Document:

Exhibit 10.38

 

TERMINATION
OF EMPLOYMENT AGREEMENT,

CONFIDENTIAL
SETTLEMENT AGREEMENT AND RELEASE OF ALL CLAIMS

 

The following documents the Termination of
Employment Agreement and Confidential Settlement Agreement and Release of All
Claims (“Agreement”) by and between Brendan P. Keegan (“Executive”), and
BancTec, Inc. (“BancTec”) (together, the “Contracting Parties”) regarding
any and all past and present claims and their future effects that have arisen
or could arise out of the Executive’s employment relationship with BancTec or
his separation there from.  This
Agreement is binding upon and extends to the Parties hereto and their:
individual officers; directors; shareholders; stockholders; employees; parents;
subsidiaries; affiliates; corporations; companies; divisions; partners;
representatives; heirs; executors; assigns; administrators; successors;
predecessors; d/b/a’s and assumed names; and insurers — whether specifically
mentioned hereafter or not.  This
Agreement will become effective upon the date it is fully executed by both
parties hereto (the “Effective Date”).

 

RECITALS

 

WHEREAS, Executive and
BancTec entered into that certain Employment Agreement dated May 27, 2007,
as amended on or about October 16, 2008 (First Amendment) and on or about June 3,
2008 (Second Amendment) (the “Employment Agreement”); and

 

WHEREAS, BancTec wishes to terminate the Employment
Agreement in the anticipation of the closing of a Transaction (as defined in
the Employment Agreement) for the ITSM business with QualxServ, LLC (“QualxServ”)
and that the Employment Agreement controls the Contracting Parties’ rights and
obligations regarding the termination;

 

WHEREAS, Executive and
BancTec desire to settle fully and finally all differences between them,
including, but in no way limited to, those differences raised or that could
have been raised in connection with the Executive’s employment with BancTec and
the Employment Agreement, which settlement constitutes the good faith
settlement of any potential claims in any manner arising from or connected with
Executive’s employment relationship with BancTec and/or the termination of his
employment.

 

1

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the
mutual promises contained in this Agreement, the sufficiency of which is hereby
acknowledged, the Contracting Parties do hereby agree as follows:

 

1.                                       Resignation and Settlement Amount.

 

a.               The Company and Executive
mutually agree that effective as of the Closing Date as defined in Section 3
of the Second Amendment to the Employment Agreement, the Executive shall be
considered to have resigned for Good Reason from all offices and positions held
by Executive in the Company and its subsidiaries upon terms and conditions set
forth in this Agreement.  However, the
Parties have agreed that if there is no Closing Date prior to March 1,
2009, this Agreement shall be null and void and the Employment Agreement shall
remain in effect as if this Agreement had not been executed.

 

b.              Until and including the Closing
Date, Executive shall continue to serve the Company in Executive’s current
capacity and, except as modified hereby, Executive and the Company will remain
subject to the terms and conditions of Executive’s Employment Agreement until
the Closing Date.

 

c.               In connection with Executive’s
resignation for Good Reason, BancTec agrees to the following:

 

i.                BancTec will pay to
Executive

 

A.           one (1) year’s base
salary (equal to $325,000), plus

 

B.             one times (1x) Executive’s
target bonus for calendar year 2008 (equal to $325,000), plus

 

C.             a Closing Bonus (as that
term is defined in the Second Amendment to the Employment Agreement) equal to
$300,000

 

(collectively,
the “Payments”); said Payments to be paid in a lump sum within fifteen (15)
business days following the Closing Date;

 

ii.             Executive shall have the
right to participate at BancTec’s expense, for a period of 18 months after the
Closing Date, in the Company’s Employee Benefits (other than vacation rights)
for which the Executive is eligible; provided however, that this right shall
terminate upon Executive’s employment by a company offering 

 

2

 

welfare benefits, whether or not the Executive elects to receive such
benefits; and

 

iii.          Executive is also entitled
to certain accrued rights as follows:

 

A.           Any accrued but unpaid
salary for any period of time worked prior to (and including) the Closing Date
and other amounts to which the Executive otherwise is entitled hereunder prior
to the date of the Executive’s termination of employment;

 

B.             Any bonus compensation
earned but not paid that relates to any calendar year ended prior to the date
of termination of employment, in accordance with the terms of the Bonus Plan
(however, the parties agree that no such unpaid bonus compensation has been
earned but not paid, so no additional amounts are owed pursuant to this
provision);

 

C.             Any accrued and unused
vacation and sick leave pay;

 

D.            Reimbursement for any
unreimbursed business expenses properly incurred by the Executive in accordance
with Company policy prior to the date of the Executive’s termination;

 

E.              Such Employee Benefits, if
any, as to which to the Executive (or his dependents or beneficiaries, as
applicable) may be entitled under the employee benefit plans of the Company or
its affiliates pursuant to the terms of such plans; and

 

F.              Vesting of equity incentive
awards as follows:

 

1)              All equity incentive awards
granted to Executive under the Company’s Amended and Restated 2007 Equity
Incentive Plan (originally granted as 335,000 incentive stock options and
60,000 shares of restricted stock, but subsequently adjusted for a
one-for-three reverse split), whether vested or unvested as of the Closing
Date, will immediately vest on the Closing Date, provided that the Effective
Date is before the Closing Date; otherwise, such awards will vest on the
Effective Date.

 

2)              Option awards will become
immediately exercisable and shall be exercisable until the earlier to occur of (1) the
end of the award term as set forth in the applicable award agreement(s) or
(2) ninety 

 

3

 

(90) days after the Closing Date, after which all such option awards
shall expire and be of no further force or effect.

 

3)              However, notwithstanding any
other provision of this Agreement, the vesting and exercisability provided for
in this Subsection 1.c.(iii)F.3) shall be subject to all provisions relating to
post-employment exercises set forth in the Company’s Amended and Restated 2007
Equity Incentive Plan and related award agreements.

 

2.                                       GENERAL RELEASE AND COVENANT NOT TO SUE.

 

a.               IN RETURN FOR
THE CONSIDERATION REFERENCED IN THIS AGREEMENT, THE EXECUTIVE, ON BEHALF OF HIMSELF,
HIS SPOUSE, ATTORNEYS, HEIRS, EXECUTORS, ADMINISTRATORS AND ASSIGNS (TOGETHER
THE “EXECUTIVE PARTIES”), HEREBY GENERALLY RELEASES AND
FOREVER DISCHARGES THE COMPANY AND ITS RESPECTIVE PREDECESSORS,
SUCCESSORS, ASSIGNS, PARENTS, SUBSIDIARIES AND AFFILIATES AND ITS RESPECTIVE
PAST AND PRESENT SHAREHOLDERS, DIRECTORS, OFFICERS, EMPLOYEES, AGENTS,
REPRESENTATIVES, PRINCIPALS, INSURERS, ACCOUNTANTS, AND ATTORNEYS (TOGETHER THE
“RELEASED PARTIES”) FROM ANY AND ALL CLAIMS, DEMANDS, LIABILITIES,
SUITS, DAMAGES, LOSSES, EXPENSES, ATTORNEYS’ FEES, OBLIGATIONS OR CAUSES OF
ACTION, KNOWN OR UNKNOWN OF ANY KIND AND EVERY NATURE WHATSOEVER, AND WHETHER
OR NOT ACCRUED OR MATURED, WHICH ANY OF THEM MAY HAVE, ARISING OUT OF OR
RELATING TO ANY TRANSACTION, DEALING, RELATIONSHIP, CONDUCT, ACT OR OMISSION,
OR ANY OTHER MATTERS OR THINGS OCCURRING OR EXISTING AT ANY TIME PRIOR TO AND
INCLUDING THE CLOSING DATE (INCLUDING, BUT NOT LIMITED TO, ANY CLAIM AGAINST
THE RELEASED PARTIES BASED ON, RELATING TO OR ARISING UNDER WRONGFUL DISCHARGE,
BREACH OF CONTRACT (WHETHER ORAL OR WRITTEN), TORT, FRAUD, FRAUDULENT
INDUCEMENT, DEFAMATION, SLANDER, UNJUST ENRICHMENT, COMPENSATION, EQUITY
INTEREST, NEGLIGENCE, 

 

4

 

PROMISSORY
ESTOPPEL, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED, ANY OTHER
CIVIL OR HUMAN RIGHTS LAW, THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967,
AMERICANS WITH DISABILITIES ACT, EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED, THE EQUAL PAY ACT, AS AMENDED, THE WORKER ADJUSTMENT AND
RETRAINING NOTIFICATION ACT, THE FAMILY AND MEDICAL LEAVE ACT, AS AMENDED, THE
FAIR LABOR STANDARDS ACT, AS AMENDED, THE SARBANES-OXLEY ACT, OR ANY OTHER
FEDERAL, STATE OR LOCAL LAW RELATING TO EMPLOYMENT OR DISCRIMINATION IN
EMPLOYMENT, INCLUDING THE TEXAS COMMISSION ON HUMAN RIGHTS ACT) IN ALL CASES ARISING
OUT OF OR RELATING TO THE EXECUTIVE’S EMPLOYMENT BY THE COMPANY OR INVESTMENT
IN THE COMPANY OR HIS SERVICES AS AN OFFICER OR EMPLOYEE OF THE COMPANY OR ITS
SUBSIDIARIES, OR OTHERWISE RELATING TO THE TERMINATION OF SUCH EMPLOYMENT OR
SERVICES; PROVIDED, HOWEVER, THAT SUCH GENERAL RELEASE WILL NOT
LIMIT OR RELEASE (i) ANY OF THE RELEASED PARTIES FROM ANY OF THEIR
RESPECTIVE OBLIGATIONS UNDER THIS AGREEMENT, (ii) ANY OF THE RELEASED
PARTIES’ RESPECTIVE OBLIGATIONS TO INDEMNIFY THE EXECUTIVE FROM THE COMPANY IN
RESPECT OF HIS SERVICES AS AN EMPLOYEE, OFFICER OR DIRECTOR OF THE COMPANY OR
ANY OF ITS SUBSIDIARIES AS PROVIDED BY LAW OR THE CERTIFICATES OF INCORPORATION
OR BY-LAWS (OR LIKE CONSTITUTIVE DOCUMENTS) OF THE COMPANY OR ANY SUBSIDIARY
THEREOF, (iii) ANY OF THE RELEASED PARTIES’ RESPECTIVE OBLIGATIONS UNDER
ANY STOCK OPTION AGREEMENT THAT IS IN EFFECT WITH RESPECT TO STOCK OPTIONS THAT
HAVE BEEN GRANTED TO EXECUTIVE PRIOR TO THE CLOSING DATE, (iv) CLAIMS OR
RIGHTS THE EXECUTIVE MIGHT HAVE UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT
OF 1967 (AND ANY AMENDMENTS THERETO) THAT ARISE AFTER THE DATE THE EXECUTIVE
SIGNS THE RELEASE OR (v) CLAIMS ARISING SOLELY AFTER THE CLOSING DATE.

 

5

 

b.              THE EXECUTIVE,
ON BEHALF OF HIMSELF AND THE EXECUTIVE PARTIES, HEREBY COVENANT FOREVER NOT TO
ASSERT, FILE, PROSECUTE, MAINTAIN, COMMENCE, INSTITUTE (OR SPONSOR OR
FACILITATE ANY PERSON IN CONNECTION WITH THE FOREGOING), ANY COMPLAINT OR
LAWSUIT OR ANY LEGAL, EQUITABLE OR ADMINISTRATIVE PROCEEDING OF ANY NATURE,
AGAINST ANY OF THE RELEASED PARTIES IN CONNECTION WITH ANY MATTER RELEASED IN
THIS RELEASE, AND REPRESENT AND WARRANT THAT NO OTHER PERSON OR ENTITY HAS
INITIATED OR, TO THE EXTENT WITHIN HIS CONTROL, WILL INITIATE ANY SUCH
PROCEEDING ON HIS BEHALF.  EVEN IF A
COURT RULES THAT EXECUTIVE, OR ANOTHER PARTY ON HIS BEHALF, MAY FILE A
LAWSUIT AGAINST THE COMPANY OR ANY OF THE RELEASED PARTIES ARISING FROM
EXECUTIVE’S EMPLOYMENT AT THE COMPANY OR ANY OF THE RELEASED PARTIES, OR THE
SEPARATION THEREOF, OR BASED ON ANY OTHER SET OF FACTS OR EVENTS OCCURRING
PRIOR TO THE EFFECTIVE DATE, EXECUTIVE AGREES NOT TO ACCEPT ANY MONEY DAMAGES
OR ANY OTHER RELIEF IN CONNECTION WITH ANY SUCH LAWSUIT.  EXECUTIVE UNDERSTANDS THAT THIS RELEASE
EFFECTIVELY RELEASES AND WAIVES ANY RIGHT HE
MIGHT HAVE TO SUE THE COMPANY OR ANY OF THE RELEASED PARTIES FOR ANY CLAIM
ARISING OUT OF OR RELATED TO HIS EMPLOYMENT AT THE COMPANY OR ANY OF THE
RELEASED PARTIES, THE SEPARATION OF HIS EMPLOYMENT, ANY AGREEMENTS BETWEEN THE
COMPANY OR THE RELEASED PARTIES AND EXECUTIVE (INCLUDING, BUT NOT LIMITED TO,
THE EMPLOYMENT AGREEMENT BETWEEN THE EXECUTIVE AND THE COMPANY DATED MAY 27,
2007), AS AMENDED, OR BASED ON ANY OTHER SET OF FACTS OR EVENTS OCCURRING PRIOR
TO THE EFFECTIVE DATE. PROVIDED HOWEVER THAT THE COVENANTS NOT TO SUE CONTAINED
HEREIN DO NOT APPLY TO THE SAME FOUR EXCEPTIONS SET FORTH IMMEDIATELY ABOVE IN SECTION 2(a) (i),
(ii), (iii) and (iv).

 

c.               EXECUTIVE
REPRESENTS THAT EXECUTIVE KNOWS OF NO CLAIM THAT 

 

6

 

EXECUTIVE
HAS THAT HAS NOT BEEN RELEASED BY THIS SECTION 2.

 

3.                                       Survival
of Employment Agreement Provisions.  Except as it reasonably necessary for
Executive to comply with the terms of his Consultant Agreement with QualxServ,
the terms of which have been made known to BancTec, solely to help QualxServ
assimilate the ITSM business, to pursue new customers for QualxServ and to service
customers and accounts assigned to QualxServ pursuant to the Transaction, notwithstanding
Section 11 of this Agreement, the provisions of Sections VIII, IX and X of
the Employment Agreement are incorporated herein by reference, shall survive
after the Effective Date and expiration of the Employment Agreement and shall continue
in full force and effect as though expressly set forth in this Agreement.  Executive hereby ratifies Sections VIII, IX
and X of the Employment Agreement. 
Executive further acknowledges and agrees that (a) Executive has
received Protected Information (defined in the Employment Agreement); (b) that
the Company is relying on Executive’s continuing agreement to comply with
Sections VIII, IX and X of the Employment Agreement in entering into this
Agreement; (c) Executive is receiving consideration for his agreement to
continue to comply with Sections VIII, IX and X of the Employment Agreement;
and (d) Section IX(A)(3) of the Employment Agreement shall be
amended and/or interpreted to also prohibit the Executive from servicing any
actual or known prospective customer of the Company to become a customer of any
third party engaged in a Restricted Business (as defined in the Employment
Agreement).  In addition, Executive and
BancTec agree to keep completely confidential the amount and terms of this
Agreement and the circumstances giving rise to this Agreement, and will not
disclose, directly or indirectly, any such information to any person or entity
with the exception that the Contracting Parties may disclose information
regarding this Agreement to their attorneys, spouses, and to a professional tax
advisor or tax return preparer for the limited purpose of obtaining advice
regarding or preparing such tax return or returns as may be necessary and
BancTec may advise its corporate officers and HR management personnel.  In the event that the Contracting Parties
make such limited disclosure to such persons as authorized by this Agreement,
the Contracting Party making such disclosure shall affirmatively instruct such
persons to abide strictly by the conditions of confidentiality imposed
hereunder.

 

7

 

4.                                       Reimbursement
of Legal Expenses.  The
Company shall reimburse Executive for up to $5,000 of Executive’s costs, expert
fees, attorneys’ fees, expenses, and other fees incurred in connection with
this Agreement.  Otherwise, the
Contracting Parties shall each bear their own costs, expert fees, attorneys’
fees, expenses, and other fees incurred in connection with this Agreement.  Executive acknowledges that the Company’s
payment of the legal expenses provided for in this Section 4 is
consideration that Executive is not already entitled to and is in consideration
for his signing the Agreement.

 

5.                                       Tax Consequences of Settlement Payment and Survival of Section III(D).  Executive acknowledges that he
is and shall be solely responsible for all federal, state and local taxes that
he may owe by virtue of receipt of any portion of the monetary payment provided
under this Agreement.  Executive agrees
to indemnify and hold BancTec harmless from any and all liability, including,
without limitations, all penalties, interest and other costs that may be
imposed by the Internal Revenue Service or other governmental agencies
regarding any of his tax obligations that may arise from the monetary
consideration made to BancTec under this Agreement.  The provisions of Section III(D) of
the Employment Agreement are incorporated herein by reference, shall survive
after the Effective Date and shall continue in full force and effect as though
expressly set forth in this Agreement.

 

6.                                       Return
of Property.  With the
exception of copies of contract documents under which the Transaction is
expected to be consummated,, on, before, or promptly after the Closing Date,
Executive will turn over to the Company all papers, files, notes, memoranda,
keys, access cards, customer lists, records, reports, mobile or cell phones,
pagers, mobile electronic mail devices, computers, other tangible and
intangible property, computer programs, computer files, data and all other documents
and materials, and all copies thereof whether prepared by Executive or others,
which contain Company information or relate or belong to the Company of which
Executive obtained possession during the course of his employment with the
Company, other than this Agreement and documentation pertaining to the
Executive’s executive benefits.  By
executing and delivering this Agreement, Executive represents and warrants to
the Company that Executive will not retain in his possession copies or notes or
other extracts, whether in paper or electronic form, of or from any information
pertaining or belonging to the 

 

8

 

Company or any business or
property of the Company, other than this Agreement and documentation pertaining
to the Executive’s executive benefits. 
This representation and warranty survives the execution of the Agreement
indefinitely.

 

7.                                       Non-disparagement.  The Executive and the Company shall not,
directly or indirectly, make or cause to be made any disparaging, denigrating,
derogatory or other negative, misleading or false statement orally or in
writing to any person or entity, including, without limitation, members of the
investment community, press, suppliers, customers, competitors, employees, agents,
lenders and advisors to the Company or its subsidiaries or affiliates, about the
other or any Released Party or the business strategy or plans, policies,
practices or operations of the Company or its subsidiaries or affiliates.

 

8.                                       Governing Law.  This
Agreement is made and delivered in the State of Texas, and shall in all
respects be interpreted, enforced, and governed under the laws of said state.

 

9.                                       Arbitration
and Venue Provisions.

 

a.               To the extent permitted by
law, all claims or disputes arising out of or relating to the construction,
meaning or effect of any provision of the Agreement, the Executive’s employment
relationship with the Company, or the termination or cessation of such
employment relationship (collectively, “Disputes”), shall be resolved by
binding and confidential arbitration in accordance with the procedures set
forth in this Section 9, including, but not limited to, any claims:

 

i.            that Executive may have
against or with the Company, the Released Parties or any of their parent companies,
subsidiaries, affiliates, predecessors, successors, and all of their present or
former officers, trust managers, directors, managers, representatives,
employees, agents, attorneys, employee benefit programs, and the trustees,
administrators, fiduciaries and insurers of such programs, as well as all
representatives of any of the foregoing entities; or

 

ii.         that Company may have
against or with Executive.

 

b.              All arbitrations shall be administered by a single arbitrator
(the “Arbitrator”) admitted to practice law in Texas for ten years or
more chosen in accordance with the American Arbitration Association Rules, or
any successor thereto.  Any such
arbitration proceeding shall take place in Dallas County, Texas.  The arbitration proceeding and all related
documents will be confidential, unless disclosure is required by law. The
Arbitrator will 

 

9

 

have the authority to award the same
remedies, damages, and costs that a court could award, including but not limited
to the right to award injunctive relief in accordance with the other provisions
of this Agreement.  Further, the
Contracting Parties specifically agree that, in the interest of minimizing
expenses and promoting early resolution of claims, the filing of dispositive
motions shall be permitted and that prompt resolution of such motions by the
Arbitrator shall be encouraged.  The
Arbitrator shall issue a written reasoned award explaining the decision within
180 days after initiation of the arbitration pursuant to this Section 9,
the reasons for the decision, and any damages awarded.  The Arbitrator’s decision will be final and
binding.  The judgment on the award
rendered by the Arbitrator may be entered in any court having jurisdiction
thereof.  This provision can be enforced
under the Federal Arbitration Act.  The
Arbitrator shall determine the prevailing Party in the arbitration.  Each Contracting Party shall be required to
bear their own costs and attorneys’ fees and expenses incurred in arbitration,
but the Company shall pay the American Arbitration Association fees and the
Arbitrator’s fees in any arbitration.

 

c.               As the sole exception to the exclusive and binding nature of the
arbitration commitment set forth above, the Contracting Parties agree that the
Company may resort to Texas state courts having equity jurisdiction in and for
Dallas County, Texas and the United States District Court for the Northern
District of Texas, Dallas Division
in order to request temporary, preliminary, and permanent injunctive, specific
performance, or other equitable relief, including, without limitation, specific
performance, to enforce the terms of Sections 3 and 7 of this Agreement,
without the necessity of proving inadequacy of legal remedies or irreparable
harm or posting bond or giving notice to the maximum extent permitted by
law.  However, nothing in this Section 9.c.
should be construed to constitute a waiver of any Parties’ rights and
obligations to arbitrate regarding all matters other than those specifically addressed
in this Section 9.c. or to seek injunctive relief, specific performance,
or any other equitable relief from the Arbitrator.

 

d.              Should a court of competent jurisdiction determine that the scope
of the arbitration and related provisions of this Agreement are too broad to be
enforced as written, the Contracting Parties intend that the court reform the
provision in question to such narrower scope as it determines to be reasonable
and enforceable.

 

10

 

10.                                 Severability of Provisions.  The Contracting Parties agree that, should
any part, term or provision of this Agreement be declared or determined by any
agency or court of competent jurisdiction to be illegal or invalid, the
validity of the remaining parts, terms, or provisions shall not be affected
thereby, and said illegal or invalid part, term or provision shall be deemed
not to be a part of this Agreement.

 

11.                                 Entire
Agreement.  This Agreement contains the entire agreement
and understanding between Executive and BancTec with respect to any and all
disputes or claims that Executive has, or could have had, against BancTec as of
the date this Agreement is executed, and supersedes all other agreements
between Executive and BancTec with regard to such disputes or claims.  This Agreement shall not be changed unless in
writing and signed by Executive and BancTec.

 

12.                                 Full Knowledge and Volition.  Executive acknowledges that no
representation, promise or inducement has been made other than as set forth in
this Agreement, and that Executive enters into this Agreement without reliance
upon any other representation, promise or inducement not set forth herein.  Executive also acknowledges that: (a) he
has been advised to consult an attorney prior to signing this Agreement; (b) he
has read carefully and had received appropriate time to consider this Agreement
and to consult with his attorney concerning its contents and effect; (c) he
understands the Agreement and acknowledges that he knowingly and voluntarily
waived the rights identified herein; and (e) he has determined that
entering into this Agreement is in his best interests.

 

13.                                 Counterparts.  This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same instrument.

 

*** Remainder of page intentionally
left blank. ***

 

11

 

WHEREFORE, Executive and
BancTec have caused this Confidential Settlement Agreement and Release of All
Claims to be executed on the dates indicated below:

 

	
   

  	
  Executive

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
   

  	
  Date:

  	
   

  
	
   

  	
   

  
	
   

  	
  and

  
	
   

  	
   

  
	
   

  	
  BancTec, Inc.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  J. Coley Clark

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Chairman & Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  

 

12Exhibit
10.39

 

 

BancTec Executive Incentive Plan — FY 2009

 

	
  Participant Name:

  	
  Participant’s Leader:

  
	
  Participant Title:

  	
  Business Unit:

  
	
  Target Percentage:

  	
   

  

 

Individual Participant
Allocation Levels (fill in percentages per Section 7 below):

 

Business Unit             
Corporate             
Personal Objectives      

 

BancTec’s Executive
Incentive Plan (“EIP” or the “Plan”) is an incentive plan designed to reward
key BancTec leaders for their contributions in helping BancTec meet 2009
financial objectives. The payout of the plan will be determined on achieving
EBITDA targets.

 

Basics of the Executive Incentive Plan

 

1.             Executive Incentive Target Percentage.  Each participant will be assigned an  Executive Incentive Target Percentage which will be disclosed to the
participant by his or her leader. This will be a percentage of the participant’s
actual earnings during 2009 minus commissions, awards, draws, prizes and any
additional or special bonus payments.

 

2.             Eligibility.  BancTec employees eligible for the 2009 Plan
are the Chief Executive Officer, Senior Vice Presidents, the Vice President of
Marketing, the General Counsel and their direct reports.

 

3.             Corporate Threshold:  For 2009, no Executive Incentive bonus will be
paid unless BancTec achieves Net EBITDA (Earnings Before Interest, Taxes,
Depreciation and Amortization) of at least $25 million.

 

4.             Corporate Payout:  If BancTec’s Net EBITDA is above the Corporate
Threshold, then the Executive Incentive Payout Percentage will be scaled
according to the following table:

 

	
   

  	
  Net EBITDA

  	
   

  	
  Payout %

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  $25 million

  	
   

  	
  20

  	
  %

  	
   

  	
   

  
	
   

  	
  $26 million

  	
   

  	
  50

  	
  %

  	
   

  	
   

  
	
   

  	
  $27 million

  	
   

  	
  100

  	
  %

  	
   

  	
   

  
	
   

  	
  $28 million

  	
   

  	
  110

  	
  %

  	
   

  	
   

  
	
   

  	
  $29 million

  	
   

  	
  120

  	
  %

  	
   

  	
   

  
	
   

  	
  $30 million and above

  	
   

  	
  130

  	
  %

  	
   

  	
   

  

 

5.             Unit Performance:  If BancTec’s
performance is above the Corporate Threshold, then the Unit Executive Incentive
Payout Percentage will be scaled according to the following

 

1

 

table. Gross EBITDA is defined as Earnings Before
Interest, Taxes, Depreciation and Amortization and bonus accruals.

 

	
   

  	
  Business Unit Gross

  	
   

  	
   

  	
   

  
	
   

  	
  EBITDA Attainment

  	
   

  	
  Payout %

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  85%

  	
   

  	
   

  	
  20%

  	
   

  	
   

  
	
   

  	
  90%

  	
   

  	
   

  	
  50%

  	
   

  	
   

  
	
   

  	
  100%

  	
   

  	
   

  	
  100%

  	
   

  	
   

  
	
   

  	
  Above
  100%

  	
   

  	
   

  	
  Equal
  to the lesser of the percentage of Business  Unit Gross EBITDA attainment or Corporate Net EBITDA attainment, but
  not less than 100%

  	
   

  

 

6.             Personal
Objectives:  Personal objectives development and
measurement will be handled by the Business Unit Senior Vice President (or Vice
President, if there is no Senior Vice President). Personal objectives must be
specified by the relevant Business Unit leader and provided to the Human
Resources department before July 31, 2009 for the Participant to be
eligible for that portion of the Participant’s bonus.

 

7.             Allocation
Percentage.  All participants at the CEO and SVP level
(including the General Counsel and Vice President of Marketing) will be
assigned an Allocation Percentage which is based 100 percent on the total
Corporate performance target. Participants at the GM/VP level will have an
allocation percentage based on a ratio of 50 percent Corporate performance and
50 percent on applicable Business Unit performance. Director level participants
(including Finance VPs and Directors) will have an allocation percentage based
on a ratio of 75 percent Corporate performance and 25 percent personal
objectives.

 

NOTE: Notwithstanding any other
provision of this Plan, no Executive Incentive Plan bonus will be paid to any
participant unless the minimum Corporate Threshold is attained.

 

8.             Examples:

 

(a)           Assume a Participant’s annual salary is $100,000, his Executive Incentive
Plan  Target Percentage is 25 percent, and because he is
an SVP his Allocation Percentage indicates that 100 percent of his Executive
Incentive Bonus will be based upon the Corporate performance target.

 

(i)            If BancTec achieves Net EBITDA attainment of $27 million, the  Participant’s Executive Incentive Bonus will be $25,000.

 

	
   

  	
  Corporate Net EBITDA

  	
   

  	
  $

  	
  27 million

  	
   

  	
   

  	
   

  
	
   

  	
  EIP funding level (see table above)

  	
   

  	
  100

  	
  %

  	
   

  	
   

  

 

	
   

  	
  Potential Bonus Amount

  	
   

  	
   

  	
   

  
	
   

  	
  Total potential payout

  	
   

  	
  $

  	
  25,000

  	
   

  
	
   

  	
  Plan funding level

  	
   

  	
  100

  	
  %

  
	
   

  	
  Total Actual Bonus Payout

  	
   

  	
  $

  	
  25,000

  	
   

  

 

2

 

(ii)           If BancTec achieves Net EBITDA
attainment of $26 million, the Participant’s Executive Incentive Bonus will be
$12,500:

 

	
   

  	
  Potential Bonus Amount

  	
   

  	
   

  	
   

  
	
   

  	
  Total potential payout

  	
   

  	
  $

  	
  25,000

  	
   

  
	
   

  	
  Plan funding level

  	
   

  	
  50

  	
  %

  
	
   

  	
  Total Actual Bonus Payout

  	
   

  	
  $

  	
  12,500

  	
   

  

 

(b)           Assume a
Participant’s annual salary is $100,000 and her Executive Incentive Target
Percentage is 25 percent. Assume also that this Participant is at the GM/VP
level with an Allocation Percentage based 50 percent on the Corporate
performance target and 50 percent on the relevant Business Unit’s performance
target.

 

If
BancTec achieves Net EBITDA attainment of 27 million and the Business Unit
achieves 90% of its Gross EBITDA target, the Participant’s bonus will be
$18,750.

 

	
   

  	
  Corporate portion of payout:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Corporate Target Payout Amount (25,000 X 50%):

  	
   

  	
  $

  	
  12,500

  	
   

  	
   

  	
   

  
	
   

  	
  Corporate Payout %

  	
   

  	
  100

  	
  %

  	
   

  	
   

  
	
   

  	
  Corporate Payout

  	
   

  	
  $

  	
  12,500

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Business Unit portion of payout:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Unit Target Payout Amount (25,000 X 50%):

  	
   

  	
  12,500

  	
   

  	
   

  	
   

  
	
   

  	
  Unit Payout %

  	
   

  	
  50

  	
  %

  	
   

  	
   

  
	
   

  	
  Unit Payout

  	
   

  	
  $

  	
  6,250

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Total Actual Bonus Payout: Corporate plus Unit
  Payout

  	
   

  	
  $

  	
  18,750

  	
   

  	
   

  	
   

  

 

(c)           Assume a
Participant’s annual salary is $100,000 and her Executive Incentive Target
Percentage is 25 percent. Assume also that this Participant is at the Director
level with an Allocation Percentage based 75 percent on the Corporate
performance target and 25 percent on individual performance objectives. Assume
also that the individual achieved 70% of her assigned performance objectives.

 

If
BancTec achieves Net EBITDA attainment of 28 million, the Participant’s bonus
will be $25,000.

 

	
   

  	
  Corporate portion of payout:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Corporate Target Payout Amount (25,000 X 75%):

  	
   

  	
  $

  	
  18,750

  	
   

  	
   

  	
   

  
	
   

  	
  Corporate Payout %

  	
   

  	
  110

  	
  %

  	
   

  	
   

  
	
   

  	
  Corporate Payout

  	
   

  	
  $

  	
  20,625

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Performance Objective portion of payout:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Objective Target Payout Amount (25,000 X 25%):

  	
   

  	
  $

  	
  6,250

  	
   

  	
   

  	
   

  
	
   

  	
  Objective Payout % Achieved

  	
   

  	
  70

  	
  %

  	
   

  	
   

  
	
   

  	
  Objective Payout (multiply together)

  	
   

  	
  $

  	
  4,375

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Total Actual Bonus Payout:

  	
   

  	
  $

  	
  25,000

  	
   

  	
   

  	
   

  

 

3

 

9.             Revenue Growth Incentive.  If BancTec’s 2009 corporate revenues exceed BancTec’s
2008 revenues by ten percent (10%) or more (after adjusting for divestitures
and currency  fluctuations), to the
extent that sufficient EBITDA is earned in excess of the Corporate Threshold in
order to cover the cost of this Revenue Growth Incentive, each individual
Participant’s Total Actual Bonus Payout (calculated in accordance with the
other provisions of this Plan) will increase by 20% of such calculated Total
Actual Bonus Payout. For example, if a Participant’s Total Actual Bonus Payout
calculated pursuant to this Plan is $20,000, such Participant will receive a
20% increase (or $4,000) such that the bonus actually paid shall be $24,000.

 

Questions?

 

If you have any questions regarding the 2009
Executive Incentive Plan, please contact the Director of Human Resources.

 

Other Executive Incentive Plan
Provisions

 

1.             The term “Business Unit” as used herein shall mean a) the EMEA
business unit, b) the Americas business unit, or, for all persons not in either
the EMEA or Americas business units, c) the Corporate business unit.

 

2.             Worldwide Application:  The EIP will be applied to BancTec business
units worldwide unless contrary to applicable law.

 

3.             No Change to Employment Terms:  None of the information relating to the 2009
EIP contained herein is intended to or will give special rights or privileges
to specific individuals or to entitle any person to remain employed by BancTec.
Although some of the guidelines set forth herein may suggest that certain
procedures or steps be followed, these procedures should not be interpreted as
altering an individual’s employment relationship and do not constitute an
employment contract or other commitment to continued employment or compensation
of any kind. In addition, any bonus under this Plan is not to be construed or
interpreted as an integral part of the participant’s compensation.
Participation in the Plan in any given year does not guarantee participation in
the Plan in subsequent years nor is there any guarantee the Plan itself will be
in effect in subsequent years.

 

4.             Extraordinary Gains and Losses:  EBITDA calculations will exclude any gain or
loss on the sale of assets or extraordinary items not included in the relevant
budget.

 

5.             Foreign Exchange Rate Gain and Losses:  EBITDA calculations will exclude foreign
exchange rate gain or losses.

 

6.             Non-cash Compensation Expenses:  EBITDA calculations will exclude non-cash
compensation expenses.

 

7.             Local Currency:  All EIP bonuses will be paid in local
currency.

 

8.             Bank Covenants:  Bank Covenant compliance is required in order
to pay EIP bonuses unless compliance has been waived by the relevant lender(s).

 

9.             Time of Payment:  EIP bonus payments are scheduled to be made
(less applicable withholding taxes and routine deductions) as soon as
practicable following completion of the corporate fiscal year 2009 audit but in
no event later than June 30, 2010.

 

4

 

10.           Employment Requirement:  Unless otherwise specified by a written
contractual arrangement, to be eligible to receive any bonuses pursuant to this
Plan, the participant must be an active employee of BancTec on the date BancTec
pays the 2009 EIP bonuses with one exception: if an employee (a) is
involuntarily separated from BancTec after December 31, 2009 but before the
date bonuses are paid and (b) such employee becomes eligible for extended
severance payments under BancTec’s then-current Severance Policy (including
signing a general release and complying with all other requirements specified
in such Severance Policy), then such employee will be eligible to receive his
or her bonus on the date EIP bonuses are paid. Other than as specified in the
immediately preceding sentence, separation from BancTec for any reason prior to
receiving a bonus payment pursuant to EIP will result in forfeiture of all
potential payment eligibility regardless of any objectives achieved or company,
business unit or regional financial performance while employed.

 

11.           Discretionary Awards:  Notwithstanding any other provision of this
Plan, the amount of the bonus, if any, will be based upon corporate, business
unit and regional financial performance as well as the participant’s ongoing
performance which is to be determined at the sole discretion of the BancTec
Chief Executive Officer. BancTec’s Chief Executive Officer has the sole
discretion to determine the amount, if any, or no amount for which a
participant may be eligible. In the case of the Chief Executive Officer, such
discretionary authority shall be vested in the Compensation Committee of the
Board of Directors. Notwithstanding the foregoing, the Compensation Committee
of the Board of Directors and/or the full Board of Directors may increase,
reduce or eliminate any payout under this Plan or alter this plan at their
discretion.

 

12.           Proration:  Bonus payouts will be prorated for the
following individuals unless prohibited by applicable law: participants who
become eligible after January 1, 2009 based upon the date they were added
to EIP; participants removed from EIP due to change in position or transfer (if
objectives have been successfully completed during their eligibility period);
and participants who were on Short-Term Disability or Long-Term Disability
during the Plan year.

 

13.           Term:  This Plan is effective as of January 1,
2009, and will remain in effect through the fiscal year ending December 31,
2009.

 

14.           Amendment; Cancellation:  BancTec reserves the right, in its sole
discretion, to amend or cancel this Plan at any time without notice.

 

15.           Disputes:  Any disputes relating to this Plan must be in
writing and addressed to the Chief Executive Officer of BancTec, Inc. All
decisions of the Chief Executive Officer are final.

 

16.           Governing Law:  This Plan is issued from the Company’s
worldwide headquarters in Irving, Texas, and shall be governed in accordance
with the laws of the State of Texas unless applicable law provides otherwise.

 

 

	
   

  	
   

  	
   

  
	
  Participant
  Signature :

  	
   

  	
  Leader’s
  Signature :

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Printed
  Name 

  	
  Date     

  	
   

  	
  Printed
  Name

  	
  Date     

  
					

 

*acceptable
signatures are electronic digital or handwritten

*approved objectives and a signed Plan document must be submitted to HR

 

5

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