EXHIBIT 10.26 



  



EMPLOYMENT AGREEMENT 



By and Between 



  



QI SYSTEMS INTERNATIONAL, INC 



QI SYSTEMS, INC. 



  



and 



ROBERT I. MCLEAN JR. 



  



THIS EMPLOYMENT AGREEMENT (“Agreement”)   is made and entered into as of the  
1st day of March, 2006 , by and between  Robert I. McLean Jr. , an individual residing in Colleyville,
Tarrant County, Texas USA (“Employee”) and  QI Systems International, Inc. 
 of Colleyville, Tarrant County, Texas USA (the “Company”). 



WITNESSETH:



WHEREAS,  the Company incorporated under the state statutes in the State of Texas, USA desires
to secure the employment services of Employee and; 



  



WHEREAS,  Employee desires to serve in the employment of the Company for the length of time
and on the terms and conditions set forth below; 



  



NOW, THEREFORE,  in consideration of the mutual covenants and agreements hereinafter set
forth, the parties hereto covenant and agree as follows: 



  






	

            1. 
 	

            Employment:  The Company hereby agrees to
continuously employ Employee in the capacity of Chief Financial Officer and Chief Operations Officer (CFO / COO) of the Company to provide strategic management and leadership and Employee hereby
accepts such employment, upon the terms and conditions set forth herein. All duties of Employee hereunder shall be preformed in or from the offices of the Company in their headquarters at 609 Cheek
Sparger Road, Colleyville, Texas USA 76034 or in or from other offices and / or locations mutually acceptable to both parties. The term “the Company” includes QI Systems International, Inc.
and any and all successors, assigns, divisions, subsidiaries and holdings, including QI Systems Inc. of 101-3820 Jacombs Road, Richmond, BC, Canada V6V 1 Y6. 
 







  






	

            2. 
 	

            Term:  The period of time covered by this Agreement
(the “Term”) shall commence on the date stated above and shall remain in force from that date forward, subject only to termination as hereafter provided and to the Board of Directors’
annual review and reappointment of Employee.  This Agreement supersedes any previous Employee Agreements between Employee and Company which are hereby terminated by mutual agreement and replaced by
the conditions contained herein.  This agreement shall be interpreted by all parties to have been in effect and binding on all parties from the date of the Employee’s original date of employment
(Paragraph 9). 
 







  



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EXHIBIT 10.26 



  






	

            3. 
 	

            Duties:  During the Term and for so long thereafter
as the Agreement continues (the “Continuance Period”), Employee shall perform such duties for the Company which are specified below and such other consistent duties and responsibilities as
established from time to time by the Board of Directors of the Company or the President & Chief Executive Officer which are mutually agreed to by all parties. Employee agrees that he will devote
such time, attention and energies, as is consistent with the duties to be performed by him, to the business of the Company and its subsidiaries and affiliates, if applicable. In the performance of
such duties hereunder, Employee shall report directly to the President & Chief Executive Officer of the Company.  During the Agreement, Employee will complete the following tasks for the

Company: 
 







  






	

              
 	

            A. 
 	

            serve has the Company’s senior financial and operations executive, render
decisions, develop plans and have responsibilities to assist the President and Chief Executive Office with the daily operation of the Company, affiliates, subsidiaries, projects and ventures; 

 










	

              
 	

            B. 
 	

            will report to the President, Chief Executive Officer and, as required, the
Board of Directors in a timely and regular manner as to the financial status of the Company and its operations and will prepare the financial statements of the company for filing and will oversee the
audit and the preparation of financial documents, filings, regulatory reports and all other financial instruments and materials; 
 










	

              
 	

            C. 
 	

            will supervise projects, ventures, partnerships, mutually beneficial business
relationships and any and all other required covenants and agreements on behalf of the Company as assigned by the President and Chief executive Officer; 
 










	

              
 	

            D. 
 	

            will conduct any and all required business on behalf of the Company in addition
to the above heretofore mentioned duties. 
 







  






	

            4. 
 	

            Compensation:  For his services on behalf of the
Company, Employee shall receive total compensation (“Annual Compensation”) consisting of all of the elements as provided hereafter in this document: 
 







  






	

              
 	

            A. 
 	

            Employee’s Base Cash Compensation 
(“Salary”) shall be the sum of Thirteen Thousand Dollars (US$13,000) per month payable monthly until such time that the Company has attained audited annual revenues of US$1.5 million at
which time Employee’s monthly compensation shall be increased ten percent (10%).  Upon the Company attaining audited annual revenues of US$5.0 million Employee’s monthly compensation shall
be increased by an additional ten percent (10%).  An additional ten percent (10%) increase shall be due upon the company attaining audited annual revenues of US$8.0 million.  The salary increases
stated above will be computed solely on audited annual revenues and shall be separate and apart from all other compensation increases provided for in this document; 
 







  






	

              
 	

            a) 
 	

            the Company and Employee agree to meet annually as soon as is reasonably
possible, after the close of the fiscal year in each year, to review the compensation plan provided to Employee in consideration of the services performed by Employee for the Company and, if the
Employee’s employment is extended, the Employee will receive a minimum of a five percent (5%)  
 







  



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EXHIBIT 10.26 



  



increase in Salary at this time.  The Company may grant a larger increase if deemed appropriate by
the Company, however, the minimal Salary increase will be automatic if the Employee’s employment is extended; 






	

              
 	

            b) 
 	

            the Company shall ensure that Employee is entitled to a benefits plan
(“Benefits”) and the Company shall pay for such health care, dental, accidental injury and long term disability insurance coverage as is available from time to time for those individuals
who are employed as senior executives of the Company and these paid benefits shall be provided to cover the cost of health care, dental, accidental injury and long term disability insurance so that
the coverage is available and applicable to Employee at his principle residence in the United States or in any other location where Employee might reside while working on behalf of the Company. 

 







  






	

            5. 
 	

            Executive Incentive Plan: 
 







The Company shall provide an Executive Incentive Plan, in total not to exceed one hundred fifty
percent (150%) of the applicable base Salary in any one calendar year as set forth below: 



  



A.  Financing Bonus: should the Company be successful
in obtaining capitalization through major financing, defined as the Company receiving capitalization of a minimum of one million dollars (US$1,000,000) over a two year period commencing with the date
of the Agreement, Employee whereby funds are received from a recognized funding source, institutional or private, and not from the exercise of warrants or other internal fund raising methods, shall
receive a one-time cash incentive bonus for having assisted in obtaining the funding to be paid as follows: 



  






	

              
 	

            (a) 
 	

            first, at a minimum of one million dollars (US$1,000,000) a bonus of two
percent (2%) of the total financing; 
 










	

              
 	

            (b) 
 	

            next, for an additional two million five hundred thousand dollars
(US$2,500,000) an additional bonus on the incremental increase of revenue of two and a half percent (2.5%) of the total financing; 
 










	

              
 	

            (c) 
 	

            next, at five million dollars and above (US$5,000,000) an additional bonus on
the incremental increase of three percent (3%) of the total financing. 
 







  



B.   Revenue Bonus:  should the
Company’s actual confirmed total gross revenue increase by the percentages stated herein by the end of the fiscal year, Employee shall be entitled to and shall receive the following performance
based Revenue Bonus: 



  






	

              
 	

            (a) 
 	

            should gross revenue increase by 50% over that of the previous fiscal year a
bonus of ten percent (10%) of Employee’s Salary; 
 










	

              
 	

            (b) 
 	

            should gross revenue increase from 51% to 150% over that of the previous year a
bonus of fifteen percent (15%) of Employees Salary; 
 










	

              
 	

            (c) 
 	

            should gross revenue increase from 151% to 200% over that of the previous year
a bonus of twenty percent (20%) of Employees Salary; 
 










	

              
 	

            (d) 
 	

            should gross revenue increase in excess of 200% over that of the previous year
a bonus of twenty-five percent (25%) of Employee’s Salary. 
 







  



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EXHIBIT 10.26 



  






	

              
 	

            C. 
 	

            Profitability Bonus:  should the Company complete
the fiscal year and have Net Income after taxes, Employee shall be granted a bonus based on this profit that is calculated on the amount of after tax profit as follows. 
 







  






	

              
 	

            (a) 
 	

            Net Income after taxes in excess of $150,000 - Bonus shall be five percent (5%)
of Employee’s Salary; 
 










	

              
 	

            (b) 
 	

            Net Income after taxes from $150,001 to $1,000,000 – Bonus shall be six
percent (6%) of Employee’s Salary; 
 










	

              
 	

            (c) 
 	

            Net Income after taxes in excess of $1,000,001 – Bonus shall be 7% of
Employee’s Salary; 
 







  






	

            6. 
 	

            Perquisites:   The following perquisites shall be
made available to the Employee:  
 










	

              
 	

            A. 
 	

            Vacation: 
 










	

              
 	

            a) 
 	

            Employee will be entitled to three weeks (15 business days) of paid vacation
per year at hiring;  
 










	

              
 	

            b) 
 	

            After two years of continuous employment four weeks (20 business days) of
vacation shall be provided; 
 










	

              
 	

            c) 
 	

            After five years of continuous employment six weeks (30 business days) of
vacation shall be provided; 
 










	

              
 	

            d) 
 	

            During each subsequent year of continuous employment, beginning with the sixth
year of employment, and for the next five years an additional day (1 business day) of vacation shall be added to the total vacation time authorized to a total maximum cumulative authorized vacation
time of 35 business days; 
 










	

              
 	

            e) 
 	

            Such vacation is to be taken at a time or times mutually agreed to by Employee
and the President and/or Chief Executive Officer of the Company;  
 










	

              
 	

            f) 
 	

            Unused vacation days may not be accrued from year to year without express
written permission from the President and/or Chief Executive Officer of the Company. 
 







  






	

              
 	

            B. 
 	

            Life Insurance: 
 










	

              
 	

            a) 
 	

            The Company shall provide Employee with a term life insurance policy with a
maximum total coverage of one million dollars (US$1,000,000) or provide to Employee in a lump sum payment the cash equivalent of the cost of said term life insurance. 
 







  






	

              
 	

            C. 
 	

            Director and Officers insurance: 
 










	

              
 	

            a) 
 	

            The Company shall provide Employee with one million dollars (US$1,000,000)
D&O Insurance coverage or provide to Employee in a .lump sum payment the cash equivalent of the cost of said insurance. 
 







  






	

            7. 
 	

            Indemnification: the Company will indemnify Employee
against any and all liability and responsibility for any and all actions and situations having developed, occurred, or resulted from actions taken by the Company, to include the Company’s Board
of Directors, corporate officers, corporate attorney( s), agents, representatives, and any other person( s),  
 







  



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EXHIBIT 10.26 



  



organization( s), company(s) or group(s) representing the Company, prior to Employee accepting the
position of President and Chief Executive Officer for the Company. 



  






	

            8. 
 	

            Termination:  should Employee’s employment be
terminated, the following conditions shall apply: 
 







  






	

              
 	

            A. 
 	

            the monthly compensation paid to Employee after termination shall be determined
by reference to the Annual Compensation of the Employee averaged for the proceeding twelve (12) months of employment by the Company; 
 










	

              
 	

            B. 
 	

            if Employee has committed an act of fraud, theft, or other acts of dishonesty
committed in the course of his employment; if he has been convicted or has pleaded guilty to criminal misconduct; if he has engaged in willful and material misconduct, including willful and material
failure to perform his duties as an officer of the Company and has failed to cure such default within thirty (30) days after receipt of written notice of default from the Company, if he breaches his
Nondisclosure & Noncompete Agreement; if he becomes totally disabled and cannot perform his duties as an Officer and Director of the Company; or if he dies, the Company may terminate
Employee’s employment for cause (“Just Cause”) per Section 7-C; 
 










	

              
 	

            C. 
 	

            providing there is Just Cause then this Agreement may be terminated by the
Company without further compensation, except in the case of disability. Should Employee become disabled during the Term of this Agreement, the Company shall pay Employee for six (6) consecutive
months his applicable Salary and Benefits commencing as of the date and beginning with the date that a licensed physician, certified medical facility or recognized insurance provider pronounce
Employee unable to continue to work in the fashion and manner that he had previously worked for the Company; 
 










	

              
 	

            D. 
 	

            this Agreement may be terminated by the Company at any time for any reason
without legal consequences upon payment to Employee per the following schedule: 
 







  






	

              
 	

            a) 
 	

            for less than three (3) years of continuous service to the Company Employee
shall receive six (6) months Annual Compensation, plus any and all incentive bonus Employee is entitled to, plus the right to exercise all vested stock options not yet exercised. Further, in the
event that the Company shall terminate this Agreement by the payment of six (6) months Compensation, then the Company shall continue Employee’s entitlement to all Benefits for the period of
ninety days (90 days) or such shorter period as Employee may advise; 
 










	

              
 	

            b) 
 	

            for three (3) or more years of continuous service to the Company Employee shall
receive twelve (12) months Compensation, plus any and all incentive bonus Employee is entitled to, plus the right to exercise all vested stock options not yet exercised. Further, in the event that
the Company shall terminate this Agreement by the payment of twelve (12) months Compensation, then the Company shall continue Employee’s entitlement to all Benefits for the period of one hundred
and twenty days (120 days) or such shorter period as Employee may advice; 
 







  



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EXHIBIT 10.26 



  






	

              
 	

            c) 
 	

            if this Agreement is terminated as provided for in this Section 8 herein and if
the Company shall pay all monies then owing to Employee as contemplated by this Agreement, Employee shall not have a claim against the Company whatsoever for damages resulting from wrongful
termination, improper notice, breach of contract or any other reason whatsoever; 
 










	

              
 	

            d) 
 	

            should the Company fail to pay all monies then owing to Employee as
contemplated by this Agreement, Employee shall unconditionally have a claim against the Company for damages resulting from wrongful termination, improper notice, breach of contract or any other
reason whatsoever; 
 










	

              
 	

            e) 
 	

            in exchange for the payment contemplated in this Section 8, Employee shall
execute such release as the Company may require and will execute such resignation from any position he may have held as an Officer and Director of the Company or any of its subsidiaries in such form
as the Company may require. 
 







  






	

            9. 
 	

            Termination Following a Control Change:  should an
acquisition, merger or continuing ownership of the Company by a person or persons, or firms, corporations, syndications, or other entities jointly or in concert, or through persons associated or
affiliated with any such person or persons, jointly or in concert seeking to change the leadership, management or direction of the Company, it will be deemed a change in ownership of the Company
(“Control Change”) and the following conditions will apply: 
 







  






	

              
 	

            A. 
 	

            the Company shall have the following obligations in the event that
Employee’s employment is terminated subsequent to a Control Change for any reason other that Just Cause during the period commencing on the date hereof and ending on the earlier of the second
anniversary of the date of the Control Change; or Employee’s normal retirement date deemed to be at age sixty-five (65) years; 
 







  






	

              
 	

            a) 
 	

            if not previously paid, the Company shall immediately pay Employee’s
Annual Compensation for the current fiscal year of the Company for the period to and including the actual date of termination plus any incentive bonuses earned; 
 










	

              
 	

            b) 
 	

            as compensation for Employee’s loss of employment, an amount equal to one
(1) times the Annual Compensation; 
 










	

              
 	

            c) 
 	

            if Employee holds any options, rights, warrants or other entitlements granted
to him by the Company for the purchase or acquisition of shares in the Company (collectively referred to as “Rights”) and these Rights are vested, Employee has ninety (90) days to exercise
his Rights by forwarding a certified check to the Company for the exercise of his Rights. Upon receipt of the certified check, shares in the Company will be issued to Employee; 
 










	

              
 	

            d) 
 	

            the Company shall pay to Employee all outstanding and accrued vacation pay due
him to the Date of Termination. The value of each vacation day shall be determined by dividing Employee’s base Salary by 260 working days per year and then multiplying the total by the number of
applicable vacation days. 
 










	

              
 	

            e) 
 	

            if this Agreement is terminated as provided for in this Section 8 herein the
Company will provide, pay for and grant to Employee the services of an  
 







  



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EXHIBIT 10.26 



  



executive placement assistance company, such as Drake Beam Morin, and will provide to Employee a
twelve (12) month assistance program. 



  






	

            10. 
 	

            Date of Employment:  
 







For the purpose of determining Employee’s base salary, benefits, raises, separation rights,
vacation time, bonuses, additional compensation, and any and all other provisions, conditions, deadlines, rights and / or any and all pertinent factors stated in and covered by this Agreement,
Employee’s employment date shall be agreed to by all parties to be as of the effective date of August 22, 2005. 



  






	

            11. 
 	

            Assignment:  The Agreement shall not be assignable by
either party without prior written consent of the other and any attempt to assign the rights, duties or obligations hereunder without such consent shall be of no effect. 
 







  






	

            12. 
 	

            Currency:  All payments hereunder shall be made in
the lawful currency, money and tender of the United States of America. 
 







  






	

            13. 
 	

            Other Agreements:  The provisions herein contained
constitute the entire agreement between the parties and supersede all previous communications, representations and agreements whether or written between the parties with respect to the subject matter
hereof. 
 







  






	

            14. 
 	

            Enurement:  This Agreement shall enure to the benefit
of and be binding upon the parties hereto and their respective permitted assigns. 
 







  






	

            15. 
 	

            Future Assurances:  Each of the parties heretofore
named covenants and agrees to execute such further and other documents and instruments and to do such further actions as may be necessary to implement and carry out the intent of this Agreement. 

 







  






	

            16. 
 	

            Changes, Alterations and Amendments: If at anytime
during the continuance of this Agreement the Parties hereto deem it necessary or expedient to make any alterations or additions to this Agreement, they may do so by means of a written agreement
between them which will be supplemental hereto and form part hereof and which may be subject to the approval of the appropriate securities regulatory bodies having true jurisdiction. 
 







  






	

            17. 
 	

            Governing Law:  This Agreement shall be governed by
and construed in accordance with the laws of the State of Texas, United States of America, which shall be deemed to be proper law hereof. The Courts of Tarrant County, State of Texas, United States
of America shall have jurisdiction (but not exclusive jurisdiction) in any way connected with construction, breach, or alleged, threatened or anticipated breach of this Agreement and shall have
jurisdiction to hear and determine all questions as to the validity, existence enforceability hereof. 
 







  



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EXHIBIT 10.26 



  











	

            18. 
 	

            Notice:  All notice, demands and payment required or
permitted to be given hereunder shall be in writing and may be delivered personally, sent by facsimile transmission or may be forwarded by first class prepaid registered mail to the addresses and
numbers set forth below: 
 







  



If to the Company: 



  



QI Systems, Inc. 



Attention: President & Chief Executive Officer 



609 Cheek Sparger Road 



Suite #300 



Phone: 817-485-8111 



Fax: 817-485-8186 



  



  



If to Employee: 



  



Robert I. McLean Jr. 



4200 Squire Court 



Grapevine, Texas 76051 



Phone: 214-769-8342 



Fax:  419-791-3674 



  



Any notice delivered or facsimile sent shall be deemed to have been given and received at the time
of delivery. Any notice mailed as foresaid shall be deemed to have been given and received on the expiration of 72 hours after it is posted, addressed as set forth above, or at such other address or
addresses as may from time to time be notified in writing by the parties hereto provided that if there shall be between the time of mailing and the actual receipt of the notice a mail strike,
slowdown or other labor dispute which effect the delivery of such notice by the mails, then such notice shall only be effective if actually delivered. 



  






	

            19. 
 	

            Severability: Should any part of this Agreement be
declared or held invalid for any reason, such invalidity shall not affect the validity of the remainder which shall continue in force and effect and be construed as if this Agreement had been
executed without the invalid portion and it is hereby declared the intention of the parties hereto that this Agreement would have been executed without reference to any portion which may, for any
reason, be hereafter declared or held invalid. 
 







  






	

            20. 
 	

            Counterparts: This Agreement may be executed in
several parts in the same form and such parts as so executed will together constitute one original agreement, and such parts, if more than one, will be read together as if all the signing parties had
executed one copy of this Agreement. 
 







  






	

            21. 
 	

            Non-Waiver: No condoning, excusing or waiver by any
party hereto of any default, breach or non-observance by any other party hereto at any time or times in respect of any covenant, proviso or condition herein contained shall operate as a waiver of
that party’s rights  
 







  



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EXHIBIT 10.26 



  



hereunder in respect of any continuing or subsequent default, breach or non-observance, or so as to
default or affect in any way the rights of that party in respect of any such continuing or subsequent default, breach, or non-observance, and no waiver shall be inferred from or implied by anything
done or omitted to be done by the party having those rights. 



  






	

            22. 
 	

            Regulatory Approval: Should the terms of this
Agreement or the receipt of any or all applicable securities be deemed to be subject to regulatory approval, the Company shall bear the burden of making all such disclosures and filings and be solely
responsible for any and all fines, penalties, damages and / or other cost for non-compliance with said policies, regulations and / or procedures. 
 







  






	

            23. 
 	

            Paragraph Headings: 
 







The titles of the paragraphs of this Agreement are solely for the convenience of the parties and
shall not be used to explain, modify, simplify, and or aid in the interpretation of the provisions of this Agreement.  



  



IN WITNESS WHEREOF  the parties hereto execute this Agreement on the day and year first
written above: 



  



  






	

              
 	

            For the Company: 
 	

            For the Employee: 
 







  



  






	

              
 	

            /s/  STEVEN R. GARMAN
 	

            /s/  ROBERT I. MCLEAN 
JR.
 










	

              
 	

            Steven R. Garman 
 	

            Robert I. McLean Jr. 
 










	

              
 	

            President & CEO 
 	

            4200 Squire Court 
 










	

              
 	

            Q I Systems, Inc. 
 	

            Grapevine, Texas USA 76051 
 










	

              
 	

            609 Cheek Sparger Road 
 







Colleyville, Texas USA 76034 



  



  



  



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