Document:

Exhibit 10.13

 

Execution Version

 

FIRST AMENDMENT TO

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

This FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”) is made and entered into as of April 19, 2011, by and among BancTec, Inc., a Delaware corporation (the “Borrower”), the other credit parties signatory hereto (together with the Borrower, each individually, a “Credit Party” and, collectively, the “Credit Parties”), the Lenders (as hereinafter defined) signatory hereto and General Electric Capital Corporation, as agent for the Lenders (in such capacity, and together with its successors and permitted assigns, the “Agent”).

 

W I T N E S S E T H

 

WHEREAS, the Borrower, the other Credit Parties signatory thereto, the Agent and the lenders party thereto (such lenders, together with their respective successors and permitted assigns, are referred to hereinafter each individually as a “Lender” and collectively as the “Lenders”) are parties to that certain Second Amended and Restated Credit Agreement, dated as of March 31, 2010 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time prior to the date hereof, the “Credit Agreement”); and

 

WHEREAS, the Credit Parties have requested, and the Agent and the Required Lenders have agreed, to make certain amendments to the Credit Agreement, on and subject to the terms and conditions provided for herein.

 

NOW THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1.                                       Definitions.  Capitalized terms not otherwise defined herein (including in the Recitals hereto) shall have the meanings ascribed to them in the Credit Agreement.

 

2.                                       Amendments to the Credit Agreement.  As of the Amendment Effective Date (as hereinafter defined), the Credit Agreement is hereby amended as follows:

 

(a)       Amendments to Section 6.2.  Section 6.2 of the Credit Agreement is hereby amended and restated to read in its entirety as follows:

 

“6.2             Senior Leverage Ratio. As of the last day of each fiscal quarter, the Credit Parties shall not permit the Senior Leverage Ratio for the Credit Parties for the twelve month period ending on such date to be greater than the applicable maximum ratio based upon the EBITDA of the Credit Parties for the twelve month period ending on such date, each as set forth in the table below:

 

	
 
    	
EBITDA
    	
 
    	
Maximum Senior Leverage Ratio
    
	
 
    	
Greater   than or equal to $25,000,000
    	
 
    	
2.50   to 1.00
    
	
 
    	
Greater   than or equal to $18,000,000 but less than $25,000,000
    	
 
    	
2.25   to 1.00
    
	
 
    	
Less   than $18,000,000
    	
 
    	
2.00   to 1.00
    

 

 

(b)                     Amendments to Section 6.3.  Section 6.3 of the Credit Agreement is hereby amended and restated to read in its entirety as follows:

 

“6.3             Total Leverage Ratio.  As of the last day of each fiscal quarter, the Credit Parties shall not permit the Total Leverage Ratio for the Credit Parties for the twelve month period ending on such date to be greater than the applicable maximum ratio based upon the EBITDA of the Credit Parties for the twelve month period ending on such date, each as set forth in the table below:

 

	
 
    	
EBITDA
    	
 
    	
Maximum Total Leverage Ratio
    
	
 
    	
Greater   than or equal to $25,000,000
    	
 
    	
3.00   to 1.00
    
	
 
    	
Greater   than or equal to $18,000,000 but less than $25,000,000
    	
 
    	
2.75   to 1.00
    
	
 
    	
Less   than $18,000,000
    	
 
    	
2.50   to 1.00
    

 

(c)       Amendments to Section 11.1.

 

(i)                Section 11.1 of the Credit Agreement is hereby amended by amending and restating the following definitions in their entirety as follows:

 

“‘Capital Lease’ means any leasing or similar arrangement which, in accordance with GAAP, is classified as a capital lease (including the Irving Lease).

 

‘EBITDA’ means, with respect to any Person for any fiscal period, an amount equal to (a) consolidated net income of such Person for such period determined in accordance with GAAP minus (b) the sum of, in each case, to the extent included in the calculation of such consolidated net income of such Person for such period in accordance with GAAP, but without duplication, (i) income tax credits, (ii) interest income, (iii) gains from extraordinary items for such period, (iv) any aggregate net gain (but not any aggregate net loss) during such period arising from the sale, exchange or other disposition of capital assets by such Person (including any fixed assets, whether tangible or intangible, all inventory sold in conjunction with the disposition of fixed assets and all securities), (v) any other non-cash gains that have been added in determining consolidated net income and (vi) non-cash gains resulting from Foreign Currency conversions plus (c) the sum of, in each case, to the extent included in the calculation of such consolidated net income of such Person for such period in accordance with GAAP, but without duplication, (i) any provision for income or franchise taxes, (ii) Interest Expense, (iii) loss from extraordinary items for such period, (iv) depreciation and amortization for such period, (v) amortized debt discount for such period, (vi) the amount of any non-cash deductions or expenses as the result of any grant to any members of the management of such Person of any Stock or Stock Equivalents, (vii) any aggregate net loss on the sale of Property (other than Accounts and Inventory) outside the Ordinary Course of Business, (viii) non-cash losses resulting from Foreign Currency conversions, (ix) subject to the proviso of 

 

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the last sentence of this definition, any other non-cash losses or charges that have been deducted in determining consolidated net income, (x) for each of the fiscal quarters ended March 31, 2010, June 30, 2010, September 30, 2010, December 31, 2010 and March 31, 2011, severance and other restructuring costs and expenses for such period in an amount not to exceed $1,151,000, $2,740,000, $2,915,000, $0.00 and $687,000, respectively, (xi) for each of the fiscal quarters ended March 31, 2010, June 30, 2010, September 30, 2010 and December 31, 2010 fees and other expenses incurred in connection with Permitted Acquisitions for such period in an amount not to exceed $828,000, $260,000, $542,000 and $542,000, respectively and (xii) for each of the fiscal quarters ended March 31, 2010, June 30, 2010, September 30, 2010 and December 31, 2010 fees and expenses relating to the Borrower’s proposed initial public offering for such period in an amount not to exceed $(688,000), $0.00, $0.00 and $2,933,000, respectively.  For purposes of this definition, the following items shall be excluded in determining consolidated net income of a Person: (1) the income (or deficit) of any other Person accrued prior to the date it became a Subsidiary of, or was merged or consolidated into, such Person or any of such Person’s Subsidiaries; (2) the income (or deficit) of any other Person (other than a Subsidiary) in which such Person has an ownership interest, except to the extent any such income has actually been received by such Person in the form of cash dividends or distributions; (3) the undistributed earnings of any Subsidiary (other than a Credit Party) of such Person to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary is not at the time permitted by the terms of any contractual obligation or requirement of law applicable to such Subsidiary; (4) any restoration to income of any contingency reserve, except to the extent that provision for such reserve was made out of income accrued during such period; (5) any write-up of any asset; (6) any net gain from the collection of the proceeds of life insurance policies; (7) any net gain arising from the acquisition of any securities, or the extinguishment, under GAAP, of any Indebtedness, of such Person; (8) in the case of a successor to such Person by consolidation or merger or as a transferee of its assets, any earnings of such successor prior to such consolidation, merger or transfer of assets; and (9) any deferred credit representing the excess of equity in any Subsidiary of such Person at the date of acquisition of such Subsidiary over the cost to such Person of the investment in such Subsidiary.  Solely for purposes of calculating the Total Leverage Ratio, Senior Leverage Ratio, the Fixed Charge Coverage Ratio and the Maximum Revolving Loan Balance notwithstanding (1) and (8) above to the contrary, EBITDA shall be calculated on a pro forma basis to give effect to any Permitted Acquisition consummated at any time on or after the first day of the test period thereof as if each such Permitted Acquisition had been effected on the first day of such period for which financial statements are available at the time of determination thereof, adjusted by verifiable expense reductions, including excess owner compensation, if any, which are expected to be realized, in each case calculated by the Borrower and approved by the Agent and Required Lenders; provided that, notwithstanding the foregoing and clause (c)(ix) above, for any test period, the pro forma effect on the EBITDA of the Credit Parties attributable to Permitted Acquisitions for periods prior to the closing date of the applicable Permitted Acquisition plus the amount of any add-backs for

 

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non-cash charges or losses included in the calculation of EBITDA under clause (c)(ix) above, shall not exceed, in the aggregate, 15% of EBITDA of the Credit Parties (after giving effect to such Permitted Acquisitions and such add-backs) for such period.

 

‘Leverage Multiple’ means, as of any date of determination, the applicable leverage multiple based upon the EBITDA of the Credit Parties for the twelve month period ending on the last day of the most-recently ended fiscal month, each as set forth in the table below:

 

	
 
    	
EBITDA
    	
 
    	
Leverage Multiple
    
	
 
    	
Greater   than or equal to $25,000,000
    	
 
    	
2.50%
    
	
 
    	
Greater   than or equal to $18,000,000 but less than $25,000,000
    	
 
    	
2.25%
    
	
 
    	
Less   than $18,000,000
    	
 
    	
2.00%
    

 

‘Senior Debt’ means, as of any determination date, the sum of (a) all Indebtedness under this Agreement, including Letter of Credit Obligations, and (b) Capital Lease Obligations (other than Capital Lease Obligations with respect to the Irving Lease).”

 

(ii)               Section 11.1 of the Credit Agreement is further amended by inserting the following new definition therein in appropriate alphabetical order:

 

“‘Irving Lease’ means the Lease Agreement, dated as of November 15, 2010, between AGNL Processing, L.L.C. as lessor and the Borrower as lessee relating to the property located at 2701 East Grauwyler Road, Irving Texas.”

 

3.             Remedies.  This Amendment shall constitute a Loan Document.  The breach by the Borrower or any other Credit Party of any representation, warranty, covenant or agreement in this Amendment shall constitute an immediate Event of Default hereunder and under the other Loan Documents.

 

4.             Representations and Warranties.  To induce the Agent and the Required Lenders to enter into this Amendment, each of the Borrower and the other Credit Parties hereby jointly and severally represent and warrant that:

 

(a)   The execution, delivery and performance by each Credit Party of this Amendment and the performance of the Credit Agreement (i) are within such Credit Party’s power and authority and have been duly authorized by all necessary action, (ii) do not (A) contravene the terms of any of such Credit Party’s Organization Documents, (B) violate any material Requirement of Law in any material respect or (C) conflict with or result in any material breach or contravention of, or result in the creation of any Lien under, any document evidencing any material Contractual Obligation to which such Credit Party is a party or any order, injunction, writ or decree of any Governmental Authority to which such Credit Party or its Property is subject and (iii) do not require any approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person except those which, if not obtained or made, would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

 

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(b)   This Amendment has been duly executed and delivered to the Agent by each Credit Party party hereto and this Amendment and the Credit Agreement are each the legal, valid and binding obligation of such Credit Party and are each enforceable against such Credit Party in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally or by equitable principles relating to enforceability.

 

(c)   No Default or Event of Default has occurred and is continuing or would result after giving effect to this Amendment.

 

(d)   No action, suit, proceeding, claim or dispute pending, or to the knowledge of any Credit Party, threatened or contemplated against any Credit Party or any Subsidiary of any Credit Party at law, in equity, in arbitration or before any Governmental Authority which challenges any Credit Party’s right, power or competence to enter into this Amendment or perform any of its obligations under this Amendment, the Credit Agreement or any other Loan Document, or the validity or enforceability of this Amendment, the Credit Agreement or any other Loan Document or any action taken under this Amendment, the Credit Agreement or any other Loan Document.

 

(e)   After giving effect to this Amendment, the representations and warranties of each Credit Party contained in the Credit Agreement and each other Loan Document are true and correct in all material respects (provided, that if any representation or warranty is by its terms qualified by concepts of materiality, such representation shall be true and correct in all respects) on and as of the Amendment Effective Date hereof with the same effect as if such representations and warranties had been made on and as of such date, except that any such representation or warranty which is expressly made only as of a specified date need be true only as of such date.

 

5.             No Amendments/Waivers.  The Credit Agreement and the other Loan Documents shall continue to be in full force and effect in accordance with their respective terms and, except as expressly provided herein, shall be unmodified.  In addition, except as expressly provided herein, this Amendment shall not be deemed an amendment, consent or waiver of any term or condition of any Loan Document or a forbearance by the Agent or the Lenders with respect to any right or remedy which the Agent or the Lenders may now or in the future have under the Loan Documents, at law or in equity or otherwise or be deemed to prejudice any rights or remedies which the Agent or the Lenders may now have or may have in the future under or in connection with any Loan Document or under or in connection with any Default or Event of Default which may now exist or which may occur after the date hereof.

 

6.             Outstanding Indebtedness; Waiver of Claims.  Each of the Credit Parties acknowledges and agrees that as of April 18, 2011 the aggregate outstanding amount of the Revolving Loans is $44,802,924.83 and the aggregate outstanding amount of Letters of Credit Obligations is $89,036.25 and that, as of the Amendment Effective Date, such amounts are payable pursuant to the Credit Agreement without defense, offset, withholding, counterclaim or deduction of any kind.  Each of the Credit Parties hereby acknowledges that it has no Claims (as hereinafter defined) arising out of or relating to the Credit Agreement or any other Loan Document (including, without limitation, as a result of credit having been extended thereunder) against the Agent, the Lenders or the L/C Issuers and their respective employees, agents, representatives, consultants, attorneys, fiduciaries, servants, officers, directors, partners, predecessors, subsidiary corporations, parent corporations and related corporate divisions and their respective successors and assigns (all of the foregoing being the “Released Persons”) and hereby waives, releases, remises and forever discharges the Agent, each Lender, each L/C Issuer and each other Released Person from any and all Claims of any and every character, known or unknown, direct and/or indirect, at law or in equity, of whatsoever kind or nature, whether heretofore or hereafter

 

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arising, for or because of any matter or things done, omitted or suffered to be done by any Released Person prior to and including the date hereof, and in any way directly or indirectly arising out of or relating to the Credit Agreement or any other Loan Document.  For purposes hereof, “Claims” shall mean all liabilities, obligations, losses, damages, penalties, actions, judgments, suits or claims which may be instituted or asserted against or incurred by such Released Person as the result of credit having been extended under the Credit Agreement or any other Loan Document or otherwise arising in connection with the transactions contemplated thereunder.

 

7.             Expenses.  Each of the Credit Parties hereby reconfirms its respective obligations pursuant to Section 9.5 of the Credit Agreement and agrees to pay and reimburse the Agent in accordance therewith for all reasonable documented out-of-pocket costs and expenses (including, without limitation, Attorney Costs to the Agent) incurred in connection with the negotiation, preparation, execution and delivery of this Amendment and all other documents and instruments delivered in connection herewith.

 

8.             Affirmation of Existing Loan Documents.  After giving effect to this Amendment, each of the Credit Parties (a) confirms and agrees that its obligations under each of the Loan Documents to which it is a party shall continue without any diminution thereof and shall remain in full force and effect on and after the date hereof, and (b) confirms and agrees that the Liens granted pursuant to the Collateral Documents to which it is a party shall continue without any diminution thereof and shall remain in full force and effect on and after the date hereof.

 

9.             Effectiveness.  This Amendment shall become effective as of April 19, 2011 (the “Amendment Effective Date”) only upon satisfaction in full in the judgment of the Agent of each of the following conditions on or prior to the date hereof:

 

(a)   Amendment.  The Agent shall have received two (2) copies of this Amendment duly executed and delivered by the Agent, the Required Lenders and each Credit Party.

 

(b)   Resolutions.  The Agent shall have received resolutions from each Credit Party’s board of directors (or other managing body, in the case of any Credit Party that is not a corporation) then in full force and effect authorizing, to the extent relevant, all aspects of this Amendment and of all of the transactions contemplated hereby.

 

(c)   Payment of Fees and Expenses.  The Borrower shall have paid to the Agent all costs, fees and expenses owing in connection with this Amendment and the other Loan Documents and due to the Agent (including, without limitation, Attorney Costs) in accordance with Section 9.5 of the Credit Agreement.

 

10.           GOVERNING LAW.  The laws of the State of New York shall govern all matters arising out of, in connection with or relating to this Amendment, including, without limitation, its validity, interpretation, construction, performance and enforcement.

 

11.           Counterparts.  This Amendment may be executed by the parties hereto on any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and the same instrument.  This Amendment may be executed and delivered by telecopier or other method of electronic transmission with the same force and effect as if it were a manually executed and delivered counterpart.

 

[Signature pages follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of the day and year first above written.

 

	
 
    	
 
    	
BORROWER:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
BANCTEC, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Jeffrey D. Cushman
    
	
 
    	
 
    	
 
    	
Name: Jeffrey D. Cushman
    
	
 
    	
 
    	
 
    	
Title: Senior Vice   President, Chief Financial
    
	
 
    	
 
    	
 
    	
Officer and Treasurer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
CREDIT PARTIES:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
BTC VENTURES, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Jeffrey D. Cushman
    
	
 
    	
 
    	
 
    	
Name: Jeffrey D. Cushman
    
	
 
    	
 
    	
 
    	
Title: President, Chief Financial Officer and 
    
	
 
    	
 
    	
 
    	
Secretary
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
BTI TECHNOLOGIES, L.P.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By: BancTec, Inc., its general partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Jeffrey D. Cushman
    
	
 
    	
 
    	
 
    	
Name: Jeffrey D. Cushman
    
	
 
    	
 
    	
 
    	
Title: Senior Vice President, Chief
    
	
 
    	
 
    	
 
    	
Financial Officer and Treasurer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
BTC INTERNATIONAL   HOLDINGS, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Jeffrey D. Cushman
    
	
 
    	
 
    	
 
    	
Name: Jeffrey D. Cushman
    
	
 
    	
 
    	
 
    	
Title: Chief Financial Officer and Secretary
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
BANCTEC (PUERTO   RICO), INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Jeffrey D. Cushman
    
	
 
    	
 
    	
 
    	
Name: Jeffrey D. Cushman
    
	
 
    	
 
    	
 
    	
Title: Senior Vice President, Chief Financial
    
	
 
    	
 
    	
 
    	
Officer and Treasurer
    

 

[Signature Page — First Amendment]

 

 

	
 
    	
 
    	
RECOGNITION MEXICO HOLDING INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By: 
    	
/s/ Jeffrey D. Cushman
    
	
 
    	
 
    	
 
    	
Name: Jeffrey D. Cushman
    
	
 
    	
 
    	
 
    	
Title: Senior Vice President, Chief Financial 
    
	
 
    	
 
    	
 
    	
Officer, Secretary and Treasurer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
DOCUDATA SOLUTIONS, L.C.  
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Jeffrey D. Cushman
    
	
 
    	
 
    	
 
    	
Name: Jeffrey D. Cushman
    
	
 
    	
 
    	
 
    	
Title: Senior Vice President, Chief Financial
    
	
 
    	
 
    	
 
    	
Officer and Treasurer
    

 

[Signature Page — First Amendment]

 

 

	
 
    	
 
    	
AGENT   AND LENDERS:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
GENERAL ELECTRIC CAPITAL CORPORATION, as the   Agent and as a Lender 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Joseph Tunney
    
	
 
    	
 
    	
 
    	
Name: Joseph Tunney
    
	
 
    	
 
    	
 
    	
Title: Duly Authorized Signatory
    

 

[Signature Page — First Amendment]

 

 

	
 
    	
 
    	
FIFTEENTH INVESTMENT RFG LIMITED, as a Lender 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Shehzaad Sacranie
    
	
 
    	
 
    	
 
    	
Name: Shehzaad Sacranie
    
	
 
    	
 
    	
 
    	
Title: Authorised Signatory
    

 

[Signature Page — First Amendment]Exhibit 10.14

 

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 

 

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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 

 

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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.

 

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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.

 

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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 

 

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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 

 

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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.

 

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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).

 

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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 

 

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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.

 

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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 

 

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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 

 

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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”).  

 

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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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