EXHIBIT 10.25


EMPLOYMENT AGREEMENT

By and Between

QI SYSTEMS INC. and QI SYSTEMS INTERNATIONAL, INC. 
and

STEVEN R. GARMAN

Dated December 21, 2005


THIS
EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as of the 21th day of
December, 2005, by and between Steven R. Garman, an individual residing in
Colleyville, Tarrant County, Texas USA (“Employee”) and QI Systems Inc. and QI Systems
International, Inc. of Colleyville, Tarrant County, Texas USA
(collectively referred to as the “Company”).


WITNESSETH:


WHEREAS, the
Company incorporated under the Texas Business Corporation Act 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
  President and Chief Executive Officer of the Company to provide strategic
  management and corporate 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 704 Saddlebrook Drive, 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 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 supercedes any previous Employee Agreements between
  Employee and Company which are hereby terminated by mutual agreement and
  replaced by the conditions contained herein.


	
 

	
 


	
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 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 Board of Directors of the Company.
  During the Agreement, Employee will complete the following tasks for the
  Company:


	
 

	
 


	
 

	
A.

	
serve has
  the Company’s senior executive leader, render decisions, develop plans and
  have responsibilities for the daily operation of the Company, affiliates,
  subsidiaries, projects and ventures;


	
 

	
 

	
 


	
 

	
B.

	
will report
  to the Board of Directors in a timely and regular manner as to the status of
  the Company and its operations;


	
 

	
 

	
 


	
 

	
C.

	
at his
  discretion will enter into projects, ventures, partnerships, mutually
  beneficial business relationships and any and all other required covenants
  and agreements on behalf of the Company;


	
 

	
 

	
 


	
 

	
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 Seventeen Thousand Five Hundred dollars
  ($17,500 US) 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 10%.
  The new salary shall be called the 








	
 

	
 

	
 

	
 

	
 

	
 


	
Initialed by
  Company:

	
M.Y.

	
 

	
Initialed by
  Employee:

	
S.G.

	
 


	
 

	


	
 

	
 

	


	
 











	
 

	
 

	
 


	
 

	
 

	
New Base.  Each subsequent
  increase shall be based on the existing salary and be then called the New
  Base.  Upon the Company attaining
  audited Annual revenues of US$3.0 Million Employee’s monthly compensation
  shall be increased an additional 20% from the New Base.  An additional 30% increase from the New
  Base shall be due upon the company attaining audited annual revenues of
  US$5.0 million.  The salary increases
  stated above will be based solely on audited annual revenues and shall be
  separate and apart from all other compensation increases provided for in this
  document;


	
 

	
 

	
 


	
 

	
B.

	
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
  inconsideration of the services performed by Employee for the Company;


	
 

	
 

	
 


	
 

	
C.

	
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;


	
 

	
 

	
 


	
 

	
D.

	
the Company
shall provide an Executive
  Incentive Plan, in total not to exceed two hundred percent (200%) of the
  applicable base Salary in any one calendar year as set forth below:









	
 

	
 

	
 

	
 


	
 

	
1)  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
  ($1,000,000 US) over a two year period commencing with the date of the
  Agreement, Employee shall receive a cash incentive bonus to be paid as
  follows:


	
 

	
 


	
 

	
 

	
(a)

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


	
 

	
 

	
 

	
 


	
 

	
 

	
(b)

	
next at two
  million dollars ($2,000,000 US) an additional bonus of one percent (1%) of
  the total financing;


	
 

	
 

	
 

	
 


	
 

	
 

	
(c)

	
at over five
  million dollars ($5,000,000 US) an additional bonus of three quarters of a
  percent (.75%) of the total financing.


	
 

	
 

	
 

	
 


	
 

	
2)  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 twenty five percent (25%) of
  Employee’s Salary;


	
 

	
 

	
 

	
 


	
 

	
 

	
(b)

	
should gross
revenue increase from 51% to
  100% over that of the previous year a bonus of 50% of Employees Salary;


	
 

	
 

	
 

	
 


	
 

	
 

	
(c)

	
should gross
revenue increase from 101% to
  150% over that of the previous year a bonus of 75% of Employees Salary;


	
 

	
 

	
 

	
 


	
 

	
 

	
(d)

	
should gross
revenue increase in excess of
  150% over that of the previous year a bonus of 100% of Employee’s Salary.


	
 

	
 

	
 

	
 


	
 

	
3)  Profitability Bonus: should the Company
  complete the fiscal year with Net Income, Employee shall be granted a bonus
  as follows.


	
 

	
 

	
 

	
 


	
 

	
 

	
(a)

	
Net Income
  in excess of 7% of Revenues - Bonus shall be 25% of Employee’s Salary;


	
 

	
 

	
 

	
 


	
 

	
 

	
(b)

	
Net Income
  in excess of 15% of Revenues – Bonus shall be 50% of Employee’s Salary;


	
 

	
 

	
 

	
 


	
 

	
 

	
(c)

	
Net Income
  in excess of 25% of Revenues – Bonus shall be 100% of Employee’s Salary;










	
 

	
 

	
 


	
5.

	
Perquisites: Prior
  to full capitalization, Employee will be entitled to three weeks (15 business
  days) of paid vacation per year. Employee shall be entitled to the following
  perquisites after the Company has been capitalized with a minimum of one
  million five hundred thousand dollars ($1,500,000 US):


	
 

	
 

	
 


	
 

	
A.

	
four weeks
  (20 business days) of vacation during the first twelve (12) months of
  employment, eight weeks (40 business days) of vacation during each subsequent
  year of employment for the next three years and ten weeks (50 business days)
  of vacation during each subsequent year of employment beginning with the
  sixth year of employment, such vacation to be taken at a time or times
  mutually agreed to by Employee and the Company’s Board of Directors. Unused
  vacation days may be accrued from year to year, however, no more than twelve
  (12) weeks (60 business days) of vacation time may be taken by Employee in
  anyone year;


	
 

	
 

	
 


	
 

	
B.

	
the Company
  shall provide Employee with a term life insurance policy with a maximum total
  coverage of two million dollars ($2,000,000 US) or provide to Employee in a
  lump sum payment the cash equivalent of the cost of said term life insurance;


	
 

	
 

	
 


	
 

	
C.

	
the Company
  shall provide Employee with five million dollars ($5,000,000 US) D&O
  Insurance coverage or provide to Employee in a .lump sum payment the cash
  equivalent of the cost of said insurance.








	
 

	
 

	
 

	
 

	
 

	
 


	
Initialed by
  Company:

	
M.Y.

	
 

	
Initialed by
  Employee:

	
S.G.

	
 


	
 

	


	
 

	
 

	


	
 











	
 

	
 

	
 

	
 


	
6.

	
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 attomey(s),
  agents, representatives, and any other person(s), 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.


	
 

	
 


	
7.

	
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:


	
 

	
 

	
 


	
 

	
 

	
1)

	
for less
  than two 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 the
  Termination payments or such shorter period as Employee may advise;


	
 

	
 

	
 

	
 


	
 

	
 

	
2)

	
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 the
  Termination payments or such shorter period as Employee may advice;


	
 

	
 

	
 

	
 


	
 

	
 

	
3)

	
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 7 herein the Company
  will provide, pay for and grant to Employee the services of an executive
  placement assistance company, such as Drake Beam Morin, and will provide to
  Employee a twelve (12) month assistance program.


	
 

	
 

	
 


	
 

	
F.

	
if this
  Agreement is terminated as provided for in this Section 7 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;


	
 

	
 

	
 


	
 

	
G.

	
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;


	
 

	
 

	
 


	
 

	
H.

	
in exchange
  for the payment contemplated in this Section 7, 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.


	
 

	
 

	
 


	
8.

	
Termination Following a Control Change: For
  the purposes of this section 8, a “Control Change” means the consummation of
  a (1) dissolution or liquidation of the Company, (2) merger of the Company
  into another corporation, or any consolidation, share exchange, combination,
  reorganization, or like transaction in which the Company is not the survivor,
  or its stockholders immediately prior to the transaction are not in control
  of the survivor following such transaction, (3) sale or transfer (other than
  as security for the Company’s obligations) of at 








	
 

	
 

	
 

	
 

	
 

	
 


	
Initialed by
  Company:

	
M.Y.

	
 

	
Initialed by
  Employee:

	
S.G.

	
 


	
 

	


	
 

	
 

	


	
 











	
 

	
 


	
 

	
least a majority of the assets of the
  Company or (4) sale or transfer of 50% or more of the issued and outstanding
  common stock by the holders thereof in a single transaction or in a series of
  related transactions.  In the event of
  a Control Change, 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;


	
 

	
 

	
 


	
 

	
 

	
1)

	
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;


	
 

	
 

	
 

	
 


	
 

	
 

	
2)

	
as
  compensation for Employee’s loss of employment, an amount equal to two (2)
  times the Annual Compensation;


	
 

	
 

	
 

	
 


	
 

	
 

	
3)

	
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;


	
 

	
 

	
 

	
 


	
 

	
 

	
4)

	
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;


	
 

	
 

	
 

	
 


	
 

	
 

	
5)

	
the Company
  shall grant the Employee 300,000 shares of common stock of the Company as
  additional compensation related to the deferral of previous salary and bonus;


	
 

	
 

	
 

	
 


	
 

	
 

	
6)

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


	
 

	
 

	
 

	
 


	
 

	
B.

	
Should a
  Control Change occur, Employee shall have, at his option, the ability and
  authority to convert up to 100% of the amount then due for compensation
  earned prior to April 1, 2005 into share of common stock of the Company.  Such conversions shall be at a rate of
  US$0.12 per share, such rate being the approximate average trading value of a
  share of Company common stock on the OTCBB for the period June 3, 2003 to
  March 31, 2005.  This Amendment shall in
  no way obligate or impose upon Employee any requirement to convert any amount
  due him into shares.


	
 

	
 

	
 


	
9.

	
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 June 6, 2003.


	
 

	
 


	
10.

	
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.


	
 

	
 


	
11.

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


	
 

	
 


	
12.

	
Other Agreements: The
  provisions herein contained constitute the entire agreement between the
  parties and supersede all previous communications, representations and
  agreements whether or not written between the parties with respect to the
  subject matter hereof.


	
 

	
 


	
13.

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


	
 

	
 


	
14.

	
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.


	
 

	
 


	
15.

	
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.








	
 

	
 

	
 

	
 

	
 

	
 


	
Initialed by
  Company:

	
M.Y.

	
 

	
Initialed by
  Employee:

	
S.G.

	
 


	
 

	


	
 

	
 

	


	
 











	
 

	
 


	
16.

	
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.


	
 

	
 


	
17.

	
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
  International, Inc.


	
 

	
 

	
 

	
Attention:
  Chairman of the Board


	
 

	
 

	
 

	
8806 Highway
  87, Lubbock, Texas USA 79423


	
 

	
 

	
 

	
Phone:
  806-745-2299, Fax: 806-745-2299


	
 

	
 

	
 

	
 


	
 

	
 

	
If to
  Employee:


	
 

	
 

	
 

	
Steven R.
  Garman


	
 

	
 

	
 

	
704
  Saddlebrook Drive, Colleyville, Texas USA 76034


	
 

	
 

	
 

	
Phone:
  817-427-8611, Fax: 817-427-8611








	
 

	
 


	
 

	
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.


	
 

	
 


	
18.

	
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.


	
 

	
 


	
19.

	
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.


	
 

	
 


	
20.

	
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 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.


	
 

	
 


	
21.

	
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.





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


	
 

	
 


	
For the
  Company:

	
For the
  Employee:


	
 

	
 


	
/s/ MATTHEW YUGOVICH

	
/s/ STEVEN R. GARMAN


	
Matthew
  Yugovich

	
Steven R.
  Garman


	
Chairman of
  the Board

	
 


	
QI Systems
  Inc.

	
704
  Saddlebrook Drive 


	
QI Systems
  International, Inc.

	
Colleyville,
  Texas






	
 

	
 


	
8806 Highway
  87

	
USA 76034


	
Lubbock,
  Texas USA 79423

	
 


	
 

	
 


	
Dated:  December 21, 2005

	
Dated:  December 21, 2005 








	
 

	
 

	
 

	
 

	
 

	
 


	
Initialed by
  Company:

	
M.Y.

	
 

	
Initialed by
  Employee:

	
S.G.