Vice President of Business Development Employment Agreement

EXHIBIT 10.5


EMPLOYMENT AGREEMENT


This Employment Agreement (the "Agreement") is made as of the 1st day of October, 2003, by and between INTEGRATED BUSINESS SYSTEMS & SERVICES, INC., a South Carolina corporation (the "Company") and DONALD R. FUTCH ("Employee").


WHEREAS, the Company desires to continue to employ Employee, and Employee desires to be employed by the Company, in accordance with the terms and conditions hereinafter set forth:


NOW, THEREFORE, in consideration of the mutual promises herein set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound, agree as follows:


1. Employment. The Company hereby agrees to continue to employ Employee to perform the duties described below subject to and in accordance with the terms and conditions hereof, and Employee hereby accepts such employment. In accepting continued employment by the Company, Employee shall continue to assume the responsibility of performing for and on behalf of the Company the duties of Vice President of Business Development of the Company.


2. Term. The continued term of employment hereunder shall commence on January 1, 2004 and unless earlier terminated in accordance with Section 5 hereof, shall continue for a term of Four (4) years ending on December 31, 2007. This Agreement shall be automatically renewed for additional terms of one (1) year, unless no less than one hundred eighty (180) days prior to the end of the then current term of this Agreement the Company notifies Employee in writing or Employee notifies the Company in writing of the intention not to renew this Agreement. References to this Agreement's term shall mean the initial term and all successive terms unless the context clearly indicates otherwise.


3. Compensation. As compensation for the services to be rendered by the Employee for the Company under this Agreement, Employee shall be compensated as follows:


(a) Salary. Employee shall be compensated by the Company on the basis of a minimum annual base salary ("Salary") of One Hundred Fifteen Thousand ($115,000) Dollars commencing on the effective date of this Agreement. Such Salary shall be payable in pay periods as determined by the Company, but in no event less frequently than semi-monthly. The Salary payable to Employee for each twelve (12) month period during the term of this Agreement following the first anniversary of the effective date of this Agreement shall be reviewed by the Board of Directors (or an appropriate committee of the Board), and may be increased if the Board of Directors (or such committee) determines that an increase is appropriate.


(b) Bonuses. In addition to the Salary, Employee shall also be eligible to receive one or more bonuses, annually or more frequently, the amount and grant of which shall be at the direction of the Company.


(c) Vacation and Leaves of Absence. In addition to all regular Company holidays, the Company shall provide Employee with twenty (20) business days of paid vacation time during each calendar year during the term of employment hereunder. Such vacation days are to be taken at such time or times as Employee may reasonably request, subject to the Company's convenience and prior approval, which approval shall not be unreasonably withheld. The Company may grant additional vacation time and time off in its sole discretion.


(d) Reimbursement for Expenses. The Company shall provide reimbursement of all reasonable expenses incurred by Employee for the benefit of the Company in the performance of Employee's duties hereunder, provided that reasonable written documentation is provided to the Company in support of such reimbursement.


(e) Other Benefits. The Company shall provide at its expense other benefits (e.g., health insurance coverage (including payment of benefits under COBRA), disability insurance coverage, retirement plan participation, etc.) reasonably comparable to, and no less favorable to Employee than, those benefits generally provided to other senior executives of the Company.


4. Stock Options. As a material inducement to Employee to enter into this extended Agreement, the Company shall grant to Employee effective the date hereof and pursuant to the Company's Stock Option Plan (the "Plan") or directly outside of the Plan as set forth below:


(a) Incentive Stock Options: Incentive Stock options shall be
provided to Employee to purchase a total of Eight Hundred
Thousand (800,000) shares of the Company's common stock at an
exercise price per share of fourteen cents ($0.14) which is
the closing stock price as of September 30, 2003 and the
average closing stock price for the prior twenty trading days.
Three Hundred Thousand options (300,000) shall vest as of
October 1, 2003 and Five Hundred thousand options (500,000)
shall vest October 1, 2005. It is intended that such options
shall be structured to satisfy the requirements of Section
422A of the Internal Revenue Code and shall be designated as
incentive stock options.


(b) Agreements and Adjustments. The Company and Employee shall execute and deliver appropriate Stock Option Agreements in the form contemplated by the Plan or otherwise as necessary to reflect the grant of options hereunder. Consistent with the adjustments contemplated with respect to options granted under the Plan, all option amounts and exercise prices shall be adjusted for any subsequent stock splits, stock dividends, recapitalizations or similar events.


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(c) Change in Control. Notwithstanding any vesting provisions identified in this Section 4, upon the occurrence of a "Change in Control" of the Company as defined herein, all unvested options granted pursuant to this Section 4 shall immediately vest and become fully exercisable and remain exercisable throughout their entire term. For purposes of this Agreement, the term "Change in Control" shall mean that any one of the following events shall have occurred: (i) a person, partnership, joint venture, corporation or other entity, or two or more of any of the foregoing acting as a group (or a "person" within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the "1934 Act"), other than the Company, a majority-owned subsidiary of the Company, an employee benefit plan (or related trust) of the Company or such subsidiary, (A) directly or indirectly become(s) after the effective date of grant of the stock options hereunder the "beneficial owner" (as defined in Rule 13(d)(3) under the 1934 Act) of 15% or more of the then outstanding voting stock of the Company or (B) makes a tender offer for 15% or more of the outstanding voting securities of the Company; or (ii) individuals who constitute a majority of the Board of Directors at the effective date hereof, or individuals elected or nominated directly or indirectly by at least a majority of such current directors, no longer constitute a majority of the Company's Board of Directors'; or (iii) the Company enters into (A) a plan of complete liquidation of the Company or (B) an agreement for the sale or disposition of all or substantially all of the Company's assets (other than to a subsidiary of the Company); or (C) a merger, consolidation, or reorganization of the Company with or involving any other corporation, other than a merger, consolidation, or reorganization that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least seventy-five percent (75%) of the combined voting power of the voting securities of the Company (or such surviving entity) outstanding immediately after such merger, consolidation or reorganization.


5. Termination.


(a) For Cause by the Company. Notwithstanding any other provision hereof, the Company may terminate Employee's employment under this Agreement at any time "for cause." For purposes hereof, the term "for cause" means one of the following acts by Employee: theft or embezzlement from the Company; knowingly falsifying Company records; conviction for a felony; or a material violation of the terms and provisions of this Agreement which remains uncured by the Employee fifteen (15) days after notice from the Company to Employee of such violation. All com ...