Exhibit 10.1


 


CARREKER
CORPORATION


 


SENIOR
EXECUTIVE


 


EMPLOYMENT
AGREEMENT


 


 


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


 


W I
T N E S S E T H:


 


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


 


NOW, THEREFORE, for and in
consideration of the premises and the mutual covenants contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, and subject to the terms and conditions hereinafter set
forth, 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 best
interests 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 the
Employee to substantially perform her duties hereunder, which duties are within
the control of the Employee (other than the failure resulting from the
Employee’s incapacity due to physical or mental illness), provided, however,
that the Employee shall not be deemed to be terminated for Cause under this
subsection (b) unless and until (1) after the Employee receives written notice
from the Company specifying with reasonable particularity the actions of
Employee which constitute a violation of this subsection (b) and (2) within a
period of 30 days after receipt of such notice (and during which the violation
is within the control of the Employee), Employee fails to reasonably and
prospectively cure such violation.


 


“Good Reason” means the
occurrence of a Triggering Event (as defined below) and (A) without her prior
concurrence, the Employee is assigned any duties or responsibilities that are
inconsistent with his position, duties, responsibilities or status at the commencement
of the term of this Agreement, or her reporting responsibilities or titles in
effect at such time are changed, (B) the Employee’s total compensation is
reduced 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 the
date hereof in which the Employee participates (including without limitation
any pension and retirement plan, savings and profit sharing plan, stock
ownership or purchase plan, stock


 

















 


option plan, or life, medical or disability insurance
plan), which would adversely affect the Employee’s rights or benefits
thereunder, unless such change occurs pursuant to a program applicable to all
executive officers of the Company and does not result in a proportionately
greater reduction in the rights of or benefits to the Employee as compared to
any other executive officer of the Company, or (D) without his prior
concurrence, the Employee is required to engage in an increased amount of
travel on the Company’s business.


 


“Triggering Date” means the date
of a Triggering Event.


 


“Triggering
Event” means an event of a nature that would be required to be reported by the
Company in response to Item 6(d) of Schedule 14A of Regulation 14A promulgated
under the Exchange Act; provided that, without limitation, such an event shall
be deemed to have occurred if (a) any person or group (as such terms are
used in Section 13(d) and 14(d) of the Exchange Act) is or becomes the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing more than 50% of the
combined voting power of the Company’s then outstanding securities, or (b)
there are serving as directors two or more persons who were elected as members
of the Board of Directors and were not nominated by management or the Board of
Directors 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 as
a result of such merger or consolidation less than 51% of the outstanding
voting securities of the surviving or resulting corporation are owned in the
aggregate by the former shareholders of the Company, excluding for purposes of
such calculation shares of the voting securities of the Company owned by a
party to such merger or consolidation or affiliates (within the meaning of the
Exchange Act) of such party, as the same existed immediately prior to such
merger or consolidation, or (d) the Company sells all or substantially all
of its assets to another corporation which is not a wholly-owned subsidiary of
the Company.


 


2.                                       EMPLOYMENT.


 


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


 


3.                                       TERM.


 


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


 


4.                                       SALARY.


 


(a)                                  For all services rendered by the Employee under
this Agreement, the Company shall pay the Employee a base salary as established
each fiscal year by the Board of Directors (“Base Salary”), payable in
accordance with the Company’s customary payroll practices.


 


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


 


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


 


5.                                       DUTIES.


 


The Employee shall continue to be engaged in a managerial capacity with
the Company to supervise and direct the activities and to maintain the public
relations and goodwill of the Company. 
The precise services of the Employee may be extended or curtailed from
time 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 the
business and affairs of the Company as are necessary to the performance and
discharge of the duties assigned to Employee under this Agreement.  Employee shall not during the term of his
employment under this Agreement engage in any other business activity that
could constitute a conflict of interest, whether or not such business activity
is pursued for gain, profit, or other pecuniary advantage.  This shall not be construed as preventing
the Employee from managing her current investments or investing his assets in
such form or manner as will not require any services on the part of the
Employee in the operation and the affairs of the companies in which such
investments are made.  On or after the
Triggering Date, the Employee shall not be required to change the situs of her
employment from her permanent place of employment immediately prior to the
Triggering Date.


 


7.                                       DISABILITY.


 


If the Employee is unable to perform his services by reason of illness
or incapacity for a continuous period in excess of six months, unless otherwise
required by the provisions of Sections 10 or 25 of this Agreement,
compensation otherwise payable by the Company shall cease and any future
payments to the Employee shall be subject to the terms and provisions of
long-term disability insurance coverage, if any, maintained by the
Company.  Notwithstanding anything
herein to the contrary, the Board of Directors of the Company may terminate the
Employee’s employment with the Company under this Agreement at any time after
the Employee shall be absent from his employment, for whatever reason, for a
continuous period of more than six months, and, except for any obligations of
the Company under Sections 10, 23, and 26 of this Agreement, all
other 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 Company
shall pay to such person as the Employee shall designate in a notice filed with
the Company, or, if no such person shall be designated, to her estate as a lump
sum death benefit, her base salary which would otherwise be payable to the
Employee at the time of her death, in equal semi-monthly installments on the
fifteenth and last day of each and every month, for a period of months (not
exceeding 12) determined by multiplying two times the number of complete
12-month periods of employment of the Employee commencing from the date of such
employment by the Company, in addition to any payments the Employee’s spouse,
beneficiaries, or estate may be entitled to receive pursuant to any pension or
employee benefit plan or life insurance policy which may be maintained by the
Company, and such payments shall fully discharge the Company’s obligations
hereunder.


 


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9.                                       TERMINATION.


 


9.1                                 Termination Prior to the Triggering Date.


 


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


 


(b)                                 Prior to the Triggering Date, the Employee may
terminate her employment with the Company under this Agreement by giving 90
days’ prior written notice of her desire to the Board of Directors of the
Company and receiving an affirmative vote of the Board of Directors of the
Company.  The Employee will continue to
receive her Base Salary and Benefits through the date of termination with no
liability on the part of the Company for further payments to the Employee
unless Employee terminates her employment pursuant to Section 9.1(c)(ii), at
which time Sections 9.1(c) and (d) shall apply.


 


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


 


(d)                                 The severance payments provided for in this
Section 9.1 shall be in lieu of all severance payments or benefits to which the
Employee might otherwise be entitled under Company severance policies from time
to time in effect, except for (i) accrued and unpaid Base Salary to the date of
termination, and (ii) any bonus due with respect to fiscal years completed as
of the date of termination.  Nothing
contained in the foregoing shall be construed so as to affect the Employee’s
rights or the Company’s obligations relating to agreements or benefits that are
unrelated to termination of employment.


 


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


 


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


 


9.2                                 Termination After the Triggering Date.


 


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


 


(b)                                 On or after the Triggering Date and irrespective
of whether or not the Employee has given notice of termination of employment
pursuant to Section 9.2(c), if the Employee’s employment with the Company is
terminated without Cause or if Employee terminates her employment with the
Company for Good Reason, the Employee will continue to accrue and receive her
base salary and Benefits through the date of termination and will be entitled
to 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 Board
of Directors of the Company, and upon three months’ prior written notice to the
Company, terminate her employment with the Company under this Agreement for any
reason whatsoever.  If the Employee’s
employment with the Company under this Agreement is terminated pursuant to this
Subsection 9.2(c) and subject in all respects to the provisions of Section
9.2(a) and (b), the Employee will continue to accrue and receive her base
salary and Benefits through the date of termination and will be entitled to
receive the benefits provided for under Section 10 hereof.  No termination of the Employee’s employment
with the Company pursuant to Subsections 9.2(b) or (c) shall in any way
terminate the Company’s obligations under Sections 23 and 26 of this
Agreement.


 


10.                                 COMPENSATION AFTER CERTAIN TERMINATIONS.


 


If the Employee’s employment with the Company is terminated (whether
such termination is by the Employee or by the Company) at any time on or within
three years after the Triggering Date for any reason other than
(a) termination by the Company for Cause, (b) the Employee having
reached the age of 65, or (c) the Employee’s death, then, within five days
after the date of such termination, the Company shall pay the Employee a lump
sum amount in cash equal to one times the Employee’s annualized includable
compensation (within the meaning of Section 280G(d)(1) of the Internal Revenue
Code of 1986, as amended) from the Company during the period consisting of the
five full taxable years of the Employee ending immediately prior to the year in
which the Triggering Date occurred (or such portion of such period during which
the 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 the
occurrence of a Triggering Event, the Company shall transfer cash to an
irrevocable trust in an amount no less than the total amount which would be
payable to the Employee pursuant to Section 10 of this Agreement as if the Employee’s
employment terminated on the Triggering Date.


 


12.                                 MITIGATION.


 


The Employee shall not be required to mitigate the amount of any payment
provided for in this Agreement by seeking other employment or otherwise, nor
shall the amount of any payment provided for in this Agreement be reduced by
any compensation earned by the Employee as the result of employment by another
employer after the date of termination of Employee’s employment with the
Company, 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 with
respect to the subject matter hereof and supersedes all prior negotiations,
agreements, and understandings relating to such subject matter, and may be
modified or amended only by an instrument in writing signed by the parties
hereto.


 


14.                                 LAW TO GOVERN.


 


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


 


15.                                 ASSIGNMENT.


 


This Agreement is personal to the parties, and neither this Agreement
nor any interest herein may be assigned (other than by will or by the laws of
descent and distribution) without the prior written consent of the parties
hereto nor be subject to alienation, anticipation, sale, pledge, encumbrance,
execution, levy, or other legal process of any kind against the Employee or any
of her beneficiaries or any other person. 
Notwithstanding the foregoing, but subject to satisfaction of the
Company’s obligation to fund the irrevocable trust as provided in Section 11,
the Company shall be permitted to assign this Agreement to any corporation or
other business entity succeeding to substantially all of the business and
assets 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 of
the Company’s obligations under this Agreement.  From and after assignment of this Agreement by the Company in
accordance with the foregoing provisions, a Triggering Event shall be deemed to
have occurred.  Failure by the Company
to obtain such assumption prior to the effectiveness of such succession shall
be a breach of this Agreement and shall entitle the Employee to immediately
receive compensation under this Agreement from the Company and from the
Company’s successor in the same aggregate amount and on the same terms as he
would be entitled to hereunder if he had voluntarily terminated his employment
with the Company for Good Reason after the Triggering Date, and, for purposes
of implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the Triggering Date.


 


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16.                                 BINDING AGREEMENT.


 


Subject to the provisions of Section 15 of this Agreement, this
Agreement shall be binding upon and shall inure to the benefit of the Company
and 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 subsections
of this Agreement.  Whenever herein the
singular 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 effective
unless the same is set forth in writing and signed by the party giving such
waiver, and no waiver of any right shall be deemed to be a waiver of any such
right in the future.


 


19.                                 DISPUTE RESOLUTION.


 


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


 


19.2                           To the extent
permitted 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 in
any court having jurisdiction thereof or having jurisdiction over one or more
of the parties or their assets.  The
award of the arbitrators may grant any relief that might be granted by a court
of competent jurisdiction.  Either
party, before or during any arbitration, may apply to a court of competent
jurisdiction for equitable relief where such relief is necessary to protect its
interests pending completion of the arbitration.


 


20.                                 NOTICES.


 


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


 


21.                                 OTHER INSTRUMENTS.


 


The parties hereto covenant and agree that they will execute such other
and further instruments and documents as are or may become necessary or
convenient 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 only
and do not constitute substantive matter to be considered in construing the
terms of this Agreement.


 


23.                                 INVALID PROVISION.


 


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


 


24.                                 RIGHTS UNDER PLANS AND PROGRAMS.


 


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


 


25.                                 MULTIPLE COPIES.


 


This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original and all of which shall together constitute
one and the same instrument.  The terms
of this Agreement shall become binding upon each party from and after the time
that he or it executed a copy hereof.  In
like manner, from and after the time that any party executes a consent or other
document, 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 Agreement
all federal, state, city, or other taxes as shall be required pursuant to any
law or government regulation or ruling.


 


27.                                 LEGAL FEES AND EXPENSES.


 


The Company shall pay and be responsible for all legal fees and expenses
which the Employee may incur as a result of the Company’s failure to perform
under this Agreement or as a result of the Company or any successor contesting
the validity or enforceability of this Agreement.


 


28.                                 SET OFF OR COUNTERCLAIM.


 


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


 


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IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and 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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