(c) Termination by the Company for Cause or by You without Good Reason. If theCompany (or any of its affiliates) terminates Your employment for Cause or You terminate Youremployment without Good Reason, the Company shall pay You Your base salary due through the date oftermination and shall have no further obligations to You. In the event the Company intends toterminate You for Cause, You shall have a reasonable opportunity, together with Your counsel, to beheard before the Board of Directors of the Company before such termination.(d) Termination by the Company without Cause or by You with Good Reason. If (i) theCompany (or any of its affiliates) terminates your employment without Cause, or (ii) You terminateYour employment for Good Reason, then the Company shall:(A) pay You (i) in equal installments as of the 1st and 15th day of eachmonth during the 12-month period commencing on Your date of termination (the “Severance Period”),an aggregate amount equal to Your then current base salary, and (ii) within thirty (30) daysfollowing Your date of termination, a pro rata portion of the annual bonus that would have beenpayable to You for the calendar year of termination if Your employment had not terminated(calculated based upon actual results through Your date of termination and based upon budget forthe remainder of the period and pro rated for the portion of the year during which You wereemployed);(B) reimburse You for any COBRA premiums You pay for You and any of Your dependents during theSeverance Period, if and to the extent You and/or Your dependents are entitled to COBRAcontinuation coverage under the Company’s major medical group plan in which You and/or Yourdependents participated immediately prior to the date of termination, *provided, however*, thatnotwithstanding anything in this subsection to the contrary, all other terms and provisions of theCompany major medical group plan governing Your rights and Your dependent’s rights under COBRAshall apply; and(C) if Your termination occurs within two (2) years following a Change in Control (or before aChange in Control has occurred, but after the Company has commenced negotiations of a transactionthat results in a Change in Control), cause all outstanding options to purchase common stock of theCompany and shares of restricted stock, if any, then held by You to be fully vested and exercisableas of the date of termination.4. Release Obligations. The Company’s obligation to pay You the separation paymentsset forth in Section 3(d) shall be conditioned upon Your execution, compliance with, andnon-revocation of, a valid, binding and irrevocable Separation & Release Agreement in a formprepared by the Company in its sole and absolute discretion, which includes, but is not limited to,Your release of the Company and its officers, directors, employees, stockholders and affiliatesfrom any and all liability and claims of any kind and Your confirmation of the Company’s right tocontinued performance by You of Your obligations under the Covenants Agreement (defined below)during the period following the termination of Your employment.5. Withholding. All payments made pursuant to this Agreement will be subject toapplicable withholdings, including taxes and Social Security.
 
 

 
6. Definitions.(a) “Cause” means (i) the indictment by a grand jury or conviction of a felony or acrime involving moral turpitude (excluding a traffic violation not involving any period ofincarceration) or the willful commission of any other act or omission involving dishonesty or fraudwith respect to, and materially adversely affecting the business affairs of, the Company or any ofits subsidiaries or any of their customers or suppliers, (ii) conduct tending to bring the Companyor any of its subsidiaries into public disgrace or disrepute that is determined by the Company tocause or be reasonably likely to cause substantial injury to the business and operations of theCompany or such subsidiary, (iii) substantial and repeated failure to perform duties, including butnot limited to, achieving quarterly goals, of the office held by You as reasonably directed by theCompany (other than any such failure resulting from Your incapacity due to injury or illness), andsuch failure is not cured within 30 days after You receive written notice thereof from the Companythat specifically identifies the manner in which the Company believes You have not substantiallyperformed Your duties, (iv) gross negligence or willful misconduct with respect to the Company orany of its subsidiaries that causes substantial and material injury to the business and operationsof the Company or such subsidiary or (v) any material breach of the Covenants Agreement. Forpurposes of this provision, no act or failure to act on Your part shall be considered “willful”unless it is done, or omitted to be done, by You in bad faith or without reasonable belief thatYour action or omission was in the best interests of the Company. Any act or failure to act basedupon authority given pursuant to a resolution duly adopted by the Board of Directors of the Companyor based upon advice of counsel for the Company shall be conclusively presumed to be done, oromitted to be done, by You in good faith and in the best interests of the Company;(b) “Change in Control” means the earliest to occur of the following: (i) any person(other than a corporation (a “Holding Company”) all of the common stock of which is owned,immediately after the transaction, by persons who owned more than 50 percent of the voting sharesof the Company immediately before the transaction) becomes the beneficial owner of 50 percent ormore of the total number of voting shares of the Company; (ii) any person (other than the personsnamed as proxies solicited on behalf of the Board) holds revocable or irrevocable proxies, as tothe election or removal of two or more directors of the Company, for more than 50 percent of thetotal number of voting shares of the Company; (iii) any person (other than a Holding Company) hascommenced a tender or exchange offer, or entered into an agreement or received an option, toacquire beneficial ownership of more than 50 percent of the total number of voting shares of theCompany; (iv) there is a sale or other transfer of all or substantially all of the assets of theCompany other than to a Holding Company or a corporation controlled by the Company, or (v) as theresult of, or in connection with, any cash tender or exchange offer, merger, or other businesscombination, sale of assets or contested election, or any combination of the foregoingtransactions, the persons who were directors of the Company before such transaction shall cease toconstitute at least a majority of the Board of any successor corporation. In the event that theCompany (or any successor entity) becomes a subsidiary of a Holding Company, references to theCompany in the preceding sentence shall be deemed to be references to the Holding Company.Notwithstanding the foregoing, a “Change in Control” will not be deemed to have occurred underclauses (ii) or (iii) above if within 30 days of such action, the Board of Directors of the Company(by a two-thirds affirmative vote of the directors in office before such action occurred) makes adetermination that such action does not and is not likely to constitute a change in control of theCompany. For purposes of this definition, a “person” includes an individual, corporation,partnership, trust, association, joint venture, pool, syndicate, unincorporated organization,joint-stock company, or similar organization or group acting in concert. A person for thesepurposes shall be deemed to be a beneficial owner as that term is used in Rule 13d-3 under theSecurities Exchange Act of 1934, as amended;(c) “Code” means the Internal Revenue Code of 1986, as amended;(d) “Controlled Group” means the Company and any other entity the employees of whichwould be required to be aggregated with the employees of the Company pursuant to Code §414(b), (c),(m), or (o);(e) “Good Reason” shall exist if (i) the Company, without Your written consent (a)materially reduces or changes Your reporting, duties and/or job title, *provided, however*, thatwhere there is no reduction in Your base salary or annual bonus potential, a material reduction orchange in Your reporting, duties, job title, or responsibilities shall not be determined to be GoodReason under this Agreement, or (b) requires You to relocate to a place more than 50 miles fromNorcross, Georgia to perform Your duties; (ii) You provide written notice to the Company of suchaction and provide the Company with 30 days to remedy such action (the “Cure Period”); (iii) theCompany fails to remedy such action within the Cure Period; and (iv) You elect to resign within 30days of the expiration of the Cure Period;(f) “Separation from Service” means, with respect to You, a “separation from service”(within the meaning of Code §409A(a)(2)(A)(i) and regulations issued thereunder) of You from allmembers of the Controlled Group; and(g) “Specified Employee” means a “key employee” (within the meaning of Code §416(i)without regard to Code §416(i)(5) thereof) of any member of the Controlled Group which has stockwhich has publicly traded on an established securities market or otherwise. You shall be treatedas being a Specified Employee as of any date occurring during the period beginning April 1 of agiven calendar year and ending on the next following March 31 if You meet the definition of aSpecified Employee in the preceding sentence at any time during the calendar year immediatelypreceding such given calendar year.
 
 

 
7. Deferral of Compensation. Notwithstanding any provision of this Agreement to thecontrary, to the extent that (i) any amount(s) would be payable to You under Section 3(a), (b), (c)or (d) above by reason of Your termination of employment, and (ii) such amount(s) constitute a“deferral of compensation” within the meaning of Treasury regulations issued under Code §409A asreasonably determined by the Company, then such amount(s) shall not be paid until You have incurreda Separation from Service if such termination of employment does not constitute a Separation fromService. Furthermore, to the extent that (i) any amount(s) would be payable to You within thefirst six (6) months following Your Separation from Service on account of Your Separation fromService, (ii) You are a Specified Employee as of the date of Your Separation from Service, and(iii) such amount(s) constitute a “deferral of compensation” within the meaning of Treasuryregulations issued under Code §409A as reasonably determined by the Company, then such amount(s)shall not be paid and shall instead be held and accumulated and paid as of the date which is six(6) months and one (1) day after the date of Your Separation from Service. Any amounts paid whichare excepted from being a “deferral of compensation” shall not be subject to the foregoingrestrictions. For all purposes of this Agreement, the right to a series of installment paymentsshall be treated as a right to a series of separate payments for purposes of Code §409A.8. Limitation on Parachute Payments. Notwithstanding any other provision of thisAgreement or of any other agreement, contract, or understanding heretofore or hereafter enteredinto by You with the Company or any subsidiary or affiliate, except an agreement, contract, orunderstanding hereafter entered into that expressly modifies or excludes application of thisSection (an “Other Agreement”), and notwithstanding any formal or informal plan or otherarrangement for the direct or indirect provision of compensation to You (including groups orclasses of participants or beneficiaries of which You are a member), whether or not suchcompensation is deferred, is in cash, or is in the form of a benefit to or for You (a “BenefitArrangement”), if You are a “disqualified individual,” as defined in Section 280G(c) of the Code,no payment or benefit shall be made or provided to You or become vested, exercisable or payable, asapplicable, (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 You, or becoming vested,exercisable or payable, as the case may be, under this Agreement, all Other Agreements and allBenefit Arrangements, would cause any such payment, right to exercise, vesting or other benefit towhich You are 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 amountsreceived by You under this Agreement, all Other Agreements, and all Benefit Arrangements would beless than the maximum after-tax amount that could be received by You without causing any suchpayment, right to exercise, vesting or other benefit to be considered a Parachute Payment. In theevent that the receipt of any such payment, right to exercise, vesting, or other benefit under thisAgreement, in conjunction with all other rights, payments, or benefits to or for You under anyOther Agreement or any Benefit Arrangement would cause You to be considered to have received aParachute Payment under this Agreement that would have the effect of decreasing the after-taxamount received by You as described in clause (ii) of the preceding sentence, then You shall havethe right, in Your sole discretion, to designate those rights, payments or benefits (or the vestingor exercisability thereof) under this Agreement, any Other Agreements and any Benefit Arrangementsthat should be reduced or eliminated so as to avoid having the right, payment or benefit to You (orthe vesting or exercisability thereof) under this Agreement be deemed to be a Parachute Payment.All determinations required to be made under this Section, including whether and when a reductionin rights, payments or benefits (or the vesting or exercisability thereof) is required and theamount 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 firmreasonably acceptable to the Company as may be designated by You in writing (the “Accounting Firm”)which shall provide detailed supporting calculations both to the Company and You within 15 businessdays of the receipt of notice from You or the Company. In the event that the Accounting Firm isserving as accountant or auditor for the Company or any individual, entity or group effecting achange in the ownership or effective control of the Company (within the meaning of Section 280G ofthe Code), You shall appoint another nationally recognized accounting firm that is reasonablyacceptable to the Company to make the determinations required hereunder (which accounting firmshall then be referred to as the Accounting Firm hereunder). All fees and expenses of theAccounting Firm shall be borne solely by the Company. Any determination by the Accounting Firmshall be binding upon the Company and You.9. Entire Agreement. This Agreement constitutes the entire agreement between theParties concerning the subject matter of this Agreement and supersedes any prior communications,agreements or understandings, whether oral or written, between You and the Company relating toseverance payments of any type or nature, including without limitation, the Prior Agreement. Other than the terms of thisAgreement, no other representation, promise or agreement has been made with You to cause You tosign this Agreement.
 
 

 
10. Confidentiality, Non-Disclosure and Non-Solicitation Agreement. By execution ofthis Agreement, the Parties acknowledge the continuing validity and effectiveness of theConfidentiality, Non-Disclosure and Non-Solicitation Agreement (the “Covenants Agreement”) enteredinto concurrently with the execution of the Prior Agreement.11. Governing Law, Jurisdiction and Venue. The laws of the State of Georgia willgovern this Agreement. If Georgia’s conflict of law rules would apply another state’s laws, theParties agree that Georgia law will still govern. You agree that any claim arising out of orrelating to this Agreement will be brought in a state or federal court of competent jurisdiction inGeorgia. You consent to the personal jurisdiction of the state and/or federal courts located inGeorgia. You waive (i) any objection to jurisdiction or venue, or (ii) any defense claiming lackof jurisdiction or improper venue, in any action brought in such courts.12. Waiver. The Company’s failure to enforce any provision of this Agreement will notact as a waiver of that or any other provision. The Company’s waiver of any breach of thisAgreement will not act as a waiver of any other breach.13. Severability. The provisions of this Agreement are severable. If any provisionis determined to be invalid, illegal, or unenforceable, in whole or in part, the remainingprovisions and any partially enforceable provisions will remain in full force and effect.14. Amendments. This Agreement may not be amended or modified except in writingsigned by both Parties.15. Successors and Assigns. This Agreement will be assignable to, and will inure tothe benefit of, the Company’s successors and assigns, including, without limitation, successorsthrough merger, name change, consolidation, or sale of a majority of the Company’s stock or assets,and will be binding upon You and Your heirs and assigns.[Signatures Appear on Following Page]
 
 

 
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the Effective Date.      **S1 CORPORATION**