Document:

Exhibit 10.3

 

 

RESERVE CAPACITY INTEGRATION AGREEMENT

 

Dated as of May 5, 1987

 

between

 

PACIFICORP, dba PACIFIC POWER & LIGHT COMPANY

 

and

 

BLACK HILLS CORPORATION, dba BLACK HILLS POWER AND LIGHT COMPANY

 

 

 

RESERVE CAPACITY INTEGRATION AGREEMENT

 

TABLE OF CONTENTS

 

	
  Section 1.

  	
  Term

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section 2.

  	
  Definitions

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section 3.

  	
  Exchange
  of Reserve Capacity

  	
  2

  
	
   

  	
   

  	
   

  
	
  Section 4.

  	
  Relocation
  of Combustion Turbines

  	
  4

  
	
   

  	
   

  	
   

  
	
  Section 5.

  	
  Fuel

  	
  4

  
	
   

  	
   

  	
   

  
	
  Section 6.

  	
  Points
  of Delivery

  	
  4

  
	
   

  	
   

  	
   

  
	
  Section 7.

  	
  Schedules

  	
  4

  
	
   

  	
   

  	
   

  
	
  Section 8.

  	
  Payment
  Schedules

  	
  5

  
	
   

  	
   

  	
   

  
	
  Section 9.

  	
  Uncontrollable
  Forces

  	
  5

  
	
   

  	
   

  	
   

  
	
  Section 10.

  	
  Limitation
  of Liability

  	
  5

  
	
   

  	
   

  	
   

  
	
  Section 11.

  	
  Government
  Regulations

  	
  5

  
	
   

  	
   

  	
   

  
	
  Section 12.

  	
  Arbitration

  	
  6

  
	
   

  	
   

  	
   

  
	
  Section 13.

  	
  Notices

  	
  6

  
	
   

  	
   

  	
   

  
	
  Section 14.

  	
  Assignment

  	
  7

  
	
   

  	
   

  	
   

  
	
  Section 15.

  	
  Choice
  of Law

  	
  7

  

 

EXHBITS

 

	
  Exhibit A
  -

  	
  Combustion
  Turbines situated at Rapid City, South Dakota

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit B
  -

  	
  Calculation
  of average annual production cost

  	
   

  

 

 

RESERVE CAPACITY INTEGRATION AGREEMENT

 

This
Reserve Capacity Integration Agreement, dated as of the 5th day of May, 1987, by and between Pacific Power &
Light Company (Pacific), and Black Hills Power and Light Company, an assumed
business name of Black Hills Corporation, a South Dakota corporation (Black
Hills).

 

RECITALS

 

WHEREAS
Pacific and Black Hills are joint lessees of the 330 megawatt Wyodak Power
Facility in Gillette, Wyoming; and

 

WHEREAS
Pacific, by virtue of a December 31, 1983 Power Sales Agreement, is Black
Hills’ principal outside supplier of firm electric power and energy; and

 

WHEREAS
Pacific and Black Hills have significant diversity of load patterns and
wholesale marketing opportunities; and

 

WHEREAS
the aforementioned circumstances create opportunities for the integration of
the parties; reserve capacity for the purpose of increasing Black Hills’ system
reliability, better matching Black Hills loads and resources, and enhancing
Pacific’s wholesale marketing opportunities;

 

NOW,
THEREFORE, Pacific and Black Hills wish to exchange and integrate their reserve
capacity upon the following terms and conditions:

 

Section 1.                    Term. This
Agreement shall commence on July 1, 1987 and terminate on June 30,
2012.

 

Section 2.                    Definitions.

 

(a)                                  “Operating and
Maintenance Costs” shall mean all costs of repairs, operating and maintenance
expenses, administrative, accounting and general expenses, other than property
tax and insurance expenses, incurred by Black Hills in the operation and
maintenance of the Combustion Turbines, and including but not limited to:

 

1.  repair costs, losses,
damages, judgments, defense costs and expense sustained or incurred by Black
Hills,

 

1

 

directly
or indirectly, in connection with the performance of services to be performed
hereunder except for such repair costs, losses, damages, judgments, defense
costs and expenses sustained or incurred as a result of Black Hills’
negligence;

 

2.                                       an appropriate
allocation for administration and general expenses;

 

3.                                       costs of
acquiring and maintaining an inventory of fuel oil for Pacific’s account as
required herein; provided, Black Hills shall pay the costs associated
with acquiring and maintaining fuel oil in the storage tanks for its purposes;

 

4.                                       costs of
electric power and energy, at applicable rates, furnished by Black Hills to
service the Combustion Turbines, including heating the fuel oil inventory for
which Pacific is responsible; and

 

5.                                       any taxes
levied specifically on operators of combustion turbines or the generation from
combustion turbines.

 

(b)                                 “Combustion
Turbines” shall mean those facilities situated at Rapid City, South Dakota and
described in Exhibit A to this Agreement.

 

(c)                                  “Incremental
Cost of Generation” means for any hour the highest average annual production
cost ($/MWh) of any of Pacific’s owned or leased coal-fired plant (excluding
lease costs) which was operating during such hour where such production cost
shall be determined from Pacific’s most recently filed FERC Form No. 1
or its successor form and where the fuel cost component of production cost
shall be increased by 7% for system losses. 
An example of a calculation of average annual production cost is
contained in Exhibit B to this Agreement.

 

Section 3.                    Exchange of
Reserve Capacity.

 

(a)                                  Black Hills
maintains the Combustion Turbines on its system to satisfy its system reserve
requirements.  Black Hills warrants that
the Combustion Turbines are in good working order as of the date of this
Agreement.

 

(b)                                 Black Hills
hereby assigns to Pacific the right to use the Combustion Turbines as specified
in this Agreement.

 

(c)                                  Black Hills
shall retain day-to-day operational control of the Combustion Turbines and keep
all necessary operating 

 

2

 

permits
in place.  Black Hills shall maintain
liability and property insurance on the Combustion Turbines consistent with
prudent utility practice and show Pacific as an additional insured, provided
that showing Pacific as an additional insured does not increase the insurance
premiums paid by Black Hills.  Black
Hills shall be responsible for maintaining the Combustion Turbines in good
working order and shall run them for Pacific’s account when requested by
Pacific to do so.  Black Hills shall
proceed with any required repair of the Combustion Turbines with all reasonable
dispatch.  Any insurance proceeds
associated with damage to the Combustion Turbines shall be applied to the cost
of repair.  Pacific shall reimburse to
Black Hills the Operation and Maintenance Costs of the Combustion Turbines and
Pacific shall pay all fuel costs associated with Pacific’s use of them.

 

(d)                                 If the
Combustion Turbines suffer sufficient wear or obsolescence that they cannot be
kept in good working order at a reasonable cost, they shall be replaced at
Pacific’s expense, in which event Pacific shall be responsible for insurance
and property taxes thereon.  Upon the
termination of this Agreement, Black Hills shall pay Pacific an amount equal to
the then-depreciated book value of any Combustion Turbines replaced by Pacific
and ownership of such Combustion Turbines shall then transfer to Black Hills.

 

(e)                                  For the Term of
this Agreement, Pacific will make available up to 100 megawatts of capacity
from its system to meet Black Hills’ reserve requirements.  Such reserve capacity shall be available to
Black Hills only at such time as consistent with prudent utility practice,
Black Hills would, absent this Agreement, have made use of the Combustion
Turbines.  At such times as Black Hills
makes use of its right to this system reserve capacity, it shall pay Pacific
for energy taken with the capacity based upon Pacific’s then-prevailing
Incremental Cost of Generation, not to exceed fuel costs associated with
operating the Combustion Turbines.  If
Black Hills concludes that because of transmission outages, or low voltage
conditions on Black Hills’ system, it is necessary for it to operate the
Combustion Turbines in lieu of taking reserve system capacity from Pacific, it
may do so, but shall be responsible for paying the associated fuel costs as
well as a pro rata share of any taxes levied on the basis of the level of
generation form the Combustion Turbines. 
Black Hills’ right to use the Combustion Turbines, when required by
prudent utility practice to do so, shall be superior to Pacific’s.

 

(f)                                    Pacific will
maintain an inventory of no less than 250,000 gallons of fuel for its use of
the Combustion Turbines and Black Hills shall maintain an inventory of no less
than 250,000 gallons for its purposes.

 

3

 

(g)                                 In consideration
of the benefits to it from this exchange of reserve capacity, Pacific will pay
Black Hills %50,000 each month of the Term of this Agreement.

 

Section 4.                    Relocation of
Combustion Turbines.  If
agreeable to Black Hills, Pacific at its cost, may relocate the Combustion
Turbines based upon terms and conditions to be negotiated by the parties.

 

Section 5.                    Fuel.  All fuel stored and used on behalf of Pacific
shall be charged to Pacific for any governmental allocations and restrictions
on use which may be applicable during the Term, and all fuel stored and used on
behalf of Black Hills shall be charged to Black Hills for such purposes.

 

During
the Term of this Agreement, by mutual agreement, the parties may elect to
convert the Combustion Turbines to burn natural gas, in which case the
provisions of this Agreement related to fuel costs shall be amended
accordingly.  Neither party shall
unreasonably withhold its consent to such a conversion if the other party is
prepared to pay the cost of the conversion.

 

Section 6.                    Points of
Delivery.  The
deliveries of power and energy contemplated by this Agreement shall be made to
the Wyodak Substation point of interconnection between Pacific’s system and
Black Hills’ system as defined in the Wyodak Sub-station Construction, Ownership
and Operation Agreement among Pacific, Black Hills and Tri-County Electric
Association, Inc. dated September 28, 1981 or to any other point of
interconnecttion as mutually agreed upon by the parties which has an adequate
capacity to accommodate such deliveries. 
Neither party shall unreasonably withhold its consent to establishing
such other points of interconnection; however, nothing herein shall be
interpreted as an agreement by any party to incur additional costs.

 

Section 7.                    Schedules.  The parties shall schedule all deliveries of
power and energy required by this Agreement in accordance with normal
scheduling practices.  Such schedules of
power and energy shall be deemed to be delivered during the hours and in the
amounts scheduled; provided, that if scheduled deliveries are
interrupted due to forces beyond either party’s control, including but not
limited to loss of facilities, such scheduled deliveries shall be adjusted to
reflect such interruptions.  While
recognizing that reserve capacity may be required on an emergency basis, the
parties shall nevertheless use their best efforts, consistent with prudent
utility practice, to minimize rapid changes in deliveries hereunder.

 

4

 

Section 8.                    Payment
Schedules.  Black Hills
shall mail to Pacific, first class postage prepaid an invoice for all Operation
and Maintenance Costs by the third working day of each month.  Invoices shall be based on the estimated
costs for that month and later invoices adjusted as actual costs are
determined.  Pacific shall mail to Black
Hills, first class postage prepaid, an invoice for all energy acquired
hereunder by Black Hills during the prior month, while taking system capacity,
by the third working day of each month. 
The parties shall pay such invoices by the 15th of each
month.  Each monthly payment shall be
made in immediately available funds by the due date.  Simple interest shall accrue on any amount
not paid when due at a rate of 125 percent of the prime rate as established by
the Morgan Guaranty Trust Company of New York during the period of delinquency.

 

Section 9.                    Uncontrollable
Forces.  Neither party to this
Agreement shall be considered to be in default in the performance of any
obligation hereunder if failure to perform shall be due to uncontrollable
forces.  The term “uncontrollable forces”
means any cause beyond the control of the party affected, including, but not
limited to, failure of facilities, flood, earthquake, storm, fire, lightening,
epidemic, war, riot, civil disturbance, labor disturbance, sabotage, restraint
by court order or public authority, by which exercise of due foresight, such
party could not reasonably have been expected to avoid, and by which exercise
of due diligence shall be able to overcome. 
The parties shall not, however, be relieved of liability for failure of
performance if such failure is due to causes arising out of removable or
remediable causes which it fails to remove or remedy with reasonable
dispatch.  Any party rendered unable to
fulfill any obligation by reason of uncontrollable forces shall exercise due
diligence to remove such inability with all reasonable dispatch.  Nothing contained herein, however, shall be
construed to require a party to prevent or settle a strike against its
will.  It is specifically understood and
agreed that Pacific’s delivery of capacity under this Agreement comes from its
system and does not depend upon the existence, operation or the efficiency of
any particular generating resource.

 

Section 10.              Limitation of
Liability.  Neither
party shall be liable for any consequential losses or damages, including, but
not limited to, damages for lost profits arising from its breach of this
Agreement, whether or not such losses or damages are caused by a party’s negligence.

 

Section 11.              Government
Regulations.  The parties
shall submit this Agreement for filing with the Federal Energy 

 

5

 

Regulatory
Commission.  The terms, conditions and
prices for service specified herein shall remain in effect for the term hereof
and shall not be subject to change through application to the Federal Energy
Regulatory Commission pursuant to the provisions of Section 205 of the
Federal Power Act, absent the agreement of the parties hereto.  The parties covenant that neither shall
request relief from any of the provisions of this Agreement pursuant to the
provisions of Section 206 of the Federal Power Act, absent the agreement
of the parties hereto.  The foregoing
statutory references are intended to include and sub-sequent similar
enactments.

 

Section 12.              Arbitration.  If any dispute arises under this Agreement as
to any factual matter, the parties shall submit the factual dispute to a board
of three arbiters, one to be selected by each party and the parties are unable
to agree on the selection of a third arbiter. 
If the parties are unable to agree on the third arbiter, the parties
shall request the senior district judge of the United States District Court of
the District of Wyoming to submit a list of five persons.  Each party shall alternately strike one name
from the list, the first exercise to be determined by lot. The last person
remaining on the list shall serve as the third arbiter. The arbiters shall not
take into account the relative value of each party’s rights and obligations
under this Agreement in resolving any issue. Except as otherwise set forth
herein, the arbitration shall be held under the rules of the American
Arbitration Association. The arbiters shall render their decision in writing
not later 30 days after the matter has been submitted to them. The decision of
the majority of the board of arbiters of the factual dispute shall be binding
upon the parties. The arbiters may in their discretion award arbitration costs
and attorneys fees to either party.

 

Section 13.              Notices.  Any notice, demand, or request under this
Agreement shall be deemed properly served, given, or made if delivered in
person or sent by registered or certified mail, postage paid and return receipt
requested, to the person so designated as its authorized representative.  The titles and addresses of the authorized
representatives hereunder are as follows:

 

	
  For
  Black Hills:

  	
  Vice
  President and Chief Operating Office

  
	
   

  	
  Black
  Hills Power and Light Company

  
	
   

  	
  625
  Ninth Street

  
	
   

  	
  PO
  Box 1400

  
	
   

  	
  Rapid
  City, SD 57709

  

 

6

 

	
  For
  Pacific:

  	
  Vice
  President, Power Systems

  
	
   

  	
  Pacific
  Power & Light Company

  
	
   

  	
  920
  SW Sixth Avenue

  
	
   

  	
  Portland,
  OR 97204

  

 

Section 14.              Assignment.  This Agreement shall not be assigned to any
third party without the written consent of the other and such consent shall not
be withheld unreasonably.  No assignment
of this Agreement shall operate to discharge the assignor of any duty or
obligation hereunder without the written consent of the other party.

 

Section 15.              Choice of Law.  This Agreement shall be subject to and be
construed under the laws of the State of Wyoming.

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in their respective names by their respective officers thereunder duly
authorized.

 

	
   

  	
   

  	
   

  	
  PACIFICORP,
  dba

  
	
   

  	
   

  	
   

  	
  PACIFIC
  POWER & LIGHT COMPANY

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/
  Robert M. Smith

  
	
   

  	
   

  	
   

  	
   

  	
  Dated:
  05/11/87

  
	
  Attest:

  	
  /s/
  Sally A. Nofziger

  	
   

  	
   

  
	
   

  	
  Secretary

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  BLACK
  HILLS CORPORATION, dba

  
	
   

  	
   

  	
   

  	
  BLACK
  HILLS POWER & LIGHT COMPANY

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/
  Daniel P. Languth

  
	
   

  	
   

  	
   

  	
   

  	
  Dated:
  May 5, 1987

  
	
  Attest:

  	
  /s/
  Louise S. Kelley

  	
   

  	
   

  	
   

  
	
   

  	
  Secretary

  	
   

  	
   

  	
   

  

 

7

 

Exhibit A

to

Reserve Capacity Integration
Agreement

 

COMBUSTION TURBINES

 

4 -                                   B.E. Model Series 5001-P
Combustion Turbines S/N 244781, 244782, 245137, 245252.  Including Site preparation and Inertial
Separator Silencers

 

1 -                                   16' x 20' Concrete Block
Battery House including wiring

 

3 -                                   66' x 40' 1 million gallon
fuel oil tanks, pumps and heaters

 

1 -                                   20' x 24' concrete block
foam house, foam equipment and distribution system for fire protection of the
three oil tanks

 

Fuel
Unloading Station including spill prevention structure, pumps and flow meters

 

Remote
metering and control equipment

 

Unit
transformers 13.2/69 KV

 

MISCELLANEOUS
ITEMS INCLUDING BUT NOT NECESSARILY LIMITED TO THE FOLLOWING:

 

1 -                                   15 KVA dry type
transformer

 

Chain
link fence

 

Certain
test equipment

 

Work
benches and cabinets

 

5 -                                   400 watt mercury vapor lamps

 

Spare
parts

 

 

RESERVE CAPACITY INTEGRATION AGREEMENT

 

EXAMPLE

 

Determine
the following Pacific Power & Light Costs associated with Jim Bridger
Plant for calendar year 1985 using FERC Form 1:

 

1.                                      Fuel
Cost in $/mWh.

 

2.                                      Production
Cost in $/mWh.

 

3.                                      Production
Cost with losses in $/mWh.

 

1.                                      F =
Fuel Cost in $/mWh: (Pg 402)

 

·                                          Fuel
cost = $104,860,108 (Line 21).

·                                          Net
Generation = 8,752,283 mWh (Line 12).

·                                          F =
$104,860,108 ÷ 8,752,283 mWh = 11.98 $/mWh.

 

2.                                      P =
Production Cost in $/mWh: (Pg 402)

 

·                                          Production
Cost = $145,514,760 (Line 34).

·                                          Net
Generation = 8,752,283 mWh (Line 12).

·                                          P =
$145,514,760 ÷ 8,752,283 mWh = 16.63 $/mWh.

 

3.                                      Production
Cost with losses in $/mWh:

 

·                                          Losses
= 7.00%

·                                          Production
Cost with losses = (1.07 x F) + (P–F)

= (1.07 x 11.98) + (16.63 – 11.98) = 17.47 $/mWh.Exhibit 10.10

 

BancTec, Inc.

 

Second Amended and Restated

2007 Equity Incentive Plan

 

WHEREAS, the BancTec, Inc. 2007 Equity Incentive Plan
(the “Initial Plan”) was adopted by the Board of Directors (the “Board”)
of BancTec, Inc., a Delaware corporation (the “Company”), on June 18,
2007 and approved by the sole stockholder of the Company on June 18, 2007,
for the purpose of attracting, retaining and motivating officers and employees
of, consultants to, and non-employee directors providing services to the Company
and its Subsidiaries (defined below) and Affiliates (defined below), and
promoting the success of the Company’s business by providing them with
appropriate incentives;

 

WHEREAS, on June 26, 2007, each of the Board and the
sole stockholder of the Company authorized and approved amendments to the
Initial Plan, as reflected in the BancTec, Inc. Amended and Restated 2007
Equity Incentive Plan (the “Amended Plan”), for the purposes of
increasing the maximum number of Shares (defined below) permitted to be issued
under the Initial Plan from 3,706,000 Shares to 3,756,000 Shares and increasing
the maximum number of Shares that may be granted to any Participant (defined
below) in any calendar year from 370,600 to 375,600;

 

WHEREAS, on November 18, 2008, the Company effected a
reverse stock split (the “Reverse Stock Split”) pursuant to which, among
other things, each three (3) issued shares of the Company’s common stock,
par value $0.01 per share (the “Common Stock”), were reclassified,
changed and converted into one (1) share of the Company’s Common Stock;

 

WHEREAS, pursuant to Section 12.1 of the Amended Plan,
the Board, in connection with the Reverse Stock Split, (i) ratably reduced
(a) the maximum number of Shares available for issuance or granting
(including the Annual Award Limit (defined below)) under the Amended Plan and (b) the
number of Shares subject to outstanding Awards (defined below) under the
Amended Plan, and (ii) increased the Option Price (defined below) of each
outstanding Option by three (3) times; and

 

WHEREAS, pursuant to Section 13.2 of the Amended Plan,
the Board authorized and approved amendments to the Amended Plan for the
purpose of increasing the maximum number of Shares that may be granted to any
Participant (defined below) in any calendar year from 125,200 to 342,000.

 

NOW, THEREFORE, the Amended Plan is amended and restated in
its entirety as follows:

 

Article 1.                                           Establishment &
Purpose

 

1.1                               Establishment.  BancTec, Inc., a Delaware corporation
(hereinafter referred to as the “Company”), hereby establishes the
BancTec, Inc. Second Amended and Restated 2007 Equity Incentive Plan
(hereinafter referred to as the “Plan”) as set forth in this document.

 

1.2                               Purpose
of the Plan.    The
purpose of this Plan is to attract, retain and motivate officers and employees
of, consultants to, and non-employee directors providing services to the
Company and its Subsidiaries and Affiliates, and to promote the success of the
Company’s business by providing them with appropriate incentives.

 

 

Article 2.                                           Definitions

 

Whenever capitalized in the Plan, the following
terms shall have the meanings set forth below.

 

2.1                               “Affiliate” means any
entity that the Company, either directly or indirectly, is in common control
with, is controlled by or controls or any entity that the Company has a
substantial direct or indirect equity interest, as determined by the Board.

 

2.2                               “Annual
Award Limit” shall have the meaning set forth in Section 5.1(b).

 

2.3                               “Award” means any
Option, Stock Appreciation Right, Restricted Stock, Other Stock-Based Award or
Performance-Based Compensation award that is granted under the Plan.

 

2.4                               “Award
Agreement” means either (a) a written agreement entered
into by the Company and a Participant setting forth the terms and provisions
applicable to an Award granted under this Plan, or (b) a written statement
issued by the Company to a Participant describing the terms and provisions of
the actual grant of such Award.

 

2.5                               “Beneficial
Owner” or “Beneficial Ownership”
shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules and
Regulations under the Exchange Act.

 

2.6                               “Board” means the
Board of Directors of the Company.

 

2.7                               “Change
of Control” means the occurrence of any of the following
events:

 

(a)                                  any Person is
or becomes the Beneficial Owner (except that a Person shall be deemed to have “beneficial
ownership” of all Shares that any such Person has the right to acquire, whether
such right is currently exercisable or only after the passage of time),
directly or indirectly, of more than 50% of the total voting power of the
voting stock of the Company, including by way of merger, consolidation, tender,
exchange offer or otherwise; or

 

(b)                                 the sale or
disposition, in one or a series of related transactions, of all or
substantially all, of the assets of the Company to any Person;

 

(c)                                  during any
period of two consecutive years commencing on or after the Effective Date,
individuals who as of the beginning of such period constituted the entire Board
(together with any new directors whose election by such Board or nomination for
election by the Company’s shareholders was approved by a vote of at least
two-thirds of the directors of the Company, then still in office, who were
directors at the beginning of the period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority thereof; or

 

(d)                                 approval by the
shareholders of the Company of a complete liquidation or dissolution of the
Company.

 

For the avoidance of doubt, the following transactions
shall not be deemed a Change of Control for purposes of this Plan: (i) the
issuance of Shares by the Company in a transaction exempt from registration
under the Securities Act of 1933, as amended, on June 27, 2007 or (ii) any
subsequent registration of the resale of such shares plus any additional shares
of common stock issued in respect 

 

2

 

thereof (whether by stock
dividend, stock distribution, stock split or otherwise) pursuant to a shelf registration
statement filed with the SEC pursuant to that certain Registration Rights
Agreement between the Company and Friedman, Billings, Ramsey & Co.,
dated June 27, 2007.

 

2.8                               “Code” means the U.S.
Internal Revenue Code of 1986, as amended from time to time.

 

2.9                               “Committee” means the
compensation committee of the Board, or any other committee designated by the
Board to administer this Plan.  The
Committee shall have at least two members, each of whom shall be (i) a
Non-Employee Director, (ii) an Outside Director and (iii) following
any initial Public Offering of the Company’s Shares, an “independent director”
within the meaning of the listing requirements of The NASDAQ Stock Market (and
each other exchange on which the Company may be listed).

 

2.10                        “Company” means BancTec, Inc.,
a Delaware corporation, and any successor thereto.

 

2.11                        “Consultant” means any
individual (other than an Employee or a Director) who is engaged by the
Company, a Subsidiary or an Affiliate to render consulting or advisory services
to the Company or such Subsidiary or Affiliate.

 

2.12                        “Covered
Employee” means for any Plan Year, a Participant designated
by the Company as a potential “covered employee,” as such term is
defined in Section 162(m) of the Code.

 

2.13                        “Director” means a member
of the Board who is not an Employee.

 

2.14                        “Effective
Date” means the date set forth in Section 14.15.

 

2.15                        “Employee” means an
officer or other employee of the Company, its Subsidiaries or an Affiliate,
including a member of the Board who is an employee of the Company, its
Subsidiaries or an Affiliate.

 

2.16                        “Exchange
Act” means the Securities Exchange Act of 1934, as
amended from time to time.

 

2.17                        “Fair
Market Value” “Fair Market Value” means, as of any date, the per
Share value determined as follows:

 

(a)                                  If the Shares
are listed on any established stock exchange or a national market system,
including the PORTAL Market, the per Share Fair Market Value shall be the
closing sales price for each share of such stock (or the closing bid, if no
sales were reported) on the date of determination (or, if no closing sales
price or closing bid was reported on that date, as applicable, on the last
trading date such closing sales price or closing bid was reported), as reported
in The Wall Street Journal or such other source as the Committee deems
reliable;

 

(b)                                 If the Shares
are regularly quoted on an automated quotation system (including the OTC
Bulletin Board and the “Pink Sheets” published by the National Quotation Bureau, Inc.)
or by a recognized securities dealer, but selling prices are not reported, the
per Share Fair Market Value shall be the mean between the high bid and low
asked prices for a Share on the date of determination (or, if no such prices
were reported on that date, on the last date such prices were reported), as 

 

3

 

reported in The Wall Street Journal or such other source as the
Committee deems reliable; or

 

(c)                                  In the absence
of an established market for the Shares of the type described in (a) and
(b), above, the per Share Fair Market Value thereof shall be determined by the
Committee in good faith and in accordance with applicable provisions of Section 409A
of the Code.

 

2.18                        “Incentive
Stock Option” means an Option intended to meet the requirements of
an incentive stock option as defined in Section 422 of the Code and
designated as an Incentive Stock Option.

 

2.19                        “Non-Employee
Director” means a person defined in Rule 16b-3(b)(3) promulgated
by the Securities and Exchange Commission under the Exchange Act, or any
successor definition adopted by the Securities and Exchange Commission.

 

2.20                        “Nonqualified
Stock Option” means an Option that is not an Incentive Stock
Option.

 

2.21                        “Other
Stock-Based Award” means any right granted under Article 9
of the Plan.

 

2.22                        “Option” means any
stock option granted from time to time under Article 6 of the Plan.

 

2.23                        “Option
Price” means the purchase price per Share subject to an
Option, as determined pursuant to Section 6.2 of the Plan.

 

2.24                        “Outside
Director” means a member of the Board who is an “outside
director” within the meaning of Section 162(m) of the Code and the
regulations promulgated thereunder.

 

2.25                        “Participant” means any
eligible person as set forth in Section 4.1 to whom an Award is granted.

 

2.26                        “Performance-Based
Compensation” means compensation under an Award that is intended
to constitute “qualified performance-based compensation” within the meaning of
the regulations promulgated under Section 162(m) of Code or any
successor provision.

 

2.27                        “Performance
Measures” means measures as described in Section 10.1 on
which the performance goals are based in order to qualify Awards as
Performance-Based Compensation.

 

2.28                        “Performance
Period” means the period of time during which the
performance goals must be met in order to determine the degree of payout and/or
vesting with respect to an Award.

 

2.29                        “Person”
shall have the meaning ascribed to such term in Section 3(a)(9) of
the Exchange Act and used in Sections 13(d) and 14(d) thereof,
including a “group” as defined in Section 13(d) thereof.

 

2.30                        “Plan” means the
BancTec, Inc. Second Amended and Restated 2007 Equity Incentive Plan.

 

2.31                        “Plan
Year” means the applicable calendar year.

 

2.32                        “Restricted
Stock” means any Award granted under Article 8.

 

4

 

2.33                        “Restriction
Period” means the period during which Restricted Stock
awarded under Article 8 of the Plan is subject to forfeiture.

 

2.34                        “Service”
means service as an Employee, Director or Consultant.

 

2.35                        “Share” means a share
of common stock of the Company, par value $0.01 per share, or such other class
or kind of shares or other securities resulting from the application of Section 12.1.

 

2.36                        “Stock
Appreciation Right” means any right granted under Article 7.

 

2.37                        “Subsidiary” means any
corporation (other than the Company) in an unbroken chain of corporations
beginning with the Company (or any parent of the Company) if each of the
corporations, other than the last corporation in each unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.

 

2.38                        “Ten
Percent Shareholder” means a person who on any given date owns,
either directly or indirectly (taking into account the attribution rules contained
in Section 424(d) of the Code), stock possessing more than 10% of the
total combined voting power of all classes of stock of the Company or a
Subsidiary or Affiliate.

 

Article 3.                                           Administration

 

3.1                               Authority
of the Committee.  The Plan
shall be administered by the Committee, which shall have full power to
interpret and administer the Plan and full authority to select the Directors,
Employees and Consultants to whom Awards will be granted and determine the type
and amount of Awards to be granted to each such Director, Employee or
Consultant, the terms and conditions of Awards granted under the Plan and the
terms of Award Agreements to be entered into with Participants.  Without
limiting the generality of the foregoing, the Committee may, in its sole
discretion, clarify, construe or resolve any ambiguity in any provision of the
Plan or any Award Agreement, accelerate or waive vesting of Awards and
exercisability of Awards, extend the term or period of exercisability of any
Awards, modify the purchase price under any Award, or waive any terms or
conditions applicable to any Award; provided that no action taken by the
Committee shall adversely affect in any material respect the rights granted to
any Participant under any outstanding Awards without the Participant’s written
consent (other than pursuant to Article 11 or Article 12
hereof).  Awards may, in the discretion
of the Committee, be made under the Plan in assumption of, or in substitution
for, outstanding awards previously granted by the Company or its Affiliates or
a company acquired by the Company or with which the Company combines.  The Committee shall have full and
exclusive discretionary power to adopt rules, forms, instruments, and
guidelines for administering the Plan as the Committee deems necessary or
proper.  Notwithstanding anything in this
Section 3.1 to the contrary, the Board, or any other committee or
sub-committee established by the Board, is hereby authorized (in addition to
any necessary action by the Committee) to grant or approve Awards as necessary
to satisfy the requirements of Section 16 of the Exchange Act and the rules and
regulations thereunder and to act in lieu of the Committee with respect to
Awards made to Non-Employee Directors under the Plan.  All actions taken and all interpretations and
determinations made by the Committee or by the Board (or any other committee or
sub-committee thereof), as applicable, shall be final and binding upon the Participants,
the Company, and all other interested individuals.

 

3.2                               Delegation.  The Committee may delegate to one or more of
its members, one or more officers of the Company or any of its Subsidiaries,
and one or more agents or advisors such administrative duties or powers as it
may deem advisable.

 

5

 

Article 4.                                           Eligibility
and Participation

 

4.1                               Eligibility.  Participants will consist of such Employees,
Consultants, and Directors as the Committee, in its sole discretion, determines
and whom the Committee may designate from time to time to receive Awards under
the Plan.  Designation of a Participant
in any year shall not require the Committee to designate such person to receive
an Award in any other year or, once designated, to receive the same type or
amount of Award as granted to the Participant in any other year.

 

4.2                               Type of
Awards.  Awards under the Plan may be
granted in any one or a combination of:  (a) Options,
(b) Stock Appreciation Rights, (c) Restricted Stock and (d) Other
Stock-Based Awards. The Plan sets forth the performance goals and procedural
requirements to permit the Company to design Awards that qualify as
Performance-Based Compensation, as described in Article 10 hereof.  Awards granted under the Plan shall be
evidenced by Award Agreements (which need not be identical) that provide
additional terms and conditions associated with such Awards, as determined by
the Committee in its sole discretion; provided, however, that in the event of any conflict between the
provisions of the Plan and any such Award Agreement, the provisions of the Plan
shall prevail.

 

Article 5.                                           Shares
Subject to the Plan and Maximum Awards

 

5.1                               Number
of Shares Available for Awards.

 

(a)                                  General.  Subject to adjustment as
provided in Section 5.1(c) and Article 12, the maximum number of
Shares available for issuance to Participants pursuant to Awards under the Plan
shall be 1,252,000 Shares.  The Shares
available for issuance under the Plan may consist, in whole or in part, of
authorized and unissued Shares or treasury Shares. The number of Shares
available for granting Incentive Stock Options under the Plan shall not exceed
1,252,000 Shares, subject to adjustments provided in Article 12 hereof and
subject to the provisions of Sections 422 or 424 of the Code or any successor
provisions.  Any Shares delivered to the
Company as part or full payment for the purchase price of an Award granted
under this Plan or, to the extent the Committee determines that the
availability of Incentive Stock Options under the Plan will not be compromised,
to satisfy the Company’s withholding obligation with respect to an Award
granted under this Plan, shall again be available for Awards under the Plan; provided however, that such Shares shall continue to be
counted as outstanding for purposes of determining whether an Annual Award
Limit has been attained.

 

(b)                                 Annual
Award Limits.  The maximum
number of Shares with respect to which any Awards may be granted to any
Participant in any Plan Year shall be 342,000 Shares, subject to adjustments made
in accordance with Article 12 hereof, or the cash equivalent thereof to
the extent such Awards are payable in cash or property (the “Annual Award
Limit”).

 

(c)                                  Additional
Shares.  In the event that any
outstanding Award expires, is forfeited, cancelled or otherwise terminated
without the issuance of Shares or are otherwise settled for cash, the Shares
subject to such Award, to the extent of any such forfeiture, cancellation,
expiration, termination or settlement for cash, shall again be available for Awards
under the Plan. If the Committee authorizes the assumption under this Plan, in
connection with any merger, consolidation, acquisition of property or stock, or
reorganization, of awards granted under 

 

6

 

another plan, such assumption shall not (i) reduce the maximum
number of Shares available for issuance under this Plan or (ii) be subject
to or counted against a Participant’s Annual Award Limit.

 

Article 6.                                           Stock
Options

 

6.1                               Grant
of Options.  The Committee
is hereby authorized to grant Options to Participants.  Each Option shall permit a Participant to
purchase from the Company a stated number of Shares at an Option Price
established by the Committee, subject to the terms and conditions described in
this Article 6 and to such additional terms and conditions, as established
by the Committee, in its sole discretion, that are consistent with the
provisions of the Plan.  Options shall be
designated as either Incentive Stock Options or Nonqualified Stock Options,
provided that Options granted to Directors and Consultants shall be
Nonqualified Stock Options.  An Option
granted as an Incentive Stock Option shall, to the extent it fails to qualify
as an Incentive Stock Option, be treated as a Nonqualified Stock Option.  Neither the Committee nor the Company or any
of its Affiliates shall be liable to any Participant or to any other person if
it is determined that an Option intended to be an Incentive Stock Option does
not qualify as an Incentive Stock Option. 
Options shall be evidenced by Award Agreements which shall state the
number of Shares covered by such Option. 
Such agreements shall conform to the requirements of the Plan, and may
contain such other provisions, as the Committee shall deem advisable.

 

6.2                               Terms
of Option Grant.  The Option
Price shall be determined by the Committee at the time of grant, but shall not
be less than the par value of a Share on the date of grant.  In the case of any Incentive Stock Option the
Option Price shall be (i) if granted to a Person other than a Ten Percent
Shareholder, not less than 100% of the Fair Market Value of a Share on the date
of grant or (ii) if granted to a Ten Percent Shareholder, not be less than
110% of the Fair Market Value of a Share on the date of grant.

 

6.3                               Option
Term.  The term of each Option
shall be determined by the Committee at the time of grant and shall be stated
in the Award Agreement, but in no event shall such term be greater than ten
years (or, in the case on an Incentive Stock Option granted to a Ten Percent
Shareholder, five (5) years).

 

6.4                               Time of
Exercise.  Options
granted under this Article 6 shall be exercisable at such times and be
subject to such restrictions and conditions as the Committee shall in each
instance approve, which terms and restrictions need not be the same for each
grant or for each Participant.

 

6.5                               Method
of Exercise.  Except as
otherwise provided in the Plan or in an Award Agreement, an Option may be
exercised for all, or from time to time any part, of the Shares for which it is
then exercisable.  For purposes of this Article 6,
the exercise date of an Option shall be the later of the date a notice of
exercise is received by the Company and, if applicable, the date payment is
received by the Company pursuant to clauses (i), (ii), (iii) or (iv) in
the following sentence. The aggregate Option Price for the Shares as to which
an Option is exercised shall be paid to the Company in full at the time of
exercise at the election of the Participant (i) in cash or its equivalent (e.g.,
by cashier’s check), (ii) to the extent permitted by the Committee, in
Shares having a Fair Market Value equal to the aggregate Option Price for the
Shares being purchased and satisfying such other requirements as may be imposed
by the Committee, (iii) partly in cash and, to the extent permitted by the
Committee, partly in such Shares or (iv) if there is a public market for
the Shares at such time, subject to such requirements as may be imposed by the
Committee, through the delivery of irrevocable instructions to a broker to sell
Shares obtained upon the exercise of the Option and to deliver promptly to the
Company an amount out of the proceeds of such sale equal to the aggregate
Option Price for the Shares being purchased. 
The Committee may prescribe 

 

7

 

any other method of payment
that it determines to be consistent with applicable law and the purpose of the
Plan.

 

6.6                               Limitations
on Incentive Stock Options.  Incentive Stock Options may be granted only
to employees of the Company or of a “parent corporation” or “subsidiary
corporation” (as such terms are defined in Section 424 of the Code) at the
date of grant.  The aggregate Fair Market
Value (generally determined as of the time the Option is granted) of the Shares
with respect to which Incentive Stock Options are exercisable for the first
time by a Participant during any calendar year (under all plans of the Company
and of any parent corporation or subsidiary corporation) shall not exceed one
hundred thousand dollars ($100,000).  For
purposes of the preceding sentence, Incentive Stock Options will be taken into
account generally in the order in which they are granted.  Each provision of the Plan and each Award Agreement
relating to an Incentive Stock Option shall be construed so that each Incentive
Stock Option shall be an incentive stock option as defined in Section 422
of the Code, and any provisions of the Award Agreement thereof that cannot be
so construed shall be disregarded.

 

Article 7.                                           Stock
Appreciation Rights

 

7.1                               Grant
of Stock Appreciation Rights.  The Committee is hereby authorized to grant
Stock Appreciation Rights to Participants, including a grant of Stock
Appreciation Rights in tandem with any Option at the same time such Option is
granted (a “Tandem SAR”).  Stock
Appreciation Rights shall be evidenced by Award Agreements that shall conform
to the requirements of the Plan and may contain such other provisions, as the
Committee shall deem advisable.  Subject
to the terms of the Plan and any applicable Award Agreement, a Stock
Appreciation Right granted under the Plan shall confer on the holder thereof a
right to receive, upon exercise thereof, the excess of (a) the Fair Market
Value of a specified number of Shares on the date of exercise over (b) the
grant price of the right as specified by the Committee on the date of the
grant.   Such payment may be in the form
of cash, Shares, other property or any combination thereof, as the Committee
shall determine in its sole discretion.

 

7.2                               Terms
of Stock Appreciation Right.  Subject to the terms of the Plan and any
applicable Award Agreement, the grant price (which shall not be less than 100%
of the Fair Market Value of a
Share on the date of grant), term, methods of exercise, methods of settlement,
and any other terms and conditions of any Stock Appreciation Right shall be as
determined by the Committee.  The
Committee may impose such other conditions or restrictions on the exercise of
any Stock Appreciation Right as it may deem appropriate.  Unless otherwise provided in the Award
Agreement, no Stock Appreciation Right shall have a term of more than 10 years
from the date of grant.

 

7.3                               Tandem
Stock Appreciation Rights and Options.  A Tandem SAR shall be exercisable only to the
extent that the related Option is exercisable and shall expire no later than
the expiration of the related Option. 
Upon the exercise of all or a portion of a Tandem SAR, a Participant
shall be required to forfeit the right to purchase an equivalent portion of the
related Option (and, when a Share is purchased under the related Option, the
Participant shall be required to forfeit an equivalent portion of the Stock
Appreciation Right).

 

Article 8.                                           Restricted
Stock

 

8.1                               Grant of Restricted Stock.  An Award of Restricted Stock
is a grant by the Company of a specified number of Shares to the Participant,
which Shares are subject to forfeiture upon the occurrence of specified
events.  Participants shall be awarded
Restricted Stock in exchange for consideration not less than the minimum
consideration required by applicable law.  Restricted Stock shall be evidenced by
an Award Agreement, which shall conform to the requirements of the Plan and may
contain such other provisions, as the Committee shall deem advisable.

 

8

 

8.2                               Terms
of Restricted Stock Awards.  Each Award Agreement evidencing a Restricted
Stock grant shall specify the period(s) of restriction, the number of
Shares of Restricted Stock subject to the Award, the performance, employment or
other conditions (including the termination of a Participant’s Service whether
due to death, disability or other cause) under which the Restricted Stock may
be forfeited to the Company and such other provisions as the Committee shall
determine.  Any Restricted Stock granted
under the Plan shall be evidenced in such manner as the Committee may deem
appropriate, including book-entry registration or issuance of a stock
certificate or certificates (in which case, the certificate(s) representing
such Shares shall be legended as to sale, transfer, assignment, pledge or other
encumbrances during the Restriction Period and deposited by the Participant,
together with a stock power endorsed in blank, with the Company, to be held in
escrow during the Restriction Period). At the end of the Restriction Period,
the restrictions imposed hereunder shall lapse with respect to the number of
shares of Restricted Stock as determined by the Committee, and the legend shall
be removed and such number of Shares delivered to the Participant (or, where
appropriate, the Participant’s legal representative). The Committee may, in its
sole discretion, modify or accelerate the lapsing of the restrictions imposed
on Restricted Stock.

 

8.3                               Voting
and Dividend Rights.  Unless
otherwise determined by the Committee and set forth in a Participant’s Award
Agreement, Participants holding Restricted Stock granted hereunder shall not
have the right to exercise voting rights with respect to the Restricted Stock
and shall not have the right to receive dividends on such Restricted Stock.

 

8.4                               Performance
Goals.  The Committee may condition
the grant of Restricted Stock or the expiration of the Restriction Period upon
the Participant’s achievement of one or more performance goal(s) specified
in the Award Agreement. If the Participant fails to achieve the specified
performance goal(s), the Committee shall not grant the Restricted Stock to such
Participant or the Participant shall forfeit the Award of Restricted Stock to
the Company.

 

8.5                               Section 83(b) Election.  If a Participant makes an
election pursuant to Section 83(b) of the Code concerning Restricted
Stock, the Participant shall be required to file promptly a copy of such
election with the Company.

 

Article 9.                                           Other
Stock-Based Awards

 

The Committee, in its sole discretion, may grant
Awards of Shares and Awards that are valued, in whole or in part, by reference
to, or are otherwise based on the Fair Market Value of, Shares (the “Other
Stock-Based Awards”).  Such Other
Stock-Based Awards shall be in such form, and dependent on such conditions, as
the Committee shall determine, including, without limitation, the right to
receive one or more Shares (or the equivalent cash value of such Shares) upon
the completion of a specified period of service, the occurrence of an event
and/or the attainment of performance objectives.  Other Stock-Based Awards may be granted alone
or in addition to any other Awards granted under the Plan.  Subject to the provisions of the Plan, the
Committee shall determine to whom and when Other Stock-Based Awards will be
made, the number of Shares to be awarded under (or otherwise related to) such
Other Stock-Based Awards; whether such Other Stock-Based Awards shall be
settled in cash, Shares or a combination of cash and Shares; and all other
terms and conditions of such Awards (including, without limitation, the vesting
provisions thereof and provisions ensuring that all Shares so awarded and
issued shall be fully paid and non-assessable).

 

9

 

Article 10.                                    Performance-Based
Compensation

 

The Committee is authorized to design any Award so
that the amounts or Shares payable or distributed pursuant to such Award are
treated as “qualified performance-based compensation” within the meaning of Section 162(m) of
the Code and related regulations.

 

10.1                        Performance
Measures.  The vesting,
crediting and/or payment of Performance-Based Compensation shall be based on
the achievement of objective performance goals based on one or more of the
following Performance Measures: (i) consolidated earnings before or after
taxes (including earnings before interest, taxes, depreciation and
amortization); (ii) net income; (iii) operating income; (iv) earnings
per Share; (v) book value per Share; (vi) return on shareholders’
equity; (vii) expense management; (viii) return on investment; (ix) improvements
in capital structure; (x) profitability of an identifiable business unit
or product; (xi) maintenance or improvement of profit margins; (xii) stock
price; (xiii) market share; (xiv) revenues or sales; (xv) costs; (xvi) cash
flow; (xvii) working capital and (xviii) return on assets.

 

Any Performance Measure may be (i) used to
measure the performance of the Company and/or any of its Subsidiaries or
Affiliates as a whole, any business unit thereof or any combination thereof or (ii) compared
to the performance of a group of comparable companies, or a published or
special index, in each case that the Committee, in its sole discretion, deems
appropriate.

 

10.2                        Establishment
of Performance Goals for Covered Employees. 
No later than ninety (90) days after the commencement of a performance
period (but in no event after twenty-five percent (25%) of such performance
period has elapsed), the Committee shall establish in writing:  (a) the performance goals applicable to
the Performance Period; (b) the Performance Measures to be used to measure
the performance goals in terms of an objective formula or standard; (c) the
method for computing the amount of compensation payable to the Participant if
such performance goals are obtained; and (d) the Participants or class of
Participants to which such performance goals apply.

 

10.3                        Adjustment
of Performance-Based Compensation.  Awards that are
designed to qualify as Performance-Based Compensation may not be adjusted
upward.  The Committee shall retain the
discretion to adjust such Awards downward, either on a formula or discretionary
basis or any combination, as the Committee determines.

 

10.4                        Certification
of Performance.  No Award
designed to qualify as Performance-Based Compensation shall be vested, credited
or paid, as applicable, with respect to any Participant until the Committee
certifies in writing that the performance goals and any other material terms
applicable to such Performance Period have been satisfied.

 

Article 11.                                    Compliance
with Section 409A of the Code

 

11.1                        General.  It is the intent of the
Company that Options, Stock Appreciation Rights and Restricted Stock Awards
under the Plan shall be structured such that the Awards do not provide for a
deferral of compensation as further set forth in Treas. Reg.
§ 1.409A-1(b)(5).  To the extent
that the Committee determines that any other Award granted under the Plan is
subject to Section 409A of the Code, the Award Agreement evidencing such Award
shall incorporate the terms and conditions required by Section 409A of the
Code.  It is expressly contemplated
that  the Committee may, in its sole
discretion and without a Participant’s prior consent, amend the Plan and/or
Awards, adopt policies and procedures, or take any other actions (including
amendments, policies, procedures and actions with retroactive effect) as are
necessary or appropriate to (a) exempt the Plan and/or any Award from the
application of Section 409A of the Code, (b) preserve the intended
tax treatment of any such Award, or (c) comply with the requirements of Section 409A
of the Code, Department of Treasury regulations and 

 

10

 

other interpretive guidance issued thereunder, including
without limitation any such regulations or other guidance that may be issued
after the date of the grant (“Section 409A Guidance”).  This Plan shall be interpreted at all times
in such a manner that the terms and provisions of the Plan and Awards are
exempt from or comply with Section 409A Guidance.

 

11.2                        Payments
to Specified Employees.  Notwithstanding
any contrary provision in the Plan or Award Agreement, any payment(s) that
are otherwise required to be made under the Plan to a “specified employee” (as
defined under Section 409A of the Code) as a result of his or her
separation from service (other than a payment that is not subject to Section 409A
of the Code) shall be delayed for the first six (6) months following such
separation from service (or, if earlier, the date of death of the specified
employee) and shall instead be paid (in a manner set forth in the Award
Agreement) on the payment date that immediately follows the end of such
six-month period or as soon as administratively practicable thereafter.

 

Article 12.                                    Adjustments

 

12.1                        Adjustments
in Authorized Shares.  In the
event of any corporate event or transaction (including, but not limited to, a
change in the Shares of the Company or the capitalization of the Company) such
as a merger, consolidation, reorganization, recapitalization, separation, stock
dividend, stock split, reverse stock split, split up, spin-off, combination of
Shares, exchange of Shares, dividend in kind, or other like change in capital
structure (other than normal cash dividends) to shareholders of the Company, or
any similar corporate event or transaction, the Committee, to prevent dilution
or enlargement of Participants’ rights under the Plan, shall substitute or
adjust, in its sole discretion, the number and kind of Shares that may be
issued under the Plan or under particular forms of Awards, the number and kind
of Shares subject to outstanding Awards, the Option Price, grant price or
purchase price applicable to outstanding Awards, the Annual Award Limits,
and/or other value determinations applicable to the Plan or outstanding Awards.

 

12.2                        Change
of Control.    Upon the occurrence of a
Change of Control after the Effective Date, unless otherwise specifically
prohibited under applicable laws or by the rules and regulations of any
governing governmental agencies or national securities exchanges, or unless the
Committee shall determine otherwise in the Award Agreement, the Committee is
authorized (but not obligated) to make adjustments in the terms and conditions
of outstanding Awards, including without limitation the following (or any
combination thereof): (i) continuation or assumption of such outstanding
Awards under the Plan by the Company (if it is the surviving company or
corporation) or by the surviving company or corporation or its parent; (ii) substitution
by the surviving company or corporation or its parent of awards with
substantially the same terms for such outstanding Awards; (iii) accelerated
exercisability, vesting and/or lapse of restrictions under all then outstanding
Awards immediately prior to the occurrence of such event; (iv) upon
written notice, provide that any outstanding Awards must be exercised, to the
extent then exercisable, within fifteen days immediately prior to the scheduled
consummation of the event, or such other period as determined by the Committee
(in either case contingent upon the consummation of the event), and at the end
of such period, such Awards shall terminate to the extent not so exercised
within the relevant period; and (v) cancellation of all or any portion of
outstanding Awards for fair value (as determined in the sole discretion of the
Committee and which may be zero) which, in the case of Options and Stock
Appreciation Rights or similar Awards, may equal the excess, if any, of the
value of the consideration to be paid in the Change of Control transaction to
holders of the same number of Shares subject to such Options or Stock
Appreciation Rights (or, if no such consideration is paid, Fair Market Value of
the Shares subject to such outstanding Awards or portion thereof being
canceled) over the aggregate Option Price or grant price, as applicable, with
respect to such Awards or portion thereof being canceled.

 

11

 

Article 13.                                    Duration,
Amendment, Modification, Suspension, and Termination

 

13.1                        Duration
of the Plan.  Unless sooner
terminated as provided in Section 13.2, the Plan shall terminate on the
tenth (10th) anniversary of the Effective Date.

 

13.2                        Amendment,
Modification, Suspension, and Termination of Plan.  The Board may amend, alter, suspend,
discontinue, or terminate the Plan or any portion thereof or any Award (or
Award Agreement) thereunder at any time; provided that no such amendment,
alteration, suspension, discontinuation or termination shall be made (i) without
shareholder approval if such approval is necessary to comply with any tax or
regulatory requirement applicable to the Plan and (ii) without the consent
of the Participant, if such action would materially diminish any of the rights
of any Participant under any Award theretofore granted to such Participant
under the Plan; provided, however, the Committee may amend the Plan, any Award
or any Award Agreement in such manner as it deems necessary to comply with
applicable laws.

 

Article 14.                                    General
Provisions

 

14.1                        No
Right to Service. The granting of an Award under the Plan shall
impose no obligation on the Company, any Subsidiary or any Affiliate to
continue the Service of a Participant and shall not lessen or affect any right
that the Company, any Subsidiary or any Affiliate may have to terminate the
Service of such Participant. No Participant or other Person shall have any
claim to be granted any Award, and there is no obligation for uniformity of
treatment of Participants, or holders or beneficiaries of Awards. The terms and
conditions of Awards and the Committee’s determinations and interpretations
with respect thereto need not be the same with respect to each Participant
(whether or not such Participants are similarly situated).

 

14.2                        Settlement
of Awards; No Fractional Shares.  Each Award
Agreement shall establish the form in which the Award shall be settled.  No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award. 
The Committee shall determine whether cash, Awards, other securities or
other property shall be issued or paid in lieu of fractional Shares or whether
such fractional Shares or any rights thereto shall be rounded, forfeited or
otherwise eliminated.

 

14.3                        Tax
Withholding.  The Company
shall have the power and the right to deduct or withhold, or require a
Participant to remit to the Company, the minimum statutory amount to satisfy
federal, state, and local taxes, domestic or foreign, required by law or
regulation to be withheld with respect to any taxable event arising as a result
of the Plan.  With respect to required
withholding, Participants may elect, subject to the approval of the Committee,
to satisfy the withholding requirement, in whole or in part, by having the
Company withhold Shares having a Fair Market Value on the date the tax is to be
determined equal to the minimum statutory total tax that could be imposed on
the transaction.

 

14.4                        No Guarantees Regarding Tax Treatment.  Participants (or their beneficiaries) shall
be responsible for all taxes with respect to any Awards under the Plan.  The Committee and the Company make no
guarantees to any person regarding the tax treatment of Awards or payments made
under the Plan.  Neither the Committee
nor the Company has any obligation to take any action to prevent the assessment
of any excise tax on any person with respect to any Award under Section 409A
of the Code or otherwise and none of the Company, any of its Subsidiaries or
Affiliates, or any of their employees or representatives shall have any
liability to a  Participant with respect
thereto.

 

14.5                        Section 16
Participants. With respect to Participants subject to Section 16
of the Exchange Act, transactions under the Plan are intended to comply with
all applicable conditions of Rule 

 

12

 

16b-3 or its successors
under the Exchange Act. To the extent any provision of the Plan or action by
the Committee fails to so comply, it shall be deemed null and void, to the
extent permitted by law and deemed advisable by the Committee.

 

14.6                        Non-Transferability
of Awards.  Unless
otherwise determined by the Committee, an Award shall not be transferable or
assignable by the Participant except in the event of his death (subject to the
applicable laws of descent and distribution) and any such purported assignment,
alienation, pledge, attachment, sale, transfer or encumbrance shall be void and
unenforceable against the Company or any Affiliate.  An Award exercisable after the death of a
Participant may be exercised by the legatees, personal representatives or
distributees of the Participant. Any permitted transfer of the Awards to heirs
or legatees of the Participant shall not be effective to bind the Company
unless the Committee shall have been furnished with written notice thereof and
a copy of such evidence as the Committee may deem necessary to establish the
validity of the transfer and the acceptance by the transferee or transferees of
the terms and conditions hereof.

 

14.7                        Conditions
and Restrictions on Shares.  The Committee
may impose such other conditions or restrictions on any Shares received in
connection with an Award as it may deem advisable or desirable.  These restrictions may include, but shall not
be limited to, a requirement that the Participant hold the Shares received for
a specified period of time or a requirement that a Participant represent and
warrant in writing that the Participant is acquiring the Shares for investment
and without any present intention to sell or distribute such Shares.  The certificates for Shares may include any
legend which the Committee deems appropriate to reflect any conditions and
restrictions applicable to such Shares.

 

14.8                        Compliance
with Law.  The granting of
Awards and the issuance of Shares under the Plan shall be subject to all
applicable laws, rules, and regulations, and to such approvals by any
governmental agencies, The NASDAQ Stock Market or stock exchanges on which the
Shares are admitted to trading or listed, as may be required.  The Company shall have no obligation to issue
or deliver evidence of title for Shares issued under the Plan prior to:

 

(a)                                  Obtaining any approvals from
governmental agencies that the Company determines are necessary or advisable;
and

 

(b)                                 Completion of any
registration or other qualification of the Shares under any applicable
national, state or foreign law or ruling of any governmental body that the
Company determines to be necessary or advisable.

 

The
restrictions contained in this Section 14.8 shall be in addition to any
conditions or restrictions that the Committee may impose pursuant to Section 14.7.  The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company’s counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.

 

14.9                        Rights
as a Shareholder.  Except as
otherwise provided herein or in the applicable Award Agreement, a Participant
shall have none of the rights of a shareholder with respect to Shares covered
by any Award until the Participant becomes the record holder of such Shares.

 

14.10                 Severability.
 If any provision of the Plan
or any Award is or becomes or is deemed to be invalid, illegal, or
unenforceable in any jurisdiction, or as to any Person or Award, or would
disqualify the Plan or any Award under any law deemed applicable by the
Committee, such provision shall be construed or deemed amended to conform to
applicable laws, or if it cannot be so construed or deemed amended 

 

13

 

without, in the
determination of the Committee, materially altering the intent of the Plan or
the Award, such provision shall be stricken as to such jurisdiction, Person, or
Award, and the remainder of the Plan and any such Award shall remain in full
force and effect.

 

14.11                 Unfunded
Plan.  Participants shall have no
right, title, or interest whatsoever in or to any investments that the Company
or any of its Subsidiaries or Affiliates may make to aid it in meeting its
obligations under the Plan.  Nothing
contained in the Plan, and no action taken pursuant to its provisions, shall
create or be construed to create a trust of any kind, or a fiduciary
relationship between the Company and any Participant, beneficiary, legal
representative, or any other person.  To
the extent that any person acquires a right to receive payments from the
Company, any of its Subsidiaries or Affiliates under the Plan, such right shall
be no greater than the right of an unsecured general creditor of the Company a
Subsidiary or Affiliate, as the case may be. 
All payments to be made hereunder shall be paid from the general funds
of the Company, a Subsidiary or Affiliate, as the case may be, and no special
or separate fund shall be established and no segregation of assets shall be
made to assure payment of such amounts. 
The Plan is not subject to the U.S. Employee Retirement Income Security
Act of 1974, as amended from time to time.

 

14.12                 No
Constraint on Corporate Action.  Nothing in the
Plan shall be construed to (a) limit, impair, or otherwise affect the
Company’s, its Subsidiary’s or Affiliate’s right or power to make adjustments,
reclassifications, reorganizations, or changes of its capital or business
structure, or to merge or consolidate, or dissolve, liquidate, sell, or
transfer all or any part of its business or assets, or (b) limit the right
or power of the Company its Subsidiary or Affiliate to take any action which
such entity deems to be necessary or appropriate.

 

14.13                 Successors.  All obligations of the Company under the Plan
with respect to Awards granted hereunder shall be binding on any successor to
the Company, whether the existence of such successor is the result of a direct
or indirect purchase, merger, consolidation, or otherwise, of all or
substantially all of the business or assets of the Company.

 

14.14                 Governing
Law.  The Plan and each Award
Agreement shall be governed by the laws of the State of Delaware, excluding any
conflicts or choice of law rule or principle that might otherwise refer
construction or interpretation of the Plan to the substantive law of another
jurisdiction.

 

14.15                 Effective
Date. The Plan shall be effective as of June 26, 2007 (the “Effective
Date”).  

 

14

 

This BancTec, Inc. Second Amended and Restated
2007 Equity Incentive Plan was duly adopted and approved by the Board of
Directors of the Company by resolution at a meeting held on the 6th day of
March, 2009.

 

 

	
   

  	
   

  
	
  J. Coley Clark

  	
   

  
	
  Chief Executive Officer
  and

  	
   

  
	
  Chairman of the Board of
  Directors

  	
   

  

 

[SIGNATURE
PAGE TO THE BANCTEC, INC.

SECOND
AMENDED AND RESTATED

2007
EQUITY INCENTIVE PLAN]

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