Exhibit 10.12
BANCTEC, INC.
SENIOR EXECUTIVE
EMPLOYMENT AGREEMENT
---------------------
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 Xxxxx X.
Xxxxxxxxx (the "Employee") who resides at 00000 Xxxx Xxxxx Xxxxx, Xxxxxxx
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.
-----------
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
1
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.
----------
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 23, 2003, unless
sooner terminated as provided for herein.
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 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).
2
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
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.
----------
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 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.
-----------
9.1 Termination Prior to the Triggering Date.
----------------------------------------
(a) Upon 30 days' prior written notice to the Employee and
prior to the Triggering Date,
3
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.
4
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 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 12 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.
---------------------------------------
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).
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 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.
5
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 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 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.
-----------------
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.
6
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. 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.
20. 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.
21. 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.
22. 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.
23. 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.
24. 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.
25. 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.
7
26. 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.
27. 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 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
-----------------------------------
Xxx X. Xxxxxx
Senior Vice President
General Counsel
/s/ XXXXX X. XXXXXXXXX
-----------------------------------
Employee
8
