Exhibit 10.7
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), effective as of September 1,
2001 to September 1, 2003, plus one year extended to September 1, 2004 is
entered into by and between GLOBAL PAYMENT TECHNOLOGIES INC., a Delaware
corporation, with executive offices at 000X Xxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx,
00000 (the "Company"), and XXXXXXX XXXX, residing at 000 Xxxxxxx Xxxxx, Xxxxxxx
Xxxx, Xxx Xxxx, 00000 (the "Executive").
W I T N E S S E T H:
WHEREAS, the Company has determined that it desires to continue the
employment of the Executive as Chief Executive Officer and Chairman of the Board
of the Company; and
WHEREAS, the Company and the Executive desire to enter into an agreement
relating to such employment;
NOW, THEREFORE, in consideration of the covenants and agreements
hereinafter set forth, the parties hereto agree as follows:
1. EMPLOYMENT
1.1 The Company hereby agrees to employ the Executive, and the Executive
hereby agrees to accept employment with the Company, upon the terms and
conditions herein contained, as the Company's Chief Executive Officer and
Chairman of the Board of Directors of the Company (the "Board of Directors"). In
such capacity, the Executive shall be the highest ranking officer of the Company
and Chairman of the Board of Directors and shall have full authority and
responsibility for formulating the plans and policies of the Company and for
administering the same and shall have the duties and responsibilities normally
inherent in such capacity in public corporations of similar size and character.
The Executive shall also serve, if elected or appointed, as a member of any
committee of the Board of Directors, its subsidiaries or affiliates.
1.2 The term of employment under this Agreement shall commence on September
1, 2001 and, subject to the terms hereof, shall terminate two years thereafter;
provided, however, that the term of this Agreement shall automatically be
extended for an additional one-year term beyond the initial two-year term unless
and until either the Company or the Executive provides 90 days' advance written
notice to the other of its or his desire to terminate this Agreement as of the
end of the then current fiscal year of the Company (such term of employment
(including any extensions thereto) is referred to hereinafter as the "Employment
Term"). It is the intent of the parties to negotiate an extension of this
Agreement commencing on or about 18 months after the effective date hereof.
1.3 Throughout the Employment Term, the Executive shall devote such efforts
to the business and affairs of the Company as the Executive shall believe
necessary to fulfill his obligations hereunder. In this connection, the Company
recognizes that the Executive has other interests, business and otherwise, and
that nothing contained herein shall prohibit the Executive from engaging in
other business endeavors and from spending time and attention with respect
thereto, whether business, charitable, philanthropic, or otherwise. The Company
understands that the Executive is the Chief Executive Officer and a member of
the Board of Directors of Cellular Technical Services Company, Inc. ("CTS"), a
publicly traded company, and that the Executive spends time and attention with
respect to the business of CTS. In the event that such involvement by the
Executive requires the Executive (as determined by the Board of Directors) to
devote less than the required time to carry out his responsibilities to the
Company, then the Board of Directors, upon 30 day's advance written notice, may
propose an adjustment to the compensation of the Executive provided hereunder to
reflect such circumstances. But in no event shall such adjustment be more than
20% of the Executives then current base salary (for the balance of the term of
the Agreement.) unless the employee is discharged pursuant to paragraph 8 of
this contract. Such adjustment, if any, shall become final and binding if the
Executive does not dispute it within 30 days. If, within 30 days of the Board of
Director's determination the Executive disputes such adjustment, then a third
party mutually agreeable and knowledgeable in the area of executive compensation
will determine the adjustment, if any, which determination shall be final and
binding on the parties for the balance of the term of this employment contract.
1.4 The duties and services to be performed by the Executive hereunder
shall be rendered at the Company's current headquarters in Hauppauge or Valley
Stream or any new headquarters (provided that any new headquarters are located
within a radius of 25 miles of either office), except for reasonable travel on
the Company's business incident to the performance of the Executive's duties.
The Executive shall not be required to perform any duties or services that
require him to relocate his current principal residence.
2. SALARY
During the Employment Term, the Executive shall be entitled to receive a
base salary at a rate of $175,000 per annum payable in accordance with the
Company's regular payroll practice for senior executives of the Company and may
be increased to a maximum of $225,000 should certain goals, as determined by the
Board of Directors be attained.
3. ANNUAL BONUSES
During the Employment Term, for each fiscal year of the Company (October 1
through September 30), the Executive shall be eligible to receive a bonus in an
amount to be determined by the Board of Directors of the Company, in its sole
discretion.
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4. ADDITIONAL COMPENSATION
4.1 Each year the Executive will be eligible to receive stock options made
available to other officers in an amount determined by the Board of Directors.
5. TERMINATION WITHOUT CAUSE OR GOOD REASON
5.1 If the Executive's employment is terminated by the Company other than
for "Cause" (as hereinafter defined) or the Executive terminates his employment
for "Good Reason" (as hereinafter defined) prior to the end of the Employment
Term, the Executive shall receive his base salary and all other payments and
benefits hereunder as if such employment had not been terminated.
5.2 Upon termination of employment pursuant to Section 5.1, the Executive
shall be entitled to continued participation for the remainder of the Employment
Term in the medical reimbursement plans of the Company available generally to
senior executives, provided that if the Executive is eligible for similar
coverage under another employer's plan, any such coverage by the Company shall
cease.
6. PERMANENT DISABILITY OR DEATH
6.1 If, prior to the end of the Employment Term, the Executive shall suffer
a "Permanent Disability" (as hereinafter defined), the Company may terminate the
Employment Term by notice in the manner described below. If so terminated, the
Executive shall receive a bonus for the fiscal year in which his Permanent
Disability occurred equal to the pro rata portion of the bonus determined by the
Board of Directors pursuant to Section 3 hereof based on the Executive's efforts
from the beginning of that fiscal year to the date on which the Permanent
Disability occurred. Such bonus shall be paid in a lump sum as soon as possible
following the determination of said bonus, but in no event later than December
31 following the end of such fiscal year. In addition, the Executive shall
receive any portion of the bonus attributable to any completed fiscal year which
has accrued but has not yet been paid. In addition, the Executive shall continue
to receive compensation payable monthly equal to the Executive's then current
base salary until the end of the Employment Term; provided that the Company's
current group LTD policy (or its equivalent) remains in force, which the
Executive has acknowledged is acceptable to him, shall be used to offset the
Company's liability under this Section 6.1. The foregoing obligations may be
paid out monthly or in lump sum as determined by the Board of Directors in its
sole discretion. The amounts payable under this Section 6.1 shall be in lieu of
any amount to which the Executive is entitled under Sections 2 and 3 of this
Agreement. In the event the Company is successful in obtaining an individual
long-term disability insurance policy for the Executive, which insurance policy
is reasonably satisfactory to the Executive, then the amounts received under any
such insurance policy shall be in lieu of the Company's obligation to pay the
monthly amounts to the Executive described above.
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Any termination by the Company on account of the Executive's Permanent
Disability shall be communicated to the Executive by a Notice of Disability
Termination 30 days in advance of the proposed termination date. For purposes of
this Agreement, a "Notice of Disability Termination" shall mean a written notice
which sets forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment under this Section
6.1. For purposes of this Agreement, no such purported termination by the
Company shall be effective without such Notice of Disability Termination.
For purposes of this Agreement, the Executive shall be deemed to have
suffered a "Permanent Disability" if the Executive, by reason of physical or
mental illness, shall have been unable to perform satisfactorily the services to
be rendered by him hereunder for a consecutive period of 180 days. Such
determination shall be made by the Board of Directors upon the advice of a
qualified physician appointed by the Board of Directors. The Executive (or, if
applicable, the person or persons legally empowered to make such decisions on
behalf of the Executive) shall have the opportunity to select a qualified
physician of his own choice and if such physician does not support the
conclusions of the physician appointed by the Board of Directors, then a third
qualified physician, mutually agreed upon by the Board of Directors and the
Executive, shall be appointed and such third physician's determination shall be
final and binding on both parties.
6.2 If, prior to the expiration of the Employment Term, the Executive shall
die, the Executive's estate, designated beneficiaries or legal representative
shall receive a bonus for the fiscal year in which his death occurred equal to
the pro rata portion of the bonus determined by the Board of Directors pursuant
to Section 3 hereof based on the Executive's efforts from the beginning of that
fiscal year to the date on which death occurred. Such bonus shall be paid in a
lump sum as soon as possible following the determination of said bonus, but in
no event later than December 31 following the end of such fiscal year. The
preceding two sentences shall have no application or effect on the Executive's
right to receive any portion of the bonus attributable to any prior fiscal year
which has accrued but has not yet been paid. In addition, the Executive's
estate, designated beneficiaries or legal representative shall continue to
receive compensation payable monthly equal to the Executive's base salary at the
time of his death until the end of the Employment Term; provided, however, that
the foregoing payments shall not become payable if the Executive's estate,
designated beneficiaries or legal representative receives no less than $500,000
from the life insurance the Company will make its reasonable efforts to obtain
under this Agreement. The amounts payable under this Section 6.2 shall be in
lieu of any amounts to which the Executive is entitled under Sections 2 and 3 of
this Agreement.
6.3 The Company shall have the right to fund all of the foregoing
obligations with insurance as it shall determine and the Executive shall fully
cooperate with respect thereto.
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7. TERMINATION FOR GOOD REASON
The Executive may terminate his employment hereunder for Good Reason at any
time during the Employment Term, in which event the Executive shall be deemed to
have to resigned from all of his positions with the Company. For purposes of
this Agreement "Good Reason" shall mean any of the following (without the
Executive's express prior written consent):
(1) The assignment to the Executive by the Company of duties inconsistent
with the Executive's position as Chief Executive Officer and Chairman of the
Board of Directors or any reduction in his duties or responsibilities, or any
removal of the Executive from any of his positions as Chief Executive Officer
and Chairman of the Board of Directors, or any failure to continue the Executive
as a member of the Board of Directors, or any amendment to the By-Laws of the
Company as in effect at the commencement of the Employment Term materially and
adversely affecting the Executive's position, responsibilities and duties as
Chief Executive Officer and Chairman of the Board, except in connection with the
termination of the Executive's employment for Cause, Permanent Disability or as
a result of the Executive's death or termination by the Executive other than for
Good Reason;
(2) A reduction by the Company in the Executive's base salary as in effect
at the commencement of the Employment Term or as the same may be increased from
time to time during the Employment Term;
(3) (i) A relocation of the Company's principal executive offices to a
location outside of a radius of 25 miles from Valley Stream, New York, unless
such relocation is required by the Company in order to carry out the operations
of the Company as determined by the Board of Directors; (ii) the Company's
requiring the Executive to be based anywhere other than a location within such
radius, except for reasonable travel on the Company's business incident to the
performance of the Executive's duties.
(4) The taking of any action by the Company which would deprive the
Executive of any material fringe benefit enjoyed by the Executive at the
commencement of the Employment Term after the Executive has provided the Company
written notice of his objection and such action has not been rescinded in a
reasonable period of time;
(5) Any material breach by the Company of any provision of this Agreement
after the Executive has provided the Company written notice of the breach and
such breach has not been cured in a reasonable period of time; or
(6) Any order by the Company to the Executive, including pressure of
sufficient force to have the effect of an order, requiring the Executive to
perform any act which the Executive reasonably believes and would in fact
constitute a civil or criminal violation of any law, regulation, court decision,
administrative decision, or other pronouncement having the force
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of law, but not a mere suggestion of the Company that the Executive consider a
course of action considered illegal by the Executive and after the Executive has
advised the Company of his belief and the Company nonetheless requires the
Executive to perform such act or course of conduct.
8. DISCHARGE FOR CAUSE
8.1 If the Company terminates the employment of the Executive for Cause,
its obligations under this Agreement to make any further payments to the
Executive shall thereupon cease and terminate, except for any obligations
accrued but which remain unpaid.
8.2 As used herein, the term "Cause" shall mean (a) any act or failure to
act which constitutes a breach of the Executive's fiduciary duty to the Company;
(b) any act of willful malfeasance by the Executive having a material adverse
effect on the Company; or (c) any failure to act by the Executive involving
willful malfeasance having a material adverse effect on the Company; provided
that (b) and (c) shall be inapplicable if the Executive reasonably believed his
conduct to be consistent with the best interests of the Company or if his
conduct occurred under circumstances entitling the Executive to indemnification
under the Certificate of Incorporation, the Company's By-Laws, or applicable
law.
8.3 Termination of the Executive for Cause pursuant to this Section 8 shall
be communicated by a Notice of Termination. For purposes of this Agreement, a
"Notice of Termination" shall mean delivery to the Executive of a copy of a
resolution duly adopted by the affirmative vote of not less than three quarters
(3/4) of the entire membership of the Board of Directors (excluding the
Executive) at a meeting of the Board of Directors called and held for the
purpose (after reasonable notice to the Executive and reasonable opportunity for
the Executive, together with the Executive's counsel, to be heard before the
Board of Directors prior to such vote), finding that in the good faith opinion
of the Board of Directors, the Executive was guilty of conduct set forth in
Section 8.2 above and specifying the particulars thereof in reasonable detail.
For purposes of this Agreement, no such purported termination of Executive's
employment shall be effective without such Notice of Termination.
9. EXPENSES
The Executive is authorized to incur reasonable expenses for promoting the
business of the Company, including expenses for travel and similar items. The
Company will reimburse the Executive for all of the above expenses upon
presentation by the Executive from time to time of an itemized account of such
expenditures in accordance with the Company's reasonable procedures as in effect
from time to time.
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10. EMPLOYEE BENEFITS
10.1 The Executive shall be provided, to the extent eligible, with all
benefits coverage afforded by the Company to its senior executives, including,
without limitation, life insurance (in an amount of not less than $500,000),
health and hospitalization insurance, individual long-term disability insurance,
travel insurance and vacations.
10.2 In all events, and notwithstanding any termination of this Agreement
for any reason other than Cause, the Company shall, for a six-month period
commencing on the date of termination of this Agreement, pay all premiums of a
life insurance policy (in an amount of not less than $500,000) on the life of
the Executive with the beneficiaries to be designated by the Executive. At the
end of the aforementioned six-month period, the Executive shall have the right
to purchase the insurance policy or policies of his life owned by the Company by
agreeing to pay and paying all future premiums due under such policy or
policies.
10.3 The Executive shall be included in all pension, profit sharing,
incentive or other similar or comparable plans, programs and arrangements
applicable generally to senior executives of the Company in accordance with the
terms thereof and shall be provided with the benefits provided by the Company
under such plans, programs and arrangements as allowed by law.
10.4 The Executive shall be provided with the full-time use of an
automobile and shall be reimbursed by the Company for all expenses related to
such automobile.
11. RESTRICTIVE COVENANTS
11.1 Similar Business. During the Employment Term and during the one-year
period thereafter, the Executive will not directly or indirectly own, manage, be
employed by, engage in, carry on, or be connected in any like manner with any
other business similar to the type of business conducted by the Company within
100 miles of any office or job site of the Company within its trade territory,
or engage in any other conduct which would interfere with or disrupt the
operations of the Company.
11.2 Customers. The Executive will not at any time, either directly or
indirectly, make known or divulge to any person, firm or corporation the names
or addresses of any of the customers of the Company at the time the Executive
entered the employ of the Company or with whom the Executive became acquainted
after entering the employ of the Company. Furthermore, the Executive will not,
during the period of one year immediately after termination of employment,
directly or indirectly, either for himself or for any other person, firm, or
corporation, call upon, solicit, divert, or take away or attempt to solicit,
divert or take away any of the customers or patrons of the Company upon whom the
Executive called, whom he solicited, to whom he catered, or with whom he became
acquainted during his employment with the Company.
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11.3 Employees. The Executive will not, during the one-year period
immediately after termination of employment, directly or indirectly, either for
himself or for any other person, firm, or corporation, approach any employee of
the Company holding the position of Vice President or higher, as a prospective
employee of the Executive, nor shall the Executive within the same period accept
an employment application or grant a job interview to any such employee of the
Company.
11.4 Information. The Executive will not at any time, in any fashion, form,
or manner, either directly or indirectly, divulge, disclose, or communicate to
any person, firm, or corporation in any manner whatsoever any information of any
kind, nature, or description concerning any matters affecting or relating to the
business of the Company, including, without limitation, the names of any of its
customers, the prices it obtains or has obtained or at which it sells or has
sold its products, or any other information concerning the business of the
Company, its manner of operation, or its plans, processes, or other data of any
kind, nature, or description, without regard to whether any or all of the
foregoing matters would be deemed confidential, material, or important.
11.5 Records. All books, records, reports, accounts, and documents relating
in any manner to the Company's business or customers, whether prepared by the
Executive or otherwise coming into the Executive's possession, shall be the
exclusive property of the Company and shall be returned immediately to the
Company on termination of employment or at the Company's request at any time.
11.6 Breach. The parties hereby stipulate that, as between them, each of
the foregoing matters are important, material, and confidential, and gravely
affect the effective and successful conduct of the business of the Company, and
its goodwill, and that any breach of the terms of this Section 11 is a material
breach of this Agreement, from which the Executive may be enjoined and for which
the Executive shall also pay to the Company all damages (including, but not
limited to, compensatory, incidental, consequential and lost profits damages),
which arise from the breach, together with interest, costs and attorney's fees
to collect such damages. Any lawsuit for breach may be brought in Nassau County,
New York, which shall be a proper venue.
11.7 Savings Clause. To the extent that any of the foregoing restrictive
covenants are inconsistent with New York law, as to either time or geography,
they shall be reformed and enforced in accordance with New York law in any
arbitration or legal proceedings arising hereunder. This Section 11 is severable
from all other sections in this Agreement, and all of the subsections herein
(11.1 through 11.7, inclusive) are severable from one another.
12. ARBITRATION
Any controversy or claim arising out of or relating to this Agreement shall
be settled by arbitration in accordance with the Rules of the American
Arbitration Association, one arbitrator, and shall be enforceable in any court
having competent jurisdiction.
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13. NOTICES
All notices or communications hereunder shall be in writing, addressed as
follows:
To the Company:
Global Payment Technologies, Inc.
000X Xxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
To the Executive:
Xxxxxxx Xxxx
000 Xxxxxxx Xxxxx
Xxxxxxx Xxxx, Xxx Xxxx 00000
All such notices or communications shall be sent certified or registered
mail, return receipt requested, postage prepaid, addressed as above (or to such
other address as such party may designate in writing from time to time), and the
actual date of receipt as shown by the receipt therefor, shall determine the
time at which notice was given.
14. SEPARABILITY; LEGAL FEES
If any provision of this Agreement shall be declared to be invalid or
unenforceable, in whole or in part, such invalidity or unenforceability shall
not affect the remaining provisions hereof which shall remain in full force and
effect. The Company shall pay all legal fees and other fees and expenses which
the Executive may incur in entering into this Agreement, if executed (provided
the amount of such legal fees shall not exceed $25,000), or in obtaining, or
attempting to obtain (if ultimately successful), compensation or other benefits
under this Agreement.
15. BINDING EFFECT; ASSIGNMENT
This Agreement shall be binding upon and inure to the benefit of the heirs
and representatives of the Executive and the assigns and successors of the
Company, but neither this Agreement nor any rights hereunder shall be assignable
or otherwise subject to hypothecation by the Executive or by the Company. The
Company shall not assign this Agreement to any successor or assign of the
Company without the written consent of the Executive.
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16. GOVERNING LAW
This Agreement shall be construed, interpreted, and governed in accordance
with the laws of the State of New York.
17. ENTIRE AGREEMENT
This Agreement represents the entire agreement of the parties and shall
supersede any and all previous contracts, arrangements or understandings between
the Company and the Executive with respect to the subject matter hereof. The
Agreement may be amended at any time by mutual written agreement of the parties
hereto.
GLOBAL PAYMENT TECHNOLOGIES, INC.
By
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Name:
Title:
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Xxxxxxx Xxxx
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