Exhibit 10.1
August 5, 2008
 
John Arthur Stone
 
Dear John:
You have tendered your resignation from S1 Corporation (the “Company”) effective
August 5, 2008 (the “Separation Date”). In order to ensure a smooth transition
of responsibilities, the Company has agreed to engage you on a consulting basis
and make certain payments to you as set forth in this letter agreement
(“Agreement”), which sets forth the terms under which your employment with the
Company is ending. We desire to resolve any and all issues relating to your
employment and the conclusion of your employment with the Company amicably on
mutually satisfactory terms. Specifically, you (“You” or “Your”) and the Company
(collectively, the “Parties”) agree:
A. Separation Terms
1. Payments. Provided that You satisfy the conditions of this Agreement and the
Covenants Agreement attached as Exhibit A hereto (the “Covenants Agreement”) and
provided that You do not revoke the Waiver (defined below) contained in this
Agreement, the Company will:

  (a)   Pay You, within ten (10) days of the expiration of the Revocation Period
(defined below) without Your revoking the Waiver, $50,508.61, which represents
the unpaid portion of Your fiscal year 2008 bonus pro rated for the portion of
the fiscal year during which You were employed by the Company;

  (b)   In consideration of the Consulting Services (as defined in Section B.1.)
to be provided to the Company as set forth below, pay You the gross amount of
Two-Hundred Thirty Thousand Dollars ($230,000), payable in equal installments
over twenty-four (24) pay periods in accordance with the Company’s regular
payroll practices (or payable sooner if required pursuant to Section B.1 below);

  (c)   Reimburse your COBRA premiums under the Company’s major medical group
health plan on a monthly basis for the next twelve (12) months upon submission
of paid receipts by You; and

  (d)   Accelerate the vesting of the next tranche of the stock options that are
scheduled to vest on November 8, 2008 granted to You pursuant to the Option
Agreement dated November 8, 2005, representing an option to purchase 31,250
shares of the common stock of the Company (the “Accelerated Options”), such that
the Accelerated Options shall become vested as of the first day following the
expiration of the Revocation Period without Your revoking the Waiver.

Additionally and regardless of whether You sign this Agreement, You will be
paid, on or before August 15, 2008, any unpaid salary through the Separation
Date and any accrued but unused vacation, and You will be paid any un-reimbursed
business expenses incurred by you as of the Separation Date in accordance with
Company policy. All payments (except for reimbursement of business expenses)
will be subject to applicable withholdings, including taxes and social security.
Because You are no longer employed as of the Separation Date, Your rights to any
particular employee benefit will be governed by applicable law and the terms and
provisions of the Company’s various employee benefit plans and arrangements. You
acknowledge that the Separation Date will be the date used in determining
benefits under all Company employee benefit plans. You further acknowledge that
You are not entitled to any payments or benefits from the Company following the
Separation Date other than those expressly set forth in this Agreement and that
the payments and benefits set forth in (a) through (d) above are consideration
for Your promises in this Agreement (including without limitation the General
Release of Claims and the Waiver) and the Covenants Agreement and are above and
beyond anything to which You are entitled per any agreement, policy,

 

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or law. The Company’s obligations listed in (a) through (d) above will terminate
immediately upon any breach by You of this Agreement or the Covenants Agreement.
2. General Release of Claims. In exchange for the payments and benefits stated
above in (a) through (d) in A.1. above, You release and discharge the Company
and its directors, officers, employees and affiliated and related companies (the
“Released Parties”), from any claim or liability, whether known or unknown,
arising out of any event, act or omission occurring on or before the day You
sign this Agreement, including, but not limited to, claims arising out of Your
employment or the cessation of Your employment or any employment agreement,
claims for breach of contract, tort, employment discrimination, retaliation, or
harassment, as well as any other statutory or common law claims, at law or in
equity, recognized under any federal, state, or local law. Except for any
obligations expressly set forth in this Agreement, You also release the Released
Parties from any claims for unpaid back pay, sick pay, vacation pay, expenses,
bonuses, commissions, attorneys’ fees, or any other compensation or benefits.
You further agree that You have suffered no harassment, retaliation, employment
discrimination, or work-related injury or illness.
3. OWBPA/ADEA Waiver. By agreeing to this provision, You release and waive any
right or claim against the Company arising out of Your employment or the
termination of Your employment with the Company under the Age Discrimination in
Employment Act, as amended, 29 U.S.C. § 621 et seq. (“ADEA”), the Older Workers
Benefit Protection Act, 29 U.S.C. § 621 et seq. (“OWBPA”), or the Georgia
Prohibition of Age Discrimination in Employment, O.C.G.A. § 34-1-2,
(collectively, the “Waiver”). You understand and agree that:

  (i)   this Agreement is written in a manner that You understand;

  (ii)   You do not release or waive rights or claims that may arise after You
sign this Agreement;

  (iii)   You waive rights and claims You may have had under the OWBPA and the
ADEA, but only in exchange for payments and/or benefits in addition to anything
of value to which You are already entitled;

  (iv)   You have been advised to consult with an attorney before signing this
Agreement;

  (v)   You have 21 days (the “Offer Period”) from receipt of this Agreement to
consider whether to sign it. If You sign before the end of the Offer Period, You
acknowledge that Your decision to do so was knowing, voluntary, and not induced
by fraud, misrepresentation, or a threat to withdraw, alter, or provide
different terms prior to the expiration of the Offer Period;

  (vi)   You have 7 days after signing this Agreement to revoke the Waiver (the
“Revocation Period”). If You revoke, the Agreement shall not be effective or
enforceable and You shall not be entitled to the separation benefits stated
above in (a) through (d) of Section A.1. To be effective, the revocation must be
in writing and received by Sandy Fountain, VP Human Resources at S1 Corporation,
705 Westech Drive, Norcross, Georgia 30092, or her successor, within the
Revocation Period; and

  (vii)   this Agreement will not become effective or enforceable until the
Revocation Period has expired without your revoking the Waiver.

B. Your Ongoing Obligations
1. Consulting Services. During the period beginning the day after the expiration
of the Revocation Period without Your revoking this Agreement until July 31,
2009 (or such earlier date as provided in this Section B.1., the “Consulting
Term”), You will provide such consulting services as the Company’s Board of
Directors (the “Board”) shall reasonably request from time to time, including
without limitation, assistance regarding the transition of the new Chief
Financial Officer of the Company (the “Consulting Services”); provided, that,
notwithstanding the foregoing, the Consulting Term may be terminated by the
Company at any time upon notice to You. In the event the Consulting Term is
terminated prior to July 31, 2009, the Company shall, within fifteen (15) days
following the date of termination, pay You, subject to applicable withholdings,
including taxes and social security, an amount equal to difference between
(i) Two-Hundred Thirty Thousand Dollars ($230,000) and (ii) any amounts
previously paid to you for Consulting Services pursuant to Section A.1.(b)
above. You will at all times during the Consulting Term be an independent
contractor of the Company, and You shall have no authority, nor shall You
represent to any person

 

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or entity that You have authority, to bind the Company in any matter without the
prior written consent of the Board. During the Consulting Term, You shall be
entitled to make Your services available to, and perform work for, other
companies, subject to Your obligations in this Agreement and the Covenants
Agreement.
2. Return of Company Property. You will, not later than August 11, 2008, return
to the Company all of the Company’s property, including, but not limited to,
keys, pass cards, credit cards, customer lists, rolodexes, tapes, software,
computer files, marketing and sales materials, and any other record, document or
piece of equipment belonging to the Company. You will not retain any copies of
the Company’s property, including any copies in electronic form. You acknowledge
that You have not and will not destroy, delete, or alter any Company property
without the Company’s consent.
3. Non-Disparagement. You will not make any disparaging or defamatory
statements, whether written or verbal, regarding the Company or its officers or
directors.
4. Future Employment. You agree that the Company has no obligation to consider
You for employment should You apply in the future.
5. Options. Subject to the terms and conditions of this Agreement, You are
vested in options to purchase certain shares of the common stock of the Company
in accordance with the grants made to You by the Company and as set forth in
Section A.1(d) above. The options are exercisable as set forth in the option
agreement(s) under which the options were granted.
6. Covenants Agreement. On the same date that You sign this Agreement, You shall
sign the Covenants Agreement attached as Exhibit A hereto. This Agreement shall
not be effective unless You sign the Covenants Agreement too.
7. Cooperation. You agree to cooperate with the Company in its defense in any
investigation, litigation or administrative proceeding regarding matters
occurring during Your employment. The Company shall fully reimburse You for
reasonable out-of-pocket expenses incident to such cooperation provided they are
properly documented.
8. Resignation From All Positions. In addition to Your resignation as Chief
Financial Officer and notwithstanding the Consulting Services You may provide to
the Company, this Agreement also represents Your resignation from any other
positions that You hold with the Company or any of its subsidiaries or
affiliates. You agree to execute all such documents evidencing Your resignations
as reasonably requested by the Company.
C. General Provisions
1. No Admission of Liability. This Agreement is not an admission of liability by
the Company or You. The Parties each deny any liability whatsoever. The Company
enters into this Agreement to reach a mutual agreement concerning Your
separation from the Company.
2. Attorneys’ Fees. In the event of litigation relating to this Agreement other
than a challenge to the OWBPA/ADEA Waiver set forth in Section A.3. above, the
Company shall, if it is the prevailing party, be entitled to recover attorneys’
fees and costs of litigation, in addition to all other remedies available at law
or in equity.
3. Waiver. The Company’s failure to enforce any provision of this Agreement
shall not act as a waiver of that or any other provision. The Company’s waiver
of any breach of this Agreement shall not act as a waiver of any other breach.
4. Severability. The provisions of this Agreement are severable. If any
provision is determined to be invalid, illegal, or unenforceable, in whole or in
part, the remaining provisions and any partially enforceable provisions shall
remain in full force and effect.
5. Governing Law. The laws of the State of Georgia shall govern this Agreement.
If Georgia’s or any other state’s conflict of law rules would apply another
state’s laws, the Parties agree that Georgia law shall still govern.
6. Entire Agreement. This Agreement and the Covenants Agreement attached hereto
as Exhibit A (collectively, the “Agreements”) constitute the entire agreement
between the Parties with respect to the subject

 

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matter herein. The Covenants Agreement is incorporated by reference, and any
post-termination obligations contained in the Covenants Agreement shall remain
in full force and effect, and shall survive cessation of Your employment. You
acknowledge that the post-termination obligations contained in the Covenants
Agreement are valid, enforceable and reasonably necessary to protect the
interests of the Company, and You agree to abide by such obligations. These
Agreements supersede any prior communications, agreements or understandings,
whether oral or written, between the Parties arising out of or relating to Your
employment and the termination of that employment, including, without
limitation, that certain agreement between You and the Company dated November
30, 2006. Other than the Agreements, no other representation, promise or
agreement has been made with You to cause You to sign this Agreement.
7. Amendments. This Agreement may not be amended or modified except in writing
signed by both Parties.
8. Successors and Assigns. You may not assign Your rights and obligations in
this Agreement without the Company’s prior written consent. This Agreement shall
be assignable to, and shall inure to the benefit of, the Company’s successors
and assigns, including, without limitation, successors through merger, name
change, consolidation, or sale of a majority of the Company’s stock or assets,
and shall be binding upon You and Your heirs and permitted assigns.
If the terms set forth in this Agreement are acceptable, please sign below and
return the signed original to me on or before August 26, 2008.

     
 
   
 
  Sincerely,
 
   
 
  /s/ Gregory D. Orenstein
 
   
 
   
 
  Gregory D. Orenstein
SVP, Corporate Development and CLO

I acknowledge the validity of this 4 page Agreement, and the attached Exhibit A,
and represent that I have the legal capacity to enter into this Agreement. I
acknowledge that I have had the opportunity to consult with an attorney before
signing this Agreement. I have carefully read the Agreement, know and understand
the terms and conditions, including its final and binding effect, and sign it
voluntarily.

     
 
   
/s/ John A. Stone
  August 5, 2008
 
   
John Arthur Stone
  Date

 

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EXHIBIT A
COVENANTS AGREEMENT
     This COVENANTS AGREEMENT (the “Agreement”) is made this 5th day of August,
2008, between S1 Corporation (the “Company”) and John Arthur Stone (“You” or
“Your”) (collectively, the “Parties”).1
For and in consideration of the Company’s promises in the separation and
consulting letter agreement (the “Separation and Consulting Agreement”) to which
this Agreement is attached, and for and in consideration of the premises, as
well as the obligations herein made and undertaken the sufficiency of which is
acknowledged, You agree to the following terms:
1. Acknowledgments. You acknowledge that:

  (a)   While an employee of the Company, You were in a position of trust and
responsibility with access to Confidential Information, Trade Secrets, and
information concerning Employees and Customers of the Company;

  (b)   the Trade Secrets and Confidential Information, and the relationship
between the Company and each of its Employees and Customers, are valuable assets
of the Company and may not be used for any purpose other than the Company’s
Business; and

  (c)   the restrictions contained in this Agreement are reasonable and
necessary to protect the legitimate business interests of the Company, and will
not impair or infringe upon Your right to work or earn a living following the
termination of Your employment with the Company.

2. Trade Secrets and Confidential Information.

  (a)   You represent and warrant that You are not subject to any legal or
contractual duty or agreement that would prevent or prohibit You from performing
Your duties for the Company or complying with this Agreement or the Separation
and Consulting Agreement.

  (b)   You will not:

  (i)   use, disclose, or reverse engineer any Trade Secrets or Confidential
Information for any purpose except as authorized in writing by the Company; or

  (ii)   (a) retain any Trade Secrets or Confidential Information, including any
copies existing in any form (including electronic form), or (b) destroy, delete,
or alter any Trade Secrets or Confidential Information without the Company’s
written consent.

  (c)   The obligations under this Agreement shall:

  (i)   with regard to the Trade Secrets, remain in effect as long as the
information constitutes a trade secret under applicable law; and

  (ii)   with regard to the Confidential Information, remain in effect during
the Restricted Period.

  (d)   The confidentiality, property, and proprietary rights protections
available in this Agreement are in addition to, and not exclusive of, any and
all other rights to which the Company is entitled under federal and state law,
including, but not limited to, rights provided under copyright laws, trade
secret and confidential information laws, and laws concerning fiduciary duties.

3. Non-Recruit of Employees. During the Restricted Period, You will not,
directly or indirectly, solicit, recruit or induce any Employee to (i) terminate
his or her employment relationship with the Company, or (ii) work as an employee
or independent contractor for any other person or entity engaged in the
Business.
4. Post-Employment Disclosure. During the Restricted Period, You shall provide a
copy of this Agreement to persons and/or entities for which You work or consult
as an owner, partner, joint venturer, employee or independent contractor.
 

1   Unless otherwise indicated, all capitalized terms used in this Agreement are
defined in the “Definitions” section of Attachment A. Attachment A is
incorporated by reference and is included in the definition of “Agreement.”

 

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5. Injunctive Relief. If You breach this Agreement, You agree that:

  (a)   the Company would suffer irreparable harm;

  (b)   it would be difficult to determine damages, and money damages alone
would be an inadequate remedy for the injuries suffered by the Company; and

  (c)   if the Company seeks injunctive relief to enforce this Agreement, You
will waive and will not (i) assert any defense that the Company has an adequate
remedy at law with respect to the breach, (ii) require that the Company submit
proof of the economic value of any Trade Secret or Confidential Information, or
(iii) require the Company to post a bond or any other security.

Nothing contained in this Agreement shall limit the Company’s right to any other
remedies at law or in equity, including any rights in the Separation and
Consulting Agreement to terminate any payments or benefits due You.
6. Attorneys’ Fees. In the event of litigation relating to this Agreement, the
Company shall, if it is the prevailing party, be entitled to recover attorneys’
fees and costs of litigation in addition to all other remedies available at law
or in equity.
7. Waiver. The Company’s failure to enforce any provision of this Agreement
shall not act as a waiver of that or any other provision. The Company’s waiver
of any breach of this Agreement shall not act as a waiver of any other breach.
8. Modification; Severability. The provisions of this Agreement are capable of
modification and severable. If any provision is determined to be invalid,
illegal, or unenforceable, in whole or in part, it shall be modified so it is
valid, legal, and enforceable. If it is not capable of modification, such
provision shall be severed and the remaining provisions and any partially
enforceable provisions shall remain in full force and effect.
9. Governing Law. The laws of the State of Georgia shall govern this Agreement.
If Georgia’s conflict of law rules would apply another state’s laws, the Parties
agree that Georgia law shall still govern.
10. No Strict Construction. If there is a dispute about the language of this
Agreement, the fact that one Party drafted the Agreement shall not be used in
its interpretation.
11. Entire Agreement. This Agreement, including Attachment A which is
incorporated by reference, constitutes the entire agreement between the Parties
concerning the subject matter of this Agreement. This Agreement supersedes any
prior communications, agreements or understandings, whether oral or written,
between the Parties relating to the subject matter of this Agreement.
12. Amendments. This Agreement may not be amended or modified except in writing
signed by both Parties.
13. Successors and Assigns. This Agreement shall be assignable to, and shall
inure to the benefit of, the Company’s successors and assigns, including,
without limitation, successors through merger, name change, consolidation, or
sale of a majority of the Company’s stock or assets, and shall be binding upon
You. You shall not have the right to assign Your rights or obligations under
this Agreement. The covenants contained in this Agreement survive cessation of
Your employment with the Company.
14. Consent to Jurisdiction and Venue. You agree that any claim arising out of
or relating to this Agreement shall be brought in a state or federal court of
competent jurisdiction in Georgia. You consent to the personal jurisdiction of
the state and/or federal courts located in Georgia. You waive (a) any objection
to jurisdiction or venue, or (b) any defense claiming lack of jurisdiction or
improper venue, in any action brought in such courts.
15. Affirmation. You acknowledge that You have carefully read this Agreement,
You know and understand its terms and conditions, and You have had the
opportunity to ask the Company any questions You may have had prior to signing
this Agreement.

 

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IN WITNESS WHEREOF, the Parties have signed this Agreement as of the date set
forth above.
S1 Corporation

          By:  
/s/ Gregory D. Orenstein
  /s/ John A. Stone    
 
    Name:  
Gregory D. Orenstein
  John Arthur Stone    
 
    Title:  
SVP, Chief Legal Officer & Secretary
       
 
    Address:  
705 Westech Drive
Norcross, Georgia 30092
   

ATTACHMENT A
DEFINITIONS

A.   “Business” shall mean the business of developing, designing, and
implementing computer applications that allow banks and insurance companies to
enable their customers to access financial information and conduct transactions
over various delivery channels.

B.   “Confidential Information” means (a) information of the Company, to the
extent not considered a Trade Secret under applicable law, that (i) relates to
the business of the Company, (ii) possesses an element of value to the Company,
and (iii) is not generally known to the Company’s competitors, and
(b) information of any third party provided to the Company which the Company is
obligated to treat as confidential. Confidential Information includes, but is
not limited to, (i) future business plans, (ii) the composition, description,
schematic or design of products, future products or equipment of the Company,
(iii) communication systems, audio systems, system designs and related
documentation, (iv) advertising or marketing plans, (v) information regarding
independent contractors, employees, clients and customers of the Company, and
(vii) information concerning the Company’s financial structure and performance
and methods and procedures of operation. Confidential Information shall not
include any information that (i) is or becomes generally available to the public
other than as a result of an unauthorized disclosure, (ii) has been
independently developed and disclosed by others without violating this Agreement
or the legal rights of any party, or (iii) otherwise enters the public domain
through lawful means.

C.   “Contact” means any interaction between You and a Customer which (i) took
place in an effort to establish, maintain, and/or further a business
relationship on behalf of the Company, and (ii) occured during the last year of
Your employment with the Company.

D.   “Customer” means any person or entity to which the Company has sold its
products or services, or solicited to sell its products or services.

E.   “Employee” means any person who (i) was employed by the Company at the time
Your employment with the Company ended, (ii) was employed by the Company during
the last year of Your employment with the Company, or (iii) is employed by the
Company during the Restricted Period.

G.   “Restricted Period” means the time period for eighteen (18) months after
Your employment with the Company ended.

H.   “Trade Secrets” means information of the Company, and its licensors,
suppliers, clients and customers, without regard to form, including, but not
limited to, technical or non-technical data, a formula, a pattern, a
compilation, a program, a device, a method, a technique, a drawing, a process,
financial data, financial plans, product plans, or a list of actual or potential
customers or suppliers which is not commonly known by or available to the public
and which information (i) derives economic value, actual or potential, from not
being generally known to, and not being readily ascertainable by proper means
by, other persons who can obtain economic value from its disclosure or use, and
(ii) is the subject of efforts that are reasonable under the circumstances to
maintain its secrecy.