**Exhibit 10.1**

 

CARREKERCORPORATION

 

SENIOREXECUTIVE

 

EMPLOYMENTAGREEMENT

 

 

This Employment Agreement (the“Agreement”) is dated as of October 6, 2003, between Carreker Corporation, aDelaware corporation with its principal executive offices at 4055 Valley ViewLane, Suite 1000, Dallas, Texas 75244 (the “Company”), and Lisa Peterson (the“Employee”) who resides at 772 Lexington Avenue, Coppell, Texas 75019

 

W IT N E S S E T H:

 

WHEREAS, the Employee and theCompany desire to define the terms of the employment of the Employee with theCompany;

 

NOW, THEREFORE, for and inconsideration of the premises and the mutual covenants contained herein, andfor other good and valuable consideration, the receipt and sufficiency of whichis hereby acknowledged, and subject to the terms and conditions hereinafter setforth, the parties hereto agree as follows:

 

1.                                       DEFINITIONS.

 

In addition to the words and terms elsewhere defined in this Agreement,the following words and terms as used herein shall have the following meanings,unless the context or use indicates a different meaning:

 

“Cause”means (a) any act by the Employee that is materially adverse to the bestinterests of the Company and which, if the subject of a criminal proceeding,could result in a criminal conviction for a felony or (b) the failure by theEmployee to substantially perform her duties hereunder, which duties are withinthe control of the Employee (other than the failure resulting from theEmployee’s incapacity due to physical or mental illness), provided, however,that the Employee shall not be deemed to be terminated for Cause under thissubsection (b) unless and until (1) after the Employee receives written noticefrom the Company specifying with reasonable particularity the actions ofEmployee which constitute a violation of this subsection (b) and (2) within aperiod of 30 days after receipt of such notice (and during which the violationis within the control of the Employee), Employee fails to reasonably andprospectively cure such violation.

 

“Good Reason” means theoccurrence of a Triggering Event (as defined below) and (A) without her priorconcurrence, the Employee is assigned any duties or responsibilities that areinconsistent with his position, duties, responsibilities or status at the commencementof the term of this Agreement, or her reporting responsibilities or titles ineffect at such time are changed, (B) the Employee’s total compensation isreduced or any other failure by the Company to comply with Section 4 hereof,(C) any change in any employee benefit plans or arrangements in effect on thedate hereof in which the Employee participates (including without limitationany pension and retirement plan, savings and profit sharing plan, stockownership or purchase plan, stock

 

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option plan, or life, medical or disability insuranceplan), which would adversely affect the Employee’s rights or benefitsthereunder, unless such change occurs pursuant to a program applicable to allexecutive officers of the Company and does not result in a proportionatelygreater reduction in the rights of or benefits to the Employee as compared toany other executive officer of the Company, or (D) without his priorconcurrence, the Employee is required to engage in an increased amount oftravel on the Company’s business.

 

“Triggering Date” means the dateof a Triggering Event.

 

“TriggeringEvent” means an event of a nature that would be required to be reported by theCompany in response to Item 6(d) of Schedule 14A of Regulation 14A promulgatedunder the Exchange Act; provided that, without limitation, such an event shallbe deemed to have occurred if (a) any person or group (as such terms areused in Section 13(d) and 14(d) of the Exchange Act) is or becomes thebeneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly orindirectly, of securities of the Company representing more than 50% of thecombined voting power of the Company’s then outstanding securities, or (b)there are serving as directors two or more persons who were elected as membersof the Board of Directors and were not nominated by management or the Board ofDirectors of the Company to serve on the Board of Directors of the Company, or(c) the Company is merged or consolidated with another corporation and asa result of such merger or consolidation less than 51% of the outstandingvoting securities of the surviving or resulting corporation are owned in theaggregate by the former shareholders of the Company, excluding for purposes ofsuch calculation shares of the voting securities of the Company owned by aparty to such merger or consolidation or affiliates (within the meaning of theExchange Act) of such party, as the same existed immediately prior to suchmerger or consolidation, or (d) the Company sells all or substantially allof its assets to another corporation which is not a wholly-owned subsidiary ofthe Company.

 

2.                                       EMPLOYMENT.

 

The Company hereby employs the Employee and the Employee hereby acceptsemployment on the terms and conditions set forth herein.

 

3.                                       TERM.

 

Subject to the provisions of termination as provided in Section 9of this Agreement, the term of the Employee’s employment with the Company shallcommence on the date hereof and shall terminate on October 6, 2006, unlesssooner terminated as provided for herein. This Agreement shall automaticallyrenew for consecutive one-year periods unless either party terminates thisAgreement pursuant to Section 9.1.

 

4.                                       SALARY.

 

(a)                                  For all services rendered by the Employee underthis Agreement, the Company shall pay the Employee a base salary as establishedeach fiscal year by the Board of Directors (“Base Salary”), payable inaccordance with the Company’s customary payroll practices.

 

(b)                                 The Employee shall be entitled to participate inany employee bonus plan or arrangement made available by the Board of Directorsin the future to its executive officers, subject to and on a basis consistentwith the terms, conditions and overall administration of such plan orarrangement (“Targeted Bonus”).

 

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(c)                                  The Employee shall be entitled to participate inor receive benefits under any employee benefit plan or arrangement(collectively referred to as “Benefits”) made available by the Company in thefuture to its executive officers and key management personnel, subject to andon a basis consistent with the terms, conditions and overall administration ofsuch plan or arrangement.  Nothing paidto the Employee under any plan or arrangement presently in effect or madeavailable in the future shall be deemed to be in lieu of the salary payable tothe Employee pursuant to Subsection 4(a) and 4(b).

 

5.                                       DUTIES.

 

The Employee shall continue to be engaged in a managerial capacity withthe Company to supervise and direct the activities and to maintain the publicrelations and goodwill of the Company. The precise services of the Employee may be extended or curtailed fromtime to time at the direction of the Board of Directors of the Company.

 

6.                                       EXTENT OF SERVICES AND SITUS.

 

The Employee shall devote such time, attention, and energy to thebusiness and affairs of the Company as are necessary to the performance anddischarge of the duties assigned to Employee under this Agreement.  Employee shall not during the term of hisemployment under this Agreement engage in any other business activity thatcould constitute a conflict of interest, whether or not such business activityis pursued for gain, profit, or other pecuniary advantage.  This shall not be construed as preventingthe Employee from managing her current investments or investing his assets insuch form or manner as will not require any services on the part of theEmployee in the operation and the affairs of the companies in which suchinvestments are made.  On or after theTriggering Date, the Employee shall not be required to change the situs of heremployment from her permanent place of employment immediately prior to theTriggering Date.

 

7.                                       DISABILITY.

 

If the Employee is unable to perform his services by reason of illnessor incapacity for a continuous period in excess of six months, unless otherwiserequired by the provisions of Sections 10 or 25 of this Agreement,compensation otherwise payable by the Company shall cease and any futurepayments to the Employee shall be subject to the terms and provisions oflong-term disability insurance coverage, if any, maintained by theCompany.  Notwithstanding anythingherein to the contrary, the Board of Directors of the Company may terminate theEmployee’s employment with the Company under this Agreement at any time afterthe Employee shall be absent from his employment, for whatever reason, for acontinuous period of more than six months, and, except for any obligations ofthe Company under Sections 10, 23, and 26 of this Agreement, allother obligations of the Company hereunder shall cease upon such termination.

 

8.                                       COMPENSATION AFTER DEATH.

 

If the Employee dies during the term of her employment, the Companyshall pay to such person as the Employee shall designate in a notice filed withthe Company, or, if no such person shall be designated, to her estate as a lumpsum death benefit, her base salary which would otherwise be payable to theEmployee at the time of her death, in equal semi-monthly installments on thefifteenth and last day of each and every month, for a period of months (notexceeding 12) determined by multiplying two times the number of complete12-month periods of employment of the Employee commencing from the date of suchemployment by the Company, in addition to any payments the Employee’s spouse,beneficiaries, or estate may be entitled to receive pursuant to any pension oremployee benefit plan or life insurance policy which may be maintained by theCompany, and such payments shall fully discharge the Company’s obligationshereunder.

 

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9.                                       TERMINATION.

 

9.1                                 Termination Prior to the Triggering Date.

 

(a)                                  Upon 90 days’ prior written notice to the Employeeand prior to the Triggering Date, the Company may terminate the Employee’semployment with the Company under this Agreement with or without Cause and bythe affirmative vote of the Board of Directors of the Company.

 

(b)                                 Prior to the Triggering Date, the Employee mayterminate her employment with the Company under this Agreement by giving 90days’ prior written notice of her desire to the Board of Directors of theCompany and receiving an affirmative vote of the Board of Directors of theCompany.  The Employee will continue toreceive her Base Salary and Benefits through the date of termination with noliability on the part of the Company for further payments to the Employeeunless Employee terminates her employment pursuant to Section 9.1(c)(ii), atwhich time Sections 9.1(c) and (d) shall apply.

 

(c)                                  In the event that (I) the Company terminates theEmployee’s employment for any reason other than for Cause and at a time whenEmployee is not eligible to receive benefits under the Company’s Long TermDisability Plan; or (ii) the Employee terminates her employment as a result ofany of the following reasons: (A) without the Employee’s consent the Companymaterially diminishes the scope of the Employee’s duties, assigns to theEmployee duties materially inconsistent with his designated position, orreduces the Employee’s Base Salary or Targeted Bonus to an amount less thanpreviously determined or established by the Board of Directors, or (B) theCompany breached any of its material obligations under this Agreement and suchbreach is not cured within 30 days after written notice thereof by theEmployee; then the Company shall pay the Employee severance payments in anamount equal to the sum of the (x) Employee’s annualized Base Salary in effectat the time of such termination, and (y) an amount equal to the bonus to which the Employee would have been entitled, hadthe Employee not been terminated and the Company’s profitability through thefiscal quarter ended immediately prior to the effective date of terminationcontinued at the same rate throughout the applicable bonus period (provided, however, that if the basis forEmployee’s termination is the reduction in her Base Salary, the severance payshall be based on the Base Salary in effect prior to such reduction).  The severance payments shall be made ininstallments over a period of 12 months. Notwithstanding the foregoing, if the Employee terminates her employmentpursuant to clause (ii) above, she shall be entitled to the severance paymentsprovided for in this paragraph only if she gives written notice to the Companyof her termination of employment within 30 days after the occurrence of theevent or events specified in clause (ii) on which she bases his termination andsuch notice specifies such event or events.

 

(d)                                 The severance payments provided for in thisSection 9.1 shall be in lieu of all severance payments or benefits to which theEmployee might otherwise be entitled under Company severance policies from timeto time in effect, except for (i) accrued and unpaid Base Salary to the date oftermination, and (ii) any bonus due with respect to fiscal years completed asof the date of termination.  Nothingcontained in the foregoing shall be construed so as to affect the Employee’srights or the Company’s obligations relating to agreements or benefits that areunrelated to termination of employment.

 

(e)                                  In the event that the Company terminates theEmployee’s employment for Cause, the Company will have no liability on its partfor further payments after the termination date to the Employee.

 

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(f)                                    In voting upon such termination described inSubsections 9.1(a) or (b), if the Employee is also a member of the Board ofDirectors of the Company, then she may not vote on such termination, and thetotal number of members of the Board of Directors will be reduced by one forpurposes of voting on such termination.

 

9.2                                 Termination After the Triggering Date.

 

(a)                                  On or after the Triggering Date and irrespectiveof whether or not the Employee has given notice of termination of employmentpursuant to Section 9.2(c), the Company may terminate the Employee’s employmentwith the Company under this Agreement only for Cause and, subject to theprovisions of Sections 23 and 26 hereof, with no liability on its part forfurther payments to the Employee by the affirmative vote of two-thirds of themembers of the Board of Directors of the Company.  In voting upon such termination, if the Employee is also a memberof the Board of Directors of the Company, then she may not vote on suchtermination, and the total number of members of the Board of Directors will bereduced by one for purposes of voting on such termination.

 

(b)                                 On or after the Triggering Date and irrespectiveof whether or not the Employee has given notice of termination of employmentpursuant to Section 9.2(c), if the Employee’s employment with the Company isterminated without Cause or if Employee terminates her employment with theCompany for Good Reason, the Employee will continue to accrue and receive herbase salary and Benefits through the date of termination and will be entitledto receive the benefits provided for under Section 10 hereof.

 

(c)                                  On or after the Triggering Date, the Employee may,in her sole and absolute discretion and without any prior approval by the Boardof Directors of the Company, and upon three months’ prior written notice to theCompany, terminate her employment with the Company under this Agreement for anyreason whatsoever.  If the Employee’semployment with the Company under this Agreement is terminated pursuant to thisSubsection 9.2(c) and subject in all respects to the provisions of Section9.2(a) and (b), the Employee will continue to accrue and receive her basesalary and Benefits through the date of termination and will be entitled toreceive the benefits provided for under Section 10 hereof.  No termination of the Employee’s employmentwith the Company pursuant to Subsections 9.2(b) or (c) shall in any wayterminate the Company’s obligations under Sections 23 and 26 of thisAgreement.

 

10.                                 COMPENSATION AFTER CERTAIN TERMINATIONS.

 

If the Employee’s employment with the Company is terminated (whethersuch termination is by the Employee or by the Company) at any time on or withinthree years after the Triggering Date for any reason other than(a) termination by the Company for Cause, (b) the Employee havingreached the age of 65, or (c) the Employee’s death, then, within five daysafter the date of such termination, the Company shall pay the Employee a lumpsum amount in cash equal to one times the Employee’s annualized includablecompensation (within the meaning of Section 280G(d)(1) of the Internal RevenueCode of 1986, as amended) from the Company during the period consisting of thefive full taxable years of the Employee ending immediately prior to the year inwhich the Triggering Date occurred (or such portion of such period during whichthe Employee was an employee of the Company).

 

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11.                                 TRANSFER OF ASSETS TO IRREVOCABLE TRUST.

 

On the Triggering Date or as soon thereafter as the Company knows of theoccurrence of a Triggering Event, the Company shall transfer cash to anirrevocable trust in an amount no less than the total amount which would bepayable to the Employee pursuant to Section 10 of this Agreement as if the Employee’semployment terminated on the Triggering Date.

 

12.                                 MITIGATION.

 

The Employee shall not be required to mitigate the amount of any paymentprovided for in this Agreement by seeking other employment or otherwise, norshall the amount of any payment provided for in this Agreement be reduced byany compensation earned by the Employee as the result of employment by anotheremployer after the date of termination of Employee’s employment with theCompany, or otherwise.

 

13.                                 ENTIRE AGREEMENT.

 

This Agreement, together with the Offer Letter dated September 26, 2003,embodies the entire agreement and understanding between the parties hereto withrespect to the subject matter hereof and supersedes all prior negotiations,agreements, and understandings relating to such subject matter, and may bemodified or amended only by an instrument in writing signed by the partieshereto.

 

14.                                 LAW TO GOVERN.

 

This Agreement is executed and delivered in the State of Texas and shallbe governed, construed, and enforced in accordance with the laws of the Stateof Texas.

 

15.                                 ASSIGNMENT.

 

This Agreement is personal to the parties, and neither this Agreementnor any interest herein may be assigned (other than by will or by the laws ofdescent and distribution) without the prior written consent of the partieshereto nor be subject to alienation, anticipation, sale, pledge, encumbrance,execution, levy, or other legal process of any kind against the Employee or anyof her beneficiaries or any other person. Notwithstanding the foregoing, but subject to satisfaction of theCompany’s obligation to fund the irrevocable trust as provided in Section 11,the Company shall be permitted to assign this Agreement to any corporation orother business entity succeeding to substantially all of the business andassets of the Company by merger, consolidation, sale of assets, or otherwise,but only if by written agreement the Company’s successor assumes in full all ofthe Company’s obligations under this Agreement.  From and after assignment of this Agreement by the Company inaccordance with the foregoing provisions, a Triggering Event shall be deemed tohave occurred.  Failure by the Companyto obtain such assumption prior to the effectiveness of such succession shallbe a breach of this Agreement and shall entitle the Employee to immediatelyreceive compensation under this Agreement from the Company and from theCompany’s successor in the same aggregate amount and on the same terms as hewould be entitled to hereunder if he had voluntarily terminated his employmentwith the Company for Good Reason after the Triggering Date, and, for purposesof implementing the foregoing, the date on which any such succession becomeseffective shall be deemed the Triggering Date.

 

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16.                                 BINDING AGREEMENT.

 

Subject to the provisions of Section 15 of this Agreement, thisAgreement shall be binding upon and shall inure to the benefit of the Companyand the Employee and their respective representatives, successors, and assigns.

 

17.                                 REFERENCES AND GENDER.

 

All references to “Sections” and “Subsections” contained herein are,unless specifically indicated otherwise, references to sections and subsectionsof this Agreement.  Whenever herein thesingular number is used, the same shall include the plural where appropriate,and words of any gender shall include each other gender where appropriate.

 

18.                                 WAIVER.

 

No waiver of any right under this Agreement shall be deemed effectiveunless the same is set forth in writing and signed by the party giving suchwaiver, and no waiver of any right shall be deemed to be a waiver of any suchright in the future.

 

19.                                 DISPUTE RESOLUTION.

 

19.1                           Any controversy orclaim arising out of or relating to this Agreement, or the breach thereof,shall be settled solely and exclusively by arbitration in accordance with theNational Rules for the Resolution of Employment Disputes of the AmericanArbitration Association (“AAA”), as modified herein (the “Rules”).  Disputes will be heard and determined by asole neutral arbitrator who is a Texas licensed employment lawyer appointed inaccordance with the Rules.  The place ofarbitration shall be Dallas, Texas.

 

19.2                           To the extentpermitted by law, judgment upon any award of the arbitrator shall be final,binding and conclusive and may be entered upon the motion of either party inany court having jurisdiction thereof or having jurisdiction over one or moreof the parties or their assets.  Theaward of the arbitrators may grant any relief that might be granted by a courtof competent jurisdiction.  Eitherparty, before or during any arbitration, may apply to a court of competentjurisdiction for equitable relief where such relief is necessary to protect itsinterests pending completion of the arbitration.

 

20.                                 NOTICES.

 

Except as may be otherwise specifically provided in this Agreement, allnotices required or permitted hereunder shall be in writing and will be deemedto be delivered when deposited in the United States mail, postage prepaid,registered or certified mail, return receipt requested, addressed to theparties at the respective addresses set forth herein, or at such otheraddresses as may have theretofore been specified by written notice delivered inaccordance herewith.

 

21.                                 OTHER INSTRUMENTS.

 

The parties hereto covenant and agree that they will execute such otherand further instruments and documents as are or may become necessary orconvenient to effectuate and carry out the terms of this Agreement.

 

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22.                                 HEADINGS.

 

The headings used in this Agreement are used for reference purposes onlyand do not constitute substantive matter to be considered in construing theterms of this Agreement.

 

23.                                 INVALID PROVISION.

 

Any clause, sentence, provision, section, subsection, or paragraph ofthis Agreement held by a court of competent jurisdiction to be invalid,illegal, or ineffective shall not impair, invalidate, or nullify the remainderof this Agreement, but the effect thereof shall be confined to the clause, sentence,provision, section, subsection, or paragraph so held to be invalid, illegal, orineffective.

 

24.                                 RIGHTS UNDER PLANS AND PROGRAMS.

 

Anything in this Agreement to the contrary notwithstanding, no provisionof this Agreement is intended, nor shall it be construed, to reduce or in anyway restrict any benefit to which the Employee may be entitled under anyagreement, plan, arrangement, or program providing benefits for the Employee.

 

25.                                 MULTIPLE COPIES.

 

This Agreement may be executed in one or more counterparts, each ofwhich shall be deemed an original and all of which shall together constituteone and the same instrument.  The termsof this Agreement shall become binding upon each party from and after the timethat he or it executed a copy hereof.  Inlike manner, from and after the time that any party executes a consent or otherdocument, such consent or other document shall be binding upon such parties.

 

26.                                 WITHHOLDING OF TAXES.

 

The Company may withhold from any amounts payable under this Agreementall federal, state, city, or other taxes as shall be required pursuant to anylaw or government regulation or ruling.

 

27.                                 LEGAL FEES AND EXPENSES.

 

The Company shall pay and be responsible for all legal fees and expenseswhich the Employee may incur as a result of the Company’s failure to performunder this Agreement or as a result of the Company or any successor contestingthe validity or enforceability of this Agreement.

 

28.                                 SET OFF OR COUNTERCLAIM.

 

Except with respect to any claim against or debt or other obligation ofthe Employee properly recorded on the books and records of the Company prior tothe Triggering Date, there shall be no right of set off or counterclaimagainst, or delay in, any payment by the Company to the Employee or herbeneficiaries provided for in this Agreement in respect of any claim against ordebt or other obligation of the Employee, whether arising hereunder orotherwise.

 

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IN WITNESS WHEREOF, the parties have executed this Agreement on the dayand year first above written.

 

 
|   |   | CARREKER CORPORATION                               |
|--------|--------|----------------------------------------------------|
|   |   |                                               |
|   |   |                                               |
|   | By:    | /s/ J. D. Carreker                                 |   |
|   |   | J. D. Carreker                                     |
|   |   | Chairman of the Board  and Chief Executive Officer |
|   |   |                                               |
|   |   |                                               |
|   |   | /s/ Lisa Peterson                                  |   |
|   |   | Lisa Peterson                                      |
|   |   | Employee                                           |

 

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