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EXHIBIT 10.5
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as of
December 17, 1996, by and between EURONET SERVICES INC., a Delaware corporation
("Employer"), and MICHAEL J. BROWN, a citizen of the United States of America
with a permanent address at 12617 Juniper Circle, Leawood, Kansas 66209, USA,
("Employee"). (Each of the above may be individually referred to herein as a
"Party" and collectively as the "Parties.")
RECITALS
A. Employer is a corporation organized and existing under the laws of the
Commonwealth of Delaware.
B. Employee is currently employed as Chairman of the Supervisory Board of
Euronet Holding N.V. (which was reorganized into the Employer) and as Chief
Executive Officer of subsidiaries of Euronet Holding N.V. pursuant to that
certain Services Agreement dated March 13, 1996, between Euronet Holding N.V.
and Employee, which shall be terminated upon the commencement of this Agreement
as set forth below; and
C. Employer believes that the services of Employee are of great value to
Employer and Employee is willing to be employed by Employer for the term and
upon terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises contained herein,
and for other good and valuable consideration, the adequacy of which is hereby
acknowledged, Employer and Employee, each intending to be legally bound, agree
as follows:
1. TERM. The term of Employee's employment hereunder shall commence on
December 31, 1996 and shall continue until December 31, 1999, except as
otherwise provided in Section 7. If the term of Employee's employment
hereunder shall have continued until December 31, 1999, thereafter, such term
of Employee's employment hereunder shall be deemed to be renewed automatically,
on the same terms and conditions contained herein, for successive periods of
one year each, unless and until either Employer or Employee, at least 90 days
prior to the expiration of the original term or any such extended term, shall
given written notice to the other of his or its intention not to renew the term
of Employee's employment hereunder. All references herein to the "Term" refer
to the term of Employee's employment stipulated herein and extensions, if any,
thereof.
2. DUTIES.
(a) Offices. During the Term, Employee shall serve as Chief Executive
Officer, President and Chairman of the Board of Directors and Employee shall
perform such services as normally are associated with and incident to such
positions and such further services as from time to time may be required or as
may be assigned to Employee by the Employer's Board of Directors (the "Board").
Employer agrees that Employee will be assigned only duties of the type, nature
and dignity normally assigned to a Chief Executive Officer, President and Board
Chairman of a corporation of the size, stature and nature of Employer. During
the Term, Employee shall have, at a minimum, the same perquisites of office as
he had on the date hereof, and he shall report directly to the Board.
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(b) Full-Time Basis. During the Term, Employee shall devote, on a
full-time basis, his services, skills and abilities to his employment
hereunder, excepting periods of vacation or illness and excepting any pursuits
which do not materially interfere with his duties hereunder or present a
conflict of interest with the interests of Employer or of any subsidiary
thereof ("Subsidiary"). Employee may maintain his residence in Kansas, but
shall travel to and work in the offices of Employer and its Subsidiaries (the
"Group"), as often as he or the Board deems necessary to attend effectively to
the affairs of the Group. In addition to travel time, Employee shall make
himself available by phone and fax to attend to the affairs of the Group.
3. COMPENSATION.
(a) Salary. During the Term, as compensation for services rendered by
Employee hereunder, Employer shall pay to Employee a base salary at a rate not
less than $100,000.00 per annum, payable in monthly installments in accordance
with Employer's general practices ("Base Salary"). In January of every year
during the Term, Employee's compensation, including Base Salary, will be
subject to the Board's review and may be adjusted at the sole discretion of the
Board.
(b) Deductions and Withholding. Employee agrees that Employer may
withhold, from any and all payments required to be made to Employee hereunder,
all taxes or other amounts that Employer is required by law to withhold in
accordance with applicable laws or regulations from time to time in effect.
4. BENEFITS. During the Term, Employee shall be entitled to such
comparable fringe benefits and perquisites as may be provided to any or all of
Employer's senior officers pursuant to policies established from time to time
by the Board. These fringe benefits and perquisites shall include holidays and
reimbursement for premiums relating to health insurance for plans pre-approved
by Employer. Also, during the Term, Employee shall be entitled to twenty (20)
days paid leave per annum and to accrue unused leave from year to year.
5. EXPENSES AND OTHER PERQUISITES. Employer shall reimburse Employee for
all reasonable and proper business expenses incurred by him in the performance
of his duties hereunder during the Term, in accordance with Employer's
customary practices for senior officers, and provided such business expenses
are reasonably documented.
6. EXCLUSIVE SERVICES, CONFIDENTIAL INFORMATION, BUSINESS
OPPORTUNITIES AND NON-SOLICITATION.
(a) Exclusive Services. During the Term, Employee shall at all times
devote his full-time attention, energies, efforts and skills to the Group's
business and shall not, directly or indirectly, engage in any other business
activity, whether or not for profit, gain or other pecuniary advantages,
without the Board's written consent, provided that such prior consent shall not
be required with respect to: (i) business interests that neither compete with
Employer or any Subsidiaries nor interfere with Employee's duties and
obligations hereunder; and (ii) Employee's charitable, philanthropic or
professional association activities.
During the Term, Employee shall not, without the Board's prior written
consent, directly or indirectly, either as an officer, director, employee,
agent, advisor, consultant, principal, stockholder, partner, owner or in any
other capacity, on his own behalf or otherwise, in any way engage in,
represent, be connected with or have a financial interest in, any business
which is, or to his knowledge, is about to become, engaged in the business of
with which Employer or any Subsidiary is
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currently or has previously done business or any subsequent line of business
developed by Employer or any Subsidiary or any business planned to be
established by Employer during the Term. Notwithstanding the foregoing,
Employee shall be permitted to own passive investments in publicly held
companies provided that such investments do not exceed five percent (5%) of any
such company's outstanding equity.
(b) Confidential Information. During the Term and for the first 24
consecutive months after the expiration or earlier termination of the Term,
Employee shall not disclose or use, directly or indirectly, any Confidential
Information (as defined below). For the purposes of this Agreement,
"Confidential Information" shall mean all information disclosed to Employee, or
known by him as a consequence of or through his employment with Employer or any
Subsidiary (under this Agreement or prior to this Agreement) where such
information is not generally known in the trade or industry or was regarded or
treated as confidential by Employer or any Subsidiary, and where such
information refers or relates in any manner whatsoever to the business
activities, processes, services or products of Employer or its Subsidiaries.
Confidential Information shall include business and development plans (whether
contemplated, initiated or completed), information with respect to the
development of technical and management services, business contacts, methods of
operation, results of analysis, business forecasts, financial data, costs,
revenues, and similar information. Upon termination of Term, Employee shall
immediately return to Employer all property of Employer or any Subsidiary and
Confidential Information which is in tangible form, and all copies thereof.
(c) Business Opportunities and Conflicts of Interests. During the Term,
Employee shall promptly disclose to the Board each business opportunity of a
type which, based upon its prospects and relationship to the existing
businesses of the Group, the Group might reasonably consider pursuing. Upon
termination of the term, regardless of the circumstances thereof, Employer
shall have the exclusive right to participate in or undertake any such
opportunity on its own behalf without any involvement of Employee.
During the Term, Employee shall refrain from engaging in any activity,
practice or act which conflicts with, or has the potential to conflict with,
the interests of Employer or its Subsidiaries, and he shall avoid any acts or
omissions which are disloyal to, or competitive with Employer or its
Subsidiaries.
(d) Non-Solicitation of Executives. During the Term and for the first 24
consecutive months after expiration or termination of the Term, Employee shall
not, except in the course of his duties hereunder, directly or indirectly,
induce or attempt to induce or otherwise counsel, advise, ask or encourage any
person to leave the employ of Employer or any Subsidiary, or solicit or offer
employment to any person who was employed by Employer or any Subsidiary at any
time during the twelve-month period preceding the solicitation or offer.
(e) Covenant Not to Compete. If Employee voluntarily terminates the Term
or declines to renew the Term, or if Employer terminates the Term for Cause (as
defined below), Employee shall not, during the first 24 consecutive months
following such termination, engage in competition with the Group, or solicit,
from any person or entity who purchased any then existing product or service
from Employer or any Subsidiary during his employment hereunder, the purchase
of any then existing product or service in competition with then existing
products or services of Employer or any Subsidiary.
For purposes of this Agreement, Employee shall be deemed to engage in
competition with Employer if he shall directly or indirectly, either
individually or as a stockholder, director, officer, partner, consultant,
owner, employee, agent, or in any other capacity, consult with or
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otherwise assist any person or entity engaged in providing technical and
management services to any person or entity which Employer or any Subsidiary,
during the Term, has developed or is working to develop. Notwithstanding
anything herein to the contrary, if Employer is in material breach of this
Agreement, the provisions of this Section 6 shall not apply.
(f) Employee Acknowledgement. Employee hereby agrees and acknowledges
that the restrictions imposed upon him by the provisions of this Section 6 are
fair and reasonable considering the nature of Employer's business, and are
reasonably required for Employer's protection.
(g) Invalidity. If a court of competent jurisdiction or an arbitrator
shall declare any provision or restriction contained in this Section 6 as
unenforceable or void, the provisions of this Section 6 shall remain in full
force and effect to the extent not so declared to be unenforceable or void, and
the court may modify the invalid provision to make it enforceable to the
maximum extent permitted by law.
(h) Specific Performance. Employee agrees that if he breaches any of the
provisions of this Section 6, the remedies available at law to Employer would
be inadequate and in lieu thereof, or in addition thereto, Employer shall be
entitled to appropriate equitable remedies, including specific performance and
injunctive relief. Employee agrees not to enter into any agreement, either
written or oral, which may conflict with this Agreement, and Employee
authorizes Employer to make known the terms of Sections 6 and 7 hereof to any
person, including future employers of Employee.
7. TERMINATION.
(a) Termination for Cause. Employer may for Cause (as defined below)
terminate the Term at any time by written notice to Employee. For purposes of
this Agreement, the term "Cause" shall mean any one or more of the following:
(i) conduct by Employee which is materially illegal or fraudulent;
(ii) the breach or violation by Employee of the Agreement, provided that
Employee must first be given notice by the Board of the alleged breach of
violation and 30 days to cure said alleged breach or violation;
(iii) Employee's knowing and willful neglect of duties or negligence in
the performance of his duties which materially affects Employer's or any
Subsidiary's business, provided that Employee must first be given notice by the
Board of such alleged neglect or negligence and 30 days to cure said alleged
neglect or negligence; or
(iv) Employee's commission of any material act of misfeasance,
malfeasance, disloyalty, dishonesty or breach of trust against any part of the
Group
If a termination occurs pursuant to clause (i) or (iv) above, the date on which
the Term is terminated (the "Termination Date") shall be the date Employee
receives notice of termination and, if a termination occurs pursuant to clauses
(ii) or (iii) above, the Termination Date shall be the date on which the
specified cure period expires. In any event, as of the Termination Date (in
the absence of satisfying the alleged breach or violation within the applicable
cure period), Employee shall be relieved of all of his duties hereunder and
Employee shall not be entitled to the accrual or provision of any compensation
or benefit, after the Termination Date but Employee shall be entitled to the
provision of all compensation and other benefits that shall have accrued as of
the Termination Date,
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including Base Salary, paid leave benefits, and reimbursement of incurred
business expenses.
(b) Death or Disability. The Term shall be terminated immediately and
automatically upon Employee's death or "Disability." The term "Disability"
shall mean Employee's inability to perform all of the essential functions of
his position hereunder for a period of 26 consecutive weeks or for an aggregate
of 150 work days during any 12-month period by reason of illness, accident or
any other physical or mental incapacity, as may be permitted by applicable law.
Employee's capability to continue performance of Employee's duties hereunder
shall be determined by a panel composed of two independent medical doctors, one
appointed by the Board and one appointed by Employee or his designated
representative. If the panel is unable to reach a decision, the matter will be
referred to arbitration in accordance with Section 8. In the event of
Employee's death or Disability for any period of six consecutive months,
Employee (or his designated beneficiary) will be paid his Base Salary then in
effect for one full year following the date of death or the end of the
six-month period, as the case may be.
(c) By Employee. Employee may, in his sole discretion, without cause,
terminate the Term at any time upon 90 days' written notice to Employer. If
Employee exercises such termination right, Employer may, at its option, at any
time after receiving such notice from Employee, relieve him of his duties and
terminate the Term at any time prior to the expiration of said notice period.
If the Term is terminated by either of the Parties pursuant to this Section
7(c), Employee shall not be entitled to the accrual or provision of any
compensation or benefit, after the effective date of such termination, but
Employee shall be entitled to the provision of all compensation and other
benefits that shall have accrued through the effective date of such
termination, including Base Salary, paid leave benefits, and reimbursement of
incurred business expenses.
8. ARBITRATION. Whenever a dispute arises between the Parties concerning
this Agreement or any of the obligations hereunder, or Employee's employment
generally, Employer and Employee shall use their best efforts to resolve the
dispute by mutual agreement. If any dispute cannot be resolved by Employer and
Employee, it shall be submitted to arbitration to the exclusion of all other
avenues of relief and adjudicated pursuant to the American Arbitration
Association's Rules for Employment Dispute Resolution then in effect. The
decision of the arbitrator must be in writing and shall be final and binding on
the Parties, and judgement may be entered on the arbitrator's award in any
court having jurisdiction thereof. The expenses of the arbitration shall be
borne by the losing Party to the arbitration and the prevailing Party shall be
entitled to recover from the losing Party all of its or his own costs and
attorney's fees with respect to the arbitration. Nothing in this Section 8
shall be construed to derogate Employer's rights to seek legal and equitable
relief in a court of competent jurisdiction as contemplated by Section 6(h).
9. NON-WAIVER. It is understood and agreed that one Party's failure at
any time to require the performance by the other Party of any of the terms,
provisions, covenants or conditions hereof shall in no way affect the first
Party's right thereafter to enforce the same, nor shall the waiver by either
Party of the breach of any term, provision, covenant or condition hereof be
taken or held to be a waiver of any succeeding breach.
10. SEVERABILITY. If any provision of this Agreement conflicts with the
law under which this Agreement is to be construed, or if any such provision is
held invalid or unenforceable by a court of competent jurisdiction or any
arbitrator, such provision shall be deleted from this Agreement and the
Agreement shall be construed to give full effect to the remaining provisions
thereof.
11. SURVIVABILITY. Unless otherwise provided herein, upon termination or
expiration of the Term, the provisions of Sections 6(b), (d) and (e) above
shall nevertheless remain in full force and
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effect.
12. GOVERNING LAW. This Agreement shall be interpreted, construed and
governed according to the laws of the Commonwealth of Delaware without regard
to the conflict of law provisions thereof.
13. CONSTRUCTION. The section headings and captions contained in this
Agreement are for convenience only and shall not be construed to define, limit
or affect the scope or meaning of the provisions hereof. All references herein
to Sections shall be deemed to refer to numbered sections of this Agreement.
14. ENTIRE AGREEMENT. This Agreement contains and represents the entire
agreement of Employer and Employee and supersedes all prior agreements,
representations or understandings, oral or written, express or implied with
respect to the subject matter hereof. This Agreement may not be modified or
amended in any way unless in a writing signed by each of Employer and Employee.
No representation, promise or inducement has been made by either Employer or
Employee that is not embodied in this Agreement, and neither Employer nor
Employee shall be bound by or liable for any alleged representation, promise or
inducement not specifically set forth herein.
15. ASSIGNABILITY. Neither this Agreement nor any rights or obligations
of Employer or Employee hereunder may be assigned by Employer or Employee
without the other Party's prior written consent. Subject to the foregoing,
this Agreement shall be binding upon and inure to the benefit of Employer and
Employee and their heirs, successors and assigns.
16. NOTICES. All notices required or permitted hereunder shall be in
writing and shall be deemed properly given if delivered personally or sent by
certified or registered mail, postage prepaid, return receipt requested, or
sent by telegram, telex, telecopy or similar form of telecommunication, and
shall be deemed to have been given when received. Any such notice or
communication shall be addressed:
if to Employer, to Euronet Services Inc.
c/o Corporation Trust Center
1209 Orange Street
Wilmington, Delaware
USA
attention: Board of Directors
if to Employee, to Michael J. Brown
12617 Juniper Circle
Leawood, Kansas 66209
USA
tel/fax: 1-913-491-3514
or to such other address as Employer or Employee shall have furnished to the
other in writing.
IN WITNESS WHEREOF, the Parties have duly executed this Agreement, to be
effective as of the day and year first above written.
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EURONET SERVICES INC.
a Delaware corporation
Date: December 17, 1996 _________________________
By:
Its:
Date: December 17, 1996 _________________________
Michael J. Brown
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