNESS WHEREOF, Employee and the Company have hereunto set their hands as of
the date set forth above.
EMPLOYEE
/s/ Xxxxx X. Xxxxxx
----------------------------------------
eFUNDS CORPORATION
/s/ Xxxx X. Xxxxxxxxx III
----------------------------------------
Chairman and Chief Executive Officer
4
EXHIBIT A
RELEASE
WHEREAS, Xxxxx X. Xxxxxx ("Employee") is an employee of eFunds
Corporation, a Delaware corporation (the "Company");
WHEREAS, Employee has voluntarily resigned from further employment by
the Company effective as of September 30, 2002 (the "Separation Date");
WHEREAS, Employee and the Company have previously entered into that
certain Executive Retention Agreement, dated as of June 17, 2002 (the "Retention
Agreement"), pursuant to which the Company has agreed to make certain payments
to Employee following the termination of his employment under certain
circumstances; and
WHEREAS, it is a condition to the Company's obligation to make the
payments provided for in the Retention Agreement that Employee execute, deliver
and not rescind this Release.
NOW, THEREFORE, IN CONSIDERATION OF THE FOREGOING, Employee and the
Company hereby agree as follows:
1. Release.
(a) As consideration for the promises of the Company contained
in the Retention Agreement, Employee, for himself and his successors and
assigns, hereby fully and completely releases and waives any and all claims,
complaints, rights, causes of action or demands of whatever kind, whether known
or unknown or suspected to exist by Employee (collectively, "Claims") which he
has or may have against the Company and any company controlling, controlled by
or under common control with the Company (collectively with the Company, the
"Controlled Group") and their respective predecessors, successors and assigns
and all officers, directors, shareholders, employees and agents of those persons
and companies ("the Released Parties") arising out of or related to any actions,
conduct, promises, statements, decisions or events occurring prior to or on the
Separation Date (the "Released Matters"), including, without limitation, any
Claims based on or arising out of Employee's employment with the Controlled
Group and the cessation of that employment; provided, however, that such release
shall not operate to relieve the members of the Controlled Group of any
obligation to indemnify Employee against any Claims brought against Employee by
any third party by reason of Employee's status as an officer or employee of the
Controlled Group. As an essential inducement to Employee to enter into this
Agreement, and as consideration for the promises of Employee contained herein,
the Company, for itself and its successors, assigns and affiliates hereby fully
and completely releases and waives any and all Claims which it or they have or
may have against Employee arising out of or related to the Released Matters;
provided, however, that such release shall not operate to relieve Employee from
any obligation to reimburse the members of the Controlled Group for any
disbursements (such as travel and entertainment expenses) improperly charged by
Employee to such Group. Employee and the Company each further agree that they
will not, and will cause their affiliates not to, institute any legal
proceedings against the persons released by them in respect of any Claim nor
will they authorize any other party, whether governmental or otherwise, to seek
individual remedies on their behalf with respect to any Claim. Employee and the
Company agree that, by signing this Release, neither party is waiving any Claim
arising after the Separation Date or under the Retention Agreement.
(b) Employee's release of Claims is intended to extend to and
include Claims of any kind arising under Title VII of the Civil Rights Act of
1964, as amended, 42 U.S.C. Sections 2000e et seq., the Age Discrimination in
Employment Act, 29 U.S.C. Sections 621 et seq., the Americans with Disabilities
Act, 42 U.S.C. Sections 12101 et seq., the Delaware Discrimination in Employment
Act, Del. Code Xxx. Tit. 19, Sections 710-718, the Delaware Handicapped Persons
Employment Protections Act, Del. Code Xxx. Tit. 19,Sections 720-728 and any
other federal, state or local statute, executive order, ordinance, policy or
practice prohibiting
employment discrimination or otherwise relating to employment, as well as any
claim for breach of contract, wrongful discharge, breach of any express or
implied promise, misrepresentation, fraud, retaliation, violation of public
policy, infliction of emotional distress, defamation, promissory estoppel,
equitable estoppel, invasion of privacy or any other theory, whether legal or
equitable.
(c) Employee has been informed of Employee's right to revoke
this Release insofar as it extends to potential claims under the Age
Discrimination in Employment Act by informing the Company of Employee's intent
to revoke this Release within seven (7) calendar days following the execution of
this Release by Employee. Employee has further been informed and understands
that any such rescission must be in writing and hand-delivered to the Company
or, if sent by mail, postmarked within the applicable time period, sent by
certified mail, return receipt requested, and addressed as follows:
eFunds Corporation
Xxxxxx Ranch Center II
0000 X. Xxxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: General Counsel
The Company and Employee agree that if Employee exercises Employee's right of
rescission, under this Section (c), the Company's obligations under Section 1 of
the Retention Agreement shall be wholly null and void.
2. Miscellaneous.
(a) Employee may not assign or delegate any of Employee's
rights or obligations in respect of this Release and any attempted assignment or
delegation shall be void and of no effect. This Release is binding upon and
enforceable by the Company and the other members of the Controlled Group and
their respective successors and assigns and inures to the benefit of Employee
and Employee's heirs and executors. This Release is governed by the substantive
laws of the State of Delaware, without regard to its conflicts of law rules.
(b) The failure of a party to insist upon strict compliance
with any of the terms, conditions or covenants expressed in this Release shall
not be deemed a waiver of such term, condition or covenant, or any other term,
condition or covenant, nor shall any waiver or relinquishment of any right or
power under this Release on one or more times be deemed a waiver or
relinquishment of such right or power or any other right or power at any other
time or times.
(c) Whenever possible, each provision of this Release will be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Release is held to be prohibited by or invalid
under applicable law, such provision will be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Release.
(d) This Release may be executed in one or more counterparts,
any one of which need not contain the signatures of more than one party, but all
such counterparts taken together will constitute one and the same instrument.
(e) Employee acknowledges and agrees that the execution by him
of this Release shall confirm his voluntary resignation from employment by the
Company and the other members of the Controlled Group and from any and all
offices he holds with such persons.
2
IN WITNESS WHEREOF, the Company and Employee have hereunto set their
hands to this Release as of the dates set forth below.
eFUNDS CORPORATION
Dated: By: ________________________
Its ________________________
Dated: ____________________________
Employee
STATE OF ___________)
County of ____________)
Subscribed and sworn before me
this ___ day of ___________, ____.
________________________________ seal
Notary Public, State of _____________
My Commission expires:____________
3
