Exhibit 10.7
BANCTEC, INC.
SENIOR EXECUTIVE
EMPLOYMENT AGREEMENT
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This Employment Agreement (the "Agreement") is dated as of October 23,
1998, between BancTec, Inc., a Delaware corporation with its principal executive
offices at 0000 XXX Xxxxxxx, Xxxxxx, Xxxxx 00000 (the "Company"), and Xxxxxxx X.
Xxxxx, Xx. (the "Employee") who resides at 0000 Xxxxxxxxx, Xxxxxx, Xxxxx 00000.
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.
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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 his 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 his 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 his 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 20% 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.
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The Company hereby employs the Employee and the Employee hereby accepts
employment on the terms and conditions set forth herein.
3. TERM.
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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 23, 2003, unless sooner
terminated as provided for herein.
4. SALARY.
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(a) For all services rendered by the Employee under this Agreement, the
Company shall pay the Employee a base salary as established each year by the
Board of Directors, payable in accordance with the Company's customary payroll
practices, with merit increases as may, in the sole discretion of the Board of
Directors of the Company, be approved from time to time by the Board of
Directors of the Company.
(b) The Employee shall be entitled to participate in or receive benefits
under any employee benefit or bonus 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).
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5. DUTIES.
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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.
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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 his 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 his employment from
his permanent place of employment immediately prior to the Triggering Date.
7. DISABILITY.
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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.
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If the Employee dies during the term of his 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 his estate as a lump sum
death benefit, his base salary which would otherwise be payable to the Employee
at the time of his death, in equal semi-monthly installments on the first and
fifteenth 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.
9. TERMINATION.
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9.1 Termination Prior to the Triggering Date.
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(a) Upon 30 days' prior written notice to the Employee and prior to
the Triggering Date,
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the Company may terminate the Employee's employment with the Company under
this Agreement with or without Cause and by the affirmative vote of two-
thirds of the members of the Board of Directors of the Company.
(b) Prior to the Triggering Date, the Employee may terminate his
employment with the Company under this Agreement by giving 30 days' prior
written notice of his desire to the Board of Directors of the Company and
receiving an affirmative vote of two-thirds of the members of the Board of
Directors of the Company. The Employee will continue to receive his 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 his 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 his 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 Employee's Targeted Bonus for
the fiscal year in which such termination occurs (provided, however, that
if the basis for Employee's termination is the reduction in his Base Salary
or the reduction of his Targeted Bonus, the severance pay shall be based on
the Base Salary and the Targeted Bonus 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 his
employment pursuant to clause (ii) above, he shall be entitled to the
severance payments provided for in this paragraph only if he gives written
notice to the Company of his termination of employment within 30 days after
the occurrence of the event or events specified in clause (ii) on which he
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 pursuant to the Executive Bonus Plan. 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.
(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 he 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.
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9.2 Termination After the Triggering Date.
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(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 he 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 his employment with the Company for
Good Reason, the Employee will continue to accrue and receive his 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 his sole and
absolute discretion and without any prior approval by the Board of
Directors of the Company, and upon twelve months' prior written notice to
the Company, terminate his 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 his 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.
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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 2.99 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).
11. TRANSFER OF ASSETS TO IRREVOCABLE TRUST.
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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 the
Irrevocable Trust created by the Irrevocable Trust Agreement, an executed copy
of which is attached hereto as Exhibit A, 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.
The Company shall take whatever steps are necessary to maintain the trust
established pursuant to the Irrevocable Trust Agreement and shall comply with
the terms of the Irrevocable Trust Agreement both before and after the
Triggering Date and until the Irrevocable Trust terminates by its own terms.
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12. MITIGATION.
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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.
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This Agreement 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.
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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.
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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 his 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.
16. BINDING AGREEMENT.
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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.
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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.
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18. WAIVER.
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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. NOTICES.
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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.
20. OTHER INSTRUMENTS.
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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.
21. HEADINGS.
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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.
22. INVALID PROVISION.
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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.
23. RIGHTS UNDER PLANS AND PROGRAMS.
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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.
24. MULTIPLE COPIES.
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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.
25. WITHHOLDING OF TAXES.
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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.
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26. LEGAL FEES AND EXPENSES.
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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.
27. SET OFF OR COUNTERCLAIM.
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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 his 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.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first above written.
BANCTEC, INC.
By: /s/ XXX X. XXXXXX
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Xxx X. Xxxxxx
Senior Vice President and
General Counsel
/s/ XXXXXXX X. XXXXX, XX.
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Employee
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