Kurt Schusterman
7946 Sitio Redonda
Carlsbad, CA 92009
Re: Employment Agreement
Dear Kurt:
This Employment Agreement (this "Agreement") sets forth our agreement concerning
certain terms of your employment by TRM Corporation (the "Company") as of
February 8, 1999.
1. Employment Agreement
1.1 Employment
(a) You will hold the position of Vice President, and Chief Operating
Officer of TRM ATM Corporation (TRM) of the Company and perform
those duties as are generally associated with such a position.
You will report to the President and Chief Executive Officer and
the Board of Directors of the Company. You also agree to perform
such acts and duties as the President and Chief Executive Officer
and the Board of Directors of the Company may reasonably direct,
to comply with all applicable policies and procedures of the
Company, and to devote such time, energy and skill to your
assignment as the President and Chief Executive Officer and the
Board of Directors of the Company considers reasonably necessary
for the performance of your duties. You and the Company
understand and agree that circumstances may arise in which you
and the Company may mutually agree to change, in whole or in
part, the scope of your responsibilities and the title of your
position.
(b) Your employment with the Company will continue under this
Agreement until terminated by you or the Company as provided in
paragraph 2.1, below. Notwithstanding the designation of a term
for this Agreement, your employment with the Company will be on
an "at will" basis with both you and the Company retaining the
right to terminate the employment relationship at any time and
for any reason, without liability on the part of the Company or
any affiliated or related corporation for the termination, except
as expressly provided in this Agreement. Your last day of
employment with the Company is referred to herein as your
Separation Date.
February 8, 1999
Kurt Schusterman Employment Agreement
Page 2 of 6
1.2 Salary. During the first term of this Agreement, you will be paid the
annualized equivalent of $150,000 as base salary, payable in
installments on regular Company paydays. The first term shall end on
December 31, 1999. On January 1, 2000 your base salary shall be
increased to $165,000/year and on January 1, 2001, your base salary
shall be increased to $185,000/year provided you are still employed by
TRM on these dates.
1.3 Benefits. In addition to your base compensation, you will be given an
opportunity to earn incentive compensation in calendar year 1999 of
$100,000 upon the achievement of additional performance criteria to be
established by the President and Chief Executive Officer or the Board
of Directors of the Company. You may take a draw of $25,000 in
December, 1999 from your earned 1999 bonus. Thereafter, you will be
eligible to receive incentive compensation as the President and Chief
Executive Officer or the Board of Directors of the Company shall
approve. You will also receive a sign-on bonus of $50,000, less
statutory taxes. Should your employment terminate for any reason
within calendar year 1999, you agree to pay back the amount of the
sign-on bonus. You will also be eligible to participate in any benefit
plans or programs generally available to the Company's management as
the Board of Directors shall from time-to-time approve, which shall
include paid time off (PTO) which will accrue beginning on your date
of employment at a rate of 20 days per year.
1.4 Stock Option. A stock option for 100,000 shares of TRM Stock will be
issued to you. That option will vest 20% per year for five years with
an exercise period of ten years. The option price of the shares will
be based on the closing price of TRM stock on the date you accept the
employment offer.
2. Termination of Agreement
2.1 Termination. The term of this Agreement shall continue until
terminated earlier as follows:
(a) This Agreement may be terminated by you for any reason upon 30
days' written notice to the Company.
(b) This Agreement may be terminated by the Company for any reason at
any time with 30 days' written notice to you, subject only to the
obligation of the Company, if you are terminated for reasons
other than those specified in paragraph 2.2, to pay severance pay
according to the following formula:
February 8, 1999
Kurt Schusterman Employment Agreement
Page 3 of 6
(i) Six months' pay plus an additional one month's pay for each
year of employment of you by the Company (based on your hire
date of February 8, 1999), up to a maximum of 12 months pay
(the "Salary Continuation Period"), plus (ii) all incentive
compensation earned but unpaid on or prior to the Separation
Date, plus (iii) health insurance for the Salary
Continuation Period at the same coverage level as in effect
immediately prior to the Separation Date.
Severance pay may be paid to you at your option in a lump
sum or in regular payroll period installments.
(c) This Agreement shall automatically terminate in the event of your
death or disability. For purposes of this Agreement, "disability"
shall mean inability to perform all or substantially all of your
responsibilities for a period of more than six (6) months.
(d) Eligibility for severance pay is conditioned upon your execution
of a Release of Claims in a form provided by the Company at the
time of termination. (sample attached)
2.2 Ineligibility for Severance Pay. With respect to subparagraph 2.1(b),
you will not be eligible for severance pay under this Agreement if:
(a) you voluntarily resign or retire from your employment at any time
and for any reason except because of an involuntary reduction in
your base salary;
(b) the Company terminates your employment for cause (as defined in
paragraph 2.3, below) or your employment terminates due to your
death or disability;
(c) you breach the terms of paragraph 3; or
(d) you fail or refuse to sign the Release of Claims form provided by
the Company at the time of termination.
2.3 Definition of Cause. For purposes of this Agreement, "cause" for
termination shall be defined as (i) any misappropriation of funds or
property of the Company by you; (ii) the conviction of or plea of
guilty or nolo contendere by you of a felony or of any crime involving
moral turpitude; (iii) your engagement in illegal, immoral or similar
conduct tending to place you or the Company, by association with you,
in disrepute; (iv) indulgence in alcohol or drugs to an extent that
renders you unable or unfit to perform his duties hereunder; or (v)
your gross dereliction of duty.
February 8, 1999
Kurt Schusterman Employment Agreement
Page 4 of 6
3. Confidentiality
3.1 Preservation and Non-Use of Confidential Information. You acknowledge
that you have a fiduciary duty as an officer and employee of the
Company not to discuss Confidential Information obtained during your
employment with the Company. For purposes of this Agreement,
"Confidential Information" means any and all confidential or
proprietary information concerning the Company or its affiliates,
joint venturers or other related entities ("The Company Group"), the
disclosure of which could disadvantage The Company Group. Confidential
Information includes trades secrets as defined under the Uniform
Trades Secrets Act.
Except pursuant to your employment by the Company and as directed by
the President and Chief Executive Officer and the Board of Directors
of the Company, you agree not to use Confidential Information, during
the term of this Agreement or after its termination for a period of
five years, for any personal or business purpose, either for your own
benefit or that of any other person, corporation, government or other
entity.
You also agree that, except pursuant to your employment by the Company
as directed by the President and Chief Executive Officer and the Board
of Directors of the Company, you will not disclose or disseminate any
Confidential Information, directly or indirectly, at any time during
the term of this Agreement or after its termination, to any person,
agency, or court unless compelled to do so pursuant to legal process
(e.g., a summons or subpoena) or otherwise required by law and then
only after providing the Company with prior notice and a copy of the
legal process.
3.2 Covenant not to Compete. You also agree that while employed by the
Company, and for a period of one year after the termination of
employment, you shall not compete with the Company, either directly or
indirectly, in the geographical areas where the Company does business,
and you shall not perform services for or own an interest in any
business that does so.
4. Return of Property
On or before your Separation Date, except as agreed to by the Company,
you will return all property belonging to The Company, including, but
not limited to, all documents, business machines, computers, computer
hardware and software programs, computer data, telephones (cellular,
mobile or otherwise), pagers, keys, card keys, credit cards and other
Company-owned property.
February 8, 1999
Kurt Schusterman Employment Agreement
Page 5 of 6
5. Right To Consult with Attorney
You have the right to consult with an attorney or financial advisor at
your own expense regarding this Agreement.
6. Dispute Resolution
You agree that any dispute (1) concerning the interpretation or
construction of this Agreement, (2) arising from your employment with
or termination of employment from the Company, (3) relating to any
compensation or benefits you may claim, or (4) relating in any way to
any claim by you for reinstatement or reemployment by the Company
after execution of this Agreement shall be submitted to final and
binding confidential arbitration. Except as specifically provided
herein, the arbitration shall be governed by the rules of the American
Arbitration Association or such other rules as agreed to by the
parties. Each party shall be responsible for its or his own costs and
attorneys' fees relating to mediation and arbitration. Both parties
agree that the procedures outlined in this paragraph are the exclusive
methods of dispute resolution.
7. Entire Agreement
This Agreement contains the entire agreement between you and the
Company concerning the subject matters discussed herein and supersedes
any other discussions, agreements, representations or warranties of
any kind. Any modification of this Agreement shall be effective only
if in writing and signed by each party or its duly authorized
representative. This Agreement supersedes all prior employment
agreements between you and the Company or any corporation affiliated
with or related to the Company. The terms of this Agreement are
contractual and not mere recitals. If for any reason any provision of
this Agreement shall be held invalid in whole or in part, such
invalidity shall not affect the remainder of this Agreement.
This Agreement shall be construed in accordance with the laws of the
state of Oregon (without regard to the conflicts of laws provisions
thereof).
February 8, 1999
Kurt Schusterman Employment Agreement
Page 6 of 6
In order to reflect your voluntary acceptance and agreement with these
terms, please sign and return the enclosed copy of this letter.
Sincerely,
TRM CORPORATION
By: FREDERIC P. STOCKTON
--------------------------------------
President and CEO
ACKNOWLEDGMENT AND AGREEMENT:
I have read this Agreement and voluntarily enter into this Agreement after
careful consideration and the opportunity to review it with financial or legal
counsel of my choice.
KURT SCHUSTERMAN
-----------------------------------------
Kurt Schusterman