<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended August 31, 1999
Commission File Number 1-6018
TOKHEIM CORPORATION
(Exact name of Registrant as specified in its charter)
INDIANA 35-0712500
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10501 CORPORATE DRIVE, FORT WAYNE, IN 46845
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number including area code): (219) 470-4600
NOT APPLICABLE
(Former name, former address, and former fiscal year if changed since last
report)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the Registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes (X) No
As of August 31, 1999, 12,671,383 shares of voting common stock were
outstanding.
The exhibit index is located on page 21.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
TOKHEIM CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statement of Earnings
(Amounts in thousands except amounts per share)
<TABLE>
<CAPTION>
(UNAUDITED) (UNAUDITED)
Three Months Ended Nine Months Ended
August 31, August 31, August 31, August 31,
1999 1998 1999 1998
------------------------------- --------------------------------
<S> <C> <C>
NET SALES......................................... $ 169,170 $ 101,492 $ 512,374 $ 291,997
Cost of sales, exclusive of items listed below.... 128,927 73,782 393,999 213,975
Selling, general, and administrative expenses..... 25,023 18,298 78,729 53,192
Depreciation and amortization..................... 6,319 2,681 19,279 7,799
Merger and acquisition costs and other unusual
items............................................ 1,292 263 6,115 6,596
----------- ------------ ------------ ------------
Operating profit 7,609 6,468 14,252 10,435
----------- ------------ ------------ ------------
Interest expense, net............................. 13,279 2,549 37,944 9,882
Foreign currency (gain) loss .................... (483) (33) 2,372 (813)
Minority interest................................. (2) 227 88 289
Other (income), net .............................. 261 (54) (1,048) (332)
----------- ------------ ------------ ------------
Earnings (loss) before income taxes and
extraordinary item............................... (5,446) 3,779 (25,104) 1,409
Income taxes...................................... 2 850 (480) 1,658
----------- ------------ ------------ ------------
Earnings (loss) before extraordinary item......... (5,448) 2,929 (24,624) (249)
Extraordinary loss on debt extinguishment......... -- -- (6,249) (4,965)
----------- ------------ ------------ ------------
NET EARNINGS (LOSS) $ (5,448) $ 2,929 $ (30,873) $ (5,214)
=========== ============ ============ ============
Preferred stock dividends......................... $ (376) $ (370) $ (1,124) $ (1,113)
Earnings (loss) applicable to common stock... $ (5,824) $ 2,559 $ (31,997) $ (6,327)
Earnings (loss) per common share:
Basic:
Before extraordinary loss.................... $ (0.46) $ 0.20 $ (2.03) $ (0.12)
Extraordinary loss on debt extinguishment.... -- -- (0.49) (0.45)
----------- ------------ ------------ ------------
Net earnings (loss).......................... $ (0.46) $ 0.20 $ (2.52) $ (0.57)
=========== ============ ============ ============
Weighted average shares outstanding.......... 12,670 12,631 12,667 10,925
Diluted:
Before extraordinary loss.................... $ (0.46) $ 0.19 $ (2.03) $ (0.12)
Extraordinary loss on debt extinguishment.... -- -- (0.49) (0.45)
----------- ------------ ------------ ------------
Net earnings (loss).......................... $ (0.46) $ 0.19 $ (2.52) $ (0.57)
=========== ============ ============ ============
Weighted average shares outstanding.......... 12,670 13,618 12,667 10,925
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
TOKHEIM CORPORATION AND SUBSIDIARIES
- --------------------------------------------------------------------------------
Consolidated Condensed Balance Sheet
(In thousands) (UNAUDITED)
August 31, November 30,
1999 1998
--------------------------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents......................... $ 20,985 $ 26,801
Accounts receivable, net.......................... 150,880 172,693
Inventories:
Raw materials and supplies..................... 58,795 70,545
Work in process................................ 15,503 27,418
Finished goods................................. 30,839 25,070
------------ ------------
105,137 123,033
Other current assets.............................. 16,923 19,139
------------ ------------
Total current assets.............................. 293,925 341,666
Property, plant, and equipment, net............... 75,895 77,905
Other tangible assets............................. 2,226 4,873
Goodwill, net..................................... 296,307 324,113
Other non-current assets and deferred
charges, net..................................... 36,667 28,085
------------ ------------
Total assets...................................... $ 705,020 $ 776,642
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current maturities of long-term debt.............. 57,629 2,110
Notes payable to banks............................ 194 410
Cash overdrafts................................... 19,852 15,064
Accounts payable.................................. 73,297 95,322
Accrued expenses.................................. 116,584 136,164
------------ ------------
Total current liabilities......................... 267,556 249,070
Notes payable, bank credit agreement.............. 147,520 182,145
Senior notes...................................... -- 22,500
Senior subordinated notes......................... 202,298 170,000
Junior subordinated Payment In Kind note.......... 43,709 40,000
Other long-term debt, less current maturities..... 3,616 4,115
Guaranteed Employees' Stock Ownership Plan
obligation...................................... 5,029 6,987
Post-retirement benefit liability................. 14,883 14,418
Minimum pension liability......................... 3,135 3,135
Other long-term liabilities....................... 5,739 7,511
------------ ------------
693,485 699,881
============ ============
Redeemable convertible preferred stock............ 24,000 24,000
Guaranteed Employees' Stock Ownership Plan
obligation...................................... (5,029) (6,987)
Treasury stock, at cost........................... (4,156) (4,883)
------------ ------------
14,815 12,130
------------ ------------
Common stock...................................... 90,375 90,354
Common stock warrants............................. 20,000 20,000
Minimum pension liability......................... (3,135) (3,135)
Foreign currency translation adjustments.......... (58,697) (22,598)
Accumulated deficit............................... (51,291) (19,295)
------------ ------------
(2,748) 65,326
Less treasury stock, at cost...................... (532) (695)
------------ ------------
(3,280) 64,631
------------ ------------
Total liabilities and shareholders' equity........ $ 705,020 $ 776,642
============ ============
</TABLE>
3
<PAGE>
TOKHEIM CORPORATION AND SUBSIDIARIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Consolidated Condensed
Statement of Cash Flows (UNAUDITED)
(In thousands) Nine Months Ended
August 31, August 31,
1999 1998
------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.......................................................... $ (30,873) $ (5,214)
Adjustments to reconcile net loss to cash used in operations:
Write-off of in process research and development........... -- 5,879
Payment in kind interest................................... 3,709 --
Extraordinary loss on debt extinguishment.................. 6,249 4,965
Depreciation and amortization.............................. 19,279 8,930
Gain on sale of property and equipment..................... (1,240) 2
Changes in assets and liabilities:
Accounts receivable, net.................................. 11,686 3,559
Inventories............................................... 11,924 97
Accounts payable.......................................... (17,334) (9,356)
Accrued expenses.......................................... (14,394) (5,730)
Long term deferred assets................................. (2,610) --
Other..................................................... (6,989) (4,732)
------------ ----------
Net cash used in operating activities............................. (20,593) (1,600)
------------ ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition, net of cash acquired................................. -- (12,137)
Proceeds from the sales of property and equipment................. 3,842 411
Plant and equipment additions..................................... (15,695) (7,390)
------------ ----------
Net cash used in investing activities............................. (11,853) (19,116)
------------ ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Redemption of senior notes........................................ (22,500) --
Proceeds from senior subordinated notes.......................... 209,647 --
Redemption of senior subordinated notes........................... (170,000) (35,382)
Increase (decrease) in other debt................................. (280) --
Increase (decrease) in notes payable, banks....................... 21,000 (4,594)
Increase in cash overdraft........................................ 5,830 2,215
Equity issuance costs............................................. -- (4,885)
Deferred debt issuance costs...................................... (8,066) --
Proceeds from issuance of common stock............................ 22 73,281
Premiums paid on debt extinguishment.............................. (555) (3,450)
Other............................................................. 890 (760)
Preferred stock dividends......................................... (1,124) (1,113)
------------ ----------
Net cash provided from financing activities....................... 34,864 25,312
------------ ----------
EFFECT OF TRANSLATION ADJUSTMENT ON CASH.......................... (8,234) (939)
CASH AND CASH EQUIVALENTS:
Increase (decrease) in cash...................................... (5,816) 3,657
Beginning of year................................................. 26,801 6,438
------------ ----------
End of period..................................................... $ 20,985 $ 10,095
============ ==========
</TABLE>
4
<PAGE>
NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
The interim financial statements are unaudited and reflect all adjustments
(consisting solely of normal recurring adjustments) that, in the opinion of
management, are necessary for a fair statement of the interim periods presented.
This report includes information in a condensed format and should be read in
conjunction with the audited consolidated financial statements included in
Tokheim Corporation's (the "Company") Annual Report to Shareholders for the year
ended November 30, 1998. The results of operations for the three and nine months
ended August 31, 1999 are not necessarily indicative of the results expected
for the full year or any other interim period.
Amounts for the year ended November 30, 1998 were derived from audited financial
statements included in the 1998 Annual Report to Shareholders.
1. NEW ACCOUNTING PRONOUNCEMENTS
SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information," and SFAS No. 132, "Employers' Disclosures about Pensions and
Other Postretirement Benefits," are effective for the year ending November 30,
1999. In the opinion of management, these statements will not have a material
impact on the Company's financial position, results of operations, or cash flows
since they are "disclosure only" standards. The Company is currently
evaluating the impact that SFAS No. 131 will have on its current segment
groupings. SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities" was issued in June 1998 and is effective for the year ending
November 30, 2001. SFAS No. 133 establishes a new model for accounting for
derivatives in the balance sheet as either assets or liabilities and measures
them at fair value. Certain disclosures concerning the designation and
assessment of hedging relationships are also required. Management has not yet
determined the impact of this statement on the Company's consolidated financial
statements.
The Company will adopt SFAS No. 130, "Reporting Comprehensive Income", for the
year ending November 30, 1999 by including a separate statement of comprehensive
income as part of the consolidated financial statements. Total comprehensive
loss for the three and nine month periods ended August 31, 1999 was $41.6
million and $67.0 million compared to earnings of $1.6 million and a loss of
$6.5 million in the comparable 1998 periods. The other components of
comprehensive loss in addition to net loss for the three and nine month periods
consist of foreign currency translation adjustments and minimum pension
liability.
2. SENIOR SUBORDINATED NOTES
On January 26, 1999, the Company issued $123.0 million aggregate principal
amount of 11.375% Senior Subordinated Notes due 2008 (the "Dollar Notes") and
Euro 75.0 million ($87.0 million equivalent) aggregate principal amount of
11.375% Senior Subordinated Notes due 2008 (the "Euro Notes") in a private
placement pursuant to Rule 144A (the "Offering"). The Notes will mature on
August 1, 2008, and interest is payable semi-annually on February 1 and August 1
of each year, commencing August 1, 1999. The Company used the net proceeds from
the Offering to redeem in whole, the $170.0 million Senior Subordinated Seller
Notes and the $22.5 million Senior Notes. In addition, the Company used
approximately $9.1 million of the net proceeds to reduce borrowings under the
revolving credit facility under the New Credit Agreement and to permanently
reduce the bank revolving credit commitment from $120.0 million to $110.0
million.
The Company has designated the Euro 75.0 million of Senior Subordinated Notes as
a hedge instrument against its' foreign denominated intercompany long term notes
receivable held by domestic subsidiaries. As such, any gains or losses on
translation of these notes to U.S. dollars are recorded in the Shareholders
Equity section of the balance sheet. For the nine months ended August 31, 1999
the Company recognized $7.7 million currency translation gain due to the
devaluation of the Euro as compared to the U.S. dollar.
5
<PAGE>
During the first quarter of 1999, the Company incurred an extraordinary loss on
debt extinguishment of approximately $6.2 million in connection with the
refinancing of the Senior Notes and the Senior Subordinated Seller Notes with
proceeds received from the Offering. This amount consists of $0.5 million of
premiums on the Senior Notes and approximately $5.7 million of unamortized
deferred issuance costs that were written off.
Each of the Dollar Notes and the Euro Notes will be redeemable, at the Company's
option, in whole at any time, or in part from time to time, on and after
February 1, 2004, upon not less than 30 nor more than 60 days' notice, at the
following redemption prices (expressed as percentages of the principal amount
thereof) if redeemed during the twelve-month period commencing on February 1 of
the year set forth below, plus, in each case, accrued and unpaid interest
thereon, if any, to the date of redemption:
<TABLE>
<CAPTION>
--------------------------------------------------------
Year Percentage
--------------------------------------------------------
<C> <S> <C>
2004 .................. 105.688%
--------------------------------------------------------
2005 .................. 103.792%
--------------------------------------------------------
2006 .................. 101.896%
--------------------------------------------------------
2007 and thereafter .................. 100.000%
--------------------------------------------------------
</TABLE>
Optional Redemption upon Public Equity Offerings.
At any time, or from time to time, on or prior to February 1, 2002, the Company
may, at its option, use the net cash proceeds of one or more public equity
offerings to redeem up to 35% of the original principal amount of the Dollar
Notes issued in the Offering and up to 35% of the original principal amount of
the Euro Notes issued in the Offering, each at a redemption price equal to
111.375% of the principal amount thereof plus accrued and unpaid interest
thereon, if any, to the date of redemption; provided that at least 55% of the
original principal amount of the Dollar Notes issued in the Offering or the Euro
Notes issued in the Offering, as the case may be, remains outstanding
immediately after any such redemption and the Company shall make such redemption
not more than 120 days after the consummation of any such public equity
offering.
The Notes are unsecured and subordinated to all of the Company's existing and
future senior debt, including its obligations under the New Credit Agreement.
All of the Company's current and future U.S. subsidiaries will guarantee the
Notes with guarantees that will be unsecured and subordinated to senior debt of
subsidiaries. The indentures under which the Notes were issued contain covenants
limiting the Company's ability to incur additional debt; pay dividends on
capital stock, repurchase capital stock or make certain other restricted
payments; make certain investments; create liens on our assets to secure debt;
enter into transactions with affiliates; merge or consolidate with another
company; and transfer and sell assets.
The Company and the subsidiary guarantors have entered into a Registration
Rights Agreement pertaining to the Dollar Notes and another Registration Rights
Agreement pertaining to the Euro Notes (together, the "Registration Rights
Agreements"). The Registration Rights Agreements require the Company to, at its
own cost, (i) within 90 days after the Issue Date, file a registration statement
on the appropriate registration form (the "Exchange Offer Registration
Statement") with the Securities and Exchange Commission (the "Commission") with
respect to the notes (the "Exchange Notes") which will have terms substantially
identical in all material respects to the Dollar Notes or the Euro Notes, as the
case may be, (except that the Exchange Notes will not contain terms with respect
to transfer restrictions or liquidated damages), (ii) use its best efforts to
cause the Exchange Offer Registration Statement to be declared effective under
the Securities Act within 150 days after the Issue Date and (iii) use its best
efforts to consummate the Exchange Offer within 195 days after the Issue Date.
The Company has filed the Exchange Offer Registration Statement described above
and the Exchange Offer Registration Statement was declared effective by the
Commission on September 22, 1999. The
6
<PAGE>
Exchange Offer is currently being conducted, and the Company is offering the
Exchange Notes in Exchange for surrender of the Euro Notes and Dollar Notes.
The Company failed to have the Exchange Offer Registration Statement declared
effective within 150 days of the Issue Date. As such, the Company was obligated
to pay the holders of the Dollar Notes and the Euro Notes an additional interest
premium of 0.5% until September 22, 1999, the date the Exchange Offer
Registration Statement was declared effective. In addition, the Company has
failed to consummate the Exchange Offer within 195 days of the Issue Date. As
such, the Company is obligated to pay the holders of the Dollar Notes and the
Euro Notes an additional premium of 0.5% from the date the Exchange Offer
Registration Statement was declared effective until the date the Exchange Offer
is consummated, subject to an additional increase of 0.5% after 90 days and for
each 90 day period thereafter (up to a maximum of 1.0% per annum).
3. ACQUISITION
On September 30, 1998, the Company completed the acquisition of the RPS division
of Schlumberger Limited. As part of the purchase price, the Company issued
warrants exercisable for five years, beginning on January 30, 1999 to purchase
at a nominal price, 2,526,923 shares of the Company's common stock. The warrants
are considered potential common stock under the guidelines of SFAS No. 128
"Earnings Per Share" for purposes of calculating diluted earnings per share and
will be reflected as shares outstanding when the Company is in an earnings
position.
As part of the purchase price of the RPS division, the Company has provided
$20.3 million for certain costs it expects to incur to close down redundant
operations in connection with the reorganization and rationalization of the RPS
division's operations. As of August 31, 1999, the Company has incurred and
charged approximately $11.1 million against this accrued liability for projects
initiated since the acquisition date, leaving a remaining balance of $9.2
million. The Company expects to incur in excess of $2.8 million of
restructuring charges in the fourth quarter of 1999. In addition, at November
30, 1998 the Company established a restructuring reserve related to the closure
of its Glenrothes, Scotland location in the amount of $5.1 million. For the
nine month period ended August 31, 1999, the Company incurred costs of $4.6
million which were charged against the reserve leaving a remaining balance of
$0.5 million. These charges relate to severance costs and facility closure
expenses. The Company expects the closure of this facility to be completed
during the fourth quarter of 1999.
4. BANK CREDIT AGREEMENT
During the quarter ended August 31, 1999, the Company failed to satisfy certain
financial covenants contained in its New Credit Agreement. The Company has
received waivers relating to the financial covenant defaults for the fiscal
quarter ended August 31, 1999 and has also amended its New Credit Agreement to,
among other things, amend the related financial covenants that cover the
Company's fourth fiscal quarter of 1999 and periods thereafter. In connection
with amending the New Credit Agreement, the Company has agreed to obtain $50.0
million by issuing new equity type securities and pay down the New Credit
Agreement balance on or before January 25, 2000. The Company believes that it
can obtain such additional equity on or before January 25, 2000 or complete
alternative refinancing arrangements and meet the amended financial covenants in
future periods. As such, the Company has reclassified $50.0 million of the
indebtedness under the New Credit Agreement to current liabilities. However,
there can be no assurance that the $50.0 million in additional equity type
securities will be obtained by the Company nor that alternative refinancing can
be secured and the failure to do so would create an event of default under the
amended New Credit Agreement. See further discussion in Management's Discussion
and Analysis of Financial Condition and Results of Operations.
7
<PAGE>
5. Guarantor and Nonguarantor Financial Statements
The Dollar Notes and the Euro Notes are, and the exchange notes which will be
issued in the exchange offer for the Dollar Notes and the Euro Notes will be,
general unsecured obligations of the Company, subordinated in right of payment
to all existing and future senior indebtedness of the Company, and guaranteed on
a full, unconditional, joint and several basis by the Company's wholly-owned
domestic subsidiaries.
The following condensed consolidating financial information presents: (1)
Condensed consolidating financial statements as of August 31, 1999 and August
31, 1998 and for the nine months ended August 31, 1999 and 1998, of (a) Tokheim
Corporation, the parent; (b) the guarantor subsidiaries; (c) the nonguarantor
subsidiaries; and (d) the Company on a consolidated basis, and (2) Elimination
entries necessary to consolidate Tokheim Corporation, the parent, with guarantor
and nonguarantor subsidiaries.
Investments in subsidiaries are accounted for by the parent using the equity
method of accounting. The guarantor and nonguarantor subsidiaries are presented
on a combined basis. The principal elimination entries eliminate investments in
subsidiaries and intercompany balances and transactions. Separate financial
statements for the guarantor subsidiaries and the nonguarantor subsidiaries are
not presented because management believes that such financial statements would
not be meaningful to investors.
8
<PAGE>
CONSOLIDATED CONDENSED STATEMENT OF EARNINGS
For the nine months ended August 31, 1999
(Amounts in thousands)
<TABLE>
<CAPTION>
Guarantor Nonguarantor Consolidated
Parent Subsidiaries Subsidiaries Eliminations Total
---------- ------------ ------------ ------------ ----------
<S> <C> <C> <C> <C> <C>
Net sales................................................. $ 121,653 $ 68,050 $ 332,923 $ (10,252) $ 512,374
Cost of sales, exclusive of items listed below............ 93,104 47,608 263,539 (10,252) 393,999
Selling, general, and administrative expenses............. 20,429 19,946 38,353 -- 78,729
Depreciation and amortization............................. 3,755 3,465 12,060 -- 19,279
Merger and acquisition costs and other unusual items...... 887 686 4,541 -- 6,115
---------- --------- ---------- ---------- ----------
Operating profit (loss)................................... 3,478 (3,656) 14,430 0 14,252
Interest (income) expense, net............................ 10,169 (327) 28,101 (0) 37,944
Foreign currency loss..................................... 316 800 1,256 -- 2,372
Equity in (earnings) loss of consolidated subsidiaries.... 12,874 -- -- (12,874) --
Minority interest......................................... -- -- 88 -- 88
Other (income) expense, net............................... 4,689 (23,909) 18,172 -- (1,048)
---------- --------- ---------- ---------- ----------
Earnings (loss) before income taxes....................... (24,570) 19,779 (33,187) 12,874 (25,104)
Income taxes.............................................. 54 (335) (198) (1) (480)
---------- --------- ---------- ---------- ----------
Earnings (loss) before extraordinary item................. (24,624) 20,114 (32,989) 12,875 (24,624)
Extraordinary loss on debt extinguishment................. (6,249) -- -- -- (6,249)
---------- --------- ---------- ---------- ----------
Net earnings (loss)....................................... $ (30,873) $ 20,114 $ (32,989) $ 12,875 $ (30,873)
========== ========= ========== ========== ==========
</TABLE>
9
<PAGE>
CONSOLIDATED CONDENSED STATEMENT OF EARNINGS
For the nine months ended August 31, 1998
(Amounts in thousands)
<TABLE>
<CAPTION>
Guarantor Nonguarantor Consolidated
Parent Subsidiaries Subsidiaries Eliminations Total
---------- ------------ ------------ ------------ ----------
<S> <C> <C> <C> <C> <C>
Net sales................................................. $ 110,264 $ 43,658 $ 151,182 $ (13,106) $ 291,997
Cost of sales, exclusive of items listed below............ 83,607 27,821 115,653 (13,106) 213,975
Selling, general, and administrative expenses............. 24,163 8,189 20,840 -- 53,192
Depreciation and amortization............................. 3,017 661 4,121 -- 7,799
Merger and acquisition costs and other unusual items...... 6,218 -- 378 -- 6,596
---------- --------- ---------- ---------- ----------
Operating profit (loss)................................... (6,741) 6,987 10,190 (0) 10,435
Interest (income) expense, net............................ 2,973 (59) 6,968 (0) 9,882
Foreign currency loss..................................... (932) (30) 148 -- (813)
Equity in (earnings) loss of consolidated subsidiaries.... (3,946) -- -- 3,946 --
Minority interest......................................... -- -- 289 -- 289
Other (income) expense, net............................... (4,648) (1,328) 5,643 -- (332)
---------- --------- ---------- ---------- ----------
Earnings (loss) before income taxes....................... (188) 8,404 (2,858) (3,946) 1,409
Income taxes.............................................. 61 426 1,214 (41) 1,658
---------- --------- ---------- ---------- ----------
Earnings (loss) before extraordinary item................. (249) 7,978 (4,072) (3,905) (249)
Extraordinary loss on debt extinguishment................. (4,965) -- -- -- (4,965)
---------- --------- ---------- ---------- ----------
Net earnings (loss)....................................... $ (5,214) $ 7,978 $ (4,072) $ (3,905) $ (5,214)
========== ========= ========== ========== ==========
</TABLE>
10
<PAGE>
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
For the nine months ended August 31, 1999
(Amounts in thousands)
<TABLE>
<CAPTION>
Guarantor Nonguarantor Consolidated
Parent Subsidiaries Subsidiaries Eliminations Total
--------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net cash provided by
(used in) operations. $ (30,303) $ 1,668 $ (4,832) $ 12,874 $ (20,593)
CASH FLOWS FROM
INVESTING ACTIVITIES:
Plant and equipment
additions............ (12,180) 2,550 (6,065) -- (15,695)
Proceeds from sale of
property and
equipment............ 8,535 (6,950) 2,257 -- 3,842
Investments in and
advances to
subsidiaries, net.... 12,874 -- -- (12,874) --
--------- -------- -------- -------- ---------
Net cash provided
from (used in)
investing
activities......... 9,229 (4,400) (3,808) (12,874) (11,853)
CASH FLOWS FROM
FINANCING ACTIVITIES:
Redemption of senior
notes................ (22,500) -- -- -- (22,500)
Proceeds from issuance
of senior subordinated
notes................ 209,647 -- -- -- 209,647
Redemption of issuance
of senior subordinated
notes................ (170,000) -- -- -- (170,000)
Increase (decrease) in
term debt............ -- -- (280) -- (280)
Increase (decrease)
notes payable, banks. 17,000 4,000 -- -- 21,000
Increase (decrease)
cash overdraft....... (131) (6) 5,967 -- 5,830
Debt issuance costs... (8,066) -- -- -- (8,066)
Premiums paid on debt
extinguishment....... (555) -- -- -- (555)
Other................. 890 -- -- -- 890
Proceeds from issuance
of common stock...... 22 -- -- -- 22
Preferred stock
dividends............ (1,124) -- -- -- (1,124)
--------- -------- -------- -------- ---------
Net cash provided
from (used in)
financing
activities......... 25,183 3,994 5,687 -- 34,864
EFFECT OF TRANSLATION
ADJUSTMENT ON CASH.... (2,207) (2,717) (3,310) -- (8,234)
--------- -------- -------- -------- ---------
CASH AND CASH
EQUIVALENTS:
Increase (decrease) in
cash................. 1,902 (1,456) (6,263) -- (5,816)
Beginning of year..... 849 5,381 20,571 -- 26,801
--------- -------- -------- -------- ---------
End of period......... $ 2,751 $ 3,925 $ 14,308 $ -- $ 20,985
========= ======== ======== ======== =========
</TABLE>
11
<PAGE>
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
For the nine months ended August 31, 1998
(Amounts In thousands)
<TABLE>
<CAPTION>
Guarantor Nonguarantor Consolidated
Parent Subsidiaries Subsidiaries Eliminations Total
-------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net cash provided by
(used in)
operations.......... $(21,289) $ 3,836 $ 19,799 $(3,946) $ (1,600)
CASH FLOWS FROM
INVESTING ACTIVITIES:
Plant and equipment
additions........... (4,061) (1,000) (2,329) -- (7,390)
Proceeds from sale of
property and
equipment........... 62 8 341 -- 411
Investments in and
advances to
subsidiaries, net... (12,137) -- (3,946) 3,946 (12,137)
-------- -------- ------- ------- --------
Net cash provided from
(used in) investing
activities............ (16,136) (992) (5,934) 3,946 (19,116)
CASH FLOWS FROM
FINANCING ACTIVITIES:
Redemption of senior
notes............... -- -- -- -- --
Proceeds from issuance
of senior
subordinated notes.. -- -- -- -- --
Redemption of senior
subordinated notes,
net................. (35,382) -- -- -- (35,382)
Increase (decrease)
in term debt....... -- -- -- -- --
Increase (decrease)
notes payable,
banks............... (990) -- (3,604) -- (4,594)
Increase (decrease)
in cash overdraft... 918 663 634 -- 2,215
Equity issuance
costs............... -- -- (4,885) -- (4,885)
Premiums paid on debt
extinguishment...... -- -- (3,450) -- (3,450)
Other................ (760) -- -- -- (760)
Proceeds from
issuance of
common stock....... 73,281 -- -- -- 73,281
Preferred stock
dividends........... (1,113) -- -- -- (1,113)
-------- -------- -------- ------- --------
Net cash provided from
(used in) financing
activities............ 35,954 663 (11,305) -- 25,312
EFFECT OF TRANSLATION
ADJUSTMENTS ON CASH... -- -- (939) -- (939)
-------- -------- -------- ------- --------
CASH AND CASH
EQUIVALENTS:
Increase (decrease)
in cash............. (1,471) 3,507 1,621 -- 3,657
Beginning of year.... 2,764 1,170 2,505 -- 6,438
-------- -------- -------- ------- --------
End of period........ $ 1,293 $ 4,677 $ 4,126 $ -- $ 10,095
======== ======== ======== ======= ========
</TABLE>
12
<PAGE>
CONSOLIDATED CONDENSED BALANCE SHEET
As of August 31, 1999
(Amounts in thousands)
<TABLE>
<CAPTION>
Guarantor Nonguarantor Consolidated
Parent Subsidiaries Subsidiaries Eliminations Total
-------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash
equivalents.......... $ 2,751 $ 3,925 $ 14,308 $ -- $ 20,985
Accounts receivables,
net.................. 48,408 77,660 113,758 (88,947) 150,880
Inventories, net...... 20,685 11,278 73,239 (63) 105,137
Other current assets.. 1,814 921 14,188 -- 16,923
--------- -------- -------- -------- ---------
Total current assets.. 73,657 93,785 215,493 (89,010) 293,925
Investments in
subsidiaries......... 48,282 26,900 3,284 (78,467) --
Property, plant, and
equipment, net....... 24,099 13,244 38,553 -- 75,895
Goodwill, net......... 71,577 36,217 188,513 -- 296,307
Other non-current
assets and deferred
charges, net......... 7,736 326,150 6,078 (301,071) 38,893
--------- --------- ---------- --------- ---------
Total assets........ $ 225,352 $ 496,296 $ 451,921 $(468,549) $ 705,020
========= ========= ========== ========= =========
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current maturities of
long-term debt......... $ -- $ 55,625 $ 2,004 $ -- $ 57,629
Notes payable to banks.. -- -- 194 -- 194
Cash overdrafts......... -- 168 19,685 -- 19,852
Accounts payable........ 35,395 38,896 89,352 (90,346) 73,297
Accrued expenses........ 13,117 42,636 60,831 -- 116,584
--------- --------- ---------- ---------- ---------
Total current
liabilities............ 48,512 137,325 172,066 (90,346) 267,556
Notes payable, bank
credit agreement....... 17,000 126,905 3,616 -- 147,520
Senior subordinated
notes.................. -- 202,298 -- -- 202,298
Junior subordinated
payment in kind note... -- 43,709 -- -- 43,709
Other long-term debt,
less current
maturities............. 6,000 3,616 302,462 (308,462) 3,616
Guaranteed Employees'
Stock Ownership Plan
obligation............. 5,029 -- -- -- 5,029
Post-retirement benefit
liability.............. 14,883 -- (0) -- 14,883
Minimum pension
liability.............. 3,135 -- -- -- 3,135
Other long-term
liabilities............ 136 (217) 5,917 (97) 5,739
--------- --------- ---------- ---------- ---------
94,695 513,635 484,061 (398,906) 693,485
Redeemable convertible
preferred stock........ 24,000 -- -- -- 24,000
Guaranteed Employees'
Stock Ownership Plan
obligation............. (5,029) -- -- -- (5,029)
Treasury stock, at cost. (4,156) -- -- -- (4,156)
--------- --------- ---------- ---------- ---------
14,815 -- -- -- 14,815
Common stock............ 90,375 41,722 14,962 (56,685) 90,375
Common stock warrants... 20,000 -- -- -- 20,000
Minimum pension
liability.............. (3,135) -- -- -- (3,135)
Foreign currency
translation
adjustments............ (7,896) (37,284) 15,426 (28,944) (58,697)
Retained earnings
(accumulated deficit).. 17,030 (21,778) (62,528) 15,985 (51,291)
--------- --------- ---------- ---------- ---------
116,373 (17,339) (32,140) (69,643) (2,748)
Less treasury stock, at
cost................... (532) -- -- -- (532)
--------- --------- ---------- ---------- ---------
115,842 (17,339) (32,140) (69,643) (3,280)
--------- --------- ---------- ---------- ---------
Total liabilities
and shareholders'
equity............. $ 225,352 $ 496,296 $ 451,921 $ (468,549) $ 705,020
========= ========= ========== ========== =========
</TABLE>
13
<PAGE>
CONSOLIDATED CONDENSED BALANCE SHEET
As of August 31, 1998
(Amounts in thousands)
<TABLE>
<CAPTION>
Guarantor Nonguarantor Consolidated
Parent Subsidiaries Subsidiaries Eliminations Total
-------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash
equivalents.......... $ 1,293 $ 4,677 $ 4,126 $ -- $ 10,095
Accounts receivables,
net.................. 36,536 33,281 54,773 (45,347) 79,243
Inventories, net...... 16,486 8,336 38,758 0 63,580
Other current assets.. 1,724 626 4,342 -- 6,691
--------- --------- --------- ---------- ---------
Total current assets.. 56,038 46,918 101,999 (45,347) 159,609
Investments in
subsidiaries......... 33,311 (7,675) 3,124 (28,760) --
Property, plant, and
equipment, net....... 21,489 4,598 18,725 -- 44,812
Goodwill, net......... 8,343 63,073 -- 71,416
Other non-current
assets and deferred
charges, net......... 98,762 434 2,598 (80,603) 21,192
--------- --------- --------- ---------- ---------
Total assets........ $ 217,944 $ 44,275 $ 189,519 $ (154,709) $ 297,029
========= ========= ========= ========== =========
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current maturities of
long-term debt......... $ -- $ -- $ 2,254 $ -- $ 2,254
Notes payable to banks.. -- -- 336 -- 336
Cash overdrafts......... -- 166 12,567 -- 12,733
Accounts payable........ 20,133 9,744 43,261 (27,446) 45,692
Accrued expenses........ 13,095 5,156 27,975 -- 46,226
--------- --------- --------- ---------- ---------
Total current
liabilities............ 33,228 15,066 86,392 (27,446) 107,241
Notes payable, bank
credit agreement....... 18,599 -- 4,741 -- 23,340
Senior subordinated
notes.................. 55,000 -- -- -- 55,000
Junior subordinated
payment in kind note... -- -- -- -- --
Other long-term debt,
less current
maturities............. -- -- 86,509 (82,855) 3,654
Guaranteed Employees'
Stock Ownership Plan
obligation............. 7,615 -- -- -- 7,615
Post-retirement benefit
liability.............. 14,217 -- (0) -- 14,216
Minimum pension
liability.............. 2,173 -- -- -- 2,173
Other long-term
liabilities............ 597 (361) 1,320 (105) 1,451
--------- --------- --------- ---------- ---------
131,428 14,705 178,962 (110,406) 214,690
Redeemable convertible
preferred stock........ 24,000 -- -- -- 24,000
Guaranteed Employees'
Stock Ownership Plan
obligation............. (7,615) -- -- -- (7,615)
Treasury stock, at cost. (4,927) -- -- -- (4,927)
--------- --------- --------- ---------- ---------
11,457 -- -- -- 11,458
Common stock............ 89,581 26,895 5,042 (31,938) 89,581
Common stock warrants... -- -- -- -- --
Minimum pension
liability.............. (2,173) -- -- -- (2,173)
Foreign currency
translation
adjustments............ (12,479) (11,110) 41,689 (37,441) (19,341)
Retained earnings
(accumulated deficit).. 821 13,785 (36,175) 25,075 3,506
--------- --------- --------- ---------- ---------
75,750 29,570 10,556 (44,304) 71,573
Less treasury stock, at
cost................... (692) -- -- -- (692)
--------- --------- --------- ---------- ---------
75,058 29,570 10,556 (44,304) 70,881
--------- --------- --------- ---------- ---------
Total liabilities
and shareholders'
equity............. $ 217,944 $ 44,275 $ 189,519 $ (154,709) $ 297,029
========= ========= ========= ========== =========
</TABLE>
14
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
GENERAL
Tokheim Corporation, including its subsidiaries ("Tokheim" or the "Company"), is
the world's largest manufacturer and servicer of electronic and mechanical
petroleum dispensing systems. These systems include petroleum dispensers and
pumps, retail automation systems (including point-of-sale ("POS") systems),
dispenser payment or "pay-at-the-pump" terminals, replacement parts and upgrade
kits. The Company provides products and services to customers in more than 80
countries. The Company is the largest supplier of petroleum dispensing systems
in Europe, Africa, Canada and Mexico, and one of the largest in the United
States. The Company also has established operations in Asia and Latin America.
RESULTS OF OPERATIONS
Consolidated sales for the three and nine month periods ended August 31, 1999
were $169.2 million and $512.4 million compared to $101.5 million and $292.0
million for the three and nine month periods ended August 31, 1998. Sales for
North America, excluding export sales, increased 26.2% and 33.7% for the three
and nine month periods, respectively, from $44.6 million and $125.3 million in
1998 to $56.3 million and $167.5 million in the comparable 1999 periods.
International sales, including domestic export sales, increased 98.4% and 106.9%
for the three and nine month periods, respectively, from $56.9 million and
$166.7 million in 1998 to $112.9 million and $344.9 million in 1999. The
increase in sales from the prior year is attributable to the RPS division
acquisition. Sales for the three and nine month periods ended August 31, 1999
were adversely affected by the continued merger activity taking place among the
major oil companies, which has resulted in a decrease in levels of capital
expenditures. Decreased spending was especially significant in emerging markets,
where the Company has a strong presence.
Gross margin as a percent of sales (defined as net sales less cost of sales
divided by net sales) decreased from 27.3% and 26.7% in the 1998 three and nine
month periods to 23.8% and 23.1% in the three and nine month periods ended
August 31, 1999. This decline from the 1998 percentages was primarily driven by
the historically lower margins achieved by the RPS division and increased mix of
service contract revenue, which provide a lower margin than dispenser sales. The
increase in gross margin as a percentage of sales for the three month period
ended August 31, 1999 as compared to the nine month period ended August 31, 1999
is the result of efficiencies gained from management's efforts at cost savings
put in place following the acquisition of the RPS division. In light of current
financial conditions, management has further accelerated the integration of the
RPS division and has instituted a series of immediate additional cost reduction
measures.
Selling, general, and administrative expenses as a percent of sales for the
three and nine month periods ended August 31, 1999 were 14.8% and 15.4% compared
to 18.0% and 18.2% in the comparable year ago periods. This decline is primarily
due to the inclusion of the RPS division and closure of redundant facilities and
termination of related personnel.
Depreciation and amortization expense for the three and nine month periods ended
August 31, 1999, was $6.3 million and $19.3 million compared to $2.7 million
and $7.8 million in the comparable year ago period. The majority of the
increase from the 1998 periods relates to increased depreciation and
amortization expense for fixed and intangible assets recorded in connection with
the acquisition of the RPS division.
15
<PAGE>
Merger and acquisition costs and other unusual items for the three and nine
month periods ended August 31, 1999 were $1.3 million and $6.1 million compared
to $0.3 million and $6.6 million in the comparable 1998 periods. The amounts
recorded in 1999 relate primarily to closure and severance expenses related to
the closing, consolidation, and merger activities involving certain facilities.
The 1999 costs include salaries of employees involved in closure activities,
vacancy costs related to owned facilities, and certain travel expenses incurred
while executing closure activities. The merger and acquisition costs recorded in
1998 primarily relate to a $5.9 million non-recurring write-off of in process
research and development that was purchased in connection with the December 1997
acquisition of Management Solutions, Inc. ("MSI").
Net interest expense for the nine month period ended August 31, 1999 was $37.9
million compared to $9.9 million in the comparable 1998 period. This increase is
due to increased debt levels associated with the September 1998 acquisition of
the RPS division and related financing.
Foreign currency effect for the three and nine month periods ended August 31,
1999 was a gain of $0.5 million and a loss $2.4 million compared to foreign
currency gain of $0.8 million in comparable nine month period. The loss for the
nine month 1999 period was driven by short-term inter-company receivables and
payables being revalued at the current rate of exchange in effect at August 31,
1999. The 1998 amounts represent realized gains associated with repayment of
various French Franc denominated Euro currency contracts entered into under the
Company's previous Bank Credit Agreement.
Other income, net, was expense of $0.3 million and income of $1.0 million for
the respective three and nine month periods ended August 31, 1999 compared to
income of $0.1 million and $0.3 million in the comparable year ago periods. The
1999 nine month amount includes a gain on the sale of surplus land adjacent to
the Company's corporate headquarters. The 1998 amounts are attributable to
various income and expense items, which are individually immaterial.
Income taxes for the nine month period ended August 31, 1999 was a benefit of
$0.5 million compared to expense of $1.7 million in the nine month 1998 period.
This change is due to lower 1999 earnings at subsidiaries that recorded taxable
income during 1998 combined with certain subsidiaries recording tax benefits in
1999 due to circumstances within these local jurisdictions.
Extraordinary loss on debt extinguishment was $6.2 million in the nine month
period ended August 31, 1999 compared to $5.0 million in the comparable nine
month period of 1998. During the first quarter of 1999, the Company incurred an
extraordinary loss on debt extinguishment of approximately $6.2 million in
connection with the refinancing of the Senior Notes and the Senior Subordinated
Seller Notes with proceeds received from the Offering. This amount consists of
$0.5 million of premiums on the Senior Notes and approximately $5.7 million of
unamortized deferred issuance costs that were written off. The $5.0 million 1998
amount was a result of a $35.0 million bond redemption. The amount includes $3.5
million of call premiums and $1.5 million of unamortized deferred issuance cost.
As a result of the above mentioned items, loss before extraordinary item was
$5.5 million and $24.6 million for the three and nine month periods ended August
31, 1999, compared to earnings of $2.9 million and loss of $0.3 million in the
comparable 1998 periods. Diluted loss per common share before extraordinary item
for the three and nine month 1999 periods was $0.46 and $2.03 compared to
earnings of $0.19 and loss of $0.12 in the three and nine month 1998 periods.
Diluted loss per common share from extraordinary loss on debt extinguishment was
$0.49 in the nine month 1999 period compared to $0.45 in the nine month 1998
period. Net loss for the three and nine months ended August 31, 1999 was $0.46
and $2.52 per diluted common share compared to a net earnings of $0.19 and net
loss of $0.57 per diluted common share for the comparable 1998 periods.
LIQUIDITY AND CAPITAL RESOURCES
Cash used in operations for the nine months ended August 31, 1999 was $20.6
million versus $1.6 million in the comparable period of 1998. During the nine
month 1999 period, the Company was able to collect receivables and reduce
inventory levels by a combined amount of $23.6 million. This is a direct result
of
16
<PAGE>
management's continued focus on working capital improvements. This cash inflow
was used to reduce the outstanding accounts payable and accrued liabilities.
Cash used in investing activities for the nine month period ended August 31,
1999, was $11.9 million compared to a cash usage of $19.1 million in the
comparable 1998 period. The cash usage in the 1999 period is attributable to
routine capital expenditures as well as capital expenditures incurred in the
implementation of the Company's restructuring plan. The cash usage in the 1998
period is mainly attributable to the acquisition of MSI and routine capital
expenditures.
Cash provided from financing activities for the 1999 nine month period was $34.9
million compared to $25.3 provided in the comparable 1998 period. The 1999
amount includes the issuance of new high yield debt in a private placement
offering and increased bank debt. The cash provided in the 1998 period is
largely attributable to the March 1998 common stock offering.
During the quarter ended August 31, 1999, the Company failed to satisfy certain
financial covenants contained in its New Credit Agreement. The Company has
received waivers relating to the financial covenant defaults for the fiscal
quarter ended August 31, 1999 and has also amended its New Credit Agreement to,
among other things, amend the related financial covenants that cover the
Company's fourth fiscal quarter of 1999 and periods thereafter. In connection
with amending the New Credit Agreement, the Company has agreed to obtain $50.0
million by issuing new equity type securities and pay down the New Credit
Agreement balance on or before January 25, 2000. The Company believes that it
can obtain such additional equity on or before January 25, 2000 or complete
alternative refinancing arrangements and meet the amended financial covenants in
future periods. As such, the Company has reclassified $50.0 million of the
indebtedness under the New Credit Agreement to current liabilities. However,
there can be no assurance that the $50.0 million in additional equity type
securities will be obtained by the Company nor that alternative refinancing can
be secured and the failure to do so would create an event of default under the
amended New Credit Agreement.
On January 26, 1999, the Company issued $123.0 million aggregate principal
amount of 11.375% Senior Subordinated Notes due 2008 (the "Dollar Notes") and
Euro 75.0 million ($87.0 million equivalent) aggregate principal amount of
11.375% Senior Subordinated Notes due 2008 (the "Euro Notes") in a private
placement pursuant to Rule 144A (the "Offering"). The Notes will mature on
August 1, 2008, and interest is payable semi-annually on February 1 and August 1
of each year, commencing August 1, 1999. The August 1, 1999 payment of
approximately $11.8 million was primarily funded from borrowings under the
working capital facility as well as cash flows from operations. At October 15,
1999 the outstanding borrowings under the Company's revolving credit facility
were $91.9 million. Available borrowings under the revolving working capital
facility were $18.1 million at October 15, 1999, subject to the Company's
borrowing base calculation and certain other loan covenants.
Net proceeds from the issuance of Senior Subordinated Notes due 2008 were used
to redeem the Senior Subordinated Seller Notes and the Senior Notes. The Senior
Subordinated Seller Notes were redeemed at an aggregate price of $176.7 million,
representing principal of $170.0 million and accrued and unpaid interest thereon
of $6.7 million. The Senior Notes were redeemed at an aggregate price of $23.2
million, representing principal of $22.5 million, accrued and unpaid interest of
$0.2 million and an applicable call premium of $0.5 million. In addition, the
Company used approximately $9.1 million of the net proceeds to reduce borrowings
under the revolving credit facility under the New Credit Agreement and to
permanently reduce the bank working capital commitment from $120.0 million to
$110.0 million.
During the first quarter of 1999, the Company incurred an extraordinary loss on
debt extinguishment of approximately $6.2 million in connection with the
refinancing of the Senior Notes and the Senior Subordinated Seller Notes with
proceeds received from the Offering. This amount consists of $0.5 million of
premiums on the Senior Notes and approximately $5.7 million of unamortized
deferred issuance costs that were written off.
As part of the purchase price of the RPS division, the Company has provided
$20.3 million for certain costs it expects to incur to close down redundant
operations in connection with the reorganization and rationalization of the RPS
division's operations. As of August 31, 1999, the Company has incurred and
charged approximately $11.1 million against this accrued liability for projects
initiated since the acquisition
17
<PAGE>
date, leaving a remaining balance of $9.2 million. The Company expects to incur
approximately $2.8 million of restructuring charges in the fourth quarter of
1999. In addition, at November 30, 1998 the Company established a restructuring
reserve related to the closure of its Glenrothes, Scotland location in the
amount of $5.1 million. For the nine month period ended August 31, 1999, the
Company incurred costs of $4.6 million which were charged against the reserve
leaving a remaining balance of $0.5 million. These charges relate to severance
costs and facility closure expenses. The Company expects the closure of this
facility to be completed during the fourth quarter of 1999.
The Company has guaranteed loans to the Employees' Stock Ownership Plan ("ESOP")
in the amounts of $5.0 million and $7.0 million at August 31, 1999 and November
30, 1998, respectively. Preferred stock dividends paid were $0.4 million and
$1.1 million for each of the three and nine month periods ended August 31, 1999
and 1998, respectively.
In December 1997, the Company initiated its Year 2000 plan, including the
organization and staffing of a full-time Year 2000 program office. The Company
has organized the process into the following sections: product certification
(ensuring all products sold by the Company are Year 2000 ready); internal
information systems (ensuring all internal hardware and software is Year 2000
ready through upgrades or replacement); suppliers, distributors and external
agents (ensuring all suppliers, distributors and external agents used by the
Company to purchase or sell goods and services are Year 2000 ready); and
manufacturing and infrastructure (ensuring manufacturing and infrastructure
systems are Year 2000 ready).
As of August 31, 1999, 98.0% of the Company's products worldwide had been tested
for Year 2000 readiness. 93.0% of the Company's total product lines are Year
2000 ready, and the Company believes that the remaining products will be Year
2000 ready by December 1999. The Company's products presently being sold are
Year 2000 ready. The Company has assessed which products in the field are not
Year 2000 ready and its responsibility to the customers, if any, to remedy non-
compliant products. This assessment has been done for all products sold by each
entity with the assessment efforts focused on the recently acquired RPS division
locations. There is a possibility that certain third-party networks over which
the POS systems must operate may not be Year 2000 ready, but the Company's
products will still allow the pumping of petroleum products. The Company has
surveyed its critical suppliers, and over 50.0% of the respondents have
indicated that they are Year 2000 ready. The remainder of those responding have
indicated that they are still working to achieve Year 2000 readiness, but none
have indicated that they expect not to be ready. The Company believes that all
of its critical information systems will be Year 2000 ready no later than
November 30, 1999. The total costs associated with required modifications to
become Year 2000 ready are not expected to be material to the Company's
financial position results of operations or cash flows. The Company estimates
that it will spend a total of approximately $3.7 million by December 31, 1999,
of which approximately $2.8 million had been spent as of August 31, 1999 to
become Year 2000 ready. The Company has enlisted the assistance of a third-party
consulting company to provide independent verification and validation of its
entire Year 2000 plan.
The failure to correct a material Year 2000 problem could result in an
interruption in, or a failure of certain normal business activities or
operations. Such failures could materially and adversely affect the Company's
results of operation, liquidity, and financial condition. The Company believes
that the most likely failure scenario is that its POS systems that have not been
updated in the field may fail, but the Company's dispensers will still allow the
dispensing of petroleum products. Under such a scenario, purchasers of petroleum
products would still be able to use the dispensers but would be required to pay
for their purchases at the cashier rather than at the pump.
Due to the general uncertainty inherent in the Year 2000 problem, resulting in
part from the uncertainty of the Year 2000 readiness of third-party suppliers,
customers, and devices that interface with the Company's products, the Company
is unable to determine at this time whether the consequences of Year 2000
failures will have a material impact on the Company's results of operations,
liquidity, or financial condition. The Year 2000 plan is expected to
significantly reduce the Company's level of uncertainty about the Year 2000
problem and, in particular, about the Year 2000 readiness of its material
external agents. The Company believes that, with the implementation of new
business systems and completion of the Year 2000 plan as scheduled, the
possibility of significant interruptions of normal operations should be reduced.
However,
18
<PAGE>
contingency planning for all sections discussed above commenced in the fourth
quarter of 1998, and the Company is currently focusing on assessing the
potential Year 2000 problems that may arise and the risks of not becoming Year
2000 ready for each section mentioned. A contingency plan was developed in the
first quarter of 1999 and distributed throughout the Company.
Former shareholders of MSI, which the Company purchased from the shareholders in
December 1997, have filed a $30.0 million arbitration claim against the Company
alleging fraud, breech of contract, tortious interference with contractual
relations and breach of implied good faith and fair dealing. The Company
believes that the claims are without merit and will vigorously defend against
the allegations. The Company has filed counterclaims and is also seeking damages
in excess of $4.0 million for breach of representations and warranties in the
purchase agreement.
The Company's principal sources of liquidity in the future are expected to be
cash flow from operations, including cash flow anticipated to be generated from
the recently acquired RPS division, and available borrowings under the New
Credit Agreement and the issuance of equity securities. It is expected that the
Company's principal uses of liquidity will be to provide working capital,
finance capital expenditures, fund costs associated with the Company's
integration and rationalization plan and meet debt service requirements. As a
result of the acquisition of the RPS division, the Company has a significant
level of debt. Based upon current levels of operations and anticipated cost
savings and future growth, the Company believes that its expected cash flow from
operations, together with available borrowings under the New Credit Agreement
and its other sources of liquidity, including leases, will be adequate to meet
its anticipated requirements for working capital, capital expenditures, lease
payments and scheduled principal and interest payments on a short and long term
basis. There can be no assurance, however, that the Company's business will
continue to generate cash flow at or above current levels, that estimated cost
savings or growth will be achieved.
The indentures under which the Dollar Notes and the Euro Notes were issued (the
"Indentures") and the New Credit Agreement contain a number of significant
covenants. The New Credit Agreement requires the Company to maintain specified
financial ratios and satisfy certain financial tests. The Company's ability to
meet the new financial covenants may be affected by events beyond its control,
including reduced purchases of dispensers and equipment by the major oil
companies. If this purchasing weakness continues, there can be no assurance that
the Company can or will remain in compliance with its covenants. In addition,
the Indentures limit the ability of the Company and its subsidiaries to, among
other things: incur additional debt; pay dividends on capital stock or
repurchase capital stock or take certain other restricted payments; use the
proceeds of certain asset sales; make certain investments; create liens on
assets to secure debt; enter into transactions with affiliates; merge or
consolidate with another company; and transfer and sell assets.
New Accounting Pronouncements
The Company has considered the impact that accounting pronouncements recently
issued by the Financial Accounting Standards Board and American Institute of
Certified Public Accountants will have on the Consolidated Financial Statements
as of November 30, 1999. None of the pronouncements that have been issued but
not yet adopted by the Company are expected to have a material impact on the
Company's financial position, results of operations or cash flows. See the
footnotes to the consolidated condensed financial statements for additional
information about recently issued accounting pronouncements.
19
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company is engaged in an arbitration matter relating to an employment claim.
The matter was discussed in the Company's Form 10-Q for the quarter ended May
31, 1999, filed July 28, 1999, and is also discussed in this Report in the
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" under the heading "Liquidity and Capital Resources."
Item 3. Defaults Upon Senior Securities
During the quarter ended August 31, 1999, the Company failed to satisfy certain
financial covenants contained in its New Credit Agreement. The Company has
received waivers relating to the financial covenant defaults for the fiscal
quarter ended August 31, 1999 and has also amended its New Credit Agreement to,
among other things, amend the related financial covenants that cover the
Company's fourth fiscal quarter of 1999 and periods thereafter. In connection
with amending the New Credit Agreement, the Company has agreed to obtain $50.0
million by issuing new equity type securities and pay down the New Credit
Agreement balance on or before January 25, 2000. The Company believes that it
can obtain such additional equity on or before January 25, 2000 or complete
alternative refinancing arrangements and meet the amended financial covenants in
future periods. As such, the Company has reclassified $50.0 million of the
indebtedness under the New Credit Agreement to current liabilities. However,
there can be no assurance that the $50.0 million in additional equity type
securities will be obtained by the Company nor that alternative refinancing can
be secured and the failure to do so would create an event of default under the
amended New Credit Agreement.
20
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
<TABLE>
<CAPTION>
Exhibit
No. Document
- ------- --------
<C> <S>
2.1 Stock Purchase Agreement, dated as of December 29, 1997 between Tokheim Corporation and Arthur S. ("Rusty")
Elston, Ronald H. Elston, Eric E. Burwell and Curt E. Burwell (incorporated herein by reference to the Company's
Current Report on Form 8-K, dated December 31, 1997).
2.2 Master Agreement for Purchase and Sale of Shares, Assets, and Liabilities, dated as of June 19, 1998, between
Tokheim Corporation and Schlumberger Limited (incorporated herein by reference to the Company's Current
Report on Form 8-K/A dated October 1, 1998).
2.3 Amendment No. 1 to the Master Agreement for Purchase and Sale of Shares, Assets and Liabilities, dated as of
September 30, 1998 between Tokheim Corporation and Schlumberger Limited (incorporated herein by reference to
the Company's Current Report on Form 8-K/A dated October 1, 1998).
3.1 Restated Articles of Incorporation of Tokheim Corporation, as amended, as filed with the Indiana Secretary of State
on February 5, 1997 (incorporated herein by reference to the Company's Annual Report on Form 10-K/A for the
year ended November 30, 1996).
3.2 Bylaws of Tokheim Corporation, as restated on July 12, 1995 and amended March 2, 1998 (incorporated herein by
reference to the Company's Quarterly Report on Form 10-Q for the period ended May 31, 1998).
3.3 Articles of Incorporation of Monitec Corporation (now known as Envirotronic Systems, Inc.) (incorporated herein
by reference to the Company's Registration Statement on Form S-4, filed April 28, 1999, as amended).
3.4 Articles of Amendment of the Articles of Incorporation of Monitec Corporation (changing name to Envirotronic
Systems, Inc.) (incorporated herein by reference to the Company's Registration Statement on Form S-4, filed
April 28, 1999, as amended).
3.5 Bylaws of Envirotronic Systems, Inc. (incorporated herein by reference to the Company's Registration Statement on
Form S-4, filed April 28, 1999, as amended).
3.6 Amended and Restated Articles of Incorporation of William M. Wilson's Sons, Inc. (now known as Gasboy
International, Inc.) (incorporated herein by reference to the Company's Registration Statement on Form S-4, filed
April 28, 1999, as amended).
3.7 Amendment No. 1 to Amended and Restated Articles of Incorporation of William M. Wilson's Sons, Inc.
(incorporated herein by reference to the Company's Registration Statement on Form S-4, filed April 28, 1999, as
amended).
3.8 Amendment No. 2 to Amended and Restated Articles of Incorporation of William M. Wilson's Sons, Inc.
(incorporated herein by reference to the Company's Registration Statement on Form S-4, filed April 28, 1999, as
amended).
3.9 Amendment No. 2 to Amended and Restated Articles of Incorporation of William M. Wilson's Sons, Inc. (changing
name to Gasboy International, Inc.) (incorporated herein by reference to the Company's Registration Statement on
Form S-4, filed April 28, 1999, as amended).
3.10 Restated Bylaws of Gasboy International, Inc. (incorporated herein by reference to the Company's Registration
Statement on Form S-4, filed April 28, 1999, as amended).
3.11 Articles of Incorporation of Management Solutions of Colorado, Inc. (now known as Management Solutions, Inc.)
(incorporated herein by reference to the Company's Registration Statement on Form S-4, filed April 28, 1999, as
amended).
</TABLE>
21
<PAGE>
<TABLE>
<C> <S>
3.12 Articles of Amendment to the Articles of Incorporation of Management Solutions of Colorado, Inc. (changing name
to Management Solutions, Inc.) (incorporated herein by reference to the Company's Registration Statement on Form
S-4, filed April 28, 1999, as amended).
3.13 Bylaws of Management Solutions, Inc. (incorporated herein by reference to the Company's Registration Statement
on Form S-4, filed April 28, 1999, as amended).
3.14 Articles of Incorporation of ESCIA, Inc. (now known as Sunbelt Hose & Petroleum Equipment, Inc.) (incorporated
herein by reference to the Company's Registration Statement on Form S-4, filed April 28, 1999, as amended).
3.15 Articles of Amendment of ESCIA, Inc. (changing name to Sunbelt Hose & Petroleum Equipment, Inc.)
(incorpo rated herein by reference to the Company's Registration Statement on Form S-4, filed April 28, 1999, as amended).
3.16 Bylaws of Sunbelt Hose & Petroleum Equipment, Inc. (incorporated herein by reference to the Company's
Registration Statement on Form S-4, filed April 28, 1999, as amended).
3.17 Articles of Incorporation of Tokheim Base Systems, Inc. (now known as Tokheim Automation Corporation)
(incorporated herein by reference to the Company's Registration Statement on Form S-4, filed April 28, 1999, as
amended).
3.18 Articles of Amendment to the Articles of Incorporation of Tokheim Base Systems, Inc. (changing name to Mini
Base Systems, Inc.) (incorporated herein by reference to the Company's Registration Statement on Form S-4, filed
April 28, 1999, as amended).
3.19 Articles of Amendment to the Articles of Incorporation of Mini Base Systems, Inc. (changing name to Tokheim
Automation Corporation) (incorporated herein by reference to the Company's Registration Statement on Form S-4,
filed April 28, 1999, as amended).
3.20 Bylaws of Tokheim Automation Corporation (incorporated herein by reference to the Company's Registration
Statement on Form S-4, filed April 28, 1999, as amended).
3.21 Certificate of Incorporation of Tokheim Equipment Corporation (incorporated herein by reference to the Company's
Registration Statement on Form S-4, filed April 28, 1999, as amended).
3.22 Bylaws of Tokheim Equipment Corporation (incorporated herein by reference to the Company's Registration
Statement on Form S-4, filed April 28, 1999, as amended).
3.23 Articles of Incorporation of Tokheim Investment Corp (incorporated herein by reference to the Company's
Registration Statement on Form S-4, filed April 28, 1999, as amended).
3.24 Bylaws of Tokheim Investment Corp (incorporated herein by reference to the Company's Registration Statement on
Form S-4, filed April 28, 1999, as amended).
3.25 Certificate of Formation of Tokheim RPS, LLC (incorporated herein by reference to the Company's Registration
Statement on Form S-4, filed April 28, 1999, as amended).
3.26 Limited Liability Company Agreement of Tokheim RPS, LLC (incorporated herein by reference to the Company's
Registration Statement on Form S-4, filed April 28, 1999, as amended).
3.27 Articles of Organization of Tokheim Services LLC (incorporated herein by reference to the Company's Registration
Statement on Form S-4, filed April 28, 1999, as amended).
3.28 Limited Liability Company Agreement of Tokheim Services LLC (incorporated herein by reference to the
Company's Registration Statement on Form S-4, filed April 28, 1999, as amended).
4.1 Rights Agreement, dated as of January 22, 1997, between Tokheim Corporation and Harris Trust and Savings Bank,
as Rights Agent (incorporated herein by reference to the Company's Current Report on Form 8-K, filed
February 23, 1997).
4.2 Amendment No. 1 to Rights Agreement, dated as of September 30, 1998, between Tokheim Corporation and Harris
Trust and Savings Bank (incorporated herein by reference to the Company's Current Report on Form 8-K/A dated
October 1, 1998).
4.3 Securities Purchase Agreement, dated September 30, 1998, between Tokheim Corporation and Schlumberger
Limited (incorporated herein by reference to the Company's Current Report on Form 8-K/A dated October 1, 1998).
</TABLE>
22
<PAGE>
4.4 12% Junior Subordinated Note due 2008 in the amount of $40,000,000
(incorporated herein by reference to the Company's Current Report on
Form 8-K/A dated October 1, 1998).
4.5 Junior Subordinated Note Indenture, dated as of September 30, 1998,
among Tokheim Corporation, Management Solutions, Inc., Tokheim
Equipment Corporation, Tokheim RPS, LLC, Sunbelt Hose & Petroleum
Equipment, Inc., Envirotronic Systems, Inc., Gasboy International,
Inc., Tokheim Automation Corporation, Tokheim Investment Corp., as
guarantors, and Harris Trust and Savings Bank, as trustee (incorporated
herein by reference to the Company's Current Report on Form 8-K/A dated
October 1, 1998).
4.6 Amendment No. 1 to Junior Subordinated Note Indenture, dated as of
January 25, 1999 (incorporated herein by reference to the Company's
Annual Report on Form 10-K, for the year ended September 30, 1998,
filed March 1, 1999).
4.7 Warrant to Purchase up to 19.9% of the Shares of Common Stock of
Tokheim Corporation (incorporated herein by reference to the Company's
Current Report on Form 8-K/A dated October 1, 1998).
4.8 Registration Rights Agreement, dated September 30, 1998, between
Tokheim Corporation and Schlumberger Limited (incorporated herein by
reference to the Company's Current Report on Form 8-K/A dated
October 1, 1998).
4.9 Amended and Restated Credit Agreement, dated as of September 30, 1998,
among Tokheim Corporation, the Borrowing Subsidiaries, the Lenders and
NBD Bank, N.A. as administrative agent and Credit Lyonnais as
documentation and collateral agent and Gleacher NatWest Inc. and
Bankers Trust Company as co-syndication agents (incorporated herein by
reference to the Company's Current Report on Form 8-K/A dated
October 1, 1998).
4.10 Second Amended and Restated Credit Agreement, dated as of December 14,
1998, among Tokheim Corporation, the Borrowing Subsidiaries, the
Lenders and NBD Bank, N.A. as administrative agent and Credit Lyonnais
as documentation and collateral agent and Gleacher NatWest Inc. and
Bankers Trust Company as co-syndication agents (incorporated herein by
reference to the Company's Annual Report on Form 10-K, for the year
ended September 30, 1998, filed March 1, 1999).
4.11 Consent and Amendment No. 1 to Amended and Restated Credit Agreement,
dated as of January 11, 1999 (incorporated herein by reference to the
Company's Quarterly Report on Form 10-Q, for the quarter ended
February 28, 1999, filed April 14, 1999).
4.12 Amendment No. 2 to Amended and Restated Credit Agreement, dated as of
March 1, 1999. (incorporated herein by reference to the Company's
Quarterly Report on Form 10-Q, for the quarter ended February 28, 1999,
filed April 14, 1999).
4.13 Amendment No. 3 to Second Amended and Restated Credit Agreement, dated
as of February 27, 1999 (incorporated herein by reference to the
Company's Quarterly Report on Form 10-Q, for the quarter ended
February 28, 1999, filed April 14, 1999).
4.14 Amendment No. 4 and Waiver to Second Amended and Restated Credit
Agreement, dated as of October 14, 1999.
4.15 Dollar Notes Indenture, dated as of January 29, 1999, among Tokheim
Corporation, BT Alex. Brown, Credit Lyonnais Securities, First Chicago
Capital Markets, Inc., Gleacher NatWest International, ABN AMRO Incorpo
rated, PaineWebber Incorporated, Schroder & Co. Inc. and certain
subsidiary guarantors of Tokheim Corporation (incorporated herein by
reference to the Company's Annual Report on Form 10-K, for the year
ended September 30, 1998, filed March 1, 1999).
4.16 Euro Notes Indenture, dated as of January 29, 1999, among Tokheim
Corporation, BT Alex. Brown, Credit Lyonnais Securities, First Chicago
Capital Markets, Inc., Gleacher NatWest International, ABN AMRO
Incorporated, PaineWebber Incorporated, Schroder & Co. Inc. and certain
subsidiary guarantors of Tokheim Corporation (incorporated herein by
reference to the Company's Annual Report on Form 10-K, for the year
ended September 30, 1998, filed March 1, 1999).
4.17 Dollar Registration Rights Agreement, dated as of January 29, 1999,
among Tokheim Corporation, BT Alex. Brown, Credit Lyonnais Securities,
First Chicago Capital Markets, Inc., Gleacher NatWest International,
ABN AMRO Incorporated, PaineWebber Incorporated, Schroder & Co. Inc.
and certain subsidiary guarantors of Tokheim Corporation (incorporated
herein by reference to the Company's Annual Report on Form 10-K, for
the year ended September 30, 1998, filed March 1, 1999).
4.18 Euro Registration Rights Agreement, dated as of January 29, 1999, among
Tokheim Corporation, BT Alex. Brown, Credit Lyonnais Securities, First
Chicago Capital Markets, Inc., Gleacher NatWest International, ABN AMRO
Incorporated, PaineWebber Incorporated, Schroder & Co. Inc. and certain
subsidiary guarantors of Tokheim Corporation (incorporated herein by
reference to the Company's Annual Report on Form 10-K, for the year
ended September 30, 1998, filed March 1, 1999).
23
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
10.1 Tokheim Corporation 1992 Stock Incentive Plan, established December 15,
1992 (incorporated herein by reference to the Company's Registration
Statement on Form S-8, File No. 33-52167, dated February 4, 1994).
10.2 Retirement Savings Plan for Employees of Tokheim Corporation and
Subsidiaries (incorporated herein by reference to Amendment No. 1 to
the Company's Registration Statement on Form S-8, File No. 33-29710,
dated August 1, 1989).
10.3 Tokheim Corporation 1996 Key Management Incentive Bonus Plan
(incorporated herein by reference to the Company's Report on Form 10-
Q/A, for the quarter ended February 29, 1996, filed November 20, 1996).
10.4 Tokheim Corporation Deferred Compensation Plan.
10.5 Tokheim Corporation Supplemental Executive Retirement Plan.
10.6 Employment Agreement, dated July 15, 1999, between the Company and
Douglas K. Pinner.
10.7 Employment Agreement, dated July 15, 1999, between the Company and John
A. Negovetich.
10.8 Employment Agreement, dated July 15, 1999, between the Company and
Jacques St-Denis.
10.9 Employment Agreement, dated July 15, 1999, between the Company and
Norman L. Roelke.
10.10 Employment Agreement, dated July 15, 1999, between the Company and
Scott A. Swogger.
10.11 Technology License Agreement, effective as of December 1, 1997, between
Tokheim and Gilbarco, Inc. (incorporated herein by reference to the
Company's Annual Report on Form 10-K for the year ended November 30,
1997).
10.12 Tokheim Corporation 1997 Incentive Plan (incorporated herein by
reference to the Company's Annual Report on Form 10-K for the year
ended November 39, 1997).
10.13 Employment Agreement, dated December 31, 1997, between Management
Solutions, Inc. and Arthur S. Elston (incorporated herein by reference
to the Company's Annual Report on Form 10-K for the year ended November
30, 1997).
11.1 Statement re computation of per share earnings.
27.1 Financial Data Schedule.
</TABLE>
b. Reports on Form 8-K
None.
24
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TOKHEIM CORPORATION
Date: October 15, 1999 /s/ Douglas K. Pinner
---------------------
Chairman, President and Chief Executive Officer
Date: October 15, 1999 /s/ John A. Negovetich
----------------------
Executive Vice-President, Finance and
Administration and Chief Financial Officer
25
<PAGE>
Exhibit Index
<TABLE>
<CAPTION>
Exhibit
No. Document
- ------- --------
<C> <S>
4.14 Amendment No. 4 and Waiver to Second Amended and Restated Credit
Agreement, dated as of October 14, 1999.
10.4 Tokheim Corporation Deferred Compensation Plan.
10.5 Tokheim Corporation Supplemental Executive Retirement Plan.
10.6 Employment Agreement, dated July 15, 1999, between the Company and
Douglas K. Pinner.
10.7 Employment Agreement, dated July 15, 1999, between the Company and John
A. Negovetich.
10.8 Employment Agreement, dated July 15, 1999, between the Company and
Jacques St-Denis.
10.9 Employment Agreement, dated July 15, 1999, between the Company and
Norman L. Roelke.
10.10 Employment Agreement, dated July 15, 1999, between the Company and
Scott A. Swogger.
11.1 Statement re computation of per share earnings.
27.1 Financial Data Schedule.
</TABLE>
26
<PAGE>
EXHIBIT 4.14
EXECUTION COPY
AMENDMENT NO. 4 AND WAIVER
TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDMENT NO. 4 AND WAIVER TO SECOND AMENDED AND RESTATED CREDIT
AGREEMENT ("Amendment") is made as of October 14, 1999 by and among TOKHEIM
CORPORATION, an Indiana corporation (the "Company"), GASBOY INTERNATIONAL, INC.,
a Pennsylvania corporation ("Gasboy"), TOKHEIM-SOFITAM S.A., a societe anonyme
organized under the laws of France ("Tokheim-Sofitam"), TOKHEIM SOFITAM
APPLICATIONS S.A., a societe anonyme organized under the laws of France
("Sofitam Applications"), the financial institutions listed on the signature
pages hereof (the "Lenders"), BANK ONE, INDIANA, NATIONAL ASSOCIATION, formerly
known as NBD BANK, N.A., in its individual capacity as a Lender and as
contractual representative on behalf of the Lenders (the "Administrative
Agent"), CREDIT LYONNAIS, as Documentation and Collateral Agent, and BANKERS
TRUST COMPANY, as Co-Syndication Agent under that certain Second Amended and
Restated Credit Agreement dated as of December 14, 1998 by and among the
Company, Gasboy, Tokheim-Sofitam, Sofitam Applications, the Lenders, the
Administrative Agent, the Documentation and Collateral Agent, and the Co-
Syndication Agent, as amended by an Amendment No. 1, an Amendment No. 2 and an
Amendment No. 3, dated as of January 11, 1999, March 1, 1999 and February 27,
1999, respectively (as amended and as the same may be amended, restated,
supplemented or otherwise modified from time to time, the "Credit Agreement").
Defined terms used herein and not otherwise defined herein shall have the
meaning given to them in the Credit Agreement.
WITNESSETH
WHEREAS, the Company, Gasboy, Tokheim-Sofitam, Sofitam Applications,
the Lenders, the Administrative Agent, the Documentation and Collateral Agent,
and the Co-Syndication Agent are parties to the Credit Agreement;
WHEREAS, the Company has notified the Administrative Agent and the
Lenders that the Company may be in violation of the financial covenants set
forth in Sections 6.12, 6.23, 6.24, 6.25, and 6.33 of the Credit Agreement, in
each case, for the fiscal quarter ending on August 31, 1999;
WHEREAS, the Borrowers have requested that the Administrative Agent
and the Required Lenders waive the "Applicable Defaults" (as described below)
and amend the Credit Agreement in certain respects, and the Required Lenders and
the Administrative Agent are willing to waive the Applicable Defaults and to
amend the Credit Agreement on the terms and conditions set forth herein, it
being expressly understood that the waiver set forth herein shall in no event
constitute a waiver by the Lenders or the Administrative Agent of any other
breach of the Credit Agreement or any of the Lenders' or Administrative Agent's
rights or remedies with respect thereto;
NOW, THEREFORE, in consideration of the premises set forth above, the
terms and conditions contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company, Gasboy, Tokheim-Sofitam, Sofitam Applications, the Administrative Agent
and the Required Lenders have agreed to the following amendments to the Credit
Agreement:
<PAGE>
1. Amendments to Credit Agreement. Effective as of October 14, 1999 and
subject to the satisfaction of the conditions precedent set forth in Section 3
below, the Credit Agreement is hereby amended as follows:
1.1. Section 1.1 of the Credit Agreement is hereby amended (i) to
delete the phrase "four" now appearing in clause (x) of the definition of
"EBITDA", and to substitute the following therefor: "nine"; and (ii) to
insert the following immediately prior to the period (".") now appearing at
the end of the first sentence of the definition of "Fixed Charge Coverage
Ratio":
", minus (f) for the four-quarter period ending on November 30, 1999,
the current portion of the Term Loans in an amount not to exceed
$50,000,000".
1.2. Section 2.1.1(i) of the Credit Agreement is hereby amended to
delete the phrase ", or, after the Agent has concluded that the syndication
process has been completed with Lenders that can Lend the Agreed Currencies
or the Revolving Loan restructured to provide a tranche to be provided by
Lenders that can provide the Agreed Currencies," now appearing therein, and
to substitute the following therefor:
", or, unless the Administrative Agent has notified the Company in
writing that the Administrative Agent has determined that Eurocurrency
Loans in currencies other than Dollars shall not be available (a copy
of which notice shall be delivered to each of the Lenders) and such
notice has not been terminated by the Administrative Agent in
writing,".
1.3. Section 2.1.2(i) of the Credit Agreement is hereby amended to
delete the word "or" now appearing immediately after the phrase "to the
Company in Dollars" in the first sentence thereof, and to substitute the
following therefor:
", or, unless the Administrative Agent has notified the Company in
writing that the Administrative Agent has determined that Swing Loans
in currencies other than Dollars shall not be available (a copy of
which notice shall be delivered to each of the Lenders) and such
notice has not been terminated by the Administrative Agent in
writing,".
1.4. Section 2.1.4(i) of the Credit Agreement is hereby amended to
delete the word "Upon" now appearing at the beginning thereof, and to
substitute the following therefor:
"Unless the Administrative Agent has notified the Company in writing
that the Administrative Agent has determined that Alternate Currency
Loans shall not be available (a copy of which notice shall be
delivered to each of the Lenders and the Alternate Currency Banks) and
such notice has not been terminated by the Administrative Agent in
writing, upon".
1.5. Section 2.5.3(B)(i)(d) of the Credit Agreement is hereby amended
to delete the phrase "[Intentionally Omitted]" now appearing therein, and
to substitute the following therefor:
2
<PAGE>
"On or before January 25, 2000, and exclusive of any mandatory
prepayment required pursuant to Section 2.5.3(B)(i)(a) or (c), the
Company shall make a mandatory prepayment of the Term Loans in an
amount not less than $50,000,000, and without duplication with respect
to any amounts paid as a mandatory prepayment pursuant to Section
2.5.3(B)(i)(b)(i)".
1.6. Section 2.6.1(a) of the Credit Agreement is hereby amended to
delete the word "or Agreed Currency" now appearing after the phrase "it is
denominated in Dollars" now appearing in the second proviso thereof, and to
substitute the following therefor:
"or, unless the Administrative Agent has notified the Company in
writing that the Administrative Agent has determined that Letters of
Credit in currencies other than Dollars shall not be available (a copy
of which notice shall be delivered to each of the Lenders) and such
notice has not been terminated by the Administrative Agent in writing,
an Agreed Currency".
1.7. Section 6.1(ii) of the Credit Agreement is hereby amended (i) to
delete the phrase "60 days" now appearing therein, and to substitute the
following therefor: "45 days", and (ii) to delete the phrase "and
consolidating" now appearing therein.
1.8. Section 6.1(vii) of the Credit Agreement is hereby amended to
delete the phrase "ninety (90) days after the beginning of each fiscal year
commencing with the fiscal year beginning December 1, 1999" now appearing
therein, and to substitute the following therefor:
"December 31, 1999 for the fiscal year beginning December 1, 1999, and
not later than ninety (90) days after the beginning of each subsequent
fiscal year,"
1.9. Section 6.1(ix) of the Credit Agreement is hereby deleted in its
entirety, and the following new clauses (ix) and (x) are substituted
therefor:
"(ix) As soon as practicable, and in any event within sixty (60) days
after the calendar month ending on November 30, 1999 (other than
the cash forecast described below for such calendar month which
shall be delivered within thirty (30) days after such calendar
month), and within thirty (30) days after the close of each
subsequent calendar month, with sufficient copies for the
Lenders, copies of internal management financial statements for
the most recently completed calendar month, together with
unaudited consolidated income statements and balance sheets as
of the end of such prior calendar month, cash forecast
(including sources and uses) for the next succeeding calendar
month, and an update on synergies, in each case with respect to
the Borrower and the Consolidated Subsidiaries.
(x) On or before January 25, 2000, for itself and the Consolidated
Subsidiaries, unaudited balance sheets as at the close of the
fiscal quarter ending on November 30, 1999 and consolidated
profit and loss and reconciliation of surplus statements and a
statement of cash flows for the period from the beginning of
such fiscal year to the end of such quarter, all certified by
its Financial Officer, together with a compliance certificate in
substantially the
3
<PAGE>
form of Exhibit I hereto signed by its Financial Officer showing
the calculations necessary to determine compliance with Section
6.23 and stating that no Default or Unmatured Default exists, or
if any Default or Unmatured Default exists, stating the nature
and status thereof."
1.10 Section 6.12 is hereby deleted in its entirety, and the following
is substituted therefor:
" 6.12. Consolidated Net Worth. The Company shall maintain, as of
the end of each fiscal quarter, Consolidated Net Worth of not less
than:
(A) for the fiscal quarter ending on or about November 30,
1999, the sum of (i) $60,000,000 plus (ii) 100% of Net Cash
Proceeds received after the Effective Date through November
30, 1999 from the issuance of Capital Stock of the Company
or any of its Subsidiaries to any Person other than the
Company or its Subsidiaries;
(B) for the fiscal quarter ending on or about February 29,
2000, the sum of (i) $100,000,000 plus (ii) an amount equal
to (x) 100% of Net Cash Proceeds received after the
Effective Date through February 29, 2000 from the issuance
of Capital Stock of the Company or any of its Subsidiaries
to any Person other than the Company or its Subsidiaries,
minus (y) $50,000,000, minus (z) any amounts used to redeem
the Seller Equity Interests;
(C) for the fiscal quarter ending on or about May 31, 2000, the
sum of (i) $103,000,000 plus (ii) an amount equal to (x)
100% of Net Cash Proceeds received after the Effective Date
through May 31, 2000 from the issuance of Capital Stock of
the Company or any of its Subsidiaries to any Person other
than the Company or its Subsidiaries, minus (y)
$50,000,000, minus (z) any amounts used to redeem the
Seller Equity Interests;
(D) for the fiscal quarter ending on or about August 31, 2000,
the sum of (i) $106,000,000 plus (ii) an amount equal to
(x) 100% of Net Cash Proceeds received after the Effective
Date through August 31, 2000 from the issuance of Capital
Stock of the Company or any of its Subsidiaries to any
Person other than the Company or its Subsidiaries, minus
(y) $50,000,000, minus (z) any amounts used to redeem the
Seller Equity Interests; and
(E) for each fiscal quarter thereafter, the sum of (i)
$118,000,000 plus (ii) sixty percent (60%) of Consolidated
Net Income (if positive) for each fiscal year of the
Company commencing with the fiscal year ending on or about
November 30, 2000 and concluding with the fiscal year
ending most recently prior to the date of determination but
without deduction for any fiscal year in which there is a
loss plus (iii) an amount equal to (x) 100% of Net Cash
Proceeds received after the Effective Date from the
issuance of Capital Stock of the Company or
4
<PAGE>
any of its Subsidiaries to any Person other than the Company
or its Subsidiaries, minus (y) $50,000,000, minus (z) any
amounts used to redeem the Seller Equity Interests."
1.11. Section 6.23 is hereby deleted in its entirety, and the
following is substituted therefor:
"6.23 Leverage Ratio and Senior Leverage Ratio. (a) At any
and all times, the Company shall not permit the Leverage Ratio to
exceed the amounts set forth below during the fiscal periods set forth
below:
<TABLE>
<CAPTION>
Fiscal Quarter Ending On or About
the Dates Set Forth Below: Maximum Ratio
-------------------------- -------------
<S> <C>
November 30, 1999 7.00 to 1.00
February 29, 2000 5.60 to 1.00
May 31, 2000 5.00 to 1.00
August 31, 2000 4.75 to 1.00
November 30, 2000 4.25 to 1.00
February 28, 2001 4.00 to 1.00
May 31, 2001 4.00 to 1.00
August 31, 2001 4.00 to 1.00
November 30, 2001 3.50 to 1.00
February 28, 2002 3.50 to 1.00
May 31, 2002 3.50 to 1.00
August 31, 2002 3.50 to 1.00
And at all times
during each fiscal quarter thereafter 3.0 to 1.00
</TABLE>
(b) At any and all times, the Company shall not permit the
Senior Leverage Ratio to exceed the amounts set forth below during the
fiscal periods set forth below:
<TABLE>
<CAPTION>
Fiscal Quarter Ending On or About
the Dates Set Forth Below: Maximum Ratio
-------------------------- -------------
<S> <C>
November 30, 1999 3.75 to 1.00
February 29, 2000 2.75 to 1.00
May 31, 2000 2.50 to 1.00
August 31, 2000 2.25 to 1.00
November 30, 2000 2.00 to 1.00
And at all times
during each fiscal quarter thereafter 2.00 to 1.00
</TABLE>
5
<PAGE>
The Leverage Ratio and Senior Leverage Ratio shall be calculated, in
each case, as of the last day of each fiscal quarter based upon (A)
for Indebtedness, Indebtedness as of the last day of each such fiscal
quarter; and (B) for EBITDA, the actual amount for the four-quarter
period ending on such day."
1.12. Section 6.24 is hereby deleted in its entirety, and the
following is substituted therefor:
"6.24 Interest Expense Coverage Ratio . The Company shall not
permit the Interest Expense Coverage Ratio to be less than the amounts
set forth below for the fiscal periods set forth below:
<TABLE>
<CAPTION>
Fiscal Quarter Ending On or About
the Dates Set Forth Below: Minimum Ratio
-------------------------- -------------
<S> <C>
November 30, 1999 1.25 to 1.00
February 29, 2000 1.50 to 1.00
May 31, 2000 1.65 to 1.00
August 31, 2000 1.75 to 1.00
November 30, 2000 2.00 to 1.00
February 28, 2001 through November 30, 2001 2.25 to 1.00
And for each fiscal quarter ending thereafter 2.50 to 1.00"
1.13. Section 6.25 is hereby deleted in its entirety, and the
following is substituted therefor:
"6.25 Fixed Charge Coverage Ratio. The Company shall not
permit the Fixed Charge Coverage Ratio to be less than the amounts set
forth below for the fiscal periods set forth below:
Fiscal Quarter Ending On or About
the Dates Set Forth Below: Minimum Ratio
--------------------------------- -------------
<S> <C>
November 30, 1999 0.80 to 1.00
February 29, 2000 0.90 to 1.00
May 31, 2000 1.00 to 1.00
August 31, 2000 1.10 to 1.00
November 30, 2000 through November 30, 2001 1.20 to 1.00
</TABLE>
6
<PAGE>
And for each fiscal quarter ending thereafter 1.25 to 1.00"
1.14. Section 6.33 is hereby deleted in its entirety, and the
following is substituted therefor:
"6.33. Minimum EBITDA. The Company shall not permit EBITDA to
be less than the amounts set forth below for the fiscal periods ending
on the dates set forth below:
<TABLE>
<CAPTION>
Fiscal Quarter Ending on or About
the Dates Set Forth Below: Minimum EBITDA
-------------------------- --------------
<S> <C>
November 30, 1999 $ 63,000,000
February 29, 2000 $ 70,000,000
May 31, 2000 $ 76,000,000
August 31, 2000 $ 83,000,000
November 30, 2000 $ 90,000,000
February 28, 2001 $ 92,000,000
May 31, 2001 $ 94,000,000
August 31, 2001 $ 97,000,000
November 30, 2001 and each fiscal quarter
thereafter $100,000,000
</TABLE>
In each case, EBITDA shall be determined as of the last day of each
fiscal quarter then ended for the four fiscal quarter period ending on
such date."
1.15. Section 7.3 of the Credit Agreement is hereby amended to insert
immediately prior to the period (".") now appearing at the end thereof, the
following: "and 6.1(x)".
1.16. Section 7.4 of the Credit Agreement is hereby amended to insert
immediately after the phrase "Section 6.1" appearing therein, the
following: "(other than Section 6.1(x))".
2. Waiver.
2.1 Upon the effectiveness of this Amendment in accordance with the
provisions of Section 3 below, the Administrative Agent and the Required
Lenders hereby waive permanently any violation of the financial covenants
set forth in Sections 6.12, 6.23, 6.24, 6.25, and 6.33 of the Credit
Agreement, in each case, for the fiscal quarter ending on August 31, 1999
(collectively, the "Applicable Defaults"), and the Lenders' and the
Administrative Agent's rights and remedies arising therefrom.
3. Conditions of Effectiveness. This Amendment shall become effective and
be deemed effective as of October 14, 1999 upon (a) the delivery of (i) duly
executed originals of this Amendment from the Required Lenders, Gasboy, Tokheim-
Sofitam, Sofitam Applications and the Company and (ii) duly executed originals
of a Reaffirmation in the form of Exhibit A attached
7
<PAGE>
hereto from Tokheim Automation Corporation, Envirotronic Systems, Inc., Tokheim
Investment Corp., Sunbelt Hose & Petroleum Equipment, Inc., Gasboy, Tokheim-
Sofitam, Sofitam Applications, Management Solutions, Inc., Tokheim Equipment
Corporation, and Tokheim RPS, LLC, and (b) the payment of all the Amendment Fee
described in Section 4 below and any other fees payable by the Company in
connection herewith.
4. Amendment Fee. Each Lender that delivers a duly executed signature
page to this Amendment to James E. Clark or Robert J. Lewis, Sidley & Austin
(fax: 312-853-7036) by 5:00 p.m. (Chicago time) on October 14, 1999, shall be
entitled to an Amendment Fee of 0.25% of such Lender's Commitment (as defined in
the Credit Agreement) as in effect on October 14, 1999; provided, that the first
Lenders (other than the Administrative Agent) that deliver duly executed
signature pages as described above (as determined by the time-stamp on such
facsimile signature pages) and whose aggregate Percentages when added to the
Percentage of the Administrative Agent first exceed fifty percent (50%) shall be
entitled to an additional fee of 0.05% of such Lender's Commitment as in effect
on October 14, 1999; provided, however, that no such Amendment Fee or additional
fee shall be payable unless this Amendment is approved by the Required Lenders
by 5:00 p.m. (Chicago time) on October 14, 1999 and by the Company. The
Amendment Fee shall be due and payable on the date the Company executes this
Amendment.
5. Representations and Warranties of the Company. The Company, Gasboy,
Tokheim-Sofitam and Sofitam Applications (each a "Credit Party") hereby
represent and warrant as follows:
(a) This Amendment and the Credit Agreement as previously executed
and amended and as amended hereby, constitute legal, valid and binding
obligations of such Credit Party and are enforceable against such Credit
Party in accordance with their terms.
(b) Upon the effectiveness of this Amendment, each Credit Party
hereby reaffirm all covenants, representations and warranties made in the
Credit Agreement, to the extent the same are not amended hereby, and agree
that all such covenants, representations and warranties shall be deemed to
have been remade as of the effective date of this Amendment (unless
expressly made as of a different date).
6. Reference to the Effect on the Credit Agreement.
6.1. Upon the effectiveness of Section 1 hereof, on and after the
date hereof, each reference in the Credit Agreement to "this Agreement,"
"hereunder," "hereof," "herein" or words of like import shall mean and be a
reference to the Second Amended and Restated Credit Agreement dated as of
December 14, 1998, as amended previously and as amended hereby.
6.2. Except as specifically amended above, the Credit Agreement and
all other documents, instruments and agreements executed and/or delivered
in connection therewith shall remain in full force and effect, and are
hereby ratified and confirmed.
6.3. The execution, delivery and effectiveness of this Amendment
shall not, except as expressly provided herein with respect to the
Applicable Defaults, operate as a waiver of any right, power or remedy of
the Administrative Agent or any of the Lenders, nor constitute a waiver of
any provision of the Credit Agreement or any other documents, instruments
and agreements executed and/or delivered in connection therewith.
8
<PAGE>
7. Costs and Expenses. The Company agrees to pay all reasonable costs,
fees and out-of-pocket expenses (including reasonable attorneys' fees and
expenses charged to the Administrative Agent) incurred by the Administrative
Agent in connection with the preparation, execution and enforcement of this
Amendment.
8. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING WITHOUT LIMITATION, 735 ILCS 105/5-
1 ET SEQ., BUT OTHERWISE WITHOUT REGARD TO THE CONFLICT OF LAW PROVISIONS) OF
THE STATE OF ILLINOIS.
9. Headings. Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.
10. Counterparts. This Amendment may be executed by one or more of the
parties to the Amendment on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
9
<PAGE>
IN WITNESS WHEREOF, this Amendment has been duly executed as of the
day and year first above written.
TOKHEIM CORPORATION, as a Borrower
By: ______________________________
Name:
Title:
GASBOY INTERNATIONAL, INC., as a Borrower
By: ______________________________
Name:
Title:
TOKHEIM-SOFITAM S.A., as a Borrower
By: ______________________________
Name:
Title:
TOKHEIM SOFITAM APPLICATIONS S.A., as a Borrower
By: ______________________________
Name:
Title:
<PAGE>
BANK ONE, INDIANA, NATIONAL ASSOCIATION, formerly known
as NBD BANK, N.A., as Administrative Agent, as a
Lender, as Issuing Lender, and a Swing Loan Lender
By: ______________________________
Name:
Title:
CREDIT LYONNAIS, CHICAGO BRANCH,
as Documentation and Collateral Agent and as a Lender
By: ______________________________
Name:
Title:
BANKERS TRUST COMPANY, as Co-Syndication Agent and as
a Lender
By: ______________________________
Name:
Title:
ABN AMRO BANK N.V., as a Lender
By: ______________________________
Name:
Title:
By: ______________________________
Name:
Title:
<PAGE>
CREDIT AGRICOLE INDOSUEZ, as a Lender
By: ______________________________
Name:
Title:
By: ______________________________
Name:
Title:
HARRIS TRUST AND SAVINGS BANK, as a Lender
By: ______________________________
Name:
Title:
COMPAGNIE FINANCIERE DE CIC ET DE L'UNION
EUROPEENNE, as a Lender
By: ______________________________
Name:
Title:
MERCANTILE BANK N.A., as a Lender
By: ______________________________
Name:
Title:
THE PROVIDENT BANK, as a Lender
By: ______________________________
Name:
Title:
<PAGE>
FINOVA CAPITAL CORPORATION, as a Lender
By: ______________________________
Name:
Title:
IMPERIAL BANK, as a Lender
By: ______________________________
Name:
Title:
NATEXIS BANQUE BFCE, as a Lender
By: ______________________________
Name:
Title:
By: ______________________________
Name:
Title:
BANK POLSKA KASA OPIEKI S.A. - PEKAO S.A.
GROUP, NEW YORK BRANCH, as a Lender
By: ______________________________
Name:
Title:
SENIOR DEBT PORTFOLIO, as a Lender
By: Boston Management and Research, as Investment
Advisor
By: ______________________________
Name:
Title:
<PAGE>
EATON VANCE SENIOR INCOME TRUST, as
By: Eaton Vance Management as
Investment Advisor
By: ______________________________
Name:
Title:
OXFORD STRATEGIC INCOME FUND, as a Lender
By: Eaton Vance Management, as Investment Advisor
By: ______________________________
Name:
Title:
OCTAGON LOAN TRUST, as a Lender
By: Octagon Credit Investors, as Manager
By: ______________________________
Name:
Title:
OCTAGON INVESTMENT PARTNERS II, LLC, as a Lender
By: ______________________________
Name:
Title:
INDOSUEZ CAPITAL FUNDING IIA, LIMITED, as
a Lender
By: Indosuez Capital Luxembourg, as Collateral Manager
By: ______________________________
Name:
Title:
<PAGE>
INDOSUEZ CAPITAL FUNDING IV, LP, as a Lender
By: Indosuez Capital Luxembourg, as Collateral
Manager
By: ______________________________
Name:
Title:
ALLIANCE INVESTMENT OPPORTUNITIES FUND,
L.L.C., as a Lender
By: ALLIANCE INVESTMENT
OPPORTUNITIES MANAGEMENT, L.L.C.,
as Managing Member
By: ALLIANCE CAPITAL MANAGEMENT L.P., as
Managing Member
By: ALLIANCE CAPITAL MANAGEMENT
CORPORATION, as General Partner
By: ______________________________
Name:
Title:
AMSOUTH BANK, as a Lender
By: ______________________________
Name:
Title:
<PAGE>
EXHIBIT A
REAFFIRMATION
Each of the undersigned hereby acknowledges receipt of a copy of the
foregoing Amendment No. 4 and Waiver to the Second Amended and Restated Credit
Agreement dated as of December 14, 1998 by and among TOKHEIM CORPORATION, an
Indiana corporation (the "Company"), GASBOY INTERNATIONAL, INC., a Pennsylvania
corporation ("Gasboy"), TOKHEIM-SOFITAM S.A., a societe anonyme organized under
the laws of France ("Tokheim-Sofitam"), TOKHEIM SOFITAM APPLICATIONS S.A., a
societe anonyme organized under the laws of France ("Sofitam Applications", and,
together with the Company, Gasboy and Tokheim-Sofitam, the "Borrowers"), the
financial institutions from time to time party thereto (the "Lenders") and BANK
ONE, INDIANA, NATIONAL ASSOCIATION, formerly known as NBD BANK, N.A., in its
individual capacity as a Lender and as contractual representative on behalf of
the Lenders (the "Administrative Agent"), CREDIT LYONNAIS, as Documentation and
Collateral Agent, and BANKERS TRUST COMPANY, as Co-Syndication Agent, as amended
by an Amendment No. 1, an Amendment No. 2 and an Amendment No. 3, dated as of
January 11, 1999, March 1, 1999 and February 27, 1999, respectively (as amended
and as the same may be amended, restated, supplemented or otherwise modified
from time to time, the "Credit Agreement"), which Amendment No. 4 and Waiver is
dated as of October 14, 1999 (the "Amendment"). Capitalized terms used in this
Reaffirmation and not defined herein shall have the meanings given to them in
the Credit Agreement. Without in any way establishing a course of dealing by any
Agent or any Lender, each of the undersigned reaffirms the terms and conditions
of the Guaranty, Pledge Agreement, Security Agreement and any other Loan
Document executed by it and acknowledges and agrees that such agreement and each
and every such Loan Document executed by the undersigned in connection with the
Credit Agreement remains in full force and effect and is hereby reaffirmed,
ratified and confirmed. All references to the Credit Agreement contained in the
above-referenced documents shall be a reference to the Credit Agreement as so
modified by Amendment No. 1, Amendment No. 2, Amendment No. 3 and the Amendment
and as the same may from time to time hereafter be amended, modified or
restated.
Dated as of October 14, 1999 TOKHEIM AUTOMATION CORPORATION
ENVIROTRONIC SYSTEMS, INC.
TOKHEIM INVESTMENT CORP.
SUNBELT HOSE & PETROLEUM
EQUIPMENT, INC.
GASBOY INTERNATIONAL, INC.
MANAGEMENT SOLUTIONS, INC.
TOKHEIM EQUIPMENT CORPORATION
TOKHEIM RPS, LLC
By: Gasboy International, Inc.
TOKHEIM-SOFITAM S.A.
TOKHEIM SOFITAM APPLICATIONS S.A.
By: ______________________________
Name:
Title:
<PAGE>
EXHIBIT 10.4
[TOKHEIM LOGO GOES HERE]
TOKHEIM CORPORATION
DEFERRED COMPENSATION PLAN
<PAGE>
TOKHEIM CORPORATION
DEFERRED COMPENSATION PLAN
ARTICLE 1
PURPOSE
-------
Tokheim Corporation ("Company") originally established the Tokheim Corporation
Deferred Compensation Plan ("Plan"), effective as of January 1, 1997. Effective
April 28, 1999, the Plan is restated as provided herein. The purpose of the Plan
is to provide deferred compensation for a select group of key management
Employees of the Company and certain subsidiaries of the Company designated by
the Company's Board of Directors (the Company and such subsidiaries hereafter
referred to as the "Employer") in recognition of their substantial contributions
to the Employer's success and to provide those Employees with additional
financial security as an inducement to remain in the employment of the Employer.
ARTICLE 2
DEFINITIONS AND RULES OF CONSTRUCTION
-------------------------------------
Section 2.1. Definitions.
As used in the Plan, the following words and phrases, when capitalized, have the
following meanings:
(a) "Account" means, with respect to a Participant, his Deferral Account
and Matching Account. "Account" also means, where the context permits, the
amount credited to an Account.
(b) "Affiliate" means an employer required to be aggregated with the
Company pursuant to Section 414(b) or (c) of the Internal Revenue Code.
(c) "Base Compensation" means, with respect to a Participant for a Plan
Year, all of his Compensation for the Plan Year other than Incentive
Compensation.
(d) "Beneficiary" means the beneficiary or beneficiaries designated by a
Participant in writing to receive the payment of benefits provided under this
Plan following the Participant's death. To be effective, a Beneficiary
designation must be received by a member of the Committee during the
Participant's life. In the absence of a designation, or if the Participant's
designated Beneficiaries predecease him, the Beneficiary shall be (i) the
Participant's surviving spouse, if the Participant is married at the time of his
death and is survived by his spouse, or, (ii) in all other cases, the
Participant's estate.
(e) "Benefit Commencement Date" means, with respect to a Participant, the
date as of which distribution of the Participant's Accounts begins.
(f) "Board of Directors" means the Company's Board of Directors or its
designee.
<PAGE>
(g) "Change of Control" means the occurrence of any one of the following:
(i) any person, as that term is used in Section 13(d)(3) and 14(d)(2) of the
Securities Exchange Act of 1934, as amended from time to time, other than a
retirement plan sponsored by the Company, becomes a beneficial owner, directly
or indirectly, of securities of the Company representing twenty percent (20%) or
more of the combined voting power of Company's then outstanding securities; (ii)
less than fifty-one percent (51%) of the members of the Board are Incumbent
Directors; (iii) any corporation or group of associated persons acting in
concert, owns more than twenty-five percent (25%) of the outstanding shares of
voting stock of the Company coupled with or followed by the exercise of the
voting power of such shares by the election of two (2) or more directors of the
Company in any one election at the instance of such corporation or group; (iv)
the Company becomes a party to an agreement of merger, consolidation, or other
reorganization pursuant to which the Company will be a constituent corporation,
and either (A) the Company is not the surviving or resulting corporation, or (B)
the transaction will result in less than sixty percent (60%) of the outstanding
voting securities of the surviving or resulting entity being owned by the former
shareholders of the Company; (v) the Company becomes a party to an agreement
providing for Company's sale or other disposition of all or substantially all of
its assets to any individual, partnership, joint venture, association, trust,
corporation, or other entity or person which is not an Affiliate; (vi) an event
that triggers to exercisability of rights under the Company's Shareholder Rights
Plan, as in effect at the time of the triggering event; or (vii) the occurrence
of another event that the Board designates a Change in Control.
(h) "Committee" means the Benefits Committee appointed by the Board of
Directors.
(i) "Company" means Tokheim Corporation.
(j) "Compensation" means, with respect to a Participant for a Plan Year,
the Participant's wages for federal income tax purposes for such year, increased
by amounts that would have been included in the Participant's wages for the
year, except for the Participant's election pursuant to Code Section 125 or
401(k) or this Plan; provided, however, Compensation included in a Participant's
Compensation for purposes of the Plan before the year of its inclusion as wages
shall not be included in his Base Compensation again in the year in which
included as wages.
(k) "Deemed Post-Termination Earnings Rate" means the average rate of
interest charged by National City Bank; Home Loan Bank, FSB; and Bank One, N.A;
or their successors in Fort Wayne, Indiana, for a 15-year fixed-rate first
mortgage in the amount of One Hundred Thousand Dollars ($100,000) as of the
first business day of the month preceding the Participant's Benefit Commencement
Date. The rate of interest specified in the preceding sentence shall be
increased to reflect any points charged with respect to the loan in accordance
with federal rules applicable to mortgage lenders. The Committee shall determine
the Deemed Post-Termination Earnings Rate in good faith, and its good faith
judgment shall be binding on all persons. If changed circumstances make
determination of the Deemed Post-Termination Earnings Rate in the foregoing
manner impossible, the Committee shall determine such rate in a manner
calculated to effect the intent of the method specified above, and the
Committee's determination shall be final.
(l) "Deferral" means Compensation deferred by a Participant pursuant to
Section 3.1.
<PAGE>
(m) "Deferral Account" means, with respect to a Participant, the
bookkeeping account pursuant to which the Participant's interest in the Plan
attributable to Deferrals is determined.
(n) "Deferral Agreement" means a written agreement between an Employer and
a Participant pursuant to which the Participant elects to defer Compensation
under the Plan.
(o) "Disabled" means, which respect to a Participant, having a disability
that has been determined by the Social Security Administration to qualify the
Participant for permanent disability benefit payments under the Social Security
Act. If a Participant has applied for permanent disability benefits under the
Social Security Act, and a physician acceptable to the Committee has opined that
the Participant satisfies the requirements for permanent disability under the
Social Security Act, the Participant shall be deemed to be Disabled pending the
Social Security Administration's determination. If distributions to a
Participant begin pursuant to the preceding sentence, and the Social Security
Administration later reaches a final determination that the Participant is not
permanently disabled, any future payments to the Participant or his Beneficiary
pursuant to the Plan shall be adjusted to reflect any prior overpayment to the
Participant on account of his deemed Disability.
(p) "Early Retirement Age" means, with respect to a Participant, the later
of age 50 or the Participant's completion of five years of continuous employment
by the Company.
(q) "Effective Date" means January 1, 1997.
(r) "Employee" means a key management employee of the Employer.
(s) "Employer" means the Company and any subsidiary of the Company
designated as eligible by the Company's Board that adopts the Plan.
(t) "Incentive Compensation" means, with respect to a Participant for a
Plan Year, his Compensation for the Plan Year consisting of bonuses and other
incentive compensation.
(u) "Incumbent Director" means a director serving on the Board who (i) was
a director on the Effective Date or (ii) was later elected as a director (except
a director whose initial assumption of office was in connection with an actual
or threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors) and whose appointment,
election, or nomination for election was approved or recommended by a vote of at
least two-thirds of the directors then still in office who either were directors
on the Effective Date hereof or whose appointment, election, or nomination for
election was previously so approved or recommended.
(v) "Matching Account" means, with respect to a Participant, the
bookkeeping account pursuant to which the Participant's Plan interest
attributable to Matching Credits is determined.
(w) "Matching Credit" means the amount credited to a Participant's Matching
Account pursuant to Section 3.2.
-3-
<PAGE>
(x) "Minimum Earnings Rate" means, with respect to a Plan Year, the rate
for 30-year United States government bonds issued on the first business day of
that year. If the United States government ceases to issue 30-year bonds, the
Committee shall determine the "Minimum Earnings Rate" in a manner calculated to
effect the intent of the rate specified above, and the Committee's determination
shall be final.
(y) "Participant" means an Employee selected by the Committee to
participate in the Plan for the Plan Year or a former Employee entitled to
future benefits under the Plan.
(z) "Plan" means the plan established by this document, known as the
Tokheim Deferred Compensation Plan, as amended from time to time.
(aa) "Plan Year" means the period beginning on the Effective Date and
ending December 31, 1997, and each calendar year thereafter.
(bb) "Stated Earnings Rate" means a rate equal to the greater of (i) the
Minimum Earnings Rate or (ii) such higher rate established by the Committee from
time to time. The Committee shall inform Participants of the Stated Earnings
Rate (or the factor or index by which the Stated Earnings Rate is determined)
before each change thereof.
(cc) "Terminated Employment" or "Termination of Employment" means the
cessation of the relationship of employer and employee between the Participant
and all Employers by reason of death, resignation, or discharge.
(dd) "Vested" means, with respect to an Account, that the Participant's
interest in the Account is nonforfeitable, except as provided in Section 6.2.
Section 2.2. Rules of Construction.
The following rules of construction shall govern in interpreting the Plan:
(a) The provisions of the Plan shall be construed and governed in all
respects under and by the laws of the State of Indiana, to the extent not
preempted by federal law.
(b) Words used in the masculine gender shall be construed to include the
feminine gender where appropriate, and vice versa.
(c) Words used in the singular shall be construed to include the plural
where appropriate, and vice versa.
(d) The headings and subheadings in the Plan are inserted for convenience
of reference only and are not to be considered in the construction of any
provision of the Plan.
-4-
<PAGE>
(e) If any provision of the Plan shall be held to be illegal or invalid for
any reason, that provision shall be deemed to be null and void, but the
invalidation of that provision shall not otherwise impair or affect the Plan.
ARTICLE 3
DEFERRAL OF COMPENSATION
------------------------
Section 3.1. Election to Defer Compensation.
(a) A Participant may elect to defer a portion of his Base Compensation up
to the amount or percentage specified by the Committee and/or a portion of his
Incentive Compensation up to the amount or percentage specified by the
Committee. The Employer shall withhold the elected Deferral amount from a
Participant's Compensation. Amounts withheld from a Participant's Compensation
shall be credited to his Deferral Account as of the date withheld.
(b) An individual who first becomes a Participant as of a date other than
the first day of a Plan Year may make his initial Deferral election by filing a
completed Deferral Agreement with the Committee at any time before becoming a
Participant, in which case his election shall become effective as of the
effective date of his participation (which effective date shall be determined by
the Committee). Except as provided in the preceding sentence, a Participant's
Deferral election for a Plan Year must be made by filing a completed Deferral
Agreement with the Committee before the first payroll date in such Plan Year, in
which case the Participant's election shall become effective as of the first day
of the Plan Year. The Committee shall provide each Participant with a Deferral
Agreement within a reasonable period of time before the election is required.
After its effective date, an election may be changed only as of the first day of
a later Plan Year by making an election before the first payroll date in that
Plan Year; provided, however, if the Employer elects to discontinue future
Matching Credits, a Participant may change his election with respect to future
Deferrals within thirty (30) days after he is informed of such election by the
Employer. An election pursuant to this Section shall remain in effect for each
subsequent Plan Year, unless changed or revoked by the Participant before the
first payroll date in the Plan Year for which the change or revocation is to be
effective.
Section 3.2. Matching Credits.
The Employer may, in its sole discretion, match all or a portion of a
Participant's Deferrals for a Plan Year. The Employer may elect to match
different amounts and/or percentages for different Participants, and it may
change the matching amount or portion from year to year. Matching Credits for a
Plan Year shall be credited to the Participant's Matching Account as of the last
day of the Plan Year or such earlier date as designated by the Committee. In the
case of a Participant who receives a lump sum distribution during a Plan Year,
any Matching Credits on behalf of the Participant for that Plan Year shall be
made before the distribution to the Participant.
-5-
<PAGE>
ARTICLE 4
PARTICIPANTS' ACCOUNTS
----------------------
Section 4.1. Accounts.
The Committee shall create and maintain adequate records to disclose the
interest in the Plan of each Participant and Beneficiary. Records shall be in
the form of individual bookkeeping accounts. Each Participant shall have a
separate Deferral Account and Matching Account. Except as expressly provided
herein, the establishment of Accounts shall not give a Participant or
Beneficiary the right to any specific assets except as a general creditor of the
Employer.
Section 4.2. Crediting of Earnings to Accounts.
As of the last day of each Plan Year before the Plan Year containing the
Participant's Benefit Commencement Date, and as of the day preceding the
Participant's Benefit Commencement Date, the Committee shall credit earnings to
the Participants' Accounts. Earnings for a Plan Year shall be credited (i) at
the Stated Earnings Rate for that Plan Year (ii) as if all contributions
credited to the Participant's Accounts for the Plan Year (and all hardship
distributions made to the Participant during the Plan Year) had been credited
(or made) as of the first day of the Plan Year; provided, however, for the Plan
Year containing the Participant's Benefits Commencement Date, the Stated
Earnings Rate shall be multiplied by a fraction, the numerator of which is the
number of full months in the Plan Year preceding the Benefits Commencement Date
and the denominator of which is 12.
Section 4.3. Valuation of Accounts.
The value of a Participant's Account as of any date before his Benefit Commence
Date shall equal the dollar amount of Deferrals or Matching Contributions
credited to the Account, adjusted to reflect earnings credited to the Account,
and decreased by any prior payments from the Account.
Section 4.4. Annual Report.
Within ninety (90) days following the end of each Plan Year, the Company shall
provide to each Participant a written statement of the amount credited to his
Deferral Account and Matching Account as of the end of that year.
ARTICLE 5
PAYMENT OF DEFERRED COMPENSATION
--------------------------------
Section 5.1. Distribution Upon Termination of Employment before Early
Retirement Age for Reason Other Than Death.
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<PAGE>
If a Participant Terminates Employment before Early Retirement Age for a
reason other than death, his Deferral Account and Vested Matching Account shall
be distributed to him in a lump sum within thirty (30) days after he Terminates
Employment.
Section 5.2. Distribution Upon Termination of Employment after Reaching Early
Retirement Age for Reason Other Than Death.
If a Participant Terminates Employment after reaching his Early Retirement Age
for a reason other than death, his Deferral Account and Matching Account shall
be distributed as provided in this Section. A Participant may elect as part of a
Deferral Agreement that Plan benefits attributable to amounts deferred pursuant
to the agreement (including Matching Credits and earnings on amounts credited to
the Participant's Accounts) be distributed either (i) as a lump sum or (ii) in
substantially equal annual installments. Distributions elected pursuant to the
preceding sentence must begin at least thirty (30) days after the Participant's
Termination of Employment and must be made not later than two (2) years after
the Participant's Termination of Employment (in the case of a lump sum) or end
not later than fifteen (15) years after the Participant's Termination of
Employment (in the case of annual installments). In addition, a Participant may
make a one-time election of a distribution option described above before January
15, 1998, with respect to benefits attributable to amounts deferred in 1997
(including Matching Credits and earnings on amounts credited to the
Participant's Accounts), provided such election shall not be effective if the
Participant Terminates Employment before December 31, 1999. In the absence of an
election to the contrary pursuant to this Section, distributions shall be made
in equal monthly payments as of the first day of the month over a period of
fifteen (15) years, beginning with the first month that begins at least thirty
(30) days after his Termination of Employment. Unless a Participant's entire
Vested Accounts are distributed to him within sixty (60) days after his
Termination of Employment, the amount of each payment made pursuant to this
Section shall be determined by assuming that the Participant's Accounts (reduced
for distributions) would earn the Deemed Post-Termination Earnings Rate
throughout the distribution period.
Section 5.3. Distributions Upon Death.
If a Participant dies after distribution of his Accounts has begun, his
remaining Deferral Account and Vested Matching Account shall be paid to his
Beneficiary in a lump sum within thirty (30) days following his death. If a
Participant dies before distribution of his Accounts has begun, his Vested
Accounts shall be paid to his Beneficiary a lump sum within thirty (30) days
following his death.
Section 5.4. Minimum Distributions.
(a) If any monthly distribution due to a Participant hereunder will be less
than $3,000, the Committee may, in its discretion, make distributions annually
instead of monthly. Annual distributions pursuant to the preceding sentence
shall be made at the time the first monthly distribution for the Plan Year would
otherwise be made.
(b) If the total remaining amount to be distributed to a Participant
hereunder is less than $30,000, the Committee may, in its discretion, elect to
pay the balance of the Participant's Vested
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<PAGE>
Account in a lump sum. A payment pursuant to the preceding sentence shall be
made at the time of the next regularly scheduled payment following the
Committee's decision to accelerate payment pursuant to this Subsection (b).
Section 5.5. Early Distribution on Change in Control.
If the Participant's employment with the Employer terminates for any reason
within one year after a Change of Control, the Participant shall receive a
distribution under the Plan pursuant to the provisions of this Section. If this
Section applies, the Participant's Deferral Account and Matching Account shall
be distributed in a lump sum within thirty (30) days after the later of (i) the
Change in Control or (ii) the date on which the Participant Terminated
Employment.
Section 5.6. Early Distribution upon Occurrence of Other Events.
If (i) the Company's 11-3/8% senior subordinated notes' credit rating, as set by
Moody's Investment Services or its successor, falls to lower than "B3" or (ii)
the Company is in material default under the financial provisions of a bond
indenture or banking agreement to which it is a party, Participants' Accounts
shall be distributed to them within thirty (30) days after occurrence of the
event described in clause (i) or (ii), provided such situation continues on the
date of distribution.
Section 5.7. Hardship Distributions.
If a Participant (i) applies for a hardship distribution of some or all of his
Deferrals; (ii) supplies evidence reasonably satisfactory to the Committee that
the requested distribution is both made on account of an immediate and heavy
financial need of the Participant and is necessary to satisfy the financial
need, after applying the standards of Treasury Regulation Section
1.401(k)(1)(d)(2), as amended, supplemented, and interpreted from time to time;
and (iii) if, but only if, the Company, subsequent to adoption of this Plan,
elects in writing to make hardship distributions available to Participants, the
Committee may, in its sole discretion, direct distribution of all or a portion
of the Participant's Deferral Account (not exceeding the amount of his prior
Deferrals, reduced by any prior distributions of his Deferral Account) in an
amount sufficient to satisfy the hardship.
ARTICLE 6
VESTING AND FORFEITURE OF ACCOUNTS
----------------------------------
Section 6.1. Vesting of Accounts.
A Participant's interest in his Deferral Account shall always be 100% Vested. No
portion of a Participant's interest in his Matching Account shall become Vested
until the earliest to occur of his (i) death while an Employee, (ii) Disability
while an Employee, (iii) a Change of Control, (iv) reaching age 50 while an
Employee, or (v) completion of five years of continuous service with the
Employer. Upon the occurrence of an event described in the preceding sentence, a
Participant's Matching Account shall become 100% Vested. Notwithstanding the
preceding provisions of this Section, a Participant's Matching Account may be
forfeited and his Deferred Account reduced pursuant to Section 6.2.
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Section 6.2. Forfeitures.
If a Participant Terminates Employment for a reason other than death or
Disability before his Accounts are Vested, his non-Vested Accounts shall be
forfeited immediately. Notwithstanding any other provision of the Plan to the
contrary, if a Participant violates the terms of any confidentiality or
noncompetition agreement with his Employer or the Participant's employment is
terminated because of the Participant's (i) commission of a felony or any crime
or offense lesser than a felony involving the property of the Company; (ii)
engaging in conduct that has caused demonstrable and serious injury to the
Company, monetary or otherwise; or (iii) gross dereliction of duties or other
grave misconduct and the failure to cure such situation within thirty (30) days
after the receipt of notice thereof from the Chairman of the Board of Directors,
President, and Chief Executive Officer, the Participant's Matching Account shall
be forfeited in its entirety, and his Deferral Account shall be redetermined by
crediting the Participant's Deferral Account with the lesser of the Minimum
Earnings Rate or the Stated Earnings Rate, retroactive to the beginning of the
Participant's participation in the Plan.
ARTICLE 7
ADMINISTRATIVE
--------------
Section 7.1. Plan Administrator.
The Committee shall be the Plan Administrator.
Section 7.2. Powers and Duties of the Administrator.
Subject to the specific limitations stated in this Plan, the Committee shall
have the following powers and duties:
(a) to carry out the general administration of the Plan;
(b) to cause to be prepared all forms necessary or appropriate for the
administration of the Plan;
(c) to keep appropriate books and records;
(d) to determine amounts to be disbursed to Participants and others under
the provisions of the Plan;
(e) to determine, consistent with the provisions of this instrument, all
questions of eligibility, rights, and status of Participants and
others under the Plan;
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(f) to exercise all other powers and duties specifically conferred upon
the Committee elsewhere in this instrument;
(g) to interpret, with discretionary authority, the provisions of this
Plan and to resolve, with discretionary authority, all disputed
questions of Plan interpretation and benefit eligibility;
(h) to incur reasonable expenses in the performance of its duties; and
(i) to delegate any of its powers and/or duties, including its
discretionary authority, to the Committee.
Section 7.3. Correction of Defects.
The Committee may correct any defect or supply any omission or reconcile any
error or inconsistency in its previous proceedings, decisions, orders,
directions, or other actions in such manner and to such extent as it shall deem
advisable to carry out the purposes of the Plan.
ARTICLE 8
MISCELLANEOUS
-------------
Section 8.1. Relationship.
Notwithstanding any other provision of this Plan, this Plan and action taken
pursuant to it shall not be deemed or construed to establish a trust or
fiduciary relationship of any kind between or among an Employer, Participant,
Beneficiary, or any other persons. The right of a Participant or Beneficiary to
receive payment of deferred compensation is strictly a contractual right to
payment, and this Plan does not grant nor shall it be deemed to grant a
Participant, Beneficiary, or any other person any interest in or right to any of
the funds, property, or assets of the Employer other than as a general creditor
of the Employer.
Section 8.2. Other Benefits and Plans.
Nothing in the Plan shall be deemed to prevent the Participant from receiving,
in addition to the deferred compensation provided for under the Plan, any funds
that may be distributable to him at any time under any other present or future
retirement or incentive plan of the Employer.
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<PAGE>
Section 8.3. Alienation of Benefits.
Neither the Participant nor any Beneficiary shall have the power to transfer,
assign, pledge, alienate, or otherwise encumber in advance any payment that may
become due under the Plan, and any attempt to do so shall be void. Payments
that may become due under the Plan shall not be subject to attachment,
garnishment, or execution or be transferrable by operation of law in the event
of bankruptcy, insolvency, or otherwise.
Section 8.4. Benefit.
This Plan shall be binding upon and inure to the benefit of the Employer and its
successors and assigns.
Section 8.5. No Employment Guarantee.
Except as otherwise expressly provided, neither the Plan nor any action taken
hereunder shall be deemed to give a Participant the right to be retained as an
Employee of the Employer or to interfere with the right of the Employer to alter
the responsibilities and duties or to discharge the Participant at any time.
Section 8.6. Successors in Interest.
Upon any Change in Control, the Employer shall obtain the written agreement of
the successor to assume the Employer's obligations under this Plan. If a Change
in Control occurs without the successor's assumption of the Employer's
obligations under this Agreement, the Employer shall make the benefit payment to
which the Participant is entitled under Section 5.2 upon the Change in Control,
without regard to whether the Participant has been terminated or whether his
responsibilities or salary have been reduced and without regard to whether the
Participant has reached his Early Retirement Age.
Section 8.7. Tax Withholding.
The Employer may withhold from any payment due hereunder any taxes that the
Employer determines in good faith are required to be withheld under applicable
federal, state, or local tax laws or regulations.
Section 8.8. Tax Liability.
The Employer does not guarantee the tax consequences of participation in the
Plan.
Section 8.9. Indemnification.
The Employee shall indemnify a Participant against, and pay any liability or
expense, including without limitation, attorneys' fees, incurred by the
Participant in enforcing his rights under this Plan.
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ARTICLE 9
AMENDMENT AND TERMINATION
-------------------------
Section 9.1. Amendment.
The Company, by duly authorized action of the Board of Directors or a designated
committee, reserves the right to amend the Plan at any time. No amendment shall
reduce any benefits accrued under the Plan before the date on which the
amendment was duly authorized (including the right to future earnings credits
with respect to such benefits), nor shall any amendment change the distribution
provisions of the Plan with respect to a Participant without the Participant's
prior written consent.
Section 9.2. Termination.
The Company reserves the right to terminate the Plan at any time as it deems
appropriate. Upon termination of the Plan, no further Deferrals or Matching
Contributions shall be made to the Plan, and each Participant's Deferral Account
and Matching Account shall be distributed to him or her within thirty (30) days
after the effective date of the Plan's termination.
Tokheim Corporation has caused this restatement of the Plan to be executed
by its duly authorized officers, as of the 20th day of July, 1999.
TOKHEIM CORPORATION
By: /s/ Douglas K. Pinner
-------------------------------------
Title: President and Chief Executive Officer
-------------------------------------
ATTEST:
/s/ Norman L. Roelke
- ----------------------------
Signature
Vice President and Secretary
- ----------------------------
Title
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<PAGE>
EXHIBIT 1O.5
[LOGO OF TOKHEIM HERE]
TOKHEIM CORPORATION
SUPPLEMENTAL
EXECUTIVE RETIREMENT PLAN
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 1. Definitions....................................................... 1
Section 2. Participation..................................................... 3
Section 3. Vesting........................................................... 3
Section 4. Supplemental Retirement Benefit................................... 3
Section 5. Post-Retirement Survivor Benefit.................................. 4
Section 6. Pre-Retirement Survivor Benefit................................... 4
Section 7. Beneficiary....................................................... 4
Section 8. Forfeiture Provisions............................................. 4
Section 9. Change in Control................................................. 4
Section 10. Trust Fund....................................................... 6
Section 11. Funding of Trust................................................. 6
Section 12. General Provisions............................................... 7
Section 13. No Right of Employment........................................... 8
Section 14. Administration................................................... 8
Section 15. Amendment and Termination........................................ 9
</TABLE>
<PAGE>
TOKHEIM CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
The Tokheim Corporation Supplemental Executive Retirement Plan ("Plan") is
hereby adopted by Tokheim Corporation ("Company"), effective April 28, 1999.
Background
1. The purpose of the Plan is to provide nonqualified deferred compensation
for a select group of key management employees of the Company or an Affiliated
Employer.
2. Exhibit A, as amended from time to time, contains a list of each key
management employee selected to participate in the Plan, contingent on such
employee's execution of a participation agreement.
Plan
Section 1. Definitions. When the initial letter of a word or phrase is
capitalized herein, the meaning of the word or phrase shall be as follows:
(a) "Administrator" means the Company. In performing its duties as
Administrator, the Company shall act through its Board or a Committee
designated by the Board to administer the Plan. The initial members of the
Committee are John Negovetich, Tim Eastom, and Norm Roelke.
(b) "Affiliated Employer" means the Company and any subsidiary of the
Company.
(c) "Base Income" means, with respect to a Participant, the
Participant's Base Monthly Rate multiplied by 12.
(d) "Base Monthly Rate" means the sum of (i) the Participant's base
monthly salary, before any reductions pursuant to the Participant's
election, and (ii) one-twelfth of the average annual bonus for the two
Fiscal Years immediately preceding the Participant's Termination of
Employment.
(e) "Beneficiary" means, with respect to a Participant, the person or
persons determined pursuant to Section 7.
(f) "Benefits Commencement Date" means, with respect to a Participant,
the date as of which distribution of the Participant's Plan benefits is
scheduled to begin; provided, however, in the case of a benefit payable
pursuant to Section 6, the Benefits
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Commencement Date shall be the first day of the month next following the
Participant's death.
(g) "Board" means the Company's Board of Directors.
(h) "Change in Control" has the meaning specified in Section 9.
(i) "Company" means Tokheim Corporation and any successor in interest.
(j) "Code" means the Internal Revenue Code of 1986, as amended from time
to time.
(k) "Committee" means the committee of individuals designated by the
Board to perform the functions of Administrator on behalf of the Company.
(l) "Disabled" or "Disability" means, with respect to an Participant,
that the Participant has a mental or physical condition that has rendered
him or her incapable of performing services of the same type and nature
rendered to the Employer immediately before onset of the condition, if such
condition lasts at least 180 days. A physician appointed by and paid for by
the Company shall determine the existence of such condition.
(m) "Earliest Retirement Date" means, with respect to a Participant, the
later of (i) the Triggering Event or (ii) the Participant's 60th birthday.
(n) "Effective Date" means April 28, 1999.
(o) "Employer" means the Company and any Affiliated Employer that
employs a Participant.
(p) "Fiscal Year" means the 12-consecutive month period beginning
December 1 and ending the following November 30.
(q) "Participant" means a key management employee (or, where the context
so permits, former key management employee) who has become a participant
pursuant to Section 2 and whose entire benefits hereunder have not been
distributed or forfeited.
(r) "Present Value" means present actuarial value, calculated using the
factors specified in Section 9.
(s) "Plan" means the Tokheim Supplemental Executive Retirement Plan, as
set out in this document, as it is amended from time to time.
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(t) "Surviving Spouse" means the person to whom a Participant is married
on the date of his or her death.
(u) "Target Retirement Benefit" means, with respect to a Participant, a
monthly benefit equal to 60% of the Participant's Base Monthly Rate.
(v) "Term Certain Expiration Date" means the 15th annual anniversary of
the Benefits Commencement Date under the Plan.
(w) "Termination of Employment" means, with respect to a Participant, a
complete termination of the employment relationship between the Participant
and all Affiliated Employers.
(x) "Triggering Event" has the meaning specified in Section 9.
(y) "Trust" means the trust created by the Company pursuant to Section
10.
(z) "Trustee" means the person or persons serving as trustee of the
Trust.
(aa) "Vested" means, with respect to a Participant, that his or her
interest in the Plan is nonforfeitable, except as provided in Section 8.
Except as provided in Section 9, the extent to which a Participant's
interest under the Plan is Vested shall be determined pursuant to Section 3.
Section 2. Participation. Participation in the Plan is limited to key
management employees designated by the Board or a committee designated by the
Board from time to time; provided however, an individual shall not become a
Participant until he or she has signed a participation agreement aceptable to
the Board or a committee designated by the Board from time to time.
Section 3. Vesting. Subject only to the provisions of Section 8, a
Participant's interest in benefits provided hereunder shall become Vested upon
the first to occur of:
(a) 60 consecutive months of employment by one or more Affiliated
Employers
(b) a Change in Control,
(c) attainment of age 50, or
(d) the Participant's death or Disability.
If a Participant Terminates Employment (other than because of his or her death)
before becoming Vested, the Participant shall not be entitled to any benefit
under the Plan.
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<PAGE>
Section 4. Supplemental Retirement Benefit. If a Participant Terminates
Employment for a reason other than his or her death with a Vested interest in
his or her benefits hereunder, the Participant shall be entitled to a monthly
benefit for life equal to his or her Target Retirement Benefit, beginning as of
the first day of the month next following the later of the Participant's (i)
60/th/ birthday or (ii) Termination of Employment.
Section 5. Post-Retirement Survivor Benefit. If a Participant dies after
his or her Benefits Commencement Date and before the Term Certain Expiration
Date, payment of the Target Retirement Benefit shall be made to the
Participant's Beneficiary as of the first day of each month occurring after the
Participant's death and before the Term Certain Expiration Date.
Section 6. Pre-Retirement Survivor Benefit. If a Participant dies either
(i) while in the Employer's employ or (ii) after having Terminated Employment
with a Vested benefit under the Plan but before his or her Benefits Commencement
Date, payment of the Target Retirement Benefit shall be made to the
Participant's Beneficiary as of the first day of each month occurring after the
Participant's death and before the Term Certain Expiration Date.
Section 7. Beneficiary. A Participant may designate one or more persons
as Beneficiary to receive his or her interest in the Plan after his or her death
To be effective, the designation must be made on a form acceptable to the
Administrator and received by the Administrator during the Participant's life.
If the Participant fails to designate a Beneficiary, the Beneficiary predeceases
the Participant, or the Participant's designation is legally ineffective for any
reason, the Participant's Beneficiary shall be (i) his or her spouse, if the
Participant is survived by a spouse, or (ii) the Participant's estate, if the
Participant is not survived by his or her spouse.
Section 8. Forfeiture Provisions. Notwithstanding the preceding Sections,
a Participant shall forfeit all rights hereunder, if he or she is discharged for
Cause before the earlier of (i) a Change in Control or (ii) his or her Benefits
Commencement Date. "Cause" means indictment for any act of theft, embezzlement,
fraud, or the misappropriation of property constituting a felony under
applicable state or federal law; provided, however, a Participant's Plan
benefits shall be forfeited pursuant to this Section only if the Participant is
ultimately convicted of or pleads guilty to such felony. Until such proceedings
are resolved, the Participant's benefits under the Plan shall not be paid.
Section 9. Change in Control.
-----------------
9.1. Benefits payable. Notwithstanding any provision of the Plan to the
contrary, a Participant shall be entitled to receive the present value of
his Target Retirement Benefit, as determined pursuant to Section 9.2, upon
the occurrence of a Triggering Event.
9.1.1 Triggering Event. A Triggering Event shall be deemed to have
occurred if:
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9.1.1.1. there is a Change in Control; and
9.1.1.2. within 12 months after the Change in Control:
(a) the Company terminates this Plan or reduces
benefits (including the right to future accruals)
hereunder, or
(b) there is a Termination of Employment with respect
to the Participant.
9.1.2. Change in Control. A "Change in Control" shall be deemed to
have occurred if there has been one or more of the following:
9.1.2.1. any "person" (as such term is used in Section 13(d)(3)
and 14(d)(2) of the Securities Exchange Act of 1934, as amended from
time to time), other than a retirement plan sponsored by the
Company, becomes a beneficial owner, directly or indirectly, of
securities of the Company representing 20% or more of the combined
voting power of Company's then outstanding securities;
9.1.2.2. less than 51% of the members of the Board are
Incumbent Directors (as defined in the Company's Deferred
Compensation Plan, as in effect on the Effective Date);
9.1.2.3. any corporation or group of associated persons acting
in concert owns more than 25% of the outstanding shares of voting
stock of the Company coupled with or followed by the exercise of the
voting power of such shares by the election of two or more directors
of the Company in any one election at the instance of such
corporation or group;
9.1.2.4. the Company becomes a party to an agreement of merger,
consolidation, or other reorganization pursuant to which the Company
will be a constituent corporation, and either (i) the Company is not
the surviving or resulting corporation, or (ii) the transaction will
result in less than 60% of the outstanding voting securities of the
surviving or resulting entity being owned by the former shareholders
of the Company;
9.1.2.5. the Company becomes a party to an agreement providing
for Company's sale or other disposition of all or substantially all
of its assets to any individual, partnership, joint venture,
association, trust, corporation, or other entity or person that is
not an Affiliated Employer;
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9.1.2.6. an event that triggers the exercisability of rights
under the Company's Shareholder Rights Plan, as in effect at the
time of the Triggering Event; or
9.1.2.7. the occurrence of another event that the Board
designates a Change in Control.
9.2. Benefits. If a Triggering Event with respect to a Participant
occurs, the Participant shall be entitled to a single lump sum payment
within 30 days thereafter. If the Participant (or Beneficiary, in the case
of a deceased Participant) Terminated Employment before the Change in
Control, the amount of the lump sum payment shall be the Present Value of
all future payments to which the Participant (or Beneficiary) is entitled
pursuant to the Plan. If the Participant did not Terminate Employment
before the Change in Control, the amount of the lump sum payment shall be
the Present Value of the benefits that would be payable to the Participant
beginning as of his Earliest Retirement Date, if he remained employed until
such date and his Base Income increased annually until such date in a manner
equivalent to his past increases in Base Income. For purposes of this
Section, Present Value shall be determined using 1983 Group Annuity
Mortality Table, 50% male/ 50% female and a discount rate equal to the
average rate for 30-year United States government bonds over the calendar
year preceding the Change in Control.
Section 10. Trust Fund. The Company shall enter into a trust agreement
creating a trust to implement and carry out the provisions of the Plan and to
finance benefits under the Plan. All rights of a Participant or Beneficiary
under the Plan shall be subject to all the terms and conditions of the Trust.
The Company may modify the Trust from time to time to accomplish the purposes of
the Plan. The Company shall not have any right, title, or interest in the
contributions made to the Trust and no part of the Trust assets shall revert to
the Company until all benefits have been paid; provided, however, all assets of
the Trust shall at all times be subject to the claims of the Company's
creditors. If the Trust does not timely make a benefit payment, the Employer
shall pay it within 20 days of its due date. No Participant or Beneficiary has
any right or interest in the Trust assets except as expressly provided in the
Plan and the Trust.
Section 11. Funding of Trust.
----------------
(a) Annual Deposits. If funded by life insurance, the Employer shall
deposit the following amounts in the Trust no less frequently than annually:
(1) for each Fiscal Year, the total amount of premiums due for that
Fiscal Year with respect to all life insurance policies then maintained
in the Trust, less the total value of cash and liquid assets maintained
in such Trust on the first day of that Fiscal Year (not including any
cash value of such insurance policies); and
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(2) for each Fiscal Year, such amounts as shall be needed from time
to time for the Trustee to make all benefit payments due under the Plan
for such Fiscal Year, reduced by the value of the other Trust assets
(except for life insurance policies) then available to pay such
benefits.
(b) Funding on Change in Control. Upon a Change in Control, the Company
shall promptly deposit any amount necessary to increase the Trust assets to
an amount equal to or greater than the amount that would be payable pursuant
to Section 9.2, if a Triggering Event occurred with respect to all
Participants on the Change in Control date.
(c) Tokheim May Make Additional Contributions. Although the Company is
obligated only to make contributions to the Trust as aforesaid in this
Section 11, it may make any additional contributions to the Trust from time
to time as it desires.
Section 12. General Provisions.
------------------
(a) Other Participants. The Company may from time to time add
Participants to be covered under the Plan, under the same or different terms
and conditions as are stated herein, provided that no such addition shall
reduce or eliminate the benefits of any Participant then covered under the
Plan without the Participant's written consent.
(b) Governing Law. To the extent not preempted by ERISA, this Plan
shall be construed in accordance with and governed by the internal laws (but
not the jurisdictional or choice of law rules) of the State of Indiana.
(c) Headings. The headings herein are for convenience only and shall
not affect in any way the meaning or interpretation of this Plan.
(d) Non-Assignability of Benefits. No benefit payable at any time under
the Plan shall be subject in any manner to alienation, sale, transfer,
assignment, pledge, attachment, garnishment, or encumbrance of any kind.
Any attempt to alienate, sell, transfer, assign, pledge or otherwise
encumber any such benefit whether presently or thereafter payable shall be
void. No benefit hereunder nor the Trust shall in any manner be liable for
or subject to the debts or liabilities of any Participant, Beneficiary, or
other person entitled to any benefit. Any attempted assignment, transfer,
pledge, disposition or encumbrance in contravention of this provision, or
the levy, attachment, execution, garnishment or other judicial process
thereupon shall be null and void and without effect.
(e) Other Rights Unaffected. A Participant's rights under any pension
or profit sharing plans or other arrangements of the Employer in which he or
she is a participant shall be governed solely by the terms of such plans and
programs, and shall be unaffected by this Plan. Further, any deferred
compensation payable under this Plan shall not be
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<PAGE>
deemed salary or other compensation to the Participant for the purpose of
computing benefits to which he or she may be entitled under any pension,
profit sharing, or othe plan or arrangement of the Employer.
(f) Payments to Legal Representatives. If the Board finds that any
Participant or Beneficiary is unable to care for his or her affairs because
of illness or accident, any payment due may be paid to such payee's spouse,
a child, a parent, sibling, or any person deemed by the Board to have
responsibility for the care of such payee; provided, however, such payment
shall be paid to that payee's duly appointed guardian, committee, or other
legal representative upon presentation of a proper claim to the Board. Any
payment made pursuant to this Subsection shall constitute a complete
discharge of the liabilities of the Employer and the Trust under this Plan
with respect to such payment.
(g) Reversion of Excess. The Employer's obligations to pay benefits
under the Plan shall be satisfied when it has paid all of the benefits
promised under the Plan. Therefore, once this has been done, any remaining
assets of the Trust or held in escrow or otherwise on behalf of the Plan or
Trust shall revert to the Company.
(h) Severability. If any provision of the Plan is invalid as applied to
any fact or circumstances, its invalidity shall not effect the validity of
any other provision of the Plan or of the same provision as applied to any
other fact or circumstance.
(i) Attorneys' Fees and Expenses. A Participant shall be entitled to
recover from the Company his or her reasonable attorneys' fees, costs, and
expenses incurred as a result of any successful action to enforce any of his
or her rights under the Plan.
(j) Successors. The Plan shall be binding upon and inure to the benefit
of the Company, its successors and assigns, and the Participant and his or
her successors and assigns, including his or her heirs, executors,
administrators, and legal representatives.
(k) Tax Withholding. The Employer shall provide to the Trustee
appropriate federal, state, and local tax withholding information, and the
Trustee shall withhold such amounts from the distributions and shall deliver
to the Employer for remittance to the appropriate taxing authority the
amounts of any taxes required to be withheld. The Employer shall have full
responsibility for the proper remittance of all withholding taxes to the
appropriate taxing authority and shall furnish the Participant or
Beneficiary and the Trustee with the appropriate tax information form
reporting the amounts of such distributions and any withholding taxes.
Section 13. No Right of Employment. Nothing contained in the Plan shall be
construed as conferring upon any Participant the right to continue in the employ
of the Employer as a participant or in any other capacity. The Employer's right
to discipline or discharge any Participant or any other employee shall not be
affected by any provisions of the Plan.
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Section 14. Administration. The Plan shall be administered by the
Administrator. All costs of administration shall be borne by the Company. The
Administrator shall be the named fiduciary as that term is used in ERISA. The
Administrator may employ and suitably compensate such attorneys and advisors and
such clerical and other service providers as it may deem necessary for the
performance of its duties. The Administrator shall have authority to promulgate
such uniform and nondiscriminatory rules for the Plan as are not inconsistent
with the provisions of the Plan or the Trust document and to make or cause to be
made all reports and filings necessary to meet its responsibilities under ERISA
concerning reporting and disclosure.
The Administrator shall enforce the Plan in accordance with its terms and
in accordance with the terms of the Trust document and shall have all powers
necessary to accomplish that purpose including without limiting the generality
of the foregoing, the following: (i) to determine conclusively all questions of
fact, including those relating to the eligibility of the Participants to receive
benefits under the Plan; (ii) to compute and certify to the Trustee the amount
of benefits payable to a Participant or Beneficiary; (iii) to authorize all
disbursements by the Trustee from the Trust; (iv) to interpret conclusively the
terms and provisions of the Plan; (v) to promulgate such uniform and
nondiscriminatory rules for the Plan as are not inconsistent with the provisions
hereof, and (vi) to make or cause to be made all reports and filings necessary
to meet its responsibilities under ERISA concerning reporting and disclosure. In
performing its duties hereunder, the Administrator may use its discretion to the
maximum extent permitted by law.
Section 15. Amendment and Termination. The Company reserves the sole and
exclusive right to amend or terminate the Plan at any time; provided, however,
such amendment or termination may not reduce the benefits of any Participant or
Beneficiary accrued through the date of the amendment or termination in the
absence of the Participant's or Beneficiary's written consent.
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IN WITNESS WHEREOF, the undersigned duly authorized officer or the Company
has executed this document on behalf of the Company of this 20th day of July,
1999.
TOKHEIM CORPORATION
By: /s/ Douglas K. Pinner
-----------------------
Douglas K. Pinner, Chairman, President
and Chief Executive Officer
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EXHIBIT A
KEY MANAGEMENT EMPLOYEE
PARTICIPANTS
Douglas K Pinner Chairman, President and CEO
John A. Negovetich Executive VP, Administration, Finance and CFO
Jacques St-Denis Executive VP. Operations
Norman L. Roelke VP, Secretary and General Counsel
<PAGE>
Exhibit 10.6
EMPLOYMENT AGREEMENT
for CHIEF EXECUTIVE OFFICER
THIS EMPLOYMENT AGREEMENT ("Agreement") is effective as of this 15th day of
July, 1999, by and between Tokheim Corporation, an Indiana Corporation
("Company") and Douglas K. Pinner ("Employee").
RECITALS
A. Company acknowledges and recognizes the value of Employee's services
and deems it necessary and desirable to retain Employee's full-time services.
B. Employee and Company desire to embody the terms and conditions of
Employee's employment in a written agreement, which will supersede all prior
employment agreements, whether written or oral.
AGREEMENT
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements set forth below, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
EMPLOYMENT. Company agrees to employ Employee, and Employee agrees to
serve Company, on a full time basis in the capacity of Chairman, President, and
Chief Executive Officer, subject to the terms and conditions of this Agreement.
1. TERM. Employee's employment shall commence on the effective date of
this Agreement and continue for an indefinite period and until such time as it
may be terminated by one or both of the parties as provided below.
2. DEFINED TERMS. For purposes of this Agreement, the following terms
shall have the following meanings, when capitalized:
"Base Monthly Rate" means the sum of (i) Employee's monthly salary payable
under Section 4.1 as of the determination date and (ii) one-twelfth of the
average bonus paid to Employee for the two fiscal years of the Company preceding
the determination date. For purposes of Section 5, the determination date shall
be the date on which this Agreement terminates, and, for purposes of Section 7,
the determination date shall be the date on which the Change in Control occurs.
For purposes of clause (ii) of the first sentence of this definition, if
Employee was not employed for the two full fiscal years immediately preceding
the determination date, the amount under clause (ii) shall be one-twelfth of
Employee's bonus for the fiscal year immediately preceding the determination
date.
"Board" means the Company's Board of Directors.
<PAGE>
"Cause" has the meaning specified in Section 5.1.1.
"Change in Control" has the meaning specified in Section 7.1.2.
"Code" or "Internal Revenue Code" means the Internal Revenue Code of 1986,
as amended from time to time.
"Committee" means a duly authorized committee of the Board.
"Confidential Information" has the meaning specified in Section 8.
"Deferred Compensation Plan" means the Tokheim Corporation Deferred
Compensation Plan, as in effect on the earlier of Executive's termination of
employment or a Change in Control.
"Disabled" or "Disability" means a mental or physical illness of Employee
that prevents Employee from performing the essential functions of his position
in a satisfactory manner and that the Board determines is likely to continue for
at least six months or the remainder of Employee's life. The Board's
determination of the existence or non-existence of Disability shall be made in
good faith based on medical evidence acceptable to the Board.
"Supplemental Executive Retirement Plan" means the Tokheim Corporation
Supplemental Executive Retirement Plan, as in effect on the earlier of
Executive's termination of employment or a Change in Control.
3. DUTIES.
3.1 During the term of this Agreement, Employee shall have such
duties and responsibilities and shall supply such services in the carrying
out of such duties and responsibilities as Company, through its Board or a
Committee shall from time to time direct. Subject to the provisions of
Section 7, Company retains the right to change the position,
responsibilities, duties, or services to be performed by Employee in such
manner as it deems appropriate. During the term of employment, Employee
shall devote his best efforts and skills to the business interests of
Company and shall not engage in any commercial enterprise or activity,
either directly or indirectly, in conflict with Company's business, or
which may in any way interfere with his employment, without the consent of
the Board.
3.2 Employee agrees that, during the term of his employment, any and
all inventions and discoveries, whether or not patentable, which Employee
may conceive or make (collectively, "Inventions"), either alone or in
conjunction with others and related or in any way connected with the
business of Company, shall be the sole and exclusive property of Company.
Employee shall, without further compensation or consideration, but at the
expense of Company, and as and when requested to do so by Company, promptly
execute
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and assign any and all applications, assignments, and other instruments
which Company shall deem necessary to apply for and obtain letters patent
of the United States and foreign countries for any Inventions and to assign
and convey to Company or its nominee the sole and exclusive right, title,
and interest in and to any Inventions or applications or patents thereon.
As promptly as known or possessed by Employee, Employee shall disclose to
Company all information with respect to any Invention. Employee further
agrees that, during the term of employment, any trademarks, tradenames,
service marks, trade styles, logos, emblems, labels, slogans, and writings,
whether or not copyrighted (collectively, "Marks"), originated by Employee,
alone or in conjunction with others, and related or in any way connected
with the business of Company, shall be the sole and exclusive property of
Company. Employee shall, without further compensation or consideration, but
at the expense of Company, and as and when requested to do so by Company,
take all action necessary to register or otherwise perfect Company's
interest in and to any Marks.
4. COMPENSATION. During the term of this Agreement, Company shall
compensate Employee for his services as follows:
4.1 Employee shall be entitled to an initial monthly base salary of
$40,300. Employee's base salary shall be payable in semi-monthly or monthly
installments in accordance with the policy of Company at the time of such
payments. Employee's base salary shall be reviewed by the Board or a
Committee at least annually and, subject to the provisions of Section 7,
shall be subject to adjustment by the Board or such Committee.
4.2 Employee shall be eligible for such bonus program as may from
time to time be made available and applicable to Employee by the Board or
a Committee.
4.3 Employee shall be granted participation in all employee benefit
plans applicable to Employee's position with Company, including, but not
limited to, medical plans, disability plans, life insurance plans, savings
plans, stock option plans, the Deferred Compensation Plan, the Supplemental
Executive Retirement Plan, and such other plans as may from time to time be
made available and applicable to Employee (collectively, "Plans"),
consistent with the policies of Company and the terms and conditions of the
Plans, as in effect from time to time. Except as provided in Section 7,
nothing in this Agreement shall be deemed to alter the terms and conditions
of any Plan or the policy of Company with respect to any Plan, and nothing
in this Agreement shall be deemed to entitle Employee to any rights in any
Plan which would not otherwise be made available to Employee pursuant to
the terms, conditions, and provisions of the Plan.
4.3.1 Except as may otherwise be expressly provided, Employee
shall be granted, upon termination of this Agreement, such rights as
may be available to him pursuant to any Plan or Plans then in effect.
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5. TERMINATION. Either Company, by action of the Board, or Employee may
terminate this Agreement upon providing written notice to the other.
5.1 By the Company. In the event this Agreement is terminated with
Cause, Employee shall be entitled to no severance pay, and the parties
shall each be entitled only to such continuing rights as may be provided in
this Agreement or as may otherwise be available to them in law or equity.
5.1.1 With Cause. For purposes of this Agreement, the
termination of this Agreement shall be deemed to have been made with
Cause only upon the occurrence of one or more of the following
circumstances:
5.1.1.1 Employee engages in any breach of fiduciary duty,
act of dishonesty, or theft involving Company;
5.1.1.2 Employee is convicted of a felony;
5.1.1.3 Employee discloses Confidential Information in
violation of Section 8 or competes with Company in violation
of Section 9;
5.1.1.4 Employee refuses or fails to carry out the duties
which may have been assigned to him; or
5.1.1.5 Employee continues to violate any written Company
policy after written notice by Company of the violation.
Before the Board terminates Employee's employment for Cause, it shall
provide Employee an opportunity, after reasonable notice, to appear
before the Board. To terminate Employee for Cause, the Board must
adopt a resolution terminating Employee by affirmative vote of at
least 75% of its members, after having given Employee the opportunity
to present his case to the Board. The Board's resolution must state
that the Board finds in good faith that (i) Employee is guilty of
conduct constituting Cause, specifying the details of such conduct,
and (ii), for cause described in Section 5.1.1.5, Employee failed to
cure such conduct within 30 days after receiving written notice from
Company detailing such conduct. The effective date of Employee's
termination for Cause shall be the date on which Employee receives a
copy of the resolution adopted by the Board or such later date
specified in the resolution.
5.1.2 Without Cause. In the event Company terminates this
Agreement without Cause, Employee shall be entitled to severance pay
equal to 36 months of Employee's base salary payable pursuant to
Section 4.1 in effect at the time of the termination, payable at the
same interval as his salary at the time of the termination.
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Employee shall have no obligation to mitigate damages by seeking
other employment.
5.1.3 The right to severance pay under this Section 5.1.2 shall
vest upon notice of termination and shall not be affected by
Employee's subsequent death or disability.
5.1.3.1 Employee shall also be entitled to the following
for 36 months or until Employee begins alternative
employment:
i Medical insurance, life insurance, and disability
insurance benefits from Company comparable to such
benefits provided with respect to Employee as of the
date of the termination of this Agreement.
ii Continued accrual of benefits under the Supplemental
Executive Retirement Plan as if Employee's employment
had continued at the Base Monthly Rate.
5.2 By Employee. Subject to Section 7, in the event Employee
terminates this Agreement, Employee shall be entitled to no severance pay
and shall be entitled only to such other rights as may be provided in this
Agreement or as may otherwise be available to him in law or equity.
5.3 Death or Disability. In the event Employee dies or becomes
permanently Disabled during the term of this Agreement or any extension of
it, this Agreement shall terminate upon the date of such death or
Disability. In the event this Agreement terminates by Employee's death or
Disability, Company shall pay Employee's pro-rata base salary under Section
4.1 through the termination date, and Employee shall be entitled to such
continuing benefits as may be provided in any plan or by law, but Employee
shall not be entitled to severance pay.
6. RETURN OF COMPANY PROPERTY. Upon termination of this Agreement for
any reason, Employee shall immediately surrender to Company, in the same
condition as existed prior to termination of this Agreement, all property of
Company in his possession or control, including Confidential Information,
computers, files, and any other property owned by Company. Employee and Company
acknowledge and agree that the damages suffered as a result of the breach of
this Section would be difficult to ascertain. Accordingly, the parties agree
that Company shall be entitled to liquidated damages in the amount of $5,000 in
the event of a breach by Employee of this Section.
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<PAGE>
7. CHANGE IN CONTROL.
7.1 Benefits payable. Notwithstanding anything in this Agreement to
the contrary, Employee shall be entitled to the termination benefits set
forth below, if this Agreement is terminated by a "Triggering Event." The
benefits set forth below shall be in addition to any other benefits which
may have accrued to Employee during the term of employment; provided,
however, the provisions regarding direct severance pay shall be exclusive
and shall replace any other rights of Employee to direct severance payments
as set forth in Section 5.
7.1.1 Triggering Event. For purposes of this Agreement, a
Triggering Event shall be deemed to have occurred if:
7.1.1.1 there is a Change in Control; and
7.1.1.2 within 12 months after the Change in Control:
(a) Company terminates this Agreement without Cause, or
(b) (1) Company or Employee terminates this Agreement, and
(2) in combination with the Change in Control, there
has been one or more of the following:
(i) termination of Employee's appointment as
President, Chairman, or Chief Executive
Officer,
(ii) a change of Employee's job authority or
responsibilities,
(iii) a reduction of Employee's base salary
payable pursuant to Section 4.1 or a
material reduction of aggregate benefits
provided to Employee, or
(iv) the relocation of Employee's primary office
location to a distance greater than 50 miles
from the current office location.
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7.1.2 Change in Control. As used in this Agreement, a "Change in Control"
shall be deemed to have occurred if there has been one or more of the following:
7.1.2.1 any "person" (as such term is used in Section 13(d)(3) and
14(d)(2) of the Securities Exchange Act of 1934, as amended from time
to time), other than a retirement plan sponsored by Company, becomes a
beneficial owner, directly or indirectly, of securities of Company
representing 20% or more of the combined voting power of Company's
then outstanding securities;
7.1.2.2 less than 51% of the members of the Board are Incumbent
Directors (as defined in the Company's Deferred Compensation Plan, as
in effect on the date of this Agreement):
7.1.2.3 any corporation or group of associated persons acting in
concert, owns more than 25% of the outstanding shares of voting stock
of Company coupled with or followed by the exercise of the voting
power of such shares by the election of two or more directors of
Company in any one election at the instance of such corporation or
group;
7.1.2.4 Company becomes a party to an agreement of merger,
consolidation, or other reorganization pursuant to which Company will
be a constituent corporation, and either (i) Company is not the
surviving or resulting corporation, or (ii) the transaction will
result in less than 60% of the outstanding voting securities of the
surviving or resulting entity being owned by former shareholders of
Company;
7.1.2.5 Company becomes a party to an agreement providing for
Company's sale or other disposition of all or substantially all of its
assets to any individual, partnership, joint venture, association,
trust, corporation, or other entity or person which is not an
Affiliate (as defined in the Company's Deferred Compensation Plan, as
in effect on the date of this Agreement);
7.1.2.6 an event that triggers the exercisability of rights under the
Company's Shareholder Rights Plan, as in effect at the time of the
Triggering Event; or
7.1.2.7 the occurrence of another event that the Board designates a
Change in Control.
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<PAGE>
7.2 Benefits. In the event this Agreement is terminated by a
Triggering Event, Employee shall be entitled to the following:
7.2.1 A lump sum severance payment equal to Employee's Base
Monthly Rate multiplied by 36, payable within 30 days following
termination of the Agreement.
7.2.2 Employee shall also be entitled to the following for 36
months or until Employee begins alternative employment.
7.2.2.1 Medical, life, accidental death and dismemberment,
disability, pension, and split dollar life insurance
benefits from Company comparable to such benefits with
respect to Employee as of the date of the termination of
this Agreement.
7.2.2.2 Continued accrual of benefits under the
Supplemental Executive Retirement Plan as if Employee's
employment had continued at the Base Monthly Rate.
7.3 If Employee incurs taxes under Code Section 4999, Company shall
gross up the amount payable pursuant to Section 7.2.1 to compensate
Employee for such taxes and well as any taxes payable on account of the
gross up under this Section.
7.4 Employee shall have the right to enforce his rights under this
Section 7 in any court with jurisdiction over the parties and matter or
pursuant to the arbitration procedures of Section 15. Company shall be
responsible for Employee's reasonable expenses and attorneys' fees in any
such court proceeding or arbitration and shall pay all costs of arbitration
relating to Employee's enforcement of his rights under this Section.
8. NONDISCLOSURE OF CONFIDENTIAL INFORMATION. For purposes of this
Agreement, Confidential Information is defined as trade secrets (as defined in
Indiana Code 24-2-3-2, as amended), software programs, customer reports,
customer lists, vendor reports, vendor lists, and other information regarding
customers and vendors utilized by Company in the course of its business, and any
information regarding Company's present or future business plans.
8.1 Employee acknowledges his position with Company will expose
Employee to certain Confidential Information and that Confidential
Information constitutes a valuable, special, and unique asset of Company's
business. Employee shall not, during or at any time after the term of his
employment, disclose any Confidential Information acquired by Employee
during his employment to any person, firm, corporation, association, or
other entity for any purpose, or use Confidential Information for any
purpose, other than for the performance of services for Company.
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<PAGE>
8.2 In the event of Employee's actual or threatened breach of the
provisions of this Section, Company shall be entitled to obtain an
injunction enjoining Employee from committing such actual or threatened
breach. In the event Company obtains an injunction enjoining Employee from
violating this provision, Company shall be entitled to recover all costs
incurred in connection with the injunction, including reasonable attorneys'
fees. Company shall also be permitted to pursue any other available
remedies available for such breach or threatened breach, including the
recovery of damages, costs, and attorneys' fees from Employee.
8.3 Employee acknowledges that all Confidential Information is the
sole and exclusive property of Company. Employee shall surrender possession
of all Confidential Information, including documents, computers, software,
disks, tapes or video recordings, or any other written, recorded, or
graphic matter, however produced or reproduced, containing Confidential
Information to Company upon any suspension or termination of Employee's
employment. If, after the suspension or termination of Employee's
employment, Employee becomes aware of any Confidential Information in his
possession, Employee shall immediately surrender possession of the
Confidential Information to Company.
9. RESTRICTIVE COVENANT. For purposes of this Agreement, "Competing
Business" is defined as Gilbarco, Wayne, Schlumberger, Bennett, and Tatsuno, and
their respective affiliates and subsidiaries, both domestic and international,
and any other company engaged in the petroleum dispensing manufacturing business
or point of sale equipment business related to petroleum dispensing.
9.1 Employee hereby covenants and agrees that, for the greater of 36
months after termination of this Agreement, or such time as Employee is
receiving any severance pay from Company (the "Restricted Period"),
Employee shall not, directly or indirectly own, manage, operate, control,
be controlled by, participate in, be employed by, or be connected in any
manner with the ownership, management, operation, or control of any
Competing Business. Employee further covenants and agrees that he shall not
during the Restricted Period contact or attempt to contact, either directly
or indirectly, any customers of Company as they may exist at the time of
termination of Employee's employment for the purpose of soliciting such
customer's business for or on behalf of any Competing Business. Employee
specifically acknowledges and agrees that Company's business is
international in scope and that the restriction as contained in this
section is intended to cover activity by Employee both domestically and
internationally. Employee further stipulates, covenants, and agrees that a
reasonable geographic restriction, as that term is used and defined by
Indiana law, on Employee's activities under this Section is the entire
world.
9.2 In the event of Employee's actual or threatened breach of the
provisions of this Section, Company shall be entitled to obtain an
injunction enjoining Employee from committing such actual or threatened
breach. In the event Company obtains an injunction enjoining Employee from
violating this provision, Company shall be entitled to recover all
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costs incurred in connection with the injunction, including reasonable
attorneys' fees. Company shall also be permitted to pursue any other
available remedies available for such breach, including the recovery of
damages and reasonable costs and attorneys' fees from Employee.
9.3 If a court of competent jurisdiction or any arbitrator determines
that any provision or restriction in this Section is unreasonable or
unenforceable, the court or arbitrator shall modify such restriction or
provision so that the agreement then becomes an enforceable restriction of
the activities of Employee.
10. FORFEITURE OF BENEFITS. If Employee breaches his obligations under
either Section 8 or Section 9, Employee shall forfeit all future payments or
compensation payable or provided by Company, except as required pursuant to the
terms of a Plan.
11. NO CONTINUING OBLIGATION. Employee acknowledges and agrees that this
Agreement does not grant Employee the right to continue as an employee of
Company as an executive or in any other capacity.
12. NO TRUST ESTABLISHED. All payments provided under this Agreement
shall be paid in cash from the general funds of Company, and no separate or
special fund has been or shall be established, and no segregation of assets has
been or shall be made to assure payment. Employee shall have no right, title,
or interest in or to any investments or other assets which Company may acquire
or obtain to assist in meeting its obligations under this Agreement. Nothing
contained in this Agreement, 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 Company and Employee or any other person. The right of any
person to receive payments from Company under this Agreement shall be no greater
than the rights of a general unsecured creditor of Company.
13. WITHHOLDING. Company may withhold from any payments or benefits
provided under this Agreement:
13.1 all federal, state, city, or other taxes as required pursuant to
any law or governmental regulation or ruling; and
13.2 any amounts owed by Employee to Company for any reason at the
time of the termination of this Agreement.
14. NO ASSIGNMENT OR ALIENATION. This Agreement shall not be assignable
by Employee without Company's prior written consent; provided, however, nothing
in this Section shall preclude Employee from designating a beneficiary to
receive any benefit payable upon his death or preclude Employee's executors,
administrators, or other legal representatives of his estate from assigning any
rights hereunder to the person or persons entitled thereto. Further, except as
required by law, no right to receive payments under this Agreement shall be
subject to anticipation,
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communication, alienation, sale, assignment, encumbrance, charge, pledge, or
hypothecation or to execution, attachment, levy, or similar process or
assignment by operation of law, and any attempt, voluntary or involuntary, to
effect any such action shall be null, void, and of no effect.
15. ARBITRATION. Employee and Company recognize and agree that the
arbitration of disputes provides mutual advantages in terms of facilitating the
fair and expeditious resolution of disputes. In consideration of these mutual
advantages, the parties agree as follows:
15.1 Limitation of Section. The provisions of this Section are subject
to and limited by the provisions of Sections 7.4, 8.2, and 9.2. Except to
the extent elected by Employee under Section 7.4, or by the Company under
Section 8.2 or 9.2, the provisions of this Section shall not apply to any
action brought pursuant to Sections 7.4, 8.2, or 9.2.
15.2 Scope of Arbitration. The parties shall submit to arbitration, in
accordance with these provisions, any and all disputes either party may
have arising from or related to this Agreement, and any other disputes
between the parties arising from or related to their employment
relationship, including but not limited to, any disputes regarding alleged
common law tort violations or violations of state or federal statutory
rights. The parties further agree that the arbitration process set forth
below shall be the exclusive means for resolving all disputes made subject
to arbitration but that no arbitrator shall have authority to determine
whether disputes fall within the scope of these arbitration provisions.
15.3 Governing Law. Employee and Company agree that the interpretation
and enforcement of the arbitration provisions of this Agreement, including
any right to appeal, shall be governed by the Indiana Uniform Arbitration
Act, I.C. 34-4-2-1, et seq.
15.4 Time Limits on Submitting Disputes. Employee and Company
acknowledge and agree that one of the objectives of this arbitration
provision is to resolve disputes expeditiously, as well as fairly, and that
it is the obligation of both parties, to those ends, to raise any disputes
subject to arbitration under this Agreement in an expeditious manner.
Accordingly, the parties agree to waive all statutes of limitations that
might otherwise be applicable, and agree further that, as to any dispute
subject to arbitration pursuant to this Agreement, notice of a demand for
arbitration must be provided to the other party:
15.4.1 In the event of a dispute arising out of a termination of
this Agreement, within six months of the date of termination;
15.4.2 In the event of a breach of Section 8 or 9, within four
months after the full Board has actual knowledge of the breach; or
15.4.3 In the event of any other dispute, within three months
after the dispute arises.
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Failure to demand arbitration on claims within these time limits is
intended to, and shall to the furthest extent permitted by law, be a waiver
and release with respect to such claims, and, in the absence of a timely
submitted written demand for arbitration, an arbitrator has no authority to
resolve the disputes or render an award.
15.5 Availability of Provisional Relief. Notwithstanding anything
herein to the contrary, nothing in this Section shall prevent Company or
Employee from obtaining injunctive relief from a court of competent
jurisdiction to enforce the obligations of Sections 8 and 9 and for which
either party may require provisional relief pending a decision on the
merits by the arbitrator.
15.6 American Arbitration Association Rules Apply as Modified Herein.
Any arbitration of disputes shall be conducted under the Model Employment
Procedures of the American Arbitration Association (AAA), as modified in
this Agreement.
15.7 Invoking Arbitration. Either party may invoke the arbitration
procedures described in this Agreement by written notice of a demand for
arbitration (an "Arbitration Notice"). An Arbitration Notice shall contain
a statement of the matter to be arbitrated in sufficient detail to
establish the timeliness of the demand. The parties shall then have ten
business days within which they may identify a mutually agreeable
arbitrator. After the ten day period has expired, the parties shall prepare
and submit to the AAA a joint submission, with each party to contribute
half of the appropriate administrative fee. In their submission to the AAA,
the parties shall either designate a mutually acceptable arbitrator or
request a panel of arbitrators from the AAA according to the procedure
described in section, below.
15.8 Arbitrator Selection. In the event the parties cannot agree upon
an arbitrator within ten business days after the Arbitration Notice is
received, their joint submission to the AAA shall request a panel of seven
arbitrators from the joint Labor and Commercial Arbitration Panels who are
practicing attorneys with professional experience in the field of labor
and/or employment law, and the parties shall attempt to select an
arbitrator from the panel according to AAA procedures. If the parties
remain unable to select an arbitrator, they shall request from AAA a panel
of three comparably qualified arbitrators from which the AAA shall reject
the least preferred candidate of each party and select the candidate with
the highest joint ranking of the parties.
In the event of the death or disability of an arbitrator, the parties
shall select a new arbitrator as provided above. The substitute arbitrator
shall have the power to determine the extent to which he or she shall act
on the record already made in arbitration.
15.9 Prehearing Procedures. Upon accepting assignment as arbitrator,
the arbitrator shall promptly conduct a preliminary hearing at which each
party shall be entitled to submit a brief statement of their respective
positions, and at which the arbitrator shall establish a timetable for
prehearing activities and the conduct of the hearing, and may
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address initial requests from the parties for prehearing disclosure of
information. At the preliminary hearing and/or thereafter, the arbitrator
shall have the discretion and authority to order, upon request or
otherwise, the prehearing disclosure of information to the parties. Such
disclosure may include, without limitation, production of requested
documents, exchange of witness lists and summaries of the testimony of
proposed witnesses, and examination by deposition of potential witnesses,
to the end that information disclosure shall be conducted in the most
expeditious and cost-effective manner possible, and shall be limited to
that which is relevant and for which each party has a substantial,
demonstrable need. The arbitrator shall further have the authority, upon
request or otherwise, to confer with the parties or their designated
representatives concerning any matter, and to set or modify timetables for
all aspects of the arbitration proceeding.
The arbitrator may award either party its reasonable attorneys' fees
and costs, including reasonable expenses associated with production of
witnesses or proof, upon a finding that the other party (i) engaged in
unreasonable delay, (ii) failed to comply with the arbitrator's discovery
order, or (iii) failed to comply with requirements of confidentiality
hereunder. The arbitrator shall also have the authority, upon request or
otherwise, to entertain and decide motions for prehearing judgment.
15.10 Stenographic Record. There shall be a stenographic record of the
arbitration hearing, unless the parties agree to record the proceedings by
other reliable means. The costs of recording the proceedings shall be borne
equally by the parties.
15.11 Location. Unless otherwise agreed by the parties, arbitration
hearings shall take place in Fort Wayne, Allen County, Indiana at a
mutually agreeable place or, if no agreement can be reached, at a place
designated by the AAA.
15.12 The Hearing. At any hearing, the party bearing the burden of
proof according to the governing substantive law shall present its evidence
first.
15.13 Posthearing Briefs. After the close of the arbitration hearing,
and on any issue concerning prehearing procedures, the arbitrator shall
allow the parties to submit written briefs.
15.14 Confidentiality. All arbitration proceedings hereunder shall be
confidential. Neither party shall disclose any information about the
evidence produced by the other in the arbitration proceeding or about
documents produced by the other in connection with the proceeding, except
in the course of a judicial, regulatory or arbitration proceeding, or as
may be requested by governmental authority. Before making any disclosure
permitted by the preceding sentence, the party shall give the other party
reasonable written notice of the intended disclosure and an opportunity to
protect its interests. Expert witnesses and stenographic reporters shall
sign appropriate nondisclosure agreements.
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15.15 Costs. Except as otherwise expressly provided in this Agreement,
as to any disputes arising from the termination of the Agreement, each
party shall be responsible for its costs, including attorneys' fees,
incurred in any arbitration, and the arbitrator shall not have authority to
include all or any portion of said costs and fees in his or her award. The
costs and fees of the arbitrator and of the AAA shall be borne equally by
the parties.
15.15.1 Notwithstanding anything herein to the contrary, Company
shall be entitled to recover its reasonable costs and attorneys' fees
incurred in enforcing the provisions of Section 8 or Section 9,
provided that it prevails in such enforcement action.
15.15.2 Notwithstanding anything herein to the contrary,
Employee shall be entitled to recover from the Company all costs and
expenses incurred in enforcing his rights under this Agreement,
including all expenses of the arbitration and attorneys' fees and
costs, provided that he prevails in whole or in part in such
enforcement action.
15.16 Remedies. The arbitrator shall have authority to award any
remedy or relief that a federal or state court situated in the State of
Indiana could grant in conformity to applicable law.
15.17 Law Governing the Arbitrator's Award. In rendering an award, the
arbitrator shall determine the rights and obligations of the parties,
including employment discrimination issues, according to federal law and
the substantive law of the State of Indiana (excluding conflicts of laws
principles) as though the matter were before a court of law.
15.18 Written Awards and Enforcement. Any arbitration award shall be
accompanied by a written statement containing a summary of the issues in
controversy, a description of the award, and an explanation of the reasons
for the award. The parties agree that a competent court shall enter
judgment upon the award of the arbitrator, provided it is in conformity
with the terms of this Agreement.
15.19 Conflict in Procedure. If any part of this arbitration procedure
is in conflict with any mandatory requirement of applicable law, the
mandatory requirement shall govern, and the procedure set forth above shall
be reformed and construed to the maximum extent possible in conformance
with the applicable law. The procedure shall remain otherwise unaffected
and enforceable.
16. MISCELLANEOUS.
16.1 Entire Agreement. This Agreement constitutes the entire agreement
between the parties and all prior negotiations and agreements, whether
written or oral, are merged into this Agreement.
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16.2 Severability. If any provision of this Agreement shall for any
reason be held to be invalid, illegal, or unenforceable in any respect,
such invalidity, illegality, or unenforceability shall not affect any other
provision or part of a provision of this Agreement; but this Agreement
shall be reformed and construed as if such provision had never been
contained in it, and any such provision shall be reformed so that it would
be valid, legal and enforceable to the maximum extent permitted.
16.3 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
counterparts collectively shall constitute one document representing the
agreement among the parties.
16.4 Binding Agreement. This Agreement shall be binding upon and shall
inure to the benefit of the parties to this Agreement and their respective
successors and assigns.
16.5 Amendment. This Agreement may not be amended, discharged,
terminated, or changed orally; and any such proposed amendment, discharge,
termination, or change shall be in writing and signed by the party against
whom such amendment, change, discharge, or termination is sought.
16.6 Waiver of Breach. The waiver by any party of a breach of any
provision of this Agreement shall not operate or be construed as a waiver
of any subsequent breach; and no waiver shall be valid unless it is in
writing and is signed by the party against whom such waiver is sought.
16.7 Extension of Noncompete Period. The periods of time during which
Employee is prohibited from engaging in such business practices pursuant to
this Agreement shall be extended by any length of time during which
Employee is in breach of any of such covenants.
16.8 Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Indiana.
16.9 Survival. The provisions and restrictions contained in Sections 8
and 9 shall survive the termination of this Agreement and Employee's
employment with Company.
16.10 Full Disclosure. Employee acknowledges that Employee's
employment with Company is conditioned upon the execution of this
Agreement. Employee represents and acknowledges that Employee has carefully
reviewed all of the terms and conditions in this Agreement and has been
advised of Employee's right to seek independent legal counsel prior to
execution of this Agreement.
16.11 Notices. Any notice, request, or other communication required or
permitted under this Agreement shall be in writing. Notice shall be deemed
to have been given only
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if personally delivered or sent by registered or certified mail, return
receipt requested. Any notice so mailed shall be deemed given on the
postmark date. Failure or refusal to accept or receive any notice or
communication shall not affect the validity of the notice. All such notices
shall be given to the respective parties at the addresses designated below,
or to such other address as a party may designate in a like manner.
If to Company: TOKHEIM CORPORATION
c/o TIMOTHY EASTOM, VP HUMAN RESOURCES
P.O. BOX 360
FORT WAYNE, IN 46801
If to Employee: _______________________________
_______________________________
_______________________________
IN WITNESS WHEREOF, the parties have entered into this Agreement as of the
date first written above.
TOKHEIM CORPORATION EMPLOYEE
/s/ Walter S. Ainsworth /s/ Douglas K. Pinner
- ------------------------------ -------------------------------
WALTER S. AINSWORTH, CHAIRMAN DOUGLAS K. PINNER
COMPENSATION COMMITTEE
/s/ Norman L. Roelke
- ------------------------------
By: NORMAN L. ROELKE
Its: VICE PRESIDENT, SECRETARY & GENERAL COUNSEL
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EXHIBIT 10.7
EMPLOYMENT AGREEMENT
for CORPORATE OFFICER
THIS EMPLOYMENT AGREEMENT ("Agreement") is effective as of this 15TH day of
JULY, 1999, by and between Tokheim Corporation, an Indiana Corporation
("Company") and JOHN A. NEGOVETICH ("Employee").
RECITALS
A. Company acknowledges and recognizes the value of Employee's services
and deems it necessary and desirable to retain Employee's full-time services.
B. Employee and Company desire to embody the terms and conditions of
Employee's employment in a written agreement, which will supersede all prior
employment agreements, whether written or oral.
AGREEMENT
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements set forth below, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
EMPLOYMENT. Company agrees to employ Employee, and Employee agrees to
serve Company, on a full time basis in the capacity of EXECUTIVE VICE PRESIDENT,
FINANCE/ADMINISTRATION, subject to the terms and conditions of this Agreement.
1. TERM. Employee's employment shall commence on the effective date of
this Agreement and continue for an indefinite period and until such time as it
may be terminated by one or both of the parties as provided below.
2. DEFINED TERMS. For purposes of this Agreement, the following terms
shall have the following meanings, when capitalized:
"Base Monthly Rate" means the sum of (i) Employee's monthly salary payable
under Section 4.1 as of the determination date and (ii) one-twelfth of the
average bonus paid to Employee for the two fiscal years of the Company preceding
the determination date. For purposes of Section 5, the determination date shall
be the date on which this Agreement terminates, and, for purposes of Section 7,
the determination date shall be the date on which the Change in Control occurs.
For purposes of clause (ii) of the first sentence of this definition, if
Employee was not employed for the two full fiscal years immediately preceding
the determination date, the amount under clause (ii) shall be one-twelfth of
Employee's bonus for the fiscal year immediately preceding the determination
date.
"Board" means the Company's Board of Directors.
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"Cause" has the meaning specified in Section 5.1.1.
"Change in Control" has the meaning specified in Section 7.1.2.
"Code" or "Internal Revenue Code" means the Internal Revenue Code of 1986,
as amended from time to time.
"Committee" means a duly authorized committee of the Board.
"Confidential Information" has the meaning specified in Section 8.
"Deferred Compensation Plan" means the Tokheim Corporation Deferred
Compensation Plan, as in effect on the earlier of Executive's termination of
employment or a Change in Control.
"Disabled" or "Disability" means a mental or physical illness of Employee
that prevents Employee from performing the essential functions of his position
in a satisfactory manner and that the Board determines is likely to continue for
at least six months or the remainder of Employee's life. The Board's
determination of the existence or non-existence of Disability shall be made in
good faith based on medical evidence acceptable to the Board.
"Supplemental Executive Retirement Plan" means the Tokheim Corporation
Supplemental Executive Retirement Plan, as in effect on the earlier of
Executive's termination of employment or a Change in Control.
3. DUTIES.
3.1 During the term of this Agreement, Employee shall have such
duties and responsibilities and shall supply such services in the carrying
out of such duties and responsibilities as Company, through its Board, a
Committee, its Chief Executive Officer, or another executive officer
designated by the Board or a Committee shall from time to time direct.
Subject to the provisions of Section 7, Company retains the right to change
the position, responsibilities, duties, or services to be performed by
Employee in such manner as it deems appropriate. During the term of
employment, Employee shall devote his best efforts and skills to the
business interests of Company and shall not engage in any commercial
enterprise or activity, either directly or indirectly, in conflict with
Company's business, or which may in any way interfere with his employment,
without the consent of the Board.
3.2 Employee agrees that, during the term of his employment, any and
all inventions and discoveries, whether or not patentable, which Employee
may conceive or make (collectively, "Inventions"), either alone or in
conjunction with others and related or in any way connected with the
business of Company, shall be the sole and exclusive property of Company.
Employee shall, without further compensation or consideration, but at the
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expense of Company, and as and when requested to do so by Company, promptly
execute and assign any and all applications, assignments, and other
instruments which Company shall deem necessary to apply for and obtain
letters patent of the United States and foreign countries for any
Inventions and to assign and convey to Company or its nominee the sole and
exclusive right, title, and interest in and to any Inventions or
applications or patents thereon. As promptly as known or possessed by
Employee, Employee shall disclose to Company all information with respect
to any Invention. Employee further agrees that, during the term of
employment, any trademarks, tradenames, service marks, trade styles,
logos, emblems, labels, slogans, and writings, whether or not copyrighted
(collectively, "Marks"), originated by Employee, alone or in conjunction
with others, and related or in any way connected with the business of
Company, shall be the sole and exclusive property of Company. Employee
shall, without further compensation or consideration, but at the expense of
Company, and as and when requested to do so by Company, take all action
necessary to register or otherwise perfect Company's interest in and to any
Marks.
4. COMPENSATION. During the term of this Agreement, Company shall
compensate Employee for her services as follows:
4.1 Employee shall be entitled to an initial monthly base salary of
$24,080. Employee's base salary shall be payable in semi-monthly or monthly
installments in accordance with the policy of Company at the time of such
payments. Employee's base salary shall be reviewed by the Board or a
Committee at least annually and, subject to the provisions of Section 7,
shall be subject to adjustment by the Board or such Committee.
4.2 Employee shall be eligible for such bonus program as may from
time to time be made available and applicable to Employee by the Board or a
Committee.
4.3 Employee shall be granted participation in all employee benefit
plans applicable to Employee's position with Company, including, but not
limited to, medical plans, disability plans, life insurance plans, savings
plans, stock option plans, the Deferred Compensation Plan, the Supplemental
Executive Retirement Plan, and such other plans as may from time to time be
made available and applicable to Employee (collectively, "Plans"),
consistent with the policies of Company and the terms and conditions of the
Plans, as in effect from time to time. Except as provided in Section 7,
nothing in this Agreement shall be deemed to alter the terms and conditions
of any Plan or the policy of Company with respect to any Plan, and nothing
in this Agreement shall be deemed to entitle Employee to any rights in any
Plan which would not otherwise be made available to Employee pursuant to
the terms, conditions, and provisions of the Plan.
4.3.1 Except as may otherwise be expressly provided, Employee
shall be granted, upon termination of this Agreement, such rights as
may be available to her pursuant to any Plan or Plans then in effect.
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5. TERMINATION. Either Company or Employee may terminate this Agreement
upon providing written notice to the other.
5.1 By the Company. In the event this Agreement is terminated with
Cause, Employee shall be entitled to no severance pay, and the parties
shall each be entitled only to such continuing rights as may be provided in
this Agreement or as may otherwise be available to them in law or equity.
5.1.1 With Cause. For purposes of this Agreement, the
termination of this Agreement shall be deemed to have been made with
Cause only upon the occurrence of one or more of the following
circumstances:
5.1.1.1 Employee engages in any breach of fiduciary duty,
act of dishonesty, or theft involving Company;
5.1.1.2 Employee is convicted of a felony;
5.1.1.3 Employee discloses Confidential Information in
violation of Section 8 or competes with Company in violation
of Section 9;
5.1.1.4 Employee refuses or fails to carry out the duties
which may have been assigned to him; or
5.1.1.5 Employee continues to violate any written Company
policy after written notice by Company of the violation.
Before the Board terminates Employee's employment for Cause, it shall
provide Employee an opportunity, after reasonable notice, to appear
before the Board. To terminate Employee for Cause, the Board must
adopt a resolution terminating Employee by affirmative vote of at
least 75% of its members, after having given Employee the opportunity
to present his case to the Board. The Board's resolution must state
that the Board finds in good faith that (i) Employee is guilty of
conduct constituting Cause, specifying the details of such conduct,
and (ii), for cause described in Section 5.1.1.5, Employee failed to
cure such conduct within 30 days after receiving written notice from
Company detailing such conduct. The effective date of Employee's
termination for Cause shall be the date on which Employee receives a
copy of the resolution adopted by the Board or such later date
specified in the resolution.
5.1.2 Without Cause. In the event Company terminates this
Agreement without Cause, Employee shall be entitled to severance pay
equal to 18 months of Employee's base salary payable pursuant to
Section 4.1 in effect at the time of the termination, payable at the
same interval as his salary at the time of the termination.
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Employee shall have no obligation to mitigate damages by seeking other
employment.
5.1.3 The right to severance pay under this Section 5.1.2 shall
vest upon notice of termination and shall not be affected by
Employee's subsequent death or disability.
5.1.3.1 Employee shall also be entitled to the following for
18 months or until Employee begins alternative employment:
i Medical insurance, life insurance, and disability
insurance benefits from Company comparable to such
benefits provided with respect to Employee as of the date
of the termination of this Agreement.
ii Continued accrual of benefits under the Supplemental
Executive Retirement Plan, if Employee is a Participant
therein, as if Employee's employment had continued at the
Base Monthly Rate.
5.2 By Employee. Subject to Section 7, in the event Employee
terminates this Agreement, Employee shall be entitled to no severance pay
and shall be entitled only to such other rights as may be provided in this
Agreement or as may otherwise be available to him in law or equity.
5.3 Death or Disability. In the event Employee dies or becomes
permanently Disabled during the term of this Agreement or any extension of
it, this Agreement shall terminate upon the date of such death or
Disability. In the event this Agreement terminates by Employee's death or
Disability, Company shall pay Employee's pro-rata base salary under Section
4.1 through the termination date, and Employee shall be entitled to such
continuing benefits as may be provided in any plan or by law, but Employee
shall not be entitled to severance pay.
6. RETURN OF COMPANY PROPERTY. Upon termination of this Agreement for
any reason, Employee shall immediately surrender to Company, in the same
condition as existed prior to termination of this Agreement, all property of
Company in his possession or control, including Confidential Information,
computers, files, and any other property owned by Company. Employee and Company
acknowledge and agree that the damages suffered as a result of the breach of
this Section would be difficult to ascertain. Accordingly, the parties agree
that Company shall be entitled to liquidated damages in the amount of $5,000 in
the event of a breach by Employee of this Section.
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7. CHANGE IN CONTROL.
7.1 Benefits payable. Notwithstanding anything in this Agreement to
the contrary, Employee shall be entitled to the termination benefits set
forth below, if this Agreement is terminated by a "Triggering Event." The
benefits set forth below shall be in addition to any other benefits which
may have accrued to Employee during the term of employment; provided,
however, the provisions regarding direct severance pay shall be exclusive
and shall replace any other rights of Employee to direct severance payments
as set forth in Section 5.
7.1.1 Triggering Event. For purposes of this Agreement, a
Triggering Event shall be deemed to have occurred if:
7.1.1.1 there is a Change in Control; and
7.1.1.2 within 12 months after the Change in Control:
--
(a) Company terminates this Agreement without Cause, or
(b) (1) Company or Employee terminates this Agreement, and
(2) in combination with the Change in Control, there
has been one or more of the following:
(i) a change in the President and/or Chief
Executive Officer of Tokheim Corporation or
the principle managing corporation,
(ii) a change of Employee's job authority or
responsibilities,
(iii) a reduction of Employee's base salary
payable pursuant to Section 4.1 or a
material reduction of aggregate benefits
provided to Employee, or
(iv) the relocation of Employee's primary office
location to a distance greater than 50 miles
from the current office location.
7.1.2 Change in Control. As used in this Agreement, a "Change in
Control" shall be deemed to have occurred if there has been one or
more of the following:
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7.1.2.1 any "person" (as such term is used in Section
13(d)(3) and 14(d)(2) of the Securities Exchange Act of
1934, as amended from time to time), other than a retirement
plan sponsored by Company, becomes a beneficial owner,
directly or indirectly, of securities of Company
representing 20% or more of the combined voting power of
Company's then outstanding securities;
7.1.2.2 less than 51% of the members of the Board are
Incumbent Directors (as defined in the Company's Deferred
Compensation Plan, as in effect on the date of this
Agreement):
7.1.2.3 any corporation or group of associated persons
acting in concert, owns more than 25% of the outstanding
shares of voting stock of Company coupled with or followed
by the exercise of the voting power of such shares by the
election of two or more directors of Company in any one
election at the instance of such corporation or group;
7.1.2.4 Company becomes a party to an agreement of merger,
consolidation, or other reorganization pursuant to which
Company will be a constituent corporation, and either (i)
Company is not the surviving or resulting corporation, or
(ii) the transaction will result in less than 60% of the
outstanding voting securities of the surviving or resulting
entity being owned by former shareholders of Company;
7.1.2.5 Company becomes a party to an agreement providing
for Company's sale or other disposition of all or
substantially all of its assets to any individual,
partnership, joint venture, association, trust, corporation,
or other entity or person which is not an Affiliate (as
defined in the Company's Deferred Compensation Plan, as in
effect on the date of this Agreement);
7.1.2.6 an event that triggers the exercisability of
rights under the Company's Shareholder Rights Plan, as in
effect at the time of the Triggering Event; or
7.1.2.7 the occurrence of another event that the Board
designates a Change in Control.
7.2 Benefits. In the event this Agreement is terminated by a
Triggering Event, Employee shall be entitled to the following:
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7.2.1 A lump sum severance payment equal to Employee's Base
Monthly Rate multiplied by 24, payable within 30 days following
termination of the Agreement.
7.2.2 Employee shall also be entitled to the following for
24 months or until Employee begins alternative employment.
7.2.2.1 Medical, life, accidental death and dismemberment,
disability, pension, and split dollar life insurance
benefits from Company comparable to such benefits with
respect to Employee as of the date of the termination of
this Agreement.
7.2.2.2 Continued accrual of benefits under the
Supplemental Executive Retirement Plan as if Employee's
employment had continued at the Base Monthly Rate.
7.3 Notwithstanding any provision of this Section 7 to the contrary,
if Company reasonably determines that any payment or benefit provided
pursuant to this Section is an "excess parachute payment" within the
meaning of Code Section 280G or any successor thereof, Company may limit
the total payment or benefit to Employee to the maximum amount payable by
Company that would not constitute an "excess parachute payment."
7.4 Employee shall have the right to enforce his rights under this
Section 7 in any court with jurisdiction over the parties and matter or
pursuant to the arbitration procedures of Section 15. Company shall be
responsible for Employee's reasonable expenses and attorneys' fees in any
such court proceeding or arbitration and shall pay all costs of arbitration
relating to Employee's enforcement of his rights under this Section.
8. NONDISCLOSURE OF CONFIDENTIAL INFORMATION. For purposes of this
Agreement, Confidential Information is defined as trade secrets (as defined in
Indiana Code 24-2-3-2, as amended), software programs, customer reports,
customer lists, vendor reports, vendor lists, and other information regarding
customers and vendors utilized by Company in the course of its business, and any
information regarding Company's present or future business plans.
8.1 Employee acknowledges his position with Company will expose
Employee to certain Confidential Information and that Confidential
Information constitutes a valuable, special, and unique asset of Company's
business. Employee shall not, during or at any time after the term of his
employment, disclose any Confidential Information acquired by Employee
during his employment to any person, firm, corporation, association, or
other entity for any purpose, or use Confidential Information for any
purpose, other than for the performance of services for Company.
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8.2 In the event of Employee's actual or threatened breach of the
provisions of this Section, Company shall be entitled to obtain an
injunction enjoining Employee from committing such actual or threatened
breach. In the event Company obtains an injunction enjoining Employee from
violating this provision, Company shall be entitled to recover all
costs incurred in connection with the injunction, including reasonable
attorneys' fees. Company shall also be permitted to pursue any other
available remedies available for such breach or threatened breach,
including the recovery of damages, costs, and attorneys' fees from
Employee.
8.3 Employee acknowledges that all Confidential Information is the
sole and exclusive property of Company. Employee shall surrender
possession of all Confidential Information, including documents, computers,
software, disks, tapes or video recordings, or any other written, recorded,
or graphic matter, however produced or reproduced, containing Confidential
Information to Company upon any suspension or termination of Employee's
employment. If, after the suspension or termination of Employee's
employment, Employee becomes aware of any Confidential Information in his
possession, Employee shall immediately surrender possession of the
Confidential Information to Company.
9. RESTRICTIVE COVENANT. For purposes of this Agreement, "Competing
Business" is defined as Gilbarco, Wayne, Schlumberger, Bennett, and Tatsuno, and
their respective affiliates and subsidiaries, both domestic and international,
and any other company engaged in the petroleum dispensing manufacturing business
or point of sale equipment business related to petroleum dispensing.
9.1 Employee hereby covenants and agrees that, for the greater of 18
months after termination of this Agreement, or such time as Employee is
receiving any severance pay from Company (the "Restricted Period"),
Employee shall not, directly or indirectly own, manage, operate, control,
be controlled by, participate in, be employed by, or be connected in any
manner with the ownership, management, operation, or control of any
Competing Business. Employee further covenants and agrees that he shall
not during the Restricted Period contact or attempt to contact, either
directly or indirectly, any customers of Company as they may exist at the
time of termination of Employee's employment for the purpose of soliciting
such customer's business for or on behalf of any Competing Business.
Employee specifically acknowledges and agrees that Company's business is
international in scope and that the restriction as contained in this
section is intended to cover activity by Employee both domestically and
internationally. Employee further stipulates, covenants, and agrees that a
reasonable geographic restriction, as that term is used and defined by
Indiana law, on Employee's activities under this Section is the entire
world.
9.2 In the event of Employee's actual or threatened breach of the
provisions of this Section, Company shall be entitled to obtain an
injunction enjoining Employee from committing such actual or threatened
breach. In the event Company obtains an injunction enjoining Employee from
violating this provision, Company shall be entitled to recover all
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costs incurred in connection with the injunction, including reasonable
attorneys' fees. Company shall also be permitted to pursue any other
available remedies available for such breach, including the recovery of
damages and reasonable costs and attorneys' fees from Employee.
9.3 If a court of competent jurisdiction or any arbitrator
determines that any provision or restriction in this Section is
unreasonable or unenforceable, the court or arbitrator shall modify such
restriction or provision so that the agreement then becomes an enforceable
restriction of the activities of Employee.
10. FORFEITURE OF BENEFITS. If Employee breaches his obligations under
either Section 8 or Section 9, Employee shall forfeit all future payments or
compensation payable or provided by Company, except as required pursuant to the
terms of a Plan.
11. NO CONTINUING OBLIGATION. Employee acknowledges and agrees that this
Agreement does not grant Employee the right to continue as an employee of
Company as an executive or in any other capacity.
12. NO TRUST ESTABLISHED. All payments provided under this Agreement
shall be paid in cash from the general funds of Company, and no separate or
special fund has been or shall be established, and no segregation of assets has
been or shall be made to assure payment. Employee shall have no right, title,
or interest in or to any investments or other assets which Company may acquire
or obtain to assist in meeting its obligations under this Agreement. Nothing
contained in this Agreement, 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 Company and Employee or any other person. The right of any
person to receive payments from Company under this Agreement shall be no greater
than the rights of a general unsecured creditor of Company.
13. WITHHOLDING. Company may withhold from any payments or benefits
provided under this Agreement:
13.1 all federal, state, city, or other taxes as required pursuant to
any law or governmental regulation or ruling; and
13.2 any amounts owed by Employee to Company for any reason at the
time of the termination of this Agreement.
14. NO ASSIGNMENT OR ALIENATION. This Agreement shall not be assignable
by Employee without Company's prior written consent; provided, however, nothing
in this Section shall preclude Employee from designating a beneficiary to
receive any benefit payable upon his death or preclude Employee's executors,
administrators, or other legal representatives of his estate from assigning any
rights hereunder to the person or persons entitled thereto. Further, except as
required by law, no right to receive payments under this Agreement shall be
subject to anticipation,
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communication, alienation, sale, assignment, encumbrance, charge, pledge, or
hypothecation or to execution, attachment, levy, or similar process or
assignment by operation of law, and any attempt, voluntary or involuntary, to
effect any such action shall be null, void, and of no effect.
15. ARBITRATION. Employee and Company recognize and agree that the
arbitration of disputes provides mutual advantages in terms of facilitating the
fair and expeditious resolution of disputes. In consideration of these mutual
advantages, the parties agree as follows:
15.1 Limitation of Section. The provisions of this Section are
subject to and limited by the provisions of Sections 7.4, 8.2, and 9.2.
Except to the extent elected by Employee under Section 7.4, or by the
Company under Section 8.2 or 9.2, the provisions of this Section shall not
apply to any action brought pursuant to Sections 7.4, 8.2, or 9.2.
15.2 Scope of Arbitration. The parties shall submit to arbitration,
in accordance with these provisions, any and all disputes either party may
have arising from or related to this Agreement, and any other disputes
between the parties arising from or related to their employment
relationship, including but not limited to, any disputes regarding alleged
common law tort violations or violations of state or federal statutory
rights. The parties further agree that the arbitration process set forth
below shall be the exclusive means for resolving all disputes made subject
to arbitration but that no arbitrator shall have authority to determine
whether disputes fall within the scope of these arbitration provisions.
15.3 Governing Law. Employee and Company agree that the
interpretation and enforcement of the arbitration provisions of this
Agreement, including any right to appeal, shall be governed by the Indiana
Uniform Arbitration Act, I.C. 34-4-2-1, et seq.
15.4 Time Limits on Submitting Disputes. Employee and Company
acknowledge and agree that one of the objectives of this arbitration
provision is to resolve disputes expeditiously, as well as fairly, and that
it is the obligation of both parties, to those ends, to raise any disputes
subject to arbitration under this Agreement in an expeditious manner.
Accordingly, the parties agree to waive all statutes of limitations that
might otherwise be applicable, and agree further that, as to any dispute
subject to arbitration pursuant to this Agreement, notice of a demand for
arbitration must be provided to the other party:
15.4.1 In the event of a dispute arising out of a termination of
this Agreement, within six months of the date of termination;
15.4.2 In the event of a breach of Section 8 or 9, within four
months after the full Board has actual knowledge of the breach; or
15.4.3 In the event of any other dispute, within three months
after the dispute arises.
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Failure to demand arbitration on claims within these time limits is
intended to, and shall to the furthest extent permitted by law, be a waiver
and release with respect to such claims, and, in the absence of a timely
submitted written demand for arbitration, an arbitrator has no authority to
resolve the disputes or render an award.
15.5 Availability of Provisional Relief. Notwithstanding anything
herein to the contrary, nothing in this Section shall prevent Company or
Employee from obtaining injunctive relief from a court of competent
jurisdiction to enforce the obligations of Sections 8 and 9 and for which
either party may require provisional relief pending a decision on the
merits by the arbitrator.
15.6 American Arbitration Association Rules Apply as Modified Herein.
Any arbitration of disputes shall be conducted under the Model Employment
Procedures of the American Arbitration Association (AAA), as modified in
this Agreement.
15.7 Invoking Arbitration. Either party may invoke the arbitration
procedures described in this Agreement by written notice of a demand for
arbitration (an "Arbitration Notice"). An Arbitration Notice shall contain
a statement of the matter to be arbitrated in sufficient detail to
establish the timeliness of the demand. The parties shall then have ten
business days within which they may identify a mutually agreeable
arbitrator. After the ten day period has expired, the parties shall
prepare and submit to the AAA a joint submission, with each party to
contribute half of the appropriate administrative fee. In their submission
to the AAA, the parties shall either designate a mutually acceptable
arbitrator or request a panel of arbitrators from the AAA according to the
procedure described in section, below.
15.8 Arbitrator Selection. In the event the parties cannot agree upon
an arbitrator within ten business days after the Arbitration Notice is
received, their joint submission to the AAA shall request a panel of seven
arbitrators from the joint Labor and Commercial Arbitration Panels who are
practicing attorneys with professional experience in the field of labor
and/or employment law, and the parties shall attempt to select an
arbitrator from the panel according to AAA procedures. If the parties
remain unable to select an arbitrator, they shall request from AAA a panel
of three comparably qualified arbitrators from which the AAA shall reject
the least preferred candidate of each party and select the candidate with
the highest joint ranking of the parties.
In the event of the death or disability of an arbitrator, the parties
shall select a new arbitrator as provided above. The substitute arbitrator
shall have the power to determine the extent to which he or she shall act
on the record already made in arbitration.
15.9 Prehearing Procedures. Upon accepting assignment as arbitrator,
the arbitrator shall promptly conduct a preliminary hearing at which each
party shall be entitled to submit a brief statement of their respective
positions, and at which the arbitrator shall establish a timetable for
prehearing activities and the conduct of the hearing, and may
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address initial requests from the parties for prehearing disclosure of
information. At the preliminary hearing and/or thereafter, the arbitrator
shall have the discretion and authority to order, upon request or
otherwise, the prehearing disclosure of information to the parties. Such
disclosure may include, without limitation, production of requested
documents, exchange of witness lists and summaries of the testimony of
proposed witnesses, and examination by deposition of potential witnesses,
to the end that information disclosure shall be conducted in the most
expeditious and cost-effective manner possible, and shall be limited to
that which is relevant and for which each party has a substantial,
demonstrable need. The arbitrator shall further have the authority, upon
request or otherwise, to confer with the parties or their designated
representatives concerning any matter, and to set or modify timetables for
all aspects of the arbitration proceeding.
The arbitrator may award either party its reasonable attorneys' fees
and costs, including reasonable expenses associated with production of
witnesses or proof, upon a finding that the other party (i) engaged in
unreasonable delay, (ii) failed to comply with the arbitrator's discovery
order, or (iii) failed to comply with requirements of confidentiality
hereunder. The arbitrator shall also have the authority, upon request or
otherwise, to entertain and decide motions for prehearing judgment.
15.10 Stenographic Record. There shall be a stenographic record of the
arbitration hearing, unless the parties agree to record the proceedings by
other reliable means. The costs of recording the proceedings shall be borne
equally by the parties.
15.11 Location. Unless otherwise agreed by the parties, arbitration
hearings shall take place in Fort Wayne, Allen County, Indiana at a
mutually agreeable place or, if no agreement can be reached, at a place
designated by the AAA.
15.12 The Hearing. At any hearing, the party bearing the burden of
proof according to the governing substantive law shall present its evidence
first.
15.13 Posthearing Briefs. After the close of the arbitration hearing,
and on any issue concerning prehearing procedures, the arbitrator shall
allow the parties to submit written briefs.
15.14 Confidentiality. All arbitration proceedings hereunder shall be
confidential. Neither party shall disclose any information about the
evidence produced by the other in the arbitration proceeding or about
documents produced by the other in connection with the proceeding, except
in the course of a judicial, regulatory or arbitration proceeding, or as
may be requested by governmental authority. Before making any disclosure
permitted by the preceding sentence, the party shall give the other party
reasonable written notice of the intended disclosure and an opportunity to
protect its interests. Expert witnesses and stenographic reporters shall
sign appropriate nondisclosure agreements.
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15.15 Costs. Except as otherwise expressly provided in this
Agreement, as to any disputes arising from the termination of the
Agreement, each party shall be responsible for its costs, including
attorneys' fees, incurred in any arbitration, and the arbitrator shall not
have authority to include all or any portion of said costs and fees in his
or her award. The costs and fees of the arbitrator and of the AAA shall be
borne equally by the parties.
15.15.1 Notwithstanding anything herein to the contrary, Company
shall be entitled to recover its reasonable costs and attorneys' fees
incurred in enforcing the provisions of Section 8 or Section 9,
provided that it prevails in such enforcement action.
15.15.2 Notwithstanding anything herein to the contrary,
Employee shall be entitled to recover from the Company all costs and
expenses incurred in enforcing his rights under this Agreement,
including all expenses of the arbitration and attorneys' fees and
costs, provided that he prevails in whole or in part in such
enforcement action.
15.16 Remedies. The arbitrator shall have authority to award any
remedy or relief that a federal or state court situated in the State of
Indiana could grant in conformity to applicable law.
15.17 Law Governing the Arbitrator's Award. In rendering an award, the
arbitrator shall determine the rights and obligations of the parties,
including employment discrimination issues, according to federal law and
the substantive law of the State of Indiana (excluding conflicts of laws
principles) as though the matter were before a court of law.
15.18 Written Awards and Enforcement. Any arbitration award shall be
accompanied by a written statement containing a summary of the issues in
controversy, a description of the award, and an explanation of the reasons
for the award. The parties agree that a competent court shall enter
judgment upon the award of the arbitrator, provided it is in conformity
with the terms of this Agreement.
15.19 Conflict in Procedure. If any part of this arbitration procedure
is in conflict with any mandatory requirement of applicable law, the
mandatory requirement shall govern, and the procedure set forth above shall
be reformed and construed to the maximum extent possible in conformance
with the applicable law. The procedure shall remain otherwise unaffected
and enforceable.
16. MISCELLANEOUS.
16.1 Entire Agreement. This Agreement constitutes the entire
agreement between the parties and all prior negotiations and agreements,
whether written or oral, are merged into this Agreement.
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16.2 Severability. If any provision of this Agreement shall for any
reason be held to be invalid, illegal, or unenforceable in any respect,
such invalidity, illegality, or unenforceability shall not affect any other
provision or part of a provision of this Agreement; but this Agreement
shall be reformed and construed as if such provision had never been
contained in it, and any such provision shall be reformed so that it would
be valid, legal and enforceable to the maximum extent permitted.
16.3 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
counterparts collectively shall constitute one document representing the
agreement among the parties.
16.4 Binding Agreement. This Agreement shall be binding upon and
shall inure to the benefit of the parties to this Agreement and their
respective successors and assigns.
16.5 Amendment. This Agreement may not be amended, discharged,
terminated, or changed orally; and any such proposed amendment, discharge,
termination, or change shall be in writing and signed by the party against
whom such amendment, change, discharge, or termination is sought.
16.6 Waiver of Breach. The waiver by any party of a breach of any
provision of this Agreement shall not operate or be construed as a waiver
of any subsequent breach; and no waiver shall be valid unless it is in
writing and is signed by the party against whom such waiver is sought.
16.7 Extension of Noncompete Period. The periods of time during which
Employee is prohibited from engaging in such business practices pursuant to
this Agreement shall be extended by any length of time during which
Employee is in breach of any of such covenants.
16.8 Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Indiana.
16.9 Survival. The provisions and restrictions contained in Sections
8 and 9 shall survive the termination of this Agreement and Employee's
employment with Company.
16.10 Full Disclosure. Employee acknowledges that Employee's
employment with Company is conditioned upon the execution of this
Agreement. Employee represents and acknowledges that Employee has
carefully reviewed all of the terms and conditions in this Agreement and
has been advised of Employee's right to seek independent legal counsel
prior to execution of this Agreement.
16.11 Notices. Any notice, request, or other communication required or
permitted under this Agreement shall be in writing. Notice shall be deemed
to have been given only
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if personally delivered or sent by registered or certified mail, return
receipt requested. Any notice so mailed shall be deemed given on the
postmark date. Failure or refusal to accept or receive any notice or
communication shall not affect the validity of the notice. All such notices
shall be given to the respective parties at the addresses designated below,
or to such other address as a party may designate in a like manner.
If to Company: TOKHEIM CORPORATION
c/o NORMAN L. ROELKE, VICE PRESIDENT, SECRETARY
& GENERAL COUNSEL
P.O. BOX 360
FORT WAYNE, IN 46801
If to Employee: __________________________________________
__________________________________________
__________________________________________
__________________________________________
IN WITNESS WHEREOF, the parties have entered into this Agreement as of the
date first written above.
TOKHEIM CORPORATION EMPLOYEE
/s/ DOUGLAS K. PINNER /s/ JOHN A. NEGOVETICH
______________________________ _______________________________
DOUGLAS K. PINNER, CHAIRMAN JOHN A. NEGOVETICH
PRESIDENT & CEO
/s/ NORMAN L. ROELKE
______________________________
By: NORMAN L. ROELKE
Its: VICE PRESIDENT, SECRETARY & GENERAL COUNSEL
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Exhibit 10.8
EMPLOYMENT AGREEMENT
for CORPORATE OFFICER
THIS EMPLOYMENT AGREEMENT ("Agreement") is effective as of this 15TH day of
JULY, 1999, by and between Tokheim Corporation, an Indiana Corporation
("Company") and JACQUES ST-DENIS ("Employee").
RECITALS
A. Company acknowledges and recognizes the value of Employee's services
and deems it necessary and desirable to retain Employee's full-time services.
B. Employee and Company desire to embody the terms and conditions of
Employee's employment in a written agreement, which will supersede all prior
employment agreements, whether written or oral.
AGREEMENT
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements set forth below, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
EMPLOYMENT. Company agrees to employ Employee, and Employee agrees to
serve Company, on a full time basis in the capacity of EXECUTIVE VICE PRESIDENT,
OPERATIONS, subject to the terms and conditions of this Agreement.
1. TERM. Employee's employment shall commence on the effective date of
this Agreement and continue for an indefinite period and until such time as it
may be terminated by one or both of the parties as provided below.
2. DEFINED TERMS. For purposes of this Agreement, the following terms
shall have the following meanings, when capitalized:
"Base Monthly Rate" means the sum of (i) Employee's monthly salary payable
under Section 4.1 as of the determination date and (ii) one-twelfth of the
average bonus paid to Employee for the two fiscal years of the Company preceding
the determination date. For purposes of Section 5, the determination date shall
be the date on which this Agreement terminates, and, for purposes of Section 7,
the determination date shall be the date on which the Change in Control occurs.
For purposes of clause (ii) of the first sentence of this definition, if
Employee was not employed for the two full fiscal years immediately preceding
the determination date, the amount under clause (ii) shall be one-twelfth of
Employee's bonus for the fiscal year immediately preceding the determination
date.
"Board" means the Company's Board of Directors.
<PAGE>
"Cause" has the meaning specified in Section 5.1.1.
"Change in Control" has the meaning specified in Section 7.1.2.
"Code" or "Internal Revenue Code" means the Internal Revenue Code of 1986,
as amended from time to time.
"Committee" means a duly authorized committee of the Board.
"Confidential Information" has the meaning specified in Section 8.
"Deferred Compensation Plan" means the Tokheim Corporation Deferred
Compensation Plan, as in effect on the earlier of Executive's termination of
employment or a Change in Control.
"Disabled" or "Disability" means a mental or physical illness of Employee
that prevents Employee from performing the essential functions of his position
in a satisfactory manner and that the Board determines is likely to continue for
at least six months or the remainder of Employee's life. The Board's
determination of the existence or non-existence of Disability shall be made in
good faith based on medical evidence acceptable to the Board.
"Supplemental Executive Retirement Plan" means the Tokheim Corporation
Supplemental Executive Retirement Plan, as in effect on the earlier of
Executive's termination of employment or a Change in Control.
3. DUTIES.
3.1 During the term of this Agreement, Employee shall have such
duties and responsibilities and shall supply such services in the carrying
out of such duties and responsibilities as Company, through its Board, a
Committee, its Chief Executive Officer, or another executive officer
designated by the Board or a Committee shall from time to time direct.
Subject to the provisions of Section 7, Company retains the right to change
the position, responsibilities, duties, or services to be performed by
Employee in such manner as it deems appropriate. During the term of
employment, Employee shall devote his best efforts and skills to the
business interests of Company and shall not engage in any commercial
enterprise or activity, either directly or indirectly, in conflict with
Company's business, or which may in any way interfere with his employment,
without the consent of the Board.
3.2 Employee agrees that, during the term of his employment, any and
all inventions and discoveries, whether or not patentable, which Employee
may conceive or make (collectively, "Inventions"), either alone or in
conjunction with others and related or in any way connected with the
business of Company, shall be the sole and exclusive property of Company.
Employee shall, without further compensation or consideration, but at the
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expense of Company, and as and when requested to do so by Company, promptly
execute and assign any and all applications, assignments, and other
instruments which Company shall deem necessary to apply for and obtain
letters patent of the United States and foreign countries for any
Inventions and to assign and convey to Company or its nominee the sole and
exclusive right, title, and interest in and to any Inventions or
applications or patents thereon. As promptly as known or possessed by
Employee, Employee shall disclose to Company all information with respect
to any Invention. Employee further agrees that, during the term of
employment, any trademarks, tradenames, service marks, trade styles, logos,
emblems, labels, slogans, and writings, whether or not copyrighted
(collectively, "Marks"), originated by Employee, alone or in conjunction
with others, and related or in any way connected with the business of
Company, shall be the sole and exclusive property of Company. Employee
shall, without further compensation or consideration, but at the expense of
Company, and as and when requested to do so by Company, take all action
necessary to register or otherwise perfect Company's interest in and to any
Marks.
4. COMPENSATION. During the term of this Agreement, Company shall
compensate Employee for his services as follows:
4.1 Employee shall be entitled to an initial monthly base salary of
$24,080. Employee's base salary shall be payable in semi-monthly or monthly
installments in accordance with the policy of Company at the time of such
payments. Employee's base salary shall be reviewed by the Board or a
Committee at least annually and, subject to the provisions of Section 7,
shall be subject to adjustment by the Board or such Committee.
4.2 Employee shall be eligible for such bonus program as may from
time to time be made available and applicable to Employee by the Board or a
Committee.
4.3 Employee shall be granted participation in all employee benefit
plans applicable to Employee's position with Company, including, but not
limited to, medical plans, disability plans, life insurance plans, savings
plans, stock option plans, the Deferred Compensation Plan, the Supplemental
Executive Retirement Plan, and such other plans as may from time to time be
made available and applicable to Employee (collectively, "Plans"),
consistent with the policies of Company and the terms and conditions of the
Plans, as in effect from time to time. Except as provided in Section 7,
nothing in this Agreement shall be deemed to alter the terms and conditions
of any Plan or the policy of Company with respect to any Plan, and nothing
in this Agreement shall be deemed to entitle Employee to any rights in any
Plan which would not otherwise be made available to Employee pursuant to
the terms, conditions, and provisions of the Plan.
4.3.1 Except as may otherwise be expressly provided, Employee
shall be granted, upon termination of this Agreement, such rights as
may be available to him pursuant to any Plan or Plans then in effect.
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5. TERMINATION. Either Company or Employee may terminate this Agreement
upon providing written notice to the other.
5.1 By the Company. In the event this Agreement is terminated with
Cause, Employee shall be entitled to no severance pay, and the parties
shall each be entitled only to such continuing rights as may be provided in
this Agreement or as may otherwise be available to them in law or equity.
5.1.1 With Cause. For purposes of this Agreement, the
termination of this Agreement shall be deemed to have been made with
Cause only upon the occurrence of one or more of the following
circumstances:
5.1.1.1 Employee engages in any breach of fiduciary duty,
act of dishonesty, or theft involving Company;
5.1.1.2 Employee is convicted of a felony;
5.1.1.3 Employee discloses Confidential Information in
violation of Section 8 or competes with Company in violation
of Section 9;
5.1.1.4 Employee refuses or fails to carry out the duties
which may have been assigned to him; or
5.1.1.5 Employee continues to violate any written Company
policy after written notice by Company of the violation.
Before the Board terminates Employee's employment for Cause, it shall
provide Employee an opportunity, after reasonable notice, to appear
before the Board. To terminate Employee for Cause, the Board must
adopt a resolution terminating Employee by affirmative vote of at
least 75% of its members, after having given Employee the opportunity
to present his case to the Board. The Board's resolution must state
that the Board finds in good faith that (i) Employee is guilty of
conduct constituting Cause, specifying the details of such conduct,
and (ii), for cause described in Section 5.1.1.5, Employee failed to
cure such conduct within 30 days after receiving written notice from
Company detailing such conduct. The effective date of Employee's
termination for Cause shall be the date on which Employee receives a
copy of the resolution adopted by the Board or such later date
specified in the resolution.
5.1.2 Without Cause. In the event Company terminates this
Agreement without Cause, Employee shall be entitled to severance pay
equal to 18 months of Employee's base salary payable pursuant to
Section 4.1 in effect at the time of the termination, payable at the
same interval as his salary at the time of the termination.
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Employee shall have no obligation to mitigate damages by seeking other
employment.
5.1.3 The right to severance pay under this Section 5.1.2 shall
vest upon notice of termination and shall not be affected by
Employee's subsequent death or disability.
5.1.3.1 Employee shall also be entitled to the following
for 18 months or until Employee begins alternative
employment:
i Medical insurance, life insurance, and disability
insurance benefits from Company comparable to such
benefits provided with respect to Employee as of the
date of the termination of this Agreement.
ii Continued accrual of benefits under the Supplemental
Executive Retirement Plan, if Employee is a Participant
therein, as if Employee's employment had continued at
the Base Monthly Rate.
5.2 By Employee. Subject to Section 7, in the event Employee
terminates this Agreement, Employee shall be entitled to no severance pay
and shall be entitled only to such other rights as may be provided in this
Agreement or as may otherwise be available to him in law or equity.
5.3 Death or Disability. In the event Employee dies or becomes
permanently Disabled during the term of this Agreement or any extension of
it, this Agreement shall terminate upon the date of such death or
Disability. In the event this Agreement terminates by Employee's death or
Disability, Company shall pay Employee's pro-rata base salary under Section
4.1 through the termination date, and Employee shall be entitled to such
continuing benefits as may be provided in any plan or by law, but Employee
shall not be entitled to severance pay.
6. RETURN OF COMPANY PROPERTY. Upon termination of this Agreement for
any reason, Employee shall immediately surrender to Company, in the same
condition as existed prior to termination of this Agreement, all property of
Company in his possession or control, including Confidential Information,
computers, files, and any other property owned by Company. Employee and Company
acknowledge and agree that the damages suffered as a result of the breach of
this Section would be difficult to ascertain. Accordingly, the parties agree
that Company shall be entitled to liquidated damages in the amount of $5,000 in
the event of a breach by Employee of this Section.
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7. CHANGE IN CONTROL.
7.1 Benefits payable. Notwithstanding anything in this Agreement to
the contrary, Employee shall be entitled to the termination benefits set
forth below, if this Agreement is terminated by a "Triggering Event." The
benefits set forth below shall be in addition to any other benefits which
may have accrued to Employee during the term of employment; provided,
however, the provisions regarding direct severance pay shall be exclusive
and shall replace any other rights of Employee to direct severance payments
as set forth in Section 5.
7.1.1 Triggering Event. For purposes of this Agreement, a
Triggering Event shall be deemed to have occurred if:
7.1.1.1 there is a Change in Control; and
7.1.1.2 within 12 months after the Change in Control:
(a) Company terminates this Agreement without Cause, or
(b) (1) Company or Employee terminates this Agreement, and
(2) in combination with the Change in Control, there
has been one or more of the following:
(i) a change in the President and/or Chief
Executive Officer of Tokheim Corporation or
the principle managing corporation,
(ii) a change of Employee's job authority or
responsibilities,
(iii) a reduction of Employee's base salary
payable pursuant to Section 4.1 or a
material reduction of aggregate benefits
provided to Employee, or
(iv) the relocation of Employee's primary office
location to a distance greater than 50 miles
from the current office location.
7.1.2 Change in Control. As used in this Agreement, a "Change
in Control" shall be deemed to have occurred if there has been one or
more of the following:
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7.1.2.1 any "person" (as such term is used in Section
13(d)(3) and 14(d)(2) of the Securities Exchange Act of
1934, as amended from time to time), other than a retirement
plan sponsored by Company, becomes a beneficial owner,
directly or indirectly, of securities of Company
representing 20% or more of the combined voting power of
Company's then outstanding securities;
7.1.2.2 less than 51% of the members of the Board are
Incumbent Directors (as defined in the Company's Deferred
Compensation Plan, as in effect on the date of this
Agreement):
7.1.2.3 any corporation or group of associated persons
acting in concert, owns more than 25% of the outstanding
shares of voting stock of Company coupled with or followed
by the exercise of the voting power of such shares by the
election of two or more directors of Company in any one
election at the instance of such corporation or group;
7.1.2.4 Company becomes a party to an agreement of merger,
consolidation, or other reorganization pursuant to which
Company will be a constituent corporation, and either (i)
Company is not the surviving or resulting corporation, or
(ii) the transaction will result in less than 60% of the
outstanding voting securities of the surviving or resulting
entity being owned by former shareholders of Company;
7.1.2.5 Company becomes a party to an agreement providing
for Company's sale or other disposition of all or
substantially all of its assets to any individual,
partnership, joint venture, association, trust, corporation,
or other entity or person which is not an Affiliate (as
defined in the Company's Deferred Compensation Plan, as in
effect on the date of this Agreement);
7.1.2.6 an event that triggers the exercisability of rights
under the Company's Shareholder Rights Plan, as in effect at
the time of the Triggering Event; or
7.1.2.7 the occurrence of another event that the Board
designates a Change in Control.
7.2 Benefits. In the event this Agreement is terminated by a
Triggering Event, Employee shall be entitled to the following:
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7.2.1 A lump sum severance payment equal to Employee's Base
Monthly Rate multiplied by 24, payable within 30 days following
termination of the Agreement.
7.2.2 Employee shall also be entitled to the following for 24
months or until Employee begins alternative employment.
7.2.2.1 Medical, life, accidental death and dismemberment,
disability, pension, and split dollar life insurance
benefits from Company comparable to such benefits with
respect to Employee as of the date of the termination of
this Agreement.
7.2.2.2 Continued accrual of benefits under the
Supplemental Executive Retirement Plan as if Employee's
employment had continued at the Base Monthly Rate.
7.3 Notwithstanding any provision of this Section 7 to the contrary,
if Company reasonably determines that any payment or benefit provided
pursuant to this Section is an "excess parachute payment" within the
meaning of Code Section 280G or any successor thereof, Company may limit
the total payment or benefit to Employee to the maximum amount payable by
Company that would not constitute an "excess parachute payment."
7.4 Employee shall have the right to enforce his rights under this
Section 7 in any court with jurisdiction over the parties and matter or
pursuant to the arbitration procedures of Section 15. Company shall be
responsible for Employee's reasonable expenses and attorneys' fees in any
such court proceeding or arbitration and shall pay all costs of arbitration
relating to Employee's enforcement of his rights under this Section.
8. NONDISCLOSURE OF CONFIDENTIAL INFORMATION. For purposes of this
Agreement, Confidential Information is defined as trade secrets (as defined in
Indiana Code 24-2-3-2, as amended), software programs, customer reports,
customer lists, vendor reports, vendor lists, and other information regarding
customers and vendors utilized by Company in the course of its business, and any
information regarding Company's present or future business plans.
8.1 Employee acknowledges his position with Company will expose
Employee to certain Confidential Information and that Confidential
Information constitutes a valuable, special, and unique asset of Company's
business. Employee shall not, during or at any time after the term of his
employment, disclose any Confidential Information acquired by Employee
during his employment to any person, firm, corporation, association, or
other entity for any purpose, or use Confidential Information for any
purpose, other than for the performance of services for Company.
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8.2 In the event of Employee's actual or threatened breach of the
provisions of this Section, Company shall be entitled to obtain an
injunction enjoining Employee from committing such actual or threatened
breach. In the event Company obtains an injunction enjoining Employee from
violating this provision, Company shall be entitled to recover all costs
incurred in connection with the injunction, including reasonable attorneys'
fees. Company shall also be permitted to pursue any other available
remedies available for such breach or threatened breach, including the
recovery of damages, costs, and attorneys' fees from Employee.
8.3 Employee acknowledges that all Confidential Information is the
sole and exclusive property of Company. Employee shall surrender
possession of all Confidential Information, including documents, computers,
software, disks, tapes or video recordings, or any other written, recorded,
or graphic matter, however produced or reproduced, containing Confidential
Information to Company upon any suspension or termination of Employee's
employment. If, after the suspension or termination of Employee's
employment, Employee becomes aware of any Confidential Information in his
possession, Employee shall immediately surrender possession of the
Confidential Information to Company.
9. RESTRICTIVE COVENANT. For purposes of this Agreement, "Competing
Business" is defined as Gilbarco, Wayne, Schlumberger, Bennett, and Tatsuno, and
their respective affiliates and subsidiaries, both domestic and international,
and any other company engaged in the petroleum dispensing manufacturing business
or point of sale equipment business related to petroleum dispensing.
9.1 Employee hereby covenants and agrees that, for the greater of 18
months after termination of this Agreement, or such time as Employee is
receiving any severance pay from Company (the "Restricted Period"),
Employee shall not, directly or indirectly own, manage, operate, control,
be controlled by, participate in, be employed by, or be connected in any
manner with the ownership, management, operation, or control of any
Competing Business. Employee further covenants and agrees that he shall
not during the Restricted Period contact or attempt to contact, either
directly or indirectly, any customers of Company as they may exist at the
time of termination of Employee's employment for the purpose of soliciting
such customer's business for or on behalf of any Competing Business.
Employee specifically acknowledges and agrees that Company's business is
international in scope and that the restriction as contained in this
section is intended to cover activity by Employee both domestically and
internationally. Employee further stipulates, covenants, and agrees that a
reasonable geographic restriction, as that term is used and defined by
Indiana law, on Employee's activities under this Section is the entire
world.
9.2 In the event of Employee's actual or threatened breach of the
provisions of this Section, Company shall be entitled to obtain an
injunction enjoining Employee from committing such actual or threatened
breach. In the event Company obtains an injunction enjoining Employee from
violating this provision, Company shall be entitled to recover all
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costs incurred in connection with the injunction, including reasonable
attorneys' fees. Company shall also be permitted to pursue any other
available remedies available for such breach, including the recovery of
damages and reasonable costs and attorneys' fees from Employee.
9.3 If a court of competent jurisdiction or any arbitrator determines
that any provision or restriction in this Section is unreasonable or
unenforceable, the court or arbitrator shall modify such restriction or
provision so that the agreement then becomes an enforceable restriction of
the activities of Employee.
10. FORFEITURE OF BENEFITS. If Employee breaches his obligations under
either Section 8 or Section 9, Employee shall forfeit all future payments or
compensation payable or provided by Company, except as required pursuant to the
terms of a Plan.
11. NO CONTINUING OBLIGATION. Employee acknowledges and agrees that this
Agreement does not grant Employee the right to continue as an employee of
Company as an executive or in any other capacity.
12. NO TRUST ESTABLISHED. All payments provided under this Agreement
shall be paid in cash from the general funds of Company, and no separate or
special fund has been or shall be established, and no segregation of assets has
been or shall be made to assure payment. Employee shall have no right, title,
or interest in or to any investments or other assets which Company may acquire
or obtain to assist in meeting its obligations under this Agreement. Nothing
contained in this Agreement, 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 Company and Employee or any other person. The right of any
person to receive payments from Company under this Agreement shall be no greater
than the rights of a general unsecured creditor of Company.
13. WITHHOLDING. Company may withhold from any payments or benefits
provided under this Agreement:
13.1 all federal, state, city, or other taxes as required pursuant to
any law or governmental regulation or ruling; and
13.2 any amounts owed by Employee to Company for any reason at the
time of the termination of this Agreement.
14. NO ASSIGNMENT OR ALIENATION. This Agreement shall not be assignable
by Employee without Company's prior written consent; provided, however, nothing
in this Section shall preclude Employee from designating a beneficiary to
receive any benefit payable upon his death or preclude Employee's executors,
administrators, or other legal representatives of his estate from assigning any
rights hereunder to the person or persons entitled thereto. Further, except as
required by law, no right to receive payments under this Agreement shall be
subject to anticipation,
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communication, alienation, sale, assignment, encumbrance, charge, pledge, or
hypothecation or to execution, attachment, levy, or similar process or
assignment by operation of law, and any attempt, voluntary or involuntary, to
effect any such action shall be null, void, and of no effect.
15. ARBITRATION. Employee and Company recognize and agree that the
arbitration of disputes provides mutual advantages in terms of facilitating the
fair and expeditious resolution of disputes. In consideration of these mutual
advantages, the parties agree as follows:
15.1 Limitation of Section. The provisions of this Section are
subject to and limited by the provisions of Sections 7.4, 8.2, and 9.2.
Except to the extent elected by Employee under Section 7.4, or by the
Company under Section 8.2 or 9.2, the provisions of this Section shall not
apply to any action brought pursuant to Sections 7.4, 8.2, or 9.2.
15.2 Scope of Arbitration. The parties shall submit to arbitration,
in accordance with these provisions, any and all disputes either party may
have arising from or related to this Agreement, and any other disputes
between the parties arising from or related to their employment
relationship, including but not limited to, any disputes regarding alleged
common law tort violations or violations of state or federal statutory
rights. The parties further agree that the arbitration process set forth
below shall be the exclusive means for resolving all disputes made subject
to arbitration but that no arbitrator shall have authority to determine
whether disputes fall within the scope of these arbitration provisions.
15.3 Governing Law. Employee and Company agree that the
interpretation and enforcement of the arbitration provisions of this
Agreement, including any right to appeal, shall be governed by the Indiana
Uniform Arbitration Act, I.C. 34-4-2-1, et seq.
15.4 Time Limits on Submitting Disputes. Employee and Company
acknowledge and agree that one of the objectives of this arbitration
provision is to resolve disputes expeditiously, as well as fairly, and
that it is the obligation of both parties, to those ends, to raise any
disputes subject to arbitration under this Agreement in an expeditious
manner. Accordingly, the parties agree to waive all statutes of limitations
that might otherwise be applicable, and agree further that, as to any
dispute subject to arbitration pursuant to this Agreement, notice of a
demand for arbitration must be provided to the other party:
15.4.1 In the event of a dispute arising out of a termination
of this Agreement, within six months of the date of termination;
15.4.2 In the event of a breach of Section 8 or 9, within four
months after the full Board has actual knowledge of the breach; or
15.4.3 In the event of any other dispute, within three months
after the dispute arises.
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Failure to demand arbitration on claims within these time limits is
intended to, and shall to the furthest extent permitted by law, be a waiver
and release with respect to such claims, and, in the absence of a timely
submitted written demand for arbitration, an arbitrator has no authority to
resolve the disputes or render an award.
15.5 Availability of Provisional Relief. Notwithstanding anything
herein to the contrary, nothing in this Section shall prevent Company or
Employee from obtaining injunctive relief from a court of competent
jurisdiction to enforce the obligations of Sections 8 and 9 and for which
either party may require provisional relief pending a decision on the
merits by the arbitrator.
15.6 American Arbitration Association Rules Apply as Modified Herein.
Any arbitration of disputes shall be conducted under the Model Employment
Procedures of the American Arbitration Association (AAA), as modified in
this Agreement.
15.7 Invoking Arbitration. Either party may invoke the arbitration
procedures described in this Agreement by written notice of a demand for
arbitration (an "Arbitration Notice"). An Arbitration Notice shall contain
a statement of the matter to be arbitrated in sufficient detail to
establish the timeliness of the demand. The parties shall then have ten
business days within which they may identify a mutually agreeable
arbitrator. After the ten day period has expired, the parties shall prepare
and submit to the AAA a joint submission, with each party to contribute
half of the appropriate administrative fee. In their submission to the AAA,
the parties shall either designate a mutually acceptable arbitrator or
request a panel of arbitrators from the AAA according to the procedure
described in section, below.
15.8 Arbitrator Selection. In the event the parties cannot agree upon
an arbitrator within ten business days after the Arbitration Notice is
received, their joint submission to the AAA shall request a panel of seven
arbitrators from the joint Labor and Commercial Arbitration Panels who are
practicing attorneys with professional experience in the field of labor
and/or employment law, and the parties shall attempt to select an
arbitrator from the panel according to AAA procedures. If the parties
remain unable to select an arbitrator, they shall request from AAA a panel
of three comparably qualified arbitrators from which the AAA shall reject
the least preferred candidate of each party and select the candidate with
the highest joint ranking of the parties.
In the event of the death or disability of an arbitrator, the parties
shall select a new arbitrator as provided above. The substitute arbitrator
shall have the power to determine the extent to which he or she shall act
on the record already made in arbitration.
15.9 Prehearing Procedures. Upon accepting assignment as arbitrator,
the arbitrator shall promptly conduct a preliminary hearing at which each
party shall be entitled to submit a brief statement of their respective
positions, and at which the arbitrator shall establish a timetable for
prehearing activities and the conduct of the hearing, and may
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address initial requests from the parties for prehearing disclosure of
information. At the preliminary hearing and/or thereafter, the arbitrator
shall have the discretion and authority to order, upon request or
otherwise, the prehearing disclosure of information to the parties. Such
disclosure may include, without limitation, production of requested
documents, exchange of witness lists and summaries of the testimony of
proposed witnesses, and examination by deposition of potential witnesses,
to the end that information disclosure shall be conducted in the most
expeditious and cost-effective manner possible, and shall be limited to
that which is relevant and for which each party has a substantial,
demonstrable need. The arbitrator shall further have the authority, upon
request or otherwise, to confer with the parties or their designated
representatives concerning any matter, and to set or modify timetables for
all aspects of the arbitration proceeding.
The arbitrator may award either party its reasonable attorneys' fees
and costs, including reasonable expenses associated with production of
witnesses or proof, upon a finding that the other party (i) engaged in
unreasonable delay, (ii) failed to comply with the arbitrator's discovery
order, or (iii) failed to comply with requirements of confidentiality
hereunder. The arbitrator shall also have the authority, upon request or
otherwise, to entertain and decide motions for prehearing judgment.
15.10 Stenographic Record. There shall be a stenographic record of
the arbitration hearing, unless the parties agree to record the proceedings
by other reliable means. The costs of recording the proceedings shall be
borne equally by the parties.
15.11 Location. Unless otherwise agreed by the parties, arbitration
hearings shall take place in Fort Wayne, Allen County, Indiana at a
mutually agreeable place or, if no agreement can be reached, at a place
designated by the AAA.
15.12 The Hearing. At any hearing, the party bearing the burden of
proof according to the governing substantive law shall present its evidence
first.
15.13 Posthearing Briefs. After the close of the arbitration hearing,
and on any issue concerning prehearing procedures, the arbitrator shall
allow the parties to submit written briefs.
15.14 Confidentiality. All arbitration proceedings hereunder shall be
confidential. Neither party shall disclose any information about the
evidence produced by the other in the arbitration proceeding or about
documents produced by the other in connection with the proceeding, except
in the course of a judicial, regulatory or arbitration proceeding, or as
may be requested by governmental authority. Before making any disclosure
permitted by the preceding sentence, the party shall give the other party
reasonable written notice of the intended disclosure and an opportunity to
protect its interests. Expert witnesses and stenographic reporters shall
sign appropriate nondisclosure agreements.
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15.15 Costs. Except as otherwise expressly provided in this
Agreement, as to any disputes arising from the termination of the
Agreement, each party shall be responsible for its costs, including
attorneys' fees, incurred in any arbitration, and the arbitrator shall not
have authority to include all or any portion of said costs and fees in his
or her award. The costs and fees of the arbitrator and of the AAA shall be
borne equally by the parties.
15.15.1 Notwithstanding anything herein to the contrary, Company
shall be entitled to recover its reasonable costs and attorneys' fees
incurred in enforcing the provisions of Section 8 or Section 9,
provided that it prevails in such enforcement action.
15.15.2 Notwithstanding anything herein to the contrary,
Employee shall be entitled to recover from the Company all costs and
expenses incurred in enforcing his rights under this Agreement,
including all expenses of the arbitration and attorneys' fees and
costs, provided that he prevails in whole or in part in such
enforcement action.
15.16 Remedies. The arbitrator shall have authority to award any
remedy or relief that a federal or state court situated in the State of
Indiana could grant in conformity to applicable law.
15.17 Law Governing the Arbitrator's Award. In rendering an award,
the arbitrator shall determine the rights and obligations of the parties,
including employment discrimination issues, according to federal law and
the substantive law of the State of Indiana (excluding conflicts of laws
principles) as though the matter were before a court of law.
15.18. Written Awards and Enforcement. Any arbitration award shall be
accompanied by a written statement containing a summary of the issues in
controversy, a description of the award, and an explanation of the reasons
for the award. The parties agree that a competent court shall enter
judgment upon the award of the arbitrator, provided it is in conformity
with the terms of this Agreement.
15.19 Conflict in Procedure. If any part of this arbitration
procedure is in conflict with any mandatory requirement of applicable law,
the mandatory requirement shall govern, and the procedure set forth above
shall be reformed and construed to the maximum extent possible in
conformance with the applicable law. The procedure shall remain otherwise
unaffected and enforceable.
16. MISCELLANEOUS.
16.1 Entire Agreement. This Agreement constitutes the entire
agreement between the parties and all prior negotiations and agreements,
whether written or oral, are merged into this Agreement.
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16.2 Severability. If any provision of this Agreement shall for any
reason be held to be invalid, illegal, or unenforceable in any respect,
such invalidity, illegality, or unenforceability shall not affect any other
provision or part of a provision of this Agreement; but this Agreement
shall be reformed and construed as if such provision had never been
contained in it, and any such provision shall be reformed so that it would
be valid, legal and enforceable to the maximum extent permitted.
16.3 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
counterparts collectively shall constitute one document representing the
agreement among the parties.
16.4 Binding Agreement. This Agreement shall be binding upon and
shall inure to the benefit of the parties to this Agreement and their
respective successors and assigns.
16.5 Amendment. This Agreement may not be amended, discharged,
terminated, or changed orally; and any such proposed amendment, discharge,
termination, or change shall be in writing and signed by the party against
whom such amendment, change, discharge, or termination is sought.
16.6 Waiver of Breach. The waiver by any party of a breach of any
provision of this Agreement shall not operate or be construed as a waiver
of any subsequent breach; and no waiver shall be valid unless it is in
writing and is signed by the party against whom such waiver is sought.
16.7 Extension of Noncompete Period. The periods of time during which
Employee is prohibited from engaging in such business practices pursuant to
this Agreement shall be extended by any length of time during which
Employee is in breach of any of such covenants.
16.8 Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Indiana.
16.9 Survival. The provisions and restrictions contained in Sections
8 and 9 shall survive the termination of this Agreement and Employee's
employment with Company.
16.10 Full Disclosure. Employee acknowledges that Employee's
employment with Company is conditioned upon the execution of this
Agreement. Employee represents and acknowledges that Employee has carefully
reviewed all of the terms and conditions in this Agreement and has been
advised of Employee's right to seek independent legal counsel prior to
execution of this Agreement.
16.11 Notices. Any notice, request, or other communication required
or permitted under this Agreement shall be in writing. Notice shall be
deemed to have been given only
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if personally delivered or sent by registered or certified mail, return
receipt requested. Any notice so mailed shall be deemed given on the
postmark date. Failure or refusal to accept or receive any notice or
communication shall not affect the validity of the notice. All such notices
shall be given to the respective parties at the addresses designated below,
or to such other address as a party may designate in a like manner.
If to Company: TOKHEIM CORPORATION
c/o NORMAN L. ORELKE, VICE PRESIDENT, SECRETARY
& GENERAL COUNSEL
P.O. BOX 360
FORT WAYNE, IN 46801
If to Employee: -----------------------------------------
-----------------------------------------
-----------------------------------------
-----------------------------------------
IN WITNESS WHEREOF, the parties have entered into this Agreement as of
the date first written above.
TOKHEIM CORPORATION EMPLOYEE
/s/ Douglas K. Pinner /s/ Jacques St-Denis
- --------------------------- ---------------------------
DOUGLAS K. PINNER, CHAIRMAN JACQUES ST-DENIS
PRESIDENT & CEO
/s/ Norman L. Roelke
--------------------------
By: NORMAN L. ROELKE
Its: VICE PRESIDENT, SECRETARY & GENERAL COUNSEL
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Exhibit 10.9
EMPLOYMENT AGREEMENT
for CORPORATE OFFICER
THIS EMPLOYMENT AGREEMENT ("Agreement") is effective as of this 15TH day
of
JULY, 1999, by and between Tokheim Corporation, an Indiana Corporation
("Company") and NORMAN L. ROELKE ("Employee").
RECITALS
A. Company acknowledges and recognizes the value of Employee's services
and deems it necessary and desirable to retain Employee's full-time services.
B. Employee and Company desire to embody the terms and conditions of
Employee's employment in a written agreement, which will supersede all prior
employment agreements, whether written or oral.
AGREEMENT
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements set forth below, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
EMPLOYMENT. Company agrees to employ Employee, and Employee agrees to
serve Company, on a full time basis in the capacity of VICE PRESIDENT,
SECRETARY
& GENERAL COUNSEL, subject to the terms and conditions of this
Agreement.
1. TERM. Employee's employment shall commence on the effective date of
this Agreement and continue for an indefinite period and until such time as it
may be terminated by one or both of the parties as provided below.
2. DEFINED TERMS. For purposes of this Agreement, the following terms
shall have the following meanings, when capitalized:
"Base Monthly Rate" means the sum of (i) Employee's monthly salary payable
under Section 4.1 as of the determination date and (ii) one-twelfth of the
average bonus paid to Employee for the two fiscal years of the Company
preceding
the determination date. For purposes of Section 5, the determination
date shall
be the date on which this Agreement terminates, and, for purposes of
Section 7, the determination date shall be the date on which the Change in
Control occurs. For purposes of clause (ii) of the first sentence of this
definition, if Employee was not employed for the two full fiscal years
immediately preceding the determination date, the amount under clause (ii) shall
be one-twelfth of Employee's bonus for the fiscal year immediately preceding the
determination date.
"Board" means the Company's Board of Directors.
<PAGE>
"Cause" has the meaning specified in Section 5.1.1.
"Change in Control" has the meaning specified in Section 7.1.2.
"Code" or "Internal Revenue Code" means the Internal Revenue Code of
1986, as amended from time to time.
"Committee" means a duly authorized committee of the Board.
"Confidential Information" has the meaning specified in Section 8.
"Deferred Compensation Plan" means the Tokheim Corporation Deferred
Compensation Plan, as in effect on the earlier of Executive's termination of
employment or a Change in Control.
"Disabled" or "Disability" means a mental or physical illness of Employee
that prevents Employee from performing the essential functions of his position
in a satisfactory manner and that the Board determines is likely to continue
for
at least six months or the remainder of Employee's life. The Board's
determination of the existence or non-existence of Disability shall be made in
good faith based on medical evidence acceptable to the Board.
"Supplemental Executive Retirement Plan" means the Tokheim Corporation
Supplemental Executive Retirement Plan, as in effect on the earlier of
Executive's termination of employment or a Change in Control.
3. DUTIES.
3.1 During the term of this Agreement, Employee shall have such
duties and responsibilities and shall supply such services in the carrying
out of such duties and responsibilities as Company, through its Board, a
Committee, its Chief Executive Officer, or another executive officer
designated by the Board or a Committee shall from time to time direct.
Subject to the provisions of Section 7, Company retains the right to
change
the position, responsibilities, duties, or services to be performed
by Employee in such manner as it deems appropriate. During the term of
employment, Employee shall devote his best efforts and skills to the
business interests of Company and shall not engage in any commercial
enterprise or activity, either directly or indirectly, in conflict with
Company's business, or which may in any way interfere with his employment,
without the consent of the Board.
3.2 Employee agrees that, during the term of his employment, any and
all inventions and discoveries, whether or not patentable, which Employee
may conceive or make (collectively, "Inventions"), either alone or in
conjunction with others and related or in any way connected with the
business of Company, shall be the sole and exclusive property of Company.
Employee shall, without further compensation or consideration, but at the
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expense of Company, and as and when requested to do so by Company, promptly
execute and assign any and all applications, assignments, and other
instruments which Company shall deem necessary to apply for and obtain
letters patent of the United States and foreign countries for any
Inventions and to assign and convey to Company or its nominee the sole and
exclusive right, title, and interest in and to any Inventions or
applications or patents thereon. As promptly as known or possessed by
Employee, Employee shall disclose to Company all information with respect
to any Invention. Employee further agrees that, during the term of
employment, any trademarks, tradenames, service marks, trade styles, logos,
emblems, labels, slogans, and writings, whether or not copyrighted
(collectively, "Marks"), originated by Employee, alone or in conjunction
with others, and related or in any way connected with the business of
Company, shall be the sole and exclusive property of Company. Employee
shall, without further compensation or consideration, but at the expense of
Company, and as and when requested to do so by Company, take all action
necessary to register or otherwise perfect Company's interest in and to any
Marks.
4. COMPENSATION. During the term of this Agreement, Company shall
compensate Employee for his services as follows:
4.1 Employee shall be entitled to an initial monthly base salary of
$15,500. Employee's base salary shall be payable in semi-monthly or monthly
installments in accordance with the policy of Company at the time of such
payments. Employee's base salary shall be reviewed by the Board or a
Committee at least annually and, subject to the provisions of Section 7,
shall be subject to adjustment by the Board or such Committee.
4.2 Employee shall be eligible for such bonus program as may from
time to time be made available and applicable to Employee by the Board or a
Committee.
4.3 Employee shall be granted participation in all employee benefit
plans applicable to Employee's position with Company, including, but not
limited to, medical plans, disability plans, life insurance plans, savings
plans, stock option plans, the Deferred Compensation Plan, the Supplemental
Executive Retirement Plan, and such other plans as may from time to time be
made available and applicable to Employee (collectively, "Plans"),
consistent with the policies of Company and the terms and conditions of the
Plans, as in effect from time to time. Except as provided in Section 7,
nothing in this Agreement shall be deemed to alter the terms and conditions
of any Plan or the policy of Company with respect to any Plan, and nothing
in this Agreement shall be deemed to entitle Employee to any rights in any
Plan which would not otherwise be made available to Employee pursuant to
the terms, conditions, and provisions of the Plan.
4.3.1 Except as may otherwise be expressly provided, Employee
shall be granted, upon termination of this Agreement, such rights as
may be available to him pursuant to any Plan or Plans then in effect.
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5. TERMINATION. Either Company or Employee may terminate this Agreement
upon providing written notice to the other.
5.1 By the Company. In the event this Agreement is terminated with
Cause, Employee shall be entitled to no severance pay, and the parties
shall each be entitled only to such continuing rights as may be provided in
this Agreement or as may otherwise be available to them in law or equity.
5.1.1 With Cause. For purposes of this Agreement, the
termination of this Agreement shall be deemed to have been made with
Cause only upon the occurrence of one or more of the following
circumstances:
5.1.1.1 Employee engages in any breach of fiduciary duty,
act of dishonesty, or theft involving Company;
5.1.1.2 Employee is convicted of a felony;
5.1.1.3 Employee discloses Confidential Information in
violation of Section 8 or competes with Company in violation
of Section 9;
5.1.1.4 Employee refuses or fails to carry out the duties
which may have been assigned to him; or
5.1.1.5 Employee continues to violate any written Company
policy after written notice by Company of the violation.
Before the Board terminates Employee's employment for Cause, it shall
provide Employee an opportunity, after reasonable notice, to appear
before the Board. To terminate Employee for Cause, the Board must
adopt a resolution terminating Employee by affirmative vote of at
least 75% of its members, after having given Employee the opportunity
to present his case to the Board. The Board's resolution must state
that the Board finds in good faith that (i) Employee is guilty of
conduct constituting Cause, specifying the details of such conduct,
and (ii), for cause described in Section 5.1.1.5, Employee failed to
cure such conduct within 30 days after receiving written notice from
Company detailing such conduct. The effective date of Employee's
termination for Cause shall be the date on which Employee receives a
copy of the resolution adopted by the Board or such later date
specified in the resolution.
5.1.2 Without Cause. In the event Company terminates this
Agreement without Cause, Employee shall be entitled to severance pay
equal to 18 months of Employee's base salary payable pursuant to
Section 4.1 in effect at the time of the termination, payable at the
same interval as his salary at the time of the termination.
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Employee shall have no obligation to mitigate damages by seeking other
employment.
5.1.3 The right to severance pay under this Section 5.1.2 shall
vest upon notice of termination and shall not be affected by
Employee's subsequent death or disability.
5.1.3.1 Employee shall also be entitled to the following
for 18 months or until Employee begins alternative
employment:
i Medical insurance, life insurance, and disability
insurance benefits from Company comparable to such
benefits provided with respect to Employee as of the
date of the termination of this Agreement.
ii Continued accrual of benefits under the Supplemental
Executive Retirement Plan, if Employee is a Participant
therein, as if Employee's employment had continued at
the Base Monthly Rate.
5.2 By Employee. Subject to Section 7, in the event Employee
terminates this Agreement, Employee shall be entitled to no severance pay
and shall be entitled only to such other rights as may be provided in this
Agreement or as may otherwise be available to him in law or equity.
5.3 Death or Disability. In the event Employee dies or becomes
permanently Disabled during the term of this Agreement or any extension of
it, this Agreement shall terminate upon the date of such death or
Disability. In the event this Agreement terminates by Employee's death or
Disability, Company shall pay Employee's pro-rata base salary under Section
4.1 through the termination date, and Employee shall be entitled to such
continuing benefits as may be provided in any plan or by law, but Employee
shall not be entitled to severance pay.
6. RETURN OF COMPANY PROPERTY. Upon termination of this Agreement for
any reason, Employee shall immediately surrender to Company, in the same
condition as existed prior to termination of this Agreement, all property of
Company in his possession or control, including Confidential Information,
computers, files, and any other property owned by Company. Employee and Company
acknowledge and agree that the damages suffered as a result of the breach of
this Section would be difficult to ascertain. Accordingly, the parties agree
that Company shall be entitled to liquidated damages in the amount of $5,000 in
the event of a breach by Employee of this Section.
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7. CHANGE IN CONTROL.
7.1 Benefits payable. Notwithstanding anything in this Agreement to
the contrary, Employee shall be entitled to the termination benefits set
forth below, if this Agreement is terminated by a "Triggering Event." The
benefits set forth below shall be in addition to any other benefits which
may have accrued to Employee during the term of employment; provided,
however, the provisions regarding direct severance pay shall be exclusive
and shall replace any other rights of Employee to direct severance payments
as set forth in Section 5.
7.1.1 Triggering Event. For purposes of this Agreement, a
Triggering Event shall be deemed to have occurred if:
7.1.1.1 there is a Change in Control; and
7.1.1.2 within 12 months after the Change in Control:
(a) Company terminates this Agreement without Cause, or
(b) (1) Company or Employee terminates this Agreement, and
(2) in combination with the Change in Control, there
has been one or more of the following:
(i) a change in the President and/or Chief
Executive Officer of Tokheim Corporation or
the principle managing corporation,
(ii) a change of Employee's job authority or
responsibilities,
(iii) a reduction of Employee's base salary
payable pursuant to Section 4.1 or a
material reduction of aggregate benefits
provided to Employee, or
(iv) the relocation of Employee's primary office
location to a distance greater than 50 miles
from the current office location.
7.1.2 Change in Control. As used in this Agreement, a "Change
in Control" shall be deemed to have occurred if there has been one or
more of the following:
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7.1.2.1 any "person" (as such term is used in Section
13(d)(3) and 14(d)(2) of the Securities Exchange Act of
1934, as amended from time to time), other than a retirement
plan sponsored by Company, becomes a beneficial owner,
directly or indirectly, of securities of Company
representing 20% or more of the combined voting power of
Company's then outstanding securities;
7.1.2.2 less than 51% of the members of the Board are
Incumbent Directors (as defined in the Company's Deferred
Compensation Plan, as in effect on the date of this
Agreement):
7.1.2.3 any corporation or group of associated persons
acting in concert, owns more than 25% of the outstanding
shares of voting stock of Company coupled with or followed
by the exercise of the voting power of such shares by the
election of two or more directors of Company in any one
election at the instance of such corporation or group;
7.1.2.4 Company becomes a party to an agreement of merger,
consolidation, or other reorganization pursuant to which
Company will be a constituent corporation, and either (i)
Company is not the surviving or resulting corporation, or
(ii) the transaction will result in less than 60% of the
outstanding voting securities of the surviving or resulting
entity being owned by former shareholders of Company;
7.1.2.5 Company becomes a party to an agreement providing
for Company's sale or other disposition of all or
substantially all of its assets to any individual,
partnership, joint venture, association, trust, corporation,
or other entity or person which is not an Affiliate (as
defined in the Company's Deferred Compensation Plan, as in
effect on the date of this Agreement);
7.1.2.6 an event that triggers the exercisability of rights
under the Company's Shareholder Rights Plan, as in effect at
the time of the Triggering Event; or
7.1.2.7 the occurrence of another event that the Board
designates a Change in Control.
7.2 Benefits. In the event this Agreement is terminated by a
Triggering Event, Employee shall be entitled to the following:
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7.2.1 A lump sum severance payment equal to Employee's Base
Monthly Rate multiplied by 24, payable within 30 days following
termination of the Agreement.
7.2.2 Employee shall also be entitled to the following for 24
months or until Employee begins alternative employment.
7.2.2.1 Medical, life, accidental death and
dismemberment, disability, pension, and split dollar life
insurance benefits from Company comparable to such benefits
with respect to Employee as of the date of the termination
of this Agreement.
7.2.2.2 Continued accrual of benefits under the
Supplemental Executive Retirement Plan as if Employee's
employment had continued at the Base Monthly Rate.
7.3 Notwithstanding any provision of this Section 7 to the contrary,
if Company reasonably determines that any payment or benefit provided
pursuant to this Section is an "excess parachute payment" within the
meaning of Code Section 280G or any successor thereof, Company may limit
the total payment or benefit to Employee to the maximum amount payable by
Company that would not constitute an "excess parachute payment."
7.4 Employee shall have the right to enforce his rights under this
Section 7 in any court with jurisdiction over the parties and matter or
pursuant to the arbitration procedures of Section 15. Company shall be
responsible for Employee's reasonable expenses and attorneys' fees in any
such court proceeding or arbitration and shall pay all costs of
arbitration relating to Employee's enforcement of his rights under this
Section.
8. NONDISCLOSURE OF CONFIDENTIAL INFORMATION. For purposes of this
Agreement, Confidential Information is defined as trade secrets (as defined in
Indiana Code 24-2-3-2, as amended), software programs, customer reports,
customer lists, vendor reports, vendor lists, and other information regarding
customers and vendors utilized by Company in the course of its business, and
any
information regarding Company's present or future business plans.
8.1 Employee acknowledges his position with Company will expose
Employee to certain Confidential Information and that Confidential
Information constitutes a valuable, special, and unique asset of Company's
business. Employee shall not, during or at any time after the term of his
employment, disclose any Confidential Information acquired by Employee
during his employment to any person, firm, corporation, association, or
other entity for any purpose, or use Confidential Information for any
purpose, other than for the performance of services for Company.
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8.2 In the event of Employee's actual or threatened breach of the
provisions of this Section, Company shall be entitled to obtain an
injunction enjoining Employee from committing such actual or threatened
breach. In the event Company obtains an injunction enjoining Employee from
violating this provision, Company shall be entitled to recover all costs
incurred in connection with the injunction, including reasonable attorneys'
fees. Company shall also be permitted to pursue any other available
remedies available for such breach or threatened breach, including the
recovery of damages, costs, and attorneys' fees from Employee.
8.3 Employee acknowledges that all Confidential Information is the
sole and exclusive property of Company. Employee shall surrender possession
of all Confidential Information, including documents, computers, software,
disks, tapes or video recordings, or any other written, recorded, or
graphic matter, however produced or reproduced, containing Confidential
Information to Company upon any suspension or termination of Employee's
employment. If, after the suspension or termination of Employee's
employment, Employee becomes aware of any Confidential Information in his
possession, Employee shall immediately surrender possession of the
Confidential Information to Company.
9. RESTRICTIVE COVENANT. For purposes of this Agreement, "Competing
Business" is defined as Gilbarco, Wayne, Schlumberge, Bennett, and Tatsuno, and
their respective affiliates and subsidiaries, both domestic and international,
and any other company engaged in the petroleum dispensing manufacturing
business or point of sale equipment business related to petroleum dispensing.
9.1 Employee hereby covenants and agrees that, for the greater of 18
months after termination of this Agreement, or such time as Employee is
receiving any severance pay from Company (the "Restricted Period"),
Employee shall not, directly or indirectly own, manage, operate, control,
be controlled by, participate in, be employed by, or be connected in any
manner with the ownership, management, operation, or control of any
Competing Business. Employee further covenants and agrees that he shall not
during the Restricted Period contact or attempt to contact, either directly
or indirectly, any customers of Company as they may exist at the time of
termination of Employee's employment for the purpose of soliciting such
customer's business for or on behalf of any Competing Business. Employee
specifically acknowledges and agrees that Company's business is
international in scope and that the restriction as contained in this
section is intended to cover activity by Employee both domestically and
internationally. Employee further stipulates, covenants, and agrees that a
reasonable geographic restriction, as that term is used and defined by
Indiana law, on Employee's activities under this Section is the entire
world.
9.2 In the event of Employee's actual or threatened breach of the
provisions of this Section, Company shall be entitled to obtain an
injunction enjoining Employee from committing such actual or threatened
breach. In the event Company obtains an injunction enjoining Employee from
violating this provision, Company shall be entitled to recover all
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costs incurred in connection with the injunction, including reasonable
attorneys' fees. Company shall also be permitted to pursue any other
available remedies available for such breach, including the recovery of
damages and reasonable costs and attorneys' fees from Employee.
9.3 If a court of competent jurisdiction or any arbitrator
determines that any provision or restriction in this Section is
unreasonable or unenforceable, the court or arbitrator shall modify such
restriction or provision so that the agreement then becomes an enforceable
restriction of the activities of Employee.
10. FORFEITURE OF BENEFITS. If Employee breaches his obligations under
either Section 8 or Section 9, Employee shall forfeit all future payments or
compensation payable or provided by Company, except as required pursuant to the
terms of a Plan.
11. NO CONTINUING OBLIGATION. Employee acknowledges and agrees that this
Agreement does not grant Employee the right to continue as an employee of
Company as an executive or in any other capacity.
12. NO TRUST ESTABLISHED. All payments provided under this Agreement
shall be paid in cash from the general funds of Company, and no separate or
special fund has been or shall be established, and no segregation of assets has
been or shall be made to assure payment. Employee shall have no right, title, or
interest in or to any investments or other assets which Company may acquire or
obtain to assist in meeting its obligations under this Agreement. Nothing
contained in this Agreement, 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 Company and Employee or any other person. The right of any
person to receive payments from Company under this Agreement shall be no
greater than the rights of a general unsecured creditor of Company.
13. WITHHOLDING. Company may withhold from any payments or benefits
provided under this Agreement:
13.1 all federal, state, city, or other taxes as required pursuant
to any law or governmental regulation or ruling; and
13.2 any amounts owed by Employee to Company for any reason at the
time of the termination of this Agreement.
14. NO ASSIGNMENT OR ALIENATION. This Agreement shall not be assignable
by Employee without Company's prior written consent; provided, however, nothing
in this Section shall preclude Employee from designating a beneficiary to
receive any benefit payable upon his death or preclude Employee's executors,
administrators, or other legal representatives of his estate from assigning any
rights hereunder to the person or persons entitled thereto. Further, except as
required by law, no right to receive payments under this Agreement shall be
subject to anticipation,
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communication, alienation, sale, assignment, encumbrance, charge, pledge, or
hypothecation or to execution, attachment, levy, or similar process or
assignment by operation of law, and any attempt, voluntary or involuntary, to
effect any such action shall be null, void, and of no effect.
15. ARBITRATION. Employee and Company recognize and agree that the
arbitration of disputes provides mutual advantages in terms of facilitating the
fair and expeditious resolution of disputes. In consideration of these mutual
advantages, the parties agree as follows:
15.1 Limitation of Section. The provisions of this Section are
subject to and limited by the provisions of Sections 7.4, 8.2, and 9.2.
Except to the extent elected by Employee under Section 7.4, or by the
Company under Section 8.2 or 9.2, the provisions of this Section shall not
apply to any action brought pursuant to Sections 7.4, 8.2, or 9.2.
15.2 Scope of Arbitration. The parties shall submit to arbitration,
in accordance with these provisions, any and all disputes either party may
have arising from or related to this Agreement, and any other disputes
between the parties arising from or related to their employment
relationship, including but not limited to, any disputes regarding alleged
common law tort violations or violations of state or federal statutory
rights. The parties further agree that the arbitration process set forth
below shall be the exclusive means for resolving all disputes made subject
to arbitration but that no arbitrator shall have authority to determine
whether disputes fall within the scope of these arbitration provisions.
15.3 Governing Law. Employee and Company agree that the
interpretation and enforcement of the arbitration provisions of this
Agreement, including any right to appeal, shall be governed by the Indiana
Uniform Arbitration Act, I.C. 34-4-2-1, et seq.
15.4 Time Limits on Submitting Disputes. Employee and Company
acknowledge and agree that one of the objectives of this arbitration
provision is to resolve disputes expeditiously, as well as fairly, and
that it is the obligation of both parties, to those ends, to raise any
disputes subject to arbitration under this Agreement in an expeditious
manner. Accordingly, the parties agree to waive all statutes of limitations
that might otherwise be applicable, and agree further that, as to any
dispute subject to arbitration pursuant to this Agreement, notice of a
demand for arbitration must be provided to the other party:
15.4.1 In the event of a dispute arising out of a termination
of this Agreement, within six months of the date of termination;
15.4.2 In the event of a breach of Section 8 or 9, within four
months after the full Board has actual knowledge of the breach; or
15.4.3 In the event of any other dispute, within three months
after the dispute arises.
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Failure to demand arbitration on claims within these time limits is
intended to, and shall to the furthest extent permitted by law, be a waiver
and release with respect to such claims, and, in the absence of a timely
submitted written demand for arbitration, an arbitrator has no authority to
resolve the disputes or render an award.
15.5 Availability of Provisional Relief. Notwithstanding anything
herein to the contrary, nothing in this Section shall prevent Company or
Employee from obtaining injunctive relief from a court of competent
jurisdiction to enforce the obligations of Sections 8 and 9 and for which
either party may require provisional relief pending a decision on the
merits by the arbitrator.
15.6 American Arbitration Association Rules Apply as Modified
Herein. Any arbitration of disputes shall be conducted under the Model
Employment Procedures of the American Arbitration Association (AAA), as
modified in this Agreement.
15.7 Invoking Arbitration. Either party may invoke the arbitration
procedures described in this Agreement by written notice of a demand for
arbitration (an "Arbitration Notice"). An Arbitration Notice shall contain
a statement of the matter to be arbitrated in sufficient detail to
establish the timeliness of the demand. The parties shall then have ten
business days within which they may identify a mutually agreeable
arbitrator. After the ten day period has expired, the parties shall prepare
and submit to the AAA a joint submission, with each party to contribute
half of the appropriate administrative fee. In their submission to the AAA,
the parties shall either designate a mutually acceptable arbitrator or
request a panel of arbitrators from the AAA according to the procedure
described in section, below.
15.8 Arbitrator Selection. In the event the parties cannot agree
upon an arbitrator within ten business days after the Arbitration Notice
is received, their joint submission to the AAA shall request a panel of
seven arbitrators from the joint Labor and Commercial Arbitration Panels
who are practicing attorneys with professional experience in the field of
labor and/or employment law, and the parties shall attempt to select an
arbitrator from the panel according to AAA procedures. If the parties
remain unable to select an arbitrator, they shall request from AAA a panel
of three comparably qualified arbitrators from which the AAA shall reject
the least preferred candidate of each party and select the candidate with
the highest joint ranking of the parties.
In the event of the death or disability of an arbitrator, the parties
shall select a new arbitrator as provided above. The substitute arbitrator
shall have the power to determine the extent to which he or she shall act
on the record already made in arbitration.
15.9 Prehearing Procedures. Upon accepting assignment as
arbitrator, the arbitrator shall promptly conduct a preliminary hearing at
which each party shall be entitled to submit a brief statement of their
respective positions, and at which the arbitrator shall establish a
timetable for prehearing activities and the conduct of the hearing, and may
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address initial requests from the parties for prehearing disclosure of
information. At the preliminary hearing and/or thereafter, the arbitrator
shall have the discretion and authority to order, upon request or
otherwise, the prehearing disclosure of information to the parties. Such
disclosure may include, without limitation, production of requested
documents, exchange of witness lists and summaries of the testimony of
proposed witnesses, and examination by deposition of potential witnesses,
to the end that information disclosure shall be conducted in the most
expeditious and cost-effective manner possible, and shall be limited to
that which is relevant and for which each party has a substantial,
demonstrable need. The arbitrator shall further have the authority, upon
request or otherwise, to confer with the parties or their designated
representatives concerning any matter, and to set or modify timetables for
all aspects of the arbitration proceeding.
The arbitrator may award either party its reasonable attorneys' fees
and costs, including reasonable expenses associated with production of
witnesses or proof, upon a finding that the other party (i) engaged in
unreasonable delay, (ii) failed to comply with the arbitrator's discovery
order, or (iii) failed to comply with requirements of confidentiality
hereunder. The arbitrator shall also have the authority, upon request or
otherwise, to entertain and decide motions for prehearing judgment.
15.10 Stenographic Record. There shall be a stenographic record of
the arbitration hearing, unless the parties agree to record the proceedings
by other reliable means. The costs of recording the proceedings shall be
borne equally by the parties.
15.11 Location. Unless otherwise agreed by the parties, arbitration
hearings shall take place in Fort Wayne, Allen County, Indiana at a
mutually agreeable place or, if no agreement can be reached, at a place
designated by the AAA.
15.12 The Hearing. At any hearing, the party bearing the burden of
proof according to the governing substantive law shall present its evidence
first.
15.13 Posthearing Briefs. After the close of the arbitration
hearing, and on any issue concerning prehearing procedures, the arbitrator
shall allow the parties to submit written briefs.
15.14 Confidentiality. All arbitration proceedings hereunder shall
be confidential. Neither party shall disclose any information about the
evidence produced by the other in the arbitration proceeding or about
documents produced by the other in connection with the proceeding, except
in the course of a judicial, regulatory or arbitration proceeding, or as
may be requested by governmental authority. Before making any disclosure
permitted by the preceding sentence, the party shall give the other party
reasonable written notice of the intended disclosure and an opportunity to
protect its interests. Expert witnesses and stenographic reporters shall
sign appropriate nondisclosure agreements.
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15.15 Costs. Except as otherwise expressly provided in this
Agreement, as to any disputes arising from the termination of the
Agreement, each party shall be responsible for its costs, including
attorneys' fees, incurred in any arbitration, and the arbitrator shall not
have authority to include all or any portion of said costs and fees in his
or her award. The costs and fees of the arbitrator and of the AAA shall be
borne equally by the parties.
15.15.1 Notwithstanding anything herein to the contrary, Company
shall be entitled to recover its reasonable costs and attorneys' fees
incurred in enforcing the provisions of Section 8 or Section 9,
provided that it prevails in such enforcement action.
15.15.2 Notwithstanding anything herein to the contrary,
Employee shall be entitled to recover from the Company all costs and
expenses incurred in enforcing his rights under this Agreement,
including all expenses of the arbitration and attorneys' fees and
costs, provided that he prevails in whole or in part in such
enforcement action.
15.16 Remedies. The arbitrator shall have authority to award any
remedy or relief that a federal or state court situated in the State of
Indiana could grant in conformity to applicable law.
15.17 Law Governing the Arbitrator's Award. In rendering an award,
the arbitrator shall determine the rights and obligations of the parties,
including employment discrimination issues, according to federal law and
the substantive law of the State of Indiana (excluding conflicts of laws
principles) as though the matter were before a court of law.
15.18 Written Awards and Enforcement. Any arbitration award shall be
accompanied by a written statement containing a summary of the issues in
controversy, a description of the award, and an explanation of the reasons
for the award. The parties agree that a competent court shall enter
judgment upon the award of the arbitrator, provided it is in conformity
with the terms of this Agreement.
15.19 Conflict in Procedure. If any part of this arbitration
procedure is in conflict with any mandatory requirement of applicable law,
the mandatory requirement shall govern, and the procedure set forth above
shall be reformed and construed to the maximum extent possible in
conformance with the applicable law. The procedure shall remain otherwise
unaffected and enforceable.
16. MISCELLANEOUS.
16.1 Entire Agreement. This Agreement constitutes the entire
agreement between the parties and all prior negotiations and agreements,
whether written or oral, are merged into this Agreement.
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16.2 Severability. If any provision of this Agreement shall for any
reason be held to be invalid, illegal, or unenforceable in any respect,
such invalidity, illegality, or unenforceability shall not affect any other
provision or part of a provision of this Agreement; but this Agreement
shall be reformed and construed as if such provision had never been
contained in it, and any such provision shall be reformed so that it would
be valid, legal and enforceable to the maximum extent permitted.
16.3 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
counterparts collectively shall constitute one document representing the
agreement among the parties.
16.4 Binding Agreement. This Agreement shall be binding upon and
shall inure to the benefit of the parties to this Agreement and their
respective successors and assigns.
16.5 Amendment. This Agreement may not be amended, discharged,
terminated, or changed orally; and any such proposed amendment, discharge,
termination, or change shall be in writing and signed by the party against
whom such amendment, change, discharge, or termination is sought.
16.6 Waiver of Breach. The waiver by any party of a breach of any
provision of this Agreement shall not operate or be construed as a waiver
of any subsequent breach; and no waiver shall be valid unless it is in
writing and is signed by the party against whom such waiver is sought.
16.7 Extension of Noncompete Period. The periods of time during
which Employee is prohibited from engaging in such business practices
pursuant to this Agreement shall be extended by any length of time during
which Employee is in breach of any of such covenants.
16.8 Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Indiana.
16.9 Survival. The provisions and restrictions contained in Sections
8 and 9 shall survive the termination of this Agreement and Employee's
employment with Company.
16.10 Full Disclosure. Employee acknowledges that Employee's
employment with Company is conditioned upon the execution of this
Agreement. Employee represents and acknowledges that Employee has
carefully reviewed all of the terms and conditions in this Agreement and
has been advised of Employee's right to seek independent legal counsel
prior to execution of this Agreement.
16.11 Notices. Any notice, request, or other communication required
or permitted under this Agreement shall be in writing. Notice shall be
deemed to have been given only
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if personally delivered or sent by registered or certified mail, return
receipt requested. Any notice so mailed shall be deemed given on the
postmark date. Failure or refusal to accept or receive any notice or
communication shall not affect the validity of the notice. All such notices
shall be given to the respective parties at the addresses designated below,
or to such other address as a party may designate in a like manner.
If to Company: TOKHEIM CORPORATION
c/o TIMOTHY EASTOM, VP HUMAN RESOURCES
P.O. BOX 360
FORT WAYNE, IN 46801
If to Employee:
IN WITNESS WHEREOF, the parties have entered into this Agreement as of the
date first written above.
TOKHEIM CORPORATION EMPLOYEE
/s/ DOUGLAS K. PINNER /s/ NORMAN L. ROELKE
_____________________________ ____________________________
DOUGLAS K. PINNER, CHAIRMAN NORMAN L. ROELKE
PRESIDENT & CEO
/s/ TIMOTHY R. EASTOM
________________________________
By: TIMOTHY R. EASTOM
Its: VICE PRESIDENT, HUMAN RESOURCES
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EXHIBIT 10.10
EMPLOYMENT AGREEMENT
for CORPORATE OFFICER
THIS EMPLOYMENT AGREEMENT ("Agreement") is effective as of this 15TH day of
JULY, 1999, by and between Tokheim Corporation, an Indiana Corporation
("Company") and SCOTT A. SWOGGER ("Employee").
RECITALS
A. Company acknowledges and recognizes the value of Employee's services
and deems it necessary and desirable to retain Employee's full-time services.
B. Employee and Company desire to embody the terms and conditions of
Employee's employment in a written agreement, which will supersede all prior
employment agreements, whether written or oral.
AGREEMENT
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements set forth below, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
EMPLOYMENT. Company agrees to employ Employee, and Employee agrees to
serve Company, on a full time basis in the capacity of PRESIDENT, TOKHEIM U.S.,
subject to the terms and conditions of this Agreement.
1. TERM. Employee's employment shall commence on the effective date of
this Agreement and continue for an indefinite period and until such time as it
may be terminated by one or both of the parties as provided below.
2. DEFINED TERMS. For purposes of this Agreement, the following terms
shall have the following meanings, when capitalized:
"Base Monthly Rate" means the sum of (i) Employee's monthly salary payable
under Section 4.1 as of the determination date and (ii) one-twelfth of the
average bonus paid to Employee for the two fiscal years of the Company preceding
the determination date. For purposes of Section 5, the determination date shall
be the date on which this Agreement terminates, and, for purposes of Section 7,
the determination date shall be the date on which the Change in Control occurs.
For purposes of clause (ii) of the first sentence of this definition, if
Employee was not employed for the two full fiscal years immediately preceding
the determination date, the amount under clause (ii) shall be one-twelfth of
Employee's bonus for the fiscal year immediately preceding the determination
date.
"Board" means the Company's Board of Directors.
<PAGE>
"Cause" has the meaning specified in Section 5.1.1.
"Change in Control" has the meaning specified in Section 7.1.2.
"Code" or "Internal Revenue Code" means the Internal Revenue Code of 1986,
as amended from time to time.
"Committee" means a duly authorized committee of the Board.
"Confidential Information" has the meaning specified in Section 8.
"Disabled" or "Disability" means a mental or physical illness of Employee
that prevents Employee from performing the essential functions of his position
in a satisfactory manner and that the Company determines is likely to continue
for at least six months or the remainder of Employee's life. The Company's
determination of the existence or non-existence of Disability shall be made in
good faith based on medical evidence acceptable to the Company.
3. DUTIES.
3.1 During the term of this Agreement, Employee shall have such
duties and responsibilities and shall supply such services in the carrying
out of such duties and responsibilities as Company, through its Chief
Executive Officer, or another executive officer designated by the Chief
Executive Officer shall from time to time direct. Subject to the
provisions of Section 7, Company retains the right to change the position,
responsibilities, duties, or services to be performed by Employee in such
manner as it deems appropriate. During the term of employment, Employee
shall devote his best efforts and skills to the business interests of
Company and shall not engage in any commercial enterprise or activity,
either directly or indirectly, in conflict with Company's business, or
which may in any way interfere with his employment, without the consent of
the Chief Executive Officer or another executive officer designated by the
Chief Executive Officer.
3.2 Employee agrees that, during the term of his employment, any and
all inventions and discoveries, whether or not patentable, which Employee
may conceive or make (collectively, "Inventions"), either alone or in
conjunction with others and related or in any way connected with the
business of Company, shall be the sole and exclusive property of Company.
Employee shall, without further compensation or consideration, but at the
expense of Company, and as and when requested to do so by Company, promptly
execute and assign any and all applications, assignments, and other
instruments which Company shall deem necessary to apply for and obtain
letters patent of the United States and foreign countries for any
Inventions and to assign and convey to Company or its nominee the sole and
exclusive right, title, and interest in and to any Inventions or
applications or patents thereon. As promptly as known or possessed by
Employee, Employee shall disclose to Company all information with respect
to any Invention. Employee further agrees that,
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during the term of employment, any trademarks, tradenames, service marks,
trade styles, logos, emblems, labels, slogans, and writings, whether or not
copyrighted (collectively, "Marks"), originated by Employee, alone or in
conjunction with others, and related or in any way connected with the
business of Company, shall be the sole and exclusive property of Company.
Employee shall, without further compensation or consideration, but at the
expense of Company, and as and when requested to do so by Company, take all
action necessary to register or otherwise perfect Company's interest in and
to any Marks.
4. COMPENSATION. During the term of this Agreement, Company shall
compensate Employee for his services as follows:
4.1 Employee shall be entitled to an initial monthly base salary of
$14,333. Employee's base salary shall be payable in semi-monthly or monthly
installments in accordance with the policy of Company at the time of such
payments. Employee's base salary shall be reviewed by the Company at least
annually and, subject to the provisions of Section 7, shall be subject to
adjustment by the Company.
4.2 Employee shall be eligible for such bonus program as may from
time to time be made available and applicable to Employee by the Company.
4.3 Employee shall be granted participation in all employee benefit
plans applicable to Employee's position with Company, including, but not
limited to, medical plans, disability plans, life insurance plans, savings
plans, stock option plans, and such other plans as may from time to time be
made available and applicable to Employee (collectively, "Plans"),
consistent with the policies of Company and the terms and conditions of the
Plans, as in effect from time to time. Except as provided in Section 7,
nothing in this Agreement shall be deemed to alter the terms and conditions
of any Plan or the policy of Company with respect to any Plan, and nothing
in this Agreement shall be deemed to entitle Employee to any rights in any
Plan which would not otherwise be made available to Employee pursuant to
the terms, conditions, and provisions of the Plan.
4.3.1 Except as may otherwise be expressly provided, Employee
shall be granted, upon termination of this Agreement, such rights as
may be available to him pursuant to any Plan or Plans then in effect.
5. TERMINATION. Either Company or Employee may terminate this Agreement
upon providing written notice to the other.
5.1 By the Company. In the event this Agreement is terminated with
Cause, Employee shall be entitled to no severance pay, and the parties
shall each be entitled only to such continuing rights as may be provided in
this Agreement or as may otherwise be available to them in law or equity.
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5.1.1. With Cause. For purposes of this Agreement, the
termination of this Agreement shall be deemed to have been made with
Cause only upon the occurrence of one or more of the following
circumstances:
5.1.1.1 Employee engages in any breach of fiduciary duty,
act of dishonesty, or theft involving Company;
5.1.1.2 Employee is convicted of a felony;
5.1.1.3 Employee discloses Confidential Information in
violation of Section 8 or competes with Company in violation
of Section 9;
5.1.1.4 Employee refuses or fails to carry out the duties
which may have been assigned to him; or
5.1.1.5 Employee continues to violate any written Company
policy after written notice by Company of the violation.
5.1.2 Without Cause. In the event Company terminates this
Agreement without Cause, Employee shall be entitled to severance pay
equal to 12 months of Employee's base salary payable pursuant to
Section 4.1 in effect at the time of the termination, payable at the
same interval as his salary at the time of the termination. Employee
shall have no obligation to mitigate damages by seeking other
employment.
5.1.3 The right to severance pay under this Section 5.1.2
shall vest upon notice of termination and shall not be affected by
Employee's subsequent death or disability.
5.1.3.1 Employee shall also be entitled to the following for
12 months or until Employee begins alternative employment:
i Medical insurance, life insurance, and disability
insurance benefits from Company comparable to such
benefits provided with respect to Employee as of the date
of the termination of this Agreement.
5.2 By Employee. Subject to Section 7, in the event Employee
terminates this Agreement, Employee shall be entitled to no severance pay
and shall be entitled only to such other rights as may be provided in this
Agreement or as may otherwise be available to him in law or equity.
-4-
<PAGE>
5.3 Death or Disability. In the event Employee dies or becomes
permanently Disabled during the term of this Agreement or any extension of
it, this Agreement shall terminate upon the date of such death or
Disability. In the event this Agreement terminates by Employee's death or
Disability, Company shall pay Employee's pro-rata base salary under Section
4.1 through the termination date, and Employee shall be entitled to such
continuing benefits as may be provided in any plan or by law, but Employee
shall not be entitled to severance pay.
6. RETURN OF COMPANY PROPERTY. Upon termination of this Agreement for
any reason, Employee shall immediately surrender to Company, in the same
condition as existed prior to termination of this Agreement, all property of
Company in his possession or control, including Confidential Information,
computers, files, and any other property owned by Company. Employee and Company
acknowledge and agree that the damages suffered as a result of the breach of
this Section would be difficult to ascertain. Accordingly, the parties agree
that Company shall be entitled to liquidated damages in the amount of $5,000 in
the event of a breach by Employee of this Section.
7. CHANGE IN CONTROL.
7.1 Benefits payable. Notwithstanding anything in this Agreement to
the contrary, Employee shall be entitled to the termination benefits set
forth below, if this Agreement is terminated by a "Triggering Event." The
benefits set forth below shall be in addition to any other benefits which
may have accrued to Employee during the term of employment; provided,
however, the provisions regarding direct severance pay shall be exclusive
and shall replace any other rights of Employee to direct severance
payments as set forth in Section 5.
7.1.1 Triggering Event. For purposes of this Agreement, a
Triggering Event shall be deemed to have occurred if:
7.1.1.1 there is a Change in Control; and
7.1.1.2 within 12 months after the Change in Control:
(a) Company terminates this Agreement without Cause, or
(b) (1) Company or Employee terminates this Agreement,
and
(2) in combination with the Change in Control, there
has
been one or more of the following:
-5-
<PAGE>
(i) a change in the President and/or Chief
Executive Officer of Tokheim Corporation or
the principle managing corporation.
(ii) a change of Employee's job authority or
responsibilities,
(iii) a reduction of Employee's base salary
payable pursuant to Section 4.1 or a
material reduction of aggregate benefits
provided to Employee, or
(iv) the relocation of Employee's primary office
location to a distance greater than 50
miles from the current office location.
7.1.2 Change in Control. As used in this Agreement, a "Change in
Control" shall be deemed to have occurred if there has been one or more of
the following:
7.1.2.1 any "person" (as such term is used in Section
13(d)(3) and 14(d)(2) of the Securities Exchange Act of
1934, as amended from time to time), other than a retirement
plan sponsored by Company, becomes a beneficial owner,
directly or indirectly, of securities of Company
representing 20% or more of the combined voting power of
Company's then outstanding securities;
7.1.2.2 less than 51% of the members of the Board are
Incumbent Directors (as defined in the Company's Deferred
Compensation Plan, as in effect on the date of this
Agreement):
7.1.2.3 any corporation or group of associated persons
acting in concert, owns more than 25% of the outstanding
shares of voting stock of Company coupled with or followed
by the exercise of the voting power of such shares by the
election of two or more directors of Company in any one
election at the instance of such corporation or group;
7.1.2.4 Company becomes a party to an agreement of merger,
consolidation, or other reorganization pursuant to which
Company will be a constituent corporation, and either (i)
Company is not the surviving or resulting corporation, or
(ii) the transaction will result
-6-
<PAGE>
in less than 60% of the outstanding voting securities of the
surviving or resulting entity being owned by former
shareholders of Company;
7.1.2.5 Company becomes a party to an agreement providing
for Company's sale or other disposition of all or
substantially all of its assets to any individual,
partnership, joint venture, association, trust, corporation,
or other entity or person which is not an Affiliate (as
defined in the Company's Deferred Compensation Plan, as in
effect on the date of this Agreement);
7.1.2.6 an event that triggers the exercisability of
rights under the Company's Shareholder Rights Plan, as in
effect at the time of the Triggering Event; or
7.1.2.7 the occurrence of another event that the Board
designates a Change in Control.
7.2 Benefits. In the event this Agreement is terminated by a
Triggering Event, Employee shall be entitled to the following:
7.2.1 A lump sum severance payment equal to Employee's Base
Monthly Rate multiplied by 18, payable within 30 days following
termination of the Agreement.
7.2.2 Employee shall also be entitled to the following for 18
months or until Employee begins alternative employment.
7.2.2.1 Medical, life, accidental death and dismemberment,
disability, pension, and split dollar life insurance
benefits from Company comparable to such benefits with
respect to Employee as of the date of the termination of
this Agreement.
7.3 Notwithstanding any provision of this Section 7 to the contrary,
if Company reasonably determines that any payment or benefit provided
pursuant to this Section is an "excess parachute payment" within the
meaning of Code Section 280G or any successor thereof, Company may limit
the total payment or benefit to Employee to the maximum amount payable by
Company that would not constitute an "excess parachute payment."
7.4 Employee shall have the right to enforce his rights under this
Section 7 in any court with jurisdiction over the parties and matter or
pursuant to the arbitration procedures of Section 15. Company shall be
responsible for Employee's reasonable expenses and attorneys' fees in any
such court proceeding or arbitration and shall pay all costs of arbitration
relating to Employee's enforcement of his rights under this Section.
-7-
<PAGE>
8. NONDISCLOSURE OF CONFIDENTIAL INFORMATION. For purposes of this
Agreement, Confidential Information is defined as trade secrets (as defined in
Indiana Code 24-2-3-2, as amended), software programs, customer reports,
customer lists, vendor reports, vendor lists, and other information regarding
customers and vendors utilized by Company in the course of its business, and
any information regarding Company's present or future business plans.
8.1 Employee acknowledges his position with Company will expose
Employee to certain Confidential Information and that Confidential
Information constitutes a valuable, special, and unique asset of Company's
business. Employee shall not, during or at any time after the term of his
employment, disclose any Confidential Information acquired by Employee
during his employment to any person, firm, corporation, association, or
other entity for any purpose, or use Confidential Information for any
purpose, other than for the performance of services for Company.
8.2 In the event of Employee's actual or threatened breach of the
provisions of this Section, Company shall be entitled to obtain an
injunction enjoining Employee from committing such actual or threatened
breach. In the event Company obtains an injunction enjoining Employee from
violating this provision, Company shall be entitled to recover all costs
incurred in connection with the injunction, including reasonable attorneys'
fees. Company shall also be permitted to pursue any other available
remedies available for such breach or threatened breach, including the
recovery of damages, costs, and attorneys' fees from Employee.
8.3 Employee acknowledges that all Confidential Information is the
sole and exclusive property of Company. Employee shall surrender possession
of all Confidential Information, including documents, computers, software,
disks, tapes or video recordings, or any other written, recorded, or
graphic matter, however produced or reproduced, containing Confidential
Information to Company upon any suspension or termination of Employee's
employment. If, after the suspension or termination of Employee's
employment, Employee becomes aware of any Confidential Information in his
possession, Employee shall immediately surrender possession of the
Confidential Information to Company.
9. RESTRICTIVE COVENANT. For purposes of this Agreement, "Competing
Business" is defined as Gilbarco, Wayne, Schlumberger, Bennett, and Tatsuno, and
their respective affiliates and subsidiaries, both domestic and international,
and any other company engaged in the petroleum dispensing manufacturing business
or point of sale equipment business related to petroleum dispensing.
9.1 Employee hereby covenants and agrees that, for the greater of 12
months after termination of this Agreement, or such time as Employee is
receiving any severance pay from Company (the "Restricted Period"),
Employee shall not, directly or indirectly own,
-8-
<PAGE>
manage, operate, control, be controlled by, participate in, be employed by,
or be connected in any manner with the ownership, management, operation, or
control of any Competing Business. Employee further covenants and agrees
that he shall not during the Restricted Period contact or attempt to
contact, either directly or indirectly, any customers of Company as they
may exist at the time of termination of Employee's employment for the
purpose of soliciting such customer's business for or on behalf of any
Competing Business. Employee specifically acknowledges and agrees that
Company's business is international in scope and that the restriction as
contained in this section is intended to cover activity by Employee both
domestically and internationally. Employee further stipulates, covenants,
and agrees that a reasonable geographic restriction, as that term is used
and defined by Indiana law, on Employee's activities under this Section is
the entire world.
9.2 In the event of Employee's actual or threatened breach of the
provisions of this Section, Company shall be entitled to obtain an
injunction enjoining Employee from committing such actual or threatened
breach. In the event Company obtains an injunction enjoining Employee from
violating this provision, Company shall be entitled to recover all costs
incurred in connection with the injunction, including reasonable attorneys'
fees. Company shall also be permitted to pursue any other available
remedies available for such breach, including the recovery of damages and
reasonable costs and attorneys' fees from Employee.
9.3 If a court of competent jurisdiction or any arbitrator determines
that any provision or restriction in this Section is unreasonable or
unenforceable, the court or arbitrator shall modify such restriction or
provision so that the agreement then becomes an enforceable restriction of
the activities of Employee.
10. FORFEITURE OF BENEFITS. If Employee breaches his obligations under
either Section 8 or Section 9, Employee shall forfeit all future payments or
compensation payable or provided by Company, except as required pursuant to the
terms of a Plan.
11. NO CONTINUING OBLIGATION. Employee acknowledges and agrees that this
Agreement does not grant Employee the right to continue as an employee of
Company as an executive or in any other capacity.
12. NO TRUST ESTABLISHED. All payments provided under this Agreement
shall be paid in cash from the general funds of Company, and no separate or
special fund has been or shall be established, and no segregation of assets has
been or shall be made to assure payment. Employee shall have no right, title, or
interest in or to any investments or other assets which Company may acquire or
obtain to assist in meeting its obligations under this Agreement. Nothing
contained in this Agreement, 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 Company and Employee or any other person. The right of any
person to receive payments from Company under this Agreement shall be no greater
than the rights of a general unsecured creditor of Company.
-9-
<PAGE>
13. WITHHOLDING. Company may withhold from any payments or benefits
provided under this Agreement:
13.1 all federal, state, city, or other taxes as required pursuant to
any law or governmental regulation or ruling; and
13.2 any amounts owed by Employee to Company for any reason at the
time of the termination of this Agreement.
14. NO ASSIGNMENT OR ALIENATION. This Agreement shall not be assignable by
Employee without Company's prior written consent; provided, however, nothing in
this Section shall preclude Employee from designating a beneficiary to receive
any benefit payable upon his death or preclude Employee's executors,
administrators, or other legal representatives of his estate from assigning any
rights hereunder to the person or persons entitled thereto. Further, except as
required by law, no right to receive payments under this Agreement shall be
subject to anticipation, communication, alienation, sale, assignment,
encumbrance, charge, pledge, or hypothecation or to execution, attachment, levy,
or similar process or assignment by operation of law, and any attempt, voluntary
or involuntary, to effect any such action shall be null, void, and of no effect.
15. ARBITRATION. Employee and Company recognize and agree that the
arbitration of disputes provides mutual advantages in terms of facilitating the
fair and expeditious resolution of disputes. In consideration of these mutual
advantages, the parties agree as follows:
15.1 Limitation of Section. The provisions of this Section are
subject to and limited by the provisions of Sections 7.4, 8.2, and 9.2.
Except to the extent elected by Employee under Section 7.4, or by the
Company under Section 8.2 or 9.2, the provisions of this Section shall not
apply to any action brought pursuant to Sections 7.4, 8.2, or 9.2.
15.2 Scope of Arbitration. The parties shall submit to arbitration,
in accordance with these provisions, any and all disputes either party may
have arising from or related to this Agreement, and any other disputes
between the parties arising from or related to their employment
relationship, including but not limited to, any disputes regarding alleged
common law tort violations or violations of state or federal statutory
rights. The parties further agree that the arbitration process set for the
below shall be the exclusive means for resolving all disputes made subject
to arbitration but that no arbitrator shall have authority to determine
whether disputes fall within the scope of these arbitration provisions.
15.3 Governing Law. Employee and Company agree that the
interpretation and enforcement of the arbitration provisions of this
Agreement, including any right to appeal, shall be governed by the Indiana
Uniform Arbitration Act, I.C. 34-4-2-1, et seq.
-10-
<PAGE>
15.4 Time Limits on Submitting Disputes. Employee and Company
acknowledge and agree that one of the objectives of this arbitration
provision is to resolve disputes expeditiously, as well as fairly, and that
it is the obligation of both parties, to those ends, to raise any disputes
subject to arbitration under this Agreement in an expeditious manner.
Accordingly, the parties agree to waive all statutes of limitations that
might otherwise be applicable, and agree further that, as to any dispute
subject to arbitration pursuant to this Agreement, notice of a demand for
arbitration must be provided to the other party:
15.4.1 In the event of a dispute arising out of a termination of
this Agreement, within six months of the date of termination;
15.4.2 In the event of a breach of Section 8 or 9, within four
months after the full Board has actual knowledge of the breach;
or
15.4.3 In the event of any other dispute, within three months
after the dispute arises.
Failure to demand arbitration on claims within these time limits is
intended to, and shall to the furthest extent permitted by law, be a waiver
and release with respect to such claims, and, in the absence of a timely
submitted written demand for arbitration, an arbitrator has no authority to
resolve the disputes or render an award.
15.5 Availability of Provisional Relief. Notwithstanding anything
herein to the contrary, nothing in this Section shall prevent Company or
Employee from obtaining injunctive relief from a court of competent
jurisdiction to enforce the obligations of Sections 8 and 9 and for which
either party may require provisional relief pending a decision on the
merits by the arbitrator.
15.6 American Arbitration Association Rules Apply as Modified Herein.
Any arbitration of disputes shall be conducted under the Model Employment
Procedures of the American Arbitration Association (AAA), as modified in
this Agreement.
15.7 Invoking Arbitration. Either party may invoke the arbitration
procedures described in this Agreement by written notice of a demand for
arbitration (an "Arbitration Notice"). An Arbitration Notice shall contain
a statement of the matter to be arbitrated in sufficient detail to
establish the timeliness of the demand. The parties shall then have ten
business days within which they may identify a mutually agreeable
arbitrator. After the ten day period has expired, the parties shall prepare
and submit to the AAA a joint submission, with each party to contribute
half of the appropriate administrative fee. In their submission to the AAA,
the parties shall either designate a mutually acceptable arbitrator or
request a panel of arbitrators from the AAA according to the procedure
described in section, below.
-11-
<PAGE>
15.8 Arbitrator Selection. In the event the parties cannot agree upon
an arbitrator within ten business days after the Arbitration Notice is
received, their joint submission to the AAA shall request a panel of seven
arbitrators from the joint Labor and Commercial Arbitration Panels who are
practicing attorneys with professional experience in the field of labor
and/or employment law, and the parties shall attempt to select an
arbitrator from the panel according to AAA procedures. If the parties
remain unable to select an arbitrator, they shall request from AAA a panel
of three comparably qualified arbitrators from which the AAA shall reject
the least preferred candidate of each party and select the candidate with
the highest joint ranking of the parties.
In the event of the death or disability of an arbitrator, the parties
shall select a new arbitrator as provided above. The substitute arbitrator
shall have the power to determine the extent to which he or she shall act
on the record already made in arbitration.
15.9 Prehearing Procedures. Upon accepting assignment as arbitrator,
the arbitrator shall promptly conduct a preliminary hearing at which each
party shall be entitled to submit a brief statement of their respective
positions, and at which the arbitrator shall establish a timetable for
prehearing activities and the conduct of the hearing, and may address
initial requests from the parties for prehearing disclosure of information.
At the preliminary hearing and/or thereafter, the arbitrator shall have the
discretion and authority to order, upon request or otherwise, the
prehearing disclosure of information to the parties. Such disclosure may
include, without limitation, production of requested documents, exchange of
witness lists and summaries of the testimony of proposed witnesses, and
examination by deposition of potential witnesses, to the end that
information disclosure shall be conducted in the most expeditious and cost-
effective manner possible, and shall be limited to that which is relevant
and for which each party has a substantial, demonstrable need. The
arbitrator shall further have the authority, upon request or otherwise, to
confer with the parties or their designated representatives concerning any
matter, and to set or modify timetables for all aspects of the arbitration
proceeding.
The arbitrator may award either party its reasonable attorneys' fees
and costs, including reasonable expenses associated with production of
witnesses or proof, upon a finding that the other party (i) engaged in
unreasonable delay, (ii) failed to comply with the arbitrator's discovery
order, or (iii) failed to comply with requirements of confidentiality
hereunder. The arbitrator shall also have the authority, upon request or
otherwise, to entertain and decide motions for prehearing judgment.
15.10 Stenographic Record. There shall be a stenographic record of the
arbitration hearing, unless the parties agree to record the proceedings by
other reliable means. The costs of recording the proceedings shall be borne
equally by the parties.
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<PAGE>
15.11 Location. Unless otherwise agreed by the parties, arbitration
hearings shall take place in Fort Wayne, Allen County, Indiana at a
mutually agreeable place or, if no agreement can be reached, at a place
designated by the AAA.
15.12 The Hearing. At any hearing, the party bearing the burden of
proof according to the governing substantive law shall present its evidence
first.
15.13 Posthearing Briefs. After the close of the arbitration hearing,
and on any issue concerning prehearing procedures, the arbitrator shall
allow the parties to submit written briefs.
15.14 Confidentiality. All arbitration proceedings hereunder shall be
confidential. Neither party shall disclose any information about the
evidence produced by the other in the arbitration proceeding or about
documents produced by the other in connection with the proceeding, except
in the course of a judicial, regulatory or arbitration proceeding, or as
may be requested by governmental authority. Before making any disclosure
permitted by the preceding sentence, the party shall give the other party
reasonable written notice of the intended disclosure and an opportunity to
protect its interests. Expert witnesses and stenographic reporters shall
sign appropriate nondisclosure agreements.
15.15 Costs. Except as otherwise expressly provided in this Agreement,
as to any disputes arising from the termination of the Agreement, each
party shall be responsible for its costs, including attorneys' fees,
incurred in any arbitration, and the arbitrator shall not have authority to
include all or any portion of said costs and fees in his or her award. The
costs and fees of the arbitrator and of the AAA shall be borne equally by
the parties.
15.15.1 Notwithstanding anything herein to the contrary, Company
shall be entitled to recover its reasonable costs and attorneys'
fees incurred in enforcing the provisions of Section 8 or Section
9, provided that it prevails in such enforcement action.
15.15.2 Notwithstanding anything herein to the contrary,
Employee shall be entitled to recover from the Company all costs
and expenses incurred in enforcing his rights under this
Agreement, including all expenses of the arbitration and
attorneys' fees and costs, provided that he prevails in whole or
in part in such enforcement action.
15.16 Remedies. The arbitrator shall have authority to award any
remedy or relief that a federal or state court situated in the State of
Indiana could grant in conformity to applicable law.
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<PAGE>
15.17 Law Governing the Arbitrator's Award. In rendering an award,
the arbitrator shall determine the rights and obligations of the parties,
including employment discrimination issues, according to federal law and
the substantive law of the State of Indiana (excluding conflicts of laws
principles) as though the matter were before a court of law.
15.18 Written Awards and Enforcement. Any arbitration award shall be
accompanied by a written statement containing a summary of the issues in
controversy, a description of the award, and an explanation of the reasons
for the award. The parties agree that a competent court shall enter
judgment upon the award of the arbitrator, provided it is in conformity
with the terms of this Agreement.
15.19 Conflict in Procedure. If any part of this arbitration
Procedure is in conflict with any mandatory requirement of applicable law,
the mandatory requirement shall govern, and the procedure set forth above
shall be reformed and construed to the maximum extent possible in
conformance with the applicable law. The procedure shall remain otherwise
unaffected and enforceable.
16. MISCELLANEOUS.
16.1 Entire Agreement. This Agreement constitutes the entire
agreement between the parties and all prior negotiations and agreements,
whether written or oral, are merged into this Agreement.
16.2 Severability. If any provision of this Agreement shall for any
reason be held to be invalid, illegal, or unenforceable in any respect,
such invalidity, illegality, or unenforceability shall not affect any
other provision or part of a provision of this Agreement; but this
Agreement shall be reformed and construed as if such provision had never
been contained in it, and any such provision shall be reformed so that it
would be valid, legal and enforceable to the maximum extent permitted.
16.3 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
counterparts collectively shall constitute one document representing the
agreement among the parties.
16.4 Binding Agreement. This Agreement shall be binding upon and
shall inure to the benefit of the parties to this Agreement and their
respective successors and assigns.
16.5 Amendment. This Agreement may not be amended, discharged,
terminated, or changed orally; and any such proposed amendment, discharge,
termination, or change shall be in writing and signed by the party against
whom such amendment, change, discharge, or termination is sought.
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<PAGE>
16.6 Waiver of Breach. The waiver by any party of a breach of any
provision of this Agreement shall not operate or be construed as a waiver
of any subsequent breach; and no waiver shall be valid unless it is in
writing and is signed by the party against whom such waiver is sought.
16.7 Extension of Noncompete Period. The periods of time during
which Employee is prohibited from engaging in such business practices
pursuant to this Agreement shall be extended by any length of time during
which Employee is in breach of any of such covenants.
16.8 Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Indiana.
16.9 Survival. The provisions and restrictions contained in Sections
8 and 9 shall survive the termination of this Agreement and Employee's
employment with Company.
16.10 Full Disclosure. Employee acknowledges that Employee's
employment with Company is conditioned upon the execution of this
Agreement. Employee represents and acknowledges that Employee has carefully
reviewed all of the terms and conditions in this Agreement and has been
advised of Employee's right to seek independent legal counsel prior to
execution of this Agreement.
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<PAGE>
16.11 Notices. Any notice, request, or other communication required
or permitted under this Agreement shall be in writing. Notice shall be
deemed to have been given only if personally delivered or sent by
registered or certified mail, return receipt requested. Any notice so
mailed shall be deemed given on the postmark date. Failure or refusal to
accept or receive any notice or communication shall not affect the validity
of the notice. All such notices shall be given to the respective parties at
the addresses designated below, or to such other address as a party may
designate in a like manner.
If to Company: TOKHEIM CORPORATION
c/o NORMAN L. ROELKE, VICE PRESIDENT, SECRETARY
& GENERAL COUNSEL
P.O. BOX 360
FORT WAYNE, IN 46801
If to Employee:
-------------------------------------------
-------------------------------------------
-------------------------------------------
-------------------------------------------
IN WITNESS WHEREOF, the parties have entered into this Agreement as of the
date first written above.
TOKHEIM CORPORATION EMPLOYEE
/s/ John A. Negovetich /s/ Scott Swogger
- ---------------------------------- ------------------------------
JOHN A. NEGOVETICH, EXECUTIVE VICE SCOTT A. SWOGGER
PRESIDENT FINANCE & ADMINISTRATION
/s/ Norman L. Roelke
- ----------------------------------
By: NORMAN L. ROELKE
Its: VICE PRESIDENT, SECRETARY & GENERAL COUNSEL
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<PAGE>
Tokheim Corporation and Subsidiaries
Exhibit (11) - Earnings Per Share
For the three and nine month periods ended August 31, 1999 and 1998.
Basic earnings per share ("EPS") is calculated based on earnings (loss)available
to common shareholders and the weighted average number of common stock shares
outstanding during each period. Diluted EPS includes additional dilution from
potential common stock equivalents such as stock issued in connection with the
conversion of preferred stock or the exercise of stock options outstanding.
The following table presents information necessary to calculate EPS for the
three and nine month periods ended August 31, 1999 and 1998.
<TABLE>
<CAPTION>
Basic Basic
------------------------ ------------------------
Three Months Ended Nine Months Ended
------------------------ ------------------------
August 31, August 31, August 31, August 31,
1999 1998 1999 1998
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Shares outstanding (in thousands):
Weighted average outstanding................... 12,670 12,631 12,667 10,925
========= ========= ========== =========
Net earnings (loss):
Before extraordinary item...................... $ (5,448) $ 2,929 $ (24,624) $ (249)
Extraordinary loss on debt extinguishment...... -- -- (6,249) (4,965)
--------- --------- ---------- ---------
Net earnings (loss)............................ (5,448) 2,929 (30,873) (5,214)
Preferred stock dividends...................... (376) (370) (1,124) (1,113)
--------- --------- ----------- ---------
Earnings (loss) applicable to common stock..... $ (5,824) $ 2,559 $ (31,997) $ (6,327)
========= ========= ========== =========
Net earnings (loss) per common share:
Before extraordinary item...................... $ (0.46) $ 0.20 $ (2.03) $ (0.12)
Extraordinary loss on debt extinguishment...... -- -- (0.49) (0.45)
--------- --------- --------- ---------
Net earnings (loss)............................ $ (0.46) $ 0.20 $ (2.52) $ (0.57)
========= ========= ========= =========
</TABLE>
For financial reporting purposes, the loss per share, assuming full dilution, is
considered to be the same as basic for periods when a net loss is reported since
the effect of the common stock equivalents would be antidilutive.
<TABLE>
<CAPTION>
Diluted Diluted
----------------------- ------------------------
Three Months Ended Nine Months Ended
----------------------- ------------------------
August 31, August 31, August 31, August 31,
1999 1998 1999 1998
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Shares outstanding (in thousands):
Weighted average outstanding..................... 12,670 12,631 12,667 10,925
Share equivalents................................ 826 224 403 254
Weighted conversion of preferred stock........... 794 763 794 763
---------- ---------- ---------- ----------
Adjusted outstanding............................. 14,290 13,618 13,864 11,942
========== ========== ========== ==========
Net earnings (loss):
Before extraordinary item........................ $ (5,448) $ 2,929 $ (24,624) $ (249)
Extraordinary loss on debt extinguishment........ -- -- (6,249) (4,965)
---------- ---------- ---------- ----------
Net earnings (loss).............................. (5,448) 2,929 (30,873) (5,214)
Incremental RSP expense.......................... (376) (370) (1,124) (1,113)
---------- ---------- ---------- ----------
Earnings (loss) applicable to common stock....... $ (5,824) $ 2,559 $ (31,997) $ (6,327)
========== ========== ========== ==========
Net earnings (loss) per common share:
Before extraordinary item........................ $ (0.41) $ 0.19 $ (1.86) $ (0.11)
Extraordinary loss on debt extinguishment........ -- -- (0.45) (0.42)
---------- ---------- ---------- ----------
Net earnings (loss).............................. $ (0.41) $ 0.19 $ (2.31) $ (0.53)
========== ========== ========== =========
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> NOV-30-1999
<PERIOD-END> AUG-31-1999
<CASH> 20,985
<SECURITIES> 0
<RECEIVABLES> 160,175
<ALLOWANCES> 9,295
<INVENTORY> 105,137<F1>
<CURRENT-ASSETS> 293,925
<PP&E> 155,960<F2>
<DEPRECIATION> 80,065
<TOTAL-ASSETS> 705,020
<CURRENT-LIABILITIES> 267,556
<BONDS> 202,298
14,815<F4>
0
<COMMON> 89,843<F3>
<OTHER-SE> (93,123)<F5>
<TOTAL-LIABILITY-AND-EQUITY> 705,020
<SALES> 512,374
<TOTAL-REVENUES> 512,374
<CGS> 393,999<F6>
<TOTAL-COSTS> 393,999
<OTHER-EXPENSES> 6,115
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 37,944
<INCOME-PRETAX> (25,104)
<INCOME-TAX> (480)
<INCOME-CONTINUING> (24,624)
<DISCONTINUED> 0
<EXTRAORDINARY> (6,249)
<CHANGES> 0
<NET-INCOME> (30,873)
<EPS-BASIC> (2.52)
<EPS-DILUTED> (2.52)
<FN>
<F1> Represents gross inventory net of loss reserve.
<F2> Represents gross PP&E.
<F3> Represents common stock of $90,375 less treasury stock of $532.
<F4> Represents redeemable preferred stock of $24,000 less Guaranteed ESOP of
$5,029 and treasury stock of $4,156.
<F5> Represents accumulated deficit of ($51,291) less minimum pension liability
of ($3,135) less foreign currency translation adjustments of ($58,697) plus
common stock warrants of $20,000.
<F6> Includes product development expenses and excludes depreciation and
amortization.
</FN>
</TABLE>
