Exhibit (e)(4)(xv)
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AGREEMENT
AGREEMENT, dated as of August 23, 1999, by and between SENSORMATIC
ELECTRONICS CORPORATION, a Delaware corporation having its principal place of
business at 000 Xxxxxx Xxxx, Xxxx Xxxxx, Xxxxxxx 00000 ("Sensormatic"), and PER-
XXXX XXXX ("Executive"), residing at 00000 Xxxx Xxxx Xxxxx, Xxx. #0000, Xxxx
Xxxxx, Xxxxxxx 00000.
W I T N E S S E T H:
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WHEREAS, as of the date hereof, Executive is becoming the President
and Chief Executive Officer of Sensormatic, and Executive is expected to make a
significant contribution to the performance and growth of Sensormatic;
WHEREAS, the Board of Directors of Sensormatic recognizes that, as is
the case with many publicly-held corporations, the possibility of a Change in
Control (as defined below) exists and that such possibility, and the uncertainty
which it may raise among Sensormatic's management, may result in the distraction
or departure of management personnel to the detriment of Sensormatic and its
stockholders, particularly at a time when Sensormatic is placing heavy demands
on its management in connection with its efforts to expand its product lines and
markets, restructure its operations and reduce its expenses;
WHEREAS, the Board of Directors of Sensormatic has determined that it
is in the best interest of Sensormatic and its stockholders to provide to
Executive certain rights as to termination compensation in the event of a Change
in Control; and
WHEREAS, the Board of Directors of Sensormatic believes that the grant
of such rights to Executive will help assure Executive=s continuing dedication
to his duties to Sensormatic, notwithstanding the occurrence of any Change in
Control, and, in particular, will enable Executive to objectively and
impartially assess, and advise the Board of Directors with respect to, any
proposal received by Sensormatic regarding a Change in Control and to take such
action regarding any such proposal as the Board of Directors may deem to be
appropriate;
WHEREAS, this Agreement is contemplated by the Executive's Employment
Agreement with Sensormatic dated August 23, 1999 (the "Employment Agreement");
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the parties hereto agree as follows:
1. Term.
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(a) The term of this Agreement shall commence on the date hereof
(which for all purposes of this Agreement shall mean the date first above
written) and shall continue after a Change in Control for so long as Sensormatic
has or may have any obligations under Sections 6, 7, 8, 12, 13 or 16 hereof.
(b) Notwithstanding the provisions of Section 1(a) hereof, this
Agreement shall terminate automatically in the event of the voluntary or
involuntary termination of Executive's
employment with Sensormatic prior to the occurrence of a Change in Control, so
long as, at the time of such termination of employment, no Attempted Change in
Control shall have occurred and then be pending. Notwithstanding anything
contained in this Agreement to the contrary, if Executive's employment is
terminated by Sensormatic prior to a Change in Control, which Change in Control
occurs, and Executive reasonably demonstrates that such termination was at the
request of a third party who effectuates such Change in Control or that such
termination was directly related to or in anticipation of such Change in
Control, then for all purposes of this Agreement, Executive shall be entitled to
the payments and other benefits provided under this Agreement, offset by any
amounts previously paid pursuant to the Employment Agreement.
2. Salary and Bonus. Executive's present base salary is $495,000 per
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year and Executive's target bonus is deemed to be $325,000 per year. After the
date of this Agreement, Executive's annual base salary and target bonus (subject
to Section 3(b) of the Employment Agreement) may be increased or decreased, to
the extent permitted under the Employment Agreement, as determined by
Sensormatic's Board of Directors or any compensation committee thereof,
provided, however, that none of the following shall be effective during the
pendency of an Attempted Change in Control or in the event of a Change in
Control or at any time within 36 months after a Change in Control has occurred:
(i) any decrease in Executive's annual base salary or target bonus from the
amounts set forth above (or any greater amounts subsequently so determined and
approved), (ii) any decrease in the actual amount paid to Executive as a bonus
from the amount of the bonus actually paid for the most recently concluded
fiscal year (except to the extent that such actual amount paid in the then-
current fiscal year exceeds 150% of the greater of the target bonus then in
effect or $325,000), or (iii) any change in the formula then in effect for
calculation of Executive's bonus that could be reasonably anticipated to result
in a decrease in the amount payable thereunder.
3. Fringe Benefits. Sensormatic currently provides to Executive the
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fringe benefits listed below, without cost to Executive, and, while nothing in
this Agreement shall be deemed to require Sensormatic to continue any such
benefits or to prohibit Sensormatic from modifying any such benefits in any
respect (subject to the express terms of the Employment Agreement, as
applicable), except that there shall be no material reduction in any such
currently provided benefits (and there shall be no material reduction in any
additional benefits subsequently approved by Sensormatic's Board of Directors or
any committee thereof) during the pendency of an Attempted Change in Control or
in the event of a Change in Control or at any time within 36 months after a
Change in Control has occurred (and, in addition, there shall not, at any time
following a Change in Control, be any change in Sensormatic's Senior Executive
Defined Contribution Retirement Plan or any similar or successor plan (the
"Senior Executive Plan", which shall include, for all purposes of this
Agreement, any Senior Executive Defined Contribution Retirement Agreement
between Sensormatic and Executive under such Plan) resulting in a reduction of
Executive's benefits thereunder), it is anticipated that such benefits (together
with any such additional benefits) shall continue to be provided to Executive on
the same or a substantially similar basis in the future in accordance with the
terms of the applicable benefit plans and policies: [Note -- check current
applicability of benefits listed below]
(a) group medical and group dental plans in which Executive and his
eligible dependents are participants;
(b) life insurance on Executive's life and accidental death and
dismemberment insurance, each equal to two times Executive's annual base
salary (but not to exceed $1,000,000 or such greater amount as may be
established by Sensormatic for such purposes from time to time);
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(c) participation in Sensormatic's retirement and/or profit sharing
plans (including the Senior Executive Plan) and in Sensormatic's annual
contributions, if any, thereto, provided that such participation is
contingent on Executive's continued qualification prior to any such Change
in Control or Attempted Change in Control as an eligible participant under
the provisions of such plans as then in effect and on Executive's election
to continue his participation in such plans;
(d) the use of a Sensormatic owned or leased automobile and
comprehensive insurance protection on such vehicle;
(e) disability income protection in an amount equal to not less than
60% of his annual base salary and target bonus;
(f) payment of such country club/golf fees and airline club room fees
as are necessary or advisable for Executive's professional activities,
including the entertainment of business associates/clients, and
commensurate with those provided to him under his Employment Agreement as
of the date this Agreement;
(g) reimbursement of Executive for reasonable travel and entertainment
expenses incurred by Executive in connection with the business of
Sensormatic; and
(h) the provision to Executive of office space befitting Executive's
position, secretarial help, and access to telephone service, including WATS
lines.
Further, Sensormatic expects that, during the term of this Agreement, and so
long as Executive continues to be employed by Sensormatic, Executive's position
shall continue to be located in Palm Beach County or Broward County, Florida,
and that the duties and responsibilities of Executive's position shall not be
significantly diminished.
4. Employment Commitment. As partial consideration for the benefits
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available to Executive under this Agreement, Executive hereby agrees to remain
as an officer and employee of Sensormatic during any Attempted Change in Control
and for a period of six months immediately after a Change in Control first
occurs (the "Commitment Period"), and during the Commitment Period to devote
substantially all his business time and efforts to the business and affairs of
Sensormatic, provided that Executive shall be entitled to terminate his
employment by Sensormatic during an Attempted Change in Control or at any time
following a Change in Control in circumstances which constitute an involuntary
termination pursuant to Section 10 hereof. Neither Executive's participation in
other businesses, as a director or otherwise, with the approval of Sensormatic's
Board of Directors (which approval shall be deemed to include the Board of
Directors not objecting to such participation following disclosure thereof to
the Board of Directors by Executive, and which approval may not be withdrawn
following such Change in Control), nor Executive's engaging in charitable
activities and community affairs or managing his personal investments and
affairs, shall be deemed to contravene the foregoing provision. In the event
that Executive voluntarily terminates his employment with Sensormatic (other
than by resignation contemplated in Section 10 hereof) at any time during the
Commitment Period, Executive shall not be entitled to any of the benefits
provided for in this Agreement, other than those provided under Sections 6(a),
6(b), 6(c), 6(d), 7(a)(ii), 12, 13 and 16 hereof, and shall promptly repay to
Sensormatic, on an after-tax basis, any benefits previously received by him
pursuant to any provisions of Sections 6 or 7 of this Agreement not referred to
in this sentence, but Sensormatic shall have no other remedy for Executive's
failure to remain an employee and officer as required by this Section 4. Any
amounts or benefits received by Executive pursuant to the Employment Agreement
or any other compensation plan or arrangement of Sensormatic, even if similar or
identical to those to which he
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would be entitled under this Agreement, shall not be deemed received pursuant to
this Agreement or be repayable to Sensormatic for purposes of the preceding
sentence.
5. Change in Control.
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(a) For purposes of this Agreement, the term "Change in Control" shall
mean a change in control of Sensormatic of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), provided,
that, without limitation, such a change in control shall be deemed to have
occurred if (i) any person (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act, "Person") is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act, "Beneficial Owner"), directly or indirectly,
of securities of Sensormatic representing 30% or more of the combined voting
power of Sensormatic's then outstanding voting securities, (ii) Sensormatic
consummates a merger, consolidation, share exchange, division or other
reorganization of Sensormatic with any other corporation or entity, unless the
shareholders of Sensormatic immediately prior to such transaction beneficially
own, directly or indirectly, (A) if Sensormatic is the surviving corporation in
such transaction, 60% or more of the combined voting power of Sensormatic's
outstanding voting securities as well as 60% or more of the total market value
of Sensormatic's outstanding equity securities, (B) if Sensormatic is not the
surviving corporation, 80% or more of the combined voting power of the surviving
entity's outstanding voting securities as well as 80% or more of the total
market value of such entity's outstanding equity securities, or (C) in the case
of a division, 80% or more of the combined voting power of the outstanding
voting securities of each entity resulting from the division as well as 80% or
more of the total market value of each such entity's outstanding equity
securities, in each case in substantially the same proportion as such
shareholders owned shares of Sensormatic prior to such transaction; (iii)
Sensormatic adopts a plan of complete liquidation or winding-up of Sensormatic;
(iv) the shareholders of Sensormatic approve an agreement for the sale or
disposition (in one transaction or a series of transactions) of all or
substantially all of Sensormatic's assets; or (v) during any period of 24
consecutive months, individuals (y) who at the beginning of such period
constitute the Board of Directors of Sensormatic or (z) whose election,
appointment or nomination for election was approved prior to such election or
appointment by a vote of at least two-thirds of the directors in office
immediately prior to such election or appointment who were directors at the
beginning of such two-year period (other than any directors who prior to the
Change in Control were associated or affiliated with any Person involved with
any Change in Control or Attempted Change in Control), cease for any reason to
constitute at least three-fourths of the Board of Directors of Sensormatic.
(b) For purposes of this Agreement, an "Attempted Change in Control"
shall be deemed to have occurred (i) if any Person files (or fails to file when
required to do so) with the Securities and Exchange Commission (the "SEC") a
Statement on Schedule 13D relating to voting securities of Sensormatic (A)
disclosing the acquisition of 10% or more thereof or (B) while disclosing the
acquisition of less than 10% of such voting securities, indicates an intention
to effect any of the transactions listed in Item 4 of Schedule 13D or otherwise
to effect a Change in Control, (ii) upon the public announcement (including,
without limitation, the filing with the SEC of a Statement on Schedule 14D-1) by
any Person of an intention to make a tender offer or otherwise to effect a
Change in Control, (iii) in the event of any solicitation of proxies for the
election of directors of Sensormatic pursuant to Rule 14a-11 of the Rules and
Regulations under the Exchange Act or the filing of a Statement on Schedule 14B
in anticipation thereof, (iv) the receipt by Sensormatic from any Person of any
other communication proposing, or indicating an intention, to effect a Change in
Control by the acquisition of voting securities of Sensormatic, the solicitation
of proxies for the election of directors or otherwise or (v) if the Board of
Directors of Sensormatic or an authorized committee thereof otherwise determines
that an Attempted Change in Control is pending. The termination of the pendency
of an Attempted
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Change in Control shall be determined by the Board of Directors of Sensormatic
(or an authorized committee thereof); provided, that any Attempted Change in
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Control shall in any event be deemed to have terminated upon the occurrence of a
Change in Control.
(c) A Change in Control shall be deemed, for purposes of this
Agreement, to be: (i) "non-approved" if (A) in connection with the
consideration thereof by the Board of Directors of Sensormatic, a majority of
the Previous Members of the Board of Directors (as defined below), either before
or after such Change in Control, (x) votes to disapprove of such Change in
Control, (y) votes to approve of such Change in Control, but as a consequence of
the existence of a competing proposal for a Change in Control, or (z) otherwise
expressly declares that such Change in Control is "non-approved", or (B) a
majority of the Previous Members of the Board of Directors neither expressly
approves nor disapproves of such Change in Control, or (ii) "approved" if in
connection with the consideration thereof by the Board of Directors of
Sensormatic, a majority of the Previous Members of the Board of Directors,
either before or after such Change in Control, (x) approves of such Change in
Control (other than as a consequence of the existence of a competing proposal
for a Change of Control) or (y) otherwise expressly declares that such Change in
Control is "approved", notwithstanding clause (A)(y) of this Section 5(c). The
majority of the Previous Members of the Board of Directors shall indicate its
approval or disapproval of a Change in Control by a statement or statements in
writing to such effect. For purposes of this Agreement, Previous Members of the
Board of Directors shall mean members of the Board of Directors of Sensormatic
as of the date of a Change in Control (the first Change in Control, if there are
more than one) who had been in office for a period of at least two years
immediately prior to such Change in Control (other than directors who prior to
such Change in Control were appointed or elected as directors as a consequence
of their association or affiliation with any Person effecting such Change in
Control).
In addition, notwithstanding any previous determination that a Change
in Control was "approved", such Change in Control may subsequently be
determined, in good faith, to be "non-approved" by a majority of the Previous
Members of the Board of Directors who are then still in office with Sensormatic
or a corporate successor of Sensormatic (or if fewer than two such Previous
Members of the Board of Directors are still in office, then by a majority of the
Previous Members of the Board of Directors, whether or not still in office)
within the 36-month period immediately following such Change in Control, if
during such period there occur (1) events of the types referred to in Section 10
hereof with respect to individuals who were officers of Sensormatic at the time
of the Change in Control, (2) defaults by Sensormatic under this Agreement or
any similar agreement, (3) the involuntary termination (other than for cause or
in the event of death or permanent disability) of the employment of a number of
the officers of Sensormatic who were officers immediately prior to such Change
in Control exceeding 40% of the total number of such officers, or (4) the
transfer (by sale, merger or otherwise) of all or substantially all the equity
securities of Sensormatic acquired by the Person effecting such Change in
Control, of all or substantially all the assets of Sensormatic, or of all or
substantially all the equity securities of Sensormatic's successor corporation,
directly or indirectly, to a third party (other than a majority owned affiliate
of such Person). In the event of such a subsequent determination, Executive
shall be entitled to all benefits arising under this Agreement out of a "non-
approved" Change in Control as if such Change in Control had been deemed "non-
approved" initially. Any additional benefits arising out of such "non-approved"
Change in Control which Executive is entitled to receive through the date of
such determination shall be paid or satisfied promptly by Sensormatic. For
purposes of this Section 5(c), the term "officers" shall not include individuals
whose only office with Sensormatic is Assistant Secretary or Assistant
Treasurer.
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(d) For the purposes of this Section 5, references to provisions of
the Exchange Act and rules, regulations and schedules thereunder shall be to
such provisions as they are in effect and interpreted as of the date of this
Agreement.
6. Benefits Effective Upon a Change in Control. In the event a
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Change in Control occurs, Executive shall be entitled to the following benefits:
(a) All stock options issued by Sensormatic to Executive, whether or
not then exercisable, shall remain fully exercisable or shall become fully
exercisable immediately (or, notwithstanding the foregoing, in the event of an
Attempted Change in Control involving a proposed Reorganization Event (as such
term is defined in Section 6(b) hereof)), such options shall become fully
exercisable thirty days before the date of such Reorganization Event, and such
options shall remain outstanding and fully exercisable for the stated term
thereof or until the later of (i) nine months following the voluntary or
involuntary termination of Executive's employment with Sensormatic (or, at the
option of Executive, in the case of an incentive stock option, three months
following such termination) or (ii) the end of the respective post-termination
exercisability periods provided for in such options (including if applicable,
such periods in the event of death or disability); provided, that in no event
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shall the term of such options be extended beyond their respective original
terms. In addition, any deferred vesting or forfeiture provisions applicable to
any shares of Sensormatic stock awarded to or otherwise held by Executive shall
be without further force or effect, and Executive shall have the unrestricted
right to such shares.
(b) In the event that (i) such Change in Control is effected through
(A) a tender or exchange offer (a "Tender Offer") or (B) any means, in one or
more transactions, with the result in either case that any Person becomes the
Beneficial Owner, directly or indirectly, of securities of Sensormatic
representing 50% or more of the combined voting power of Sensormatic's then
outstanding voting securities (any such Change in Control referred to in this
clause (i), including pursuant to a Tender Offer, being hereinafter referred to
as a "Majority Acquisition"), (ii) in connection with, as a result of or within
24 months immediately following a Change in Control, Sensormatic's Board of
Directors shall have approved a merger, consolidation, reclassification,
reorganization, dissolution, sale of all or substantially all of the assets of
Sensormatic or similar event (a "Reorganization Event") as a result of which
Sensormatic's Common Stock would cease to be outstanding or (iii) in connection
with, as a result of or within 24 months immediately following a Change in
Control, Sensormatic's Common Stock ceases to be listed for trading on a
national securities exchange or quoted through NASDAQ or a comparable securities
quotation system, Executive shall have the right, exercisable by written notice
given at any time during the 13-month period immediately following the date of
such Change in Control (and, if later, the date of any such Majority
Acquisition, Reorganization Event or cessation of listing or quotation), to
require Sensormatic to purchase:
(1) any or all of such stock options issued by Sensormatic to
Executive, whether or not then exercisable, and/or any stock options issued
upon conversion of or in exchange for any such Sensormatic stock options
pursuant to any such Reorganization Event ("Conversion Options"), at a
purchase price equal to the excess of the aggregate Fair Market Value (as
defined below) of the shares of Sensormatic Common Stock subject to such
Sensormatic stock options over the aggregate exercise price of such stock
options (or, in the case of any Conversion Options, such amount calculated
with respect to the Sensormatic stock options which were converted into or
exchanged for such Conversion Options); and/or
(2) any or all shares of Sensormatic Common Stock held by Executive at
or immediately prior to the date of such Change in Control (including any
shares of Sensormatic
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Common Stock (restricted or otherwise, and whether or not vested) awarded
to Executive pursuant to any compensation plan or arrangement of
Sensormatic) or issued pursuant to the exercise of any such Sensormatic
stock options following the date of such Change in Control, and/or (without
duplication) any shares or other securities issued upon conversion of or in
exchange for any such shares of Common Stock pursuant to any such
Reorganization Event ("Conversion Shares"), at a purchase price equal to
the aggregate Fair Market Value of such shares (or, in the case of any
Conversion Shares issued upon conversion of or in exchange for Common
Stock, the Fair Market Value of the shares of Common Stock which were
converted into or exchanged for such Conversion Shares); provided, that
Sensormatic may offset against the amount so payable for Common Stock or
Conversion Shares all amounts outstanding on any loans made to Executive
for the purchase of, or payment of taxes relating to, such shares of Common
Stock or Conversion Shares, as contemplated by Section 6(c) hereof or
otherwise.
Payment for any such options or shares shall be made by Sensormatic within 10
days after Executive's surrender of any such options, and/or within 10 days
after Executive's surrender of the certificates representing any such shares of
Common Stock or Conversion Shares (or, if such certificates are in Sensormatic's
possession, within 10 days after Executive's notice of exercise under this
Section 6(b)).
For purposes of this Section 6(b), the "Fair Market Value" of a share
of Sensormatic Common Stock means the highest fair market value per share of
Sensormatic Common Stock of the consideration paid in any transaction by any
Person who effects such Change in Control, in connection therewith, whether
through open market purchases, Tender Offers, Reorganization Events, private
transactions or otherwise.
(c) Upon Executive's request, Sensormatic shall lend to Executive,
interest free, up to an amount equal to the aggregate exercise price of the
options referred to in Section 6(a) hereof, should Executive elect to exercise
such options. If requested by Executive, Sensormatic shall also lend to
Executive, interest free (or, at Executive's option, provide a guaranty to
enable Executive to borrow), up to an amount equal to the percentage specified
in Section 6(d)(i) times the Share Income (as such term is defined in such
Section) resulting from such exercise and/or vesting. Such loan or loans shall
be due and payable to Sensormatic upon the earliest of (i) the fifth anniversary
date of such loan or loans, (ii) in the event that Executive's employment with
Sensormatic terminates, other than termination by Sensormatic for Cause (as
defined in Section 9 hereof, "Cause"), upon the expiration of 30 months
following such termination, or in the event that Executive's employment is
terminated by Sensormatic for Cause, upon the expiration of 30 days after such
termination, or (iii) promptly (but in any event within five (5) business days)
after receipt of the proceeds of sale from the sale of such shares, to the
extent of the loan or loans applicable to such sold shares. Executive shall
deposit such shares with Sensormatic as security for any such loan, if
Sensormatic shall so request. Notwithstanding anything to the contrary
contained in this Section 6(c), Sensormatic's Stock Purchase Loan Plan or any
promissory note or security agreement executed by Executive pursuant to such
Plan, no additional collateral shall be required by Sensormatic in connection
with any such loan to Executive, and, if necessary to be in compliance with
applicable margin regulations under federal laws, such loans shall be unsecured;
and if, because of Internal Revenue Service rules or other rules, Sensormatic is
unable to lend such funds to Executive interest free and without any imputation
of interest, Sensormatic shall pay Executive a dollar amount of additional
compensation which shall equal the amount of interest required to be charged in
order to avoid such imputation in such instances and Executive shall then pay
Sensormatic the rate of interest on such loan required by law to avoid
imputation.
(d) (i) If a Majority Acquisition shall have occurred or if, in
connection with, as a result of or within 24 months immediately following a
Change in Control, either a Reorganization
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Event shall have occurred or Sensormatic's Common Stock ceases to be listed
for trading on a national securities exchange or quoted through NASDAQ or a
comparable securities quotation system, then Executive shall have the
right, exercisable during the period and in the manner described in Section
6(d)(ii) hereof, to require Sensormatic to purchase any or all of
Executive's Option Acquired Shares and Award Shares (as defined below),
and/or any or all Conversion Shares issued with respect to any Option
Acquired Shares or Award Shares. The price at which Executive shall be
entitled to sell any Option Acquired Share to Sensormatic under this
Section 6(d)(i) shall equal the sum of (A) the option exercise price paid
(including payments made by promissory notes issued under Sensormatic's
Stock Purchase Loan Plan or otherwise) by Executive in acquiring such
share, plus (B) an amount equal to a percentage, determined as provided
below in this clause (i), of the difference between such option exercise
price and the Market Value of a share of Sensormatic Common Stock on the
date the share was acquired. The price at which Executive shall be entitled
to sell any Award Share under this Section 6(d)(i) shall be equal to the
Market Value (as defined below) of such share on the date Executive's right
to such share vested, multiplied by the percentage determined as provided
below in this clause (i). The price at which Executive shall be entitled to
sell any Conversion Shares pursuant to this Section 6(d)(i) shall be
calculated as set forth above with respect to Option Acquired Shares or
Award Shares, as applicable, based upon the purchase price, date of
purchase and Market Value of any Option Acquired Shares, and the vesting
date and Market Value of any Award Shares, which were converted into or
exchanged for any such Conversion Shares sold. The percentage referred to
in this Section 6(d)(i) shall be equal to the sum of (1) the highest
marginal net rate of income tax (federal, state and local) applicable to an
individual residing where the Executive resided at the time the Executive
reported income ("Share Income") with respect to the Option Acquired Shares
or Award Shares, as the case may be plus (2) the Medicare employee tax
rate, plus (3) a percentage equal to (x) that part, if any, of the Share
Income that was actually subject to employee Social Security tax,
multiplied by (y) the social security employee tax rate, divided by (z) the
total Share Income (in each case as applicable at the time such share was
purchased by Executive, in the case of any Option Acquired Shares, or at
the time Executive's right to such share vested, in the case of any Award
Shares). The purchase price payable by Sensormatic shall in all events be
equitably adjusted to reflect any stock dividends, stock splits,
extraordinary dividends or similar events since the date of acquisition by
Executive of any such shares.
For purposes of this Section 6(d), the term "Option Acquired Shares"
shall mean shares of Sensormatic Common Stock acquired by Executive upon
exercise of options granted to Executive, the term "Award Shares" shall
mean shares of Sensormatic Common Stock awarded to Executive pursuant to
Sensormatic's Stock Incentive Plan or any other compensation plan or
arrangement of Sensormatic, other than pursuant to the exercise of options,
and the term "Market Value" shall mean the average of the high and low
sales prices of a share of such Common Stock on the applicable date (or
most recent date on which one or more sales occurred) as reported through
NASDAQ or the principal exchange on which such Common Stock was listed for
trading.
(ii) Executive may exercise his right to sell Option Acquired
Shares, Award Shares and/or Conversion Shares under this Section 6(d) at
any time within 13 months following any of the events specified in the
first sentence of Section 6(d)(i) hereof by giving written notice of such
exercise to Sensormatic, which notice shall set forth the Option Acquired
Shares, Award Shares and/or Conversion Shares to be sold, the exercise
price paid by Executive in acquiring any such Option Acquired Shares or
Conversion Shares, the highest marginal tax rates applicable for purposes
of the respective calculations specified in Section 6(d)(i) hereof and the
Market Value of the Common Stock or Conversion Shares, as applicable, on
each date that any applicable
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Option Acquired Shares or Conversion Shares to be sold were purchased by
Executive or Executive's right to any applicable Award Shares vested, as
the case may be. The information set forth in such notice shall be presumed
to be correct.
(iii) In addition to the purchase price for the Option Acquired
Shares, Award Shares or Conversion Shares being sold to Sensormatic under
this Section 6(d), Sensormatic shall pay to Executive an amount (the "Tax
Payment") equal to a percentage (determined pursuant to the following
sentence) of the excess, if any, of (A) the product of the number of such
Option Acquired Shares, Award Shares and/or Conversion Shares being sold
multiplied by the Market Value of a share of Sensormatic Common Stock or
Conversion Shares, as applicable, on the Purchase Date, as such term is
defined in Section 6(d)(iv) hereof, or such other value of a share of
Sensormatic Common Stock or Conversion Shares as may be required to be used
to determine the amount, if any, recognizable as ordinary income arising
out of the sale of such shares to Sensormatic, over (B) the aggregate
purchase price for all such Option Acquired Shares, Award Shares and/or
Conversion Shares being sold by Executive. The percentage referred to in
the preceding sentence shall be determined in accordance with Section
6(d)(i) hereof as applicable on the Purchase Date.
(iv) Within 10 days after Executive's surrender of the certificates
representing any such Option Acquired Shares, Award Shares and/or
Conversion Shares or, if such certificates are in Sensormatic's possession,
within 10 days after Executive's notice of exercise under this Section 6(d)
(the "Purchase Date"), Sensormatic shall purchase the Option Acquired
Shares, Award Shares and/or Conversion Shares referred to in such notice by
paying to Executive (subject to offset as provided in the following
sentence) the full purchase price thereof, as calculated under Section
6(d)(i) hereof, plus the Tax Payment applicable thereto. Sensormatic may
offset against payment of any or all of such purchase price and the related
Tax Payment all or a portion of any indebtedness of Executive then
outstanding under Sensormatic's Stock Purchase Loan Plan attributable to
any Option Acquired Shares and/or Conversion Shares sold to Sensormatic
hereunder.
(v) Executive's rights under this Section 6(d) are independent of
and not limited by, and do not constitute any limitation of, Executive's
rights under Section 6(b) hereof. Executive may exercise any rights under
either Section 6(b) hereof or this Section 6(d), in whole or in part (but
without duplication), in Executive's sole discretion.
(e) (i) Subject to Section 4 hereof, if either a Majority Acquisition
occurs or, in connection with, as a result of or within 24 months following
a Change in Control, a Reorganization Event occurs, then Sensormatic shall
pay to Executive (irrespective of whether he is then employed by
Sensormatic or its successor; provided, however, that in the event that
-------- -------
Executive voluntarily terminates his employment with Sensormatic (other
than by resignation contemplated by Section 10 hereof) prior to the
occurrence of the event giving rise to the right to receive the cash bonus
payment provided for in this Section 6(e), Executive shall have no right to
receive such bonus payment), within thirty days after the effective date of
such Majority Acquisition or Reorganization Event, as the case may be, a
cash bonus payment equal to a percentage (determined pursuant to Sections
6(e)(ii) and 6(e)(iii) hereof) of Executive's Special Bonus Base (as
defined below). Executive's Special Bonus Base shall equal four times the
greater of (A) the sum of Executive's annual base salary in effect at the
end of the last full month preceding the first public announcement relating
to the proposed Majority Acquisition or Reorganization Event, as the case
may be, plus the bonus paid to Executive by Sensormatic with respect to the
most
9
recently completed fiscal year of Sensormatic prior to such month, or (B)
the sum of Executive's annual base salary and target bonus as specified in
Section 2 hereof.
(ii) The percentage of the Special Bonus Base which Executive shall
be entitled to receive under this Section 6(e) shall be calculated on the
basis of the Premium (as defined below) paid or offered to holders of
Sensormatic's Common Stock in connection with a Majority Acquisition or
Reorganization Event. Premium shall mean the percentage which results from
dividing (A) the amount by which the Event Value (as defined below) exceeds
the Pre-Event Share Price (as defined below), by (B) the Pre-Event Share
Price. The Pre-Event Share Price shall be equal to the average of the
closing sales prices (or if there is no sales price, the last bid price)
for a share of Sensormatic's Common Stock, as such prices are reported
through NASDAQ or the principal exchange on which such shares are listed
for trading, on the last business day of each week during the twenty-six
weeks immediately preceding the first to occur of (x) the first public
announcement relating to any proposed Change in Control or Reorganization
Event, or (y) any event resulting in the pendency of an Attempted Change in
Control which culminates, directly or indirectly, in the Change in Control
giving rise to Executive's rights under this Section 6(e). In the case of
any Reorganization Event or Tender Offer, or combination or series of
Reorganization Events and/or Tender Offers, "Event Value" shall mean the
fair market value of the consideration paid per share of Sensormatic Common
Stock pursuant to such Reorganization Event or Tender Offer determined as
of the effective date of the Reorganization Event or of the consummation of
the Tender Offer, as the case may be, provided that in the event that
different prices are paid per share of Sensormatic Common Stock pursuant to
such Reorganization Event, Tender Offer or any combination or series
thereof, the Event Value shall be equal to the fair market value of the
aggregate consideration paid pursuant to all such Tender Offers and/or
Reorganization Events (determined as of the dates set forth above) divided
by the number of shares of Sensormatic Common Stock purchased pursuant to
all such Tender Offers and/or Reorganization Events. In case of any other
transaction or series of transactions giving rise to the right of Executive
to receive the bonus provided for in this Section 6(e), "Event Value" shall
mean the highest fair market value of the consideration paid per share of
Sensormatic Common Stock pursuant to any such transaction, determined as of
the date of payment thereunder. The determination of Event Value shall be
conclusively made by an investment banking firm selected by the Previous
Members of the Board of Directors who are not entitled to receive bonuses
under this Section 6(e) or analogous provisions of other agreements;
provided, that in the event that the Previous Members of the Board of
--------
Directors fail to make such selection within 45 days after consummation of
the transaction giving rise to the right to rights under this Section 6(e),
or the selected investment banking firm fails to make such a determination
within an additional 90 days, Event Value shall be determined by
arbitration under Section 17. Sensormatic shall pay all fees and expenses
of any such investment banker.
(iii) The percentage of the Special Bonus Base which Executive
shall be entitled to receive as a bonus under this Section 6(e) shall be
20% if the Premium is at least 20% and shall increase by 3.2% for each one
percent (and by a fraction of 3.2% for each fraction of one percent) by
which the Premium exceeds 20%. For example, if the Premium were 30%,
Executive would be entitled to a bonus of 52% of the Special Bonus Base; if
the Premium were 40.5%, Executive would be entitled to a bonus of 85.6% of
the Special Bonus Base; and if the Premium were 50%, Executive would be
entitled to a bonus of 116% of the Special Bonus Base. The maximum bonus
which Executive shall be entitled to receive is 167% of the Special Bonus
Base. No bonus shall be payable pursuant to this Section 6(e) if the
Premium is less than 20%.
7. Benefits on Termination.
-----------------------
10
(a) Termination at Any Time after Change in Control. In the event of
--------------------------------------- -------
any termination, other than termination by Sensormatic for Cause, of Executive's
employment with Sensormatic at any time following a Change in Control, Executive
shall be entitled to the following benefits:
(i) Subject to Section 4 hereof, Sensormatic shall, as soon as
practicable, pay to Executive a lump sum payment equal to the amount of any
then unvested interest which Executive may have had on the date of such
Change in Control (less any amount of such interest subsequently vested),
and as supplemented thereafter through the date of such termination, in
Sensormatic's profit sharing, ESOP or other retirement plans (other than
the Senior Executive Plan); and
(ii) Unless a trust or other arrangement previously determined in
writing to be satisfactory by a majority of the Previous Members of the
Board of Directors (as defined below) then in office assuring payment of
benefits to or for the benefit of Executive under Sensormatic's Senior
Executive Plan in the event of a Change in Control has been previously
established and is then in effect, Sensormatic shall take such steps as are
necessary, within 30 days after such termination, to fully fund all of
Executive's benefits under such Plan (after giving effect to the change in
control provisions of such Plan) through paid-up insurance, annuity
contracts and/or other similar means, so that the ultimate payment of
benefits (at a rate not less than the greater of the rates in effect under
such Plan at the date of such termination or immediately after such Change
in Control) upon Executive's attaining retirement age under such Plan or
upon his earlier death or disability (as defined in such Plan) (despite
Executive's no longer being employed by Sensormatic) shall be assured
beyond any reasonable doubt; provided, however, that either such manner of
-------- -------
funding shall be structured so as not to constitute "constructive receipt"
by Executive of the benefits in question for income tax purposes, or the
benefits in question shall be paid out in a lump sum, discounted to present
value in the manner provided in Section 8(a). In addition, following any
such termination which is involuntary, any noncompetition provisions
included in such Plan shall have no force or effect.
(b) Involuntary Termination Within 36 Months After Change in Control.
---------------------------------------------- -----------------
In the event of the involuntary termination (other than for Cause) of
Executive's employment with Sensormatic within the 36-month period immediately
following a Change in Control:
(i) Executive shall be entitled to receive, for each of the 36
months immediately following the effective date of such termination and
irrespective of whether Executive commences new employment within such
period, the greatest of (A) 1/12 of the amount of Executive's most recent
rate of annual base salary, plus 1/12 of Executive=s most recent annual
bonus, (B) 1/12 of Executive's annual base salary and target bonus in
effect immediately prior to the date of such Change in Control or (C) 1/12
of Executive's annual base salary and target bonus as specified in Section
2 hereof;
(ii) During that portion of the period set forth in Section 7(b)(i)
hereof during which Executive has not commenced new regular, full time
employment,
(x) Sensormatic shall continue to provide to Executive the
fringe benefits enumerated in Sections 3(a), (b), (c), (e) and (f)
hereof on at least the same basis as in effect immediately prior to
the Change in Control, and shall, if requested by Executive, provide
Executive with office space appropriate for his level and in close
11
proximity to the office he occupied at the time of the Change in
Control, secretarial help and local and long distance telephone
service; and
(y) Sensormatic shall provide Executive with appropriate
out-placement services, including counseling and traveling expenses to
such outplacement services, when necessary, as well as to potential
job interviews when not paid by the potential employer, all without
charge to Executive;
(iii) Within 30 days after such termination, Sensormatic shall
pay to Executive an amount equal to his pro rata annual bonus for the year
--- ----
in which termination occurs, based on the target bonus for such year; and
(iv) On the date of such termination, ownership of the car which
Sensormatic was providing to Executive shall immediately be transferred to
Executive free and clear of any liens or other obligations, if such car is
then owned by Sensormatic. If such car is then leased, rather than owned,
by Sensormatic, Executive shall continue to have the use of such car and
Sensormatic shall continue to pay all lease payments and insurance premiums
with respect thereto until the end of the then existing term, at which time
Sensormatic shall purchase such car and shall transfer title to such car to
Executive.
(c) Voluntary Termination Within 24 Months After Change in Control.
-------------------------------------------- -----------------
Subject to Section 4 hereof, in the event of Executive's voluntary termination
of employment with Sensormatic (other than by resignation contemplated in
Section 10 hereof) within the 24-month period immediately following a Change in
Control:
(i) Executive shall be entitled to receive, for each of the 24
months immediately following the effective date of such termination and
irrespective of whether Executive commences new employment within such
period, the greatest of (A) 1/12 of the amount of Executive's most recent
rate of annual base salary, plus 1/12 of Executive's most recent annual
bonus, (B) 1/12 of Executive's annual base salary and target bonus in
effect immediately prior to the date of such Change in Control or (C) 1/12
of Executive's annual base salary and target bonus as specified in Section
2 hereof; and
(ii) During that portion of the period set forth in Section 7(c)(i)
hereof during which Executive has not commenced new regular, full time
employment, Executive shall be entitled to the benefits set forth in
Section 7(b)(ii) hereof; and
(iii) Within 30 days after such termination, Sensormatic shall pay
to Executive an amount equal to his pro rata annual bonus for the year in
--- ----
which termination occurs, based on the target bonus for such year; and
(iv) Executive shall be entitled to the benefits set forth in
Section 7(b)(iv) hereof.
(d) Consulting Services. For a period of one year following
-------------------
Executive's voluntary termination (other than by resignation contemplated in
Section 10 hereof or in Section 4(c) of the Employment Agreement (or the
corresponding provision of any successor agreement)), following an "approved"
Change in Control, of his employment with Sensormatic in which Executive
receives payments under Section 7(c)(i) hereof, or, if shorter, the period
beginning on the date of such termination and ending six months after the
appointment of a new chief executive officer (other than an interim or acting
chief executive officer) (the "Payment Period"), Executive agrees to make
himself available at the
12
executive offices of Sensormatic in Palm Beach County or Broward County, Florida
to advise and consult with Sensormatic with respect to matters specified by the
chief executive officer or Board of Directors of Sensormatic and appropriate for
a former chief executive officer or chief operating officer. Executive shall
perform such services at such times as are (i) reasonably requested by the chief
executive officer or Board of Directors of Sensormatic, (ii) reasonably
acceptable to Executive and (iii) consistent with Executive's duties and
obligations in the course of his then occupation or employment, if any.
Executive shall use reasonable efforts to comply with such requests to perform
up to 250 hours of such services during the Payment Period.
(e) In the event of any termination of Executive's employment to which
this Section 7 is applicable, Executive shall be under no obligation to seek
other employment and there shall be no offset against amounts due Executive
under this Agreement on account of any remuneration attributable to any
subsequent employment that he may obtain, except as expressly set forth in this
Section 7.
8. Benefits on Death or Disability.
-------------------------------
(a) In the event of Executive's death at any time within 36 months
after a Change in Control and prior to any termination of Executive's
employment, or in the event that Executive had died prior to a Change in Control
and that as of the date of such Change in Control there remain outstanding
amounts payable under Sensormatic's Senior Executive Plan for Executive, unless
in either case a trust or other arrangement previously determined in writing to
be satisfactory by a majority of the Previous Members of the Board of Directors
then in office assuring payment of benefits to or for the benefit of the
Executive under such Plan in the event of a Change in Control has been
previously established and is then in effect, Sensormatic shall promptly pay to
Executive's designated beneficiary or Executive's heirs, executors,
administrators or personal representatives (collectively, "Successors") all of
the remaining benefits under such Plan to which Executive's Successors are then
entitled, in the form of a lump sum payment equal to the amount of such benefits
discounted to present value using an interest rate equal to the rate published
by Pension Benefit Guaranty Corporation for the purpose of discounting pension
benefits to present value in the event of a lump sum prepayment thereof, as then
in effect, but such discount rate shall in no event be greater than ten percent
(10%) per annum.
--- -----
(b) In the event of Executive's death or permanent and total
disability (within the meaning of Section 22(e)(3) of the Internal Revenue Code
of 1986, as amended and in effect and interpreted as of the date of this
Agreement) at any time within the 24-month period immediately following a Change
in Control and prior to any termination of Executive's employment, Executive or
Executive's Successors shall be entitled to all of the benefits of Executive
provided under this Agreement as if Executive had voluntarily terminated his
employment with Sensormatic (but without giving effect to Section 4 hereof or to
the loss of benefits upon voluntary termination under Section 6(e)(i) hereof),
including, without limitation, those set forth in Section 6(c) hereof.
(c) In the event of Executive's death or disability after termination
of Executive's employment with Sensormatic, Executive or Executive's Successors
shall be entitled to receive all remaining benefits to which Executive is
entitled under this Agreement.
9 Termination for Cause. In the event that Executive's employment
---------------------
with Sensormatic is terminated for Cause at any time after any Change in
Control, Executive shall not be entitled to any of the benefits set forth in
Sections 6, 7 or 8 of this Agreement not yet received by him, except to the
extent that Executive exercised rights prior to such termination with respect to
options, Award Shares or Conversion Shares as provided under Sections 6(a), 6(b)
and 6(d) hereof. The foregoing shall not affect any rights of Executive accrued
other than by virtue of this Agreement. For
13
purposes of this Agreement, Sensormatic shall be deemed to have terminated
Executive's employment with Sensormatic for Cause only if such termination is
effected for any of the following reasons:
(a) willful misconduct by Executive in the performance of Executive's
duties resulting in material economic harm to Sensormatic; or
(b) the conviction of Executive for a felony involving moral turpitude
under federal or state law;
provided, however, that the determination of the existence of the grounds
-------- -------
referred to in subparagraph (a) of this Section 9 shall be made, in good faith,
only by a majority of the Previous Members of the Board of Directors who are
then in office with Sensormatic or a corporate successor of Sensormatic,
provided that such majority shall consist of not less than two persons; and
provided, further, that Executive shall be given prior written notice by the
-------- -------
Board of Directors of the intention to terminate him for Cause and the specific
grounds for such termination, as determined in accordance with this Section 9,
and shall be entitled to a hearing before such Previous Members of the Board of
Directors before such termination becomes effective.
10 Involuntary Termination Events. By way of illustration, and not
------------------------------
of limitation, each of the following events shall constitute involuntary
termination of Executive's employment with Sensormatic, provided that Executive
--------
resigns from such employment within six months following such event, but in no
case later than 36 months immediately following a Change in Control, and
provided, further, that Executive shall not have consented to such event in
-------- -------
writing:
(a) Executive is assigned any duties or responsibilities that are
materially inconsistent with Executive's position, office, duties,
responsibilities or status immediately prior to the date of such Change in
Control, or which materially impair Executive's ability to function as President
or Chief Executive Officer of Sensormatic, or a material change is made in
Executive's reporting responsibilities, titles or offices from those in effect
immediately prior to such Change in Control, or Executive is removed from, or is
not re-elected to, any such position or office, or as a director of Sensormatic,
following such Change in Control, unless in connection with the termination of
Executive's employment with Sensormatic for Cause or by reason of his death or
disability;
(b)(i) Executive's annual rate of salary or target bonus is reduced
below the greater of the amounts (x) paid therefor immediately preceding the
date of such Change in Control or (y) expressly set forth in Section 2 hereof,
(ii) the formula for the calculation of Executive's bonus is changed in a manner
that could reasonably be anticipated to decrease the amount payable thereunder
or (iii) any other change is made with respect to Executive's salary or bonus
that would violate Section 2;
(c) a material reduction is made in the benefits set forth in
paragraphs (a) through (i) of Section 3 hereof or to any additional benefits or
perquisites which may have been granted to Executive subsequent to the date of
this Agreement (other than changes made in benefit plans required by law or
applicable regulations thereunder), as they may be in effect immediately prior
to the date of such Change in Control, or if any increase is made in the cost to
Executive for such benefits; or
(d) Executive is transferred or required to transfer to a location
outside of a 25-mile radius of Sensormatic's then-current headquarters in Palm
Beach County or Broward County, Florida, or the principal place of business of
Sensormatic in which Executive's major duties have been carried out is
transferred to a location outside of a 25-mile radius of Sensormatic's then-
current headquarters in Palm Beach County or Broward County, Florida.
14
(e) Sensormatic fails to obtain the assumption in writing of its
obligation to perform this Agreement by any successor to all or substantially
all of the assets and/or business of Sensormatic within 15 days after a
Reorganization Event or any other transaction occurring in connection with, as a
result of or within 24 months following a Change in Control pursuant to which
Sensormatic is not the surviving corporation.
11 Payments. All monthly payments that Executive (or his
--------
Successors) is entitled to receive under Sections 6 or 7 of this Agreement shall
be paid by or on behalf of Sensormatic on or before the 10th day of each month
in which payable, except that any payments required to be made under the plans
referred to in Section 7(a) hereof shall be made in accordance with the terms of
such plans. Any lump sum payable to Executive under Sections 6, 7, 8(a) or 12
of this Agreement shall be paid by or on behalf of Sensormatic within 10 days
after Executive's right to such payment accrues, except as otherwise expressly
set forth any provision of such Sections.
12 Excise Taxes. In the event that the aggregate of all payments or
------------
benefits made or provided to Executive in connection with a Change in Control
under this Agreement and under all other plans and programs of Sensormatic (the
"Aggregate Payment") is determined to constitute a Parachute Payment, as such
term is defined in Section 280G(b)(2) of the Internal Revenue Code, as amended,
or any successor provision, Sensormatic shall pay to Executive, prior to the
time any excise tax imposed by Section 4999 of the Internal Revenue Code, as
amended, or any successor provision ("Excise Tax"), is payable with respect to
such Aggregate Payment, an additional amount which, after the imposition of all
income and excise taxes thereon, is equal to the Excise Tax on the Aggregate
Payment. The determination of whether the Aggregate Payment constitutes a
Parachute Payment and, if so, the amount to be paid to Executive and the time of
payment pursuant to this Section 12 shall be made by an independent auditor (the
"Auditor") jointly selected by Sensormatic and Executive and paid by
Sensormatic. The Auditor shall be a nationally recognized United States public
accounting firm which has not, during the two years preceding the date of its
selection, acted in any way on behalf of Sensormatic or any affiliate thereof.
If Executive and Sensormatic cannot agree on the firm to serve as the Auditor,
then Executive and Sensormatic shall each select one nationally recognized
United States accounting firm and those two firms shall jointly select the
accounting firm to serve as the Auditor. Notwithstanding the foregoing, in the
event that the amount of Executive's Excise Tax liability is subsequently
determined to be greater than the Excise Tax liability with respect to which an
initial payment to Executive under this Section 12 has been made, Sensormatic
shall pay to Executive an additional amount with respect to such additional
Excise Tax (and any interest and penalties thereon) at the time that the amount
of the actual Excise Tax liability is finally determined, such additional amount
to be calculated in the same manner as such initial payment. Executive and
Sensormatic shall cooperate with each other in connection with any action,
arbitration, suit, investigation or proceeding (collectively, "Proceeding")
relating to the existence or amount of liability for Excise Tax, and all
expenses relating to any such Proceeding (including all reasonable attorney's
fees and other expenses incurred by Executive in connection therewith) shall be
paid by Sensormatic promptly upon notice of demand from Executive.
13 Costs of Collection. Sensormatic agrees upon demand to pay all
-------------------
costs and expenses of Executive (including, without limitation, reasonable
counsel fees and expenses) in connection with the enforcement, whether through
negotiations, arbitration or legal proceedings or otherwise, of this Agreement
and the collection of any benefits due to Executive hereunder.
14 No Effect on Employment. This Agreement is not, and nothing
-----------------------
hereby shall be deemed to create, a contract of employment between Sensormatic
and Executive. The right of Sensormatic to terminate Executive's employment
with Sensormatic or any subsidiary thereof, at any
15
time at will or as otherwise provided in the Employment Agreement or any other
agreement between Sensormatic and Executive, shall not be affected or limited by
this Agreement and is specifically reserved. Further, this Agreement shall not
be deemed to require Sensormatic to continue, or to continue unmodified, any
benefit plan or policy, whether or not referred to in Section 3 hereof, provided
that no Change in Control shall have occurred and no Attempted Change in Control
shall have occurred and then be pending.
15 Conflicts with Other Agreements. Nothing contained in or arising
-------------------------------
out of this Agreement shall be deemed to discharge, release or modify the
obligations of Sensormatic to Executive under the provisions of the Employment
Agreement or any other agreement between them or of any plan or program of
Sensormatic, regardless of whether the subject matter of any provision thereof
is the same or similar to that of any provision of this Agreement, the rights
and remedies of Executive under this Agreement and any other such agreement,
plan or program being cumulative and not in substitution of each other;
provided, however, that nothing in this Agreement shall entitle Executive to
receive duplicative payments of salary, bonus or other benefits. Further,
nothing in this Agreement shall diminish or otherwise adversely affect
Executive's rights or benefits accruing as a consequence of his death or
disability, at any time after a Change in Control, under the terms and
conditions of the plans or programs of Sensormatic in which Executive is a
participant immediately prior to any Change in Control and any additional plan
or program of Sensormatic in which Executive is a participant at the time of
Executive's death or disability.
16 Maintenance of Plans. Sensormatic agrees that, for not less than
--------------------
36 months after a Change in Control (whether "approved" or "non-approved"), it
shall maintain in effect the plans and programs in which Executive is a
participant immediately prior to such Change in Control (or comparable plans and
programs) to the extent necessary to assure that the rights and benefits of
Executive thereunder shall be no less favorable after such Change in Control
than immediately prior thereto, provided, that Sensormatic shall in no event
make any change in the event of or at any time after a Change in Control in the
Senior Executive Plan resulting in a reduction of Executive's benefits
thereunder.
17 Arbitration. Any controversy or claim arising out of or relating
-----------
to this Agreement shall be settled by arbitration before the American
Arbitration Association in Miami, Florida, in accordance with the Commercial
Arbitration Rules of the American Arbitration Association. Judgment upon the
award rendered by the arbitrators may be entered in any court having
jurisdiction thereof. Any costs, including, without limitation, attorneys' fees
and disbursements, incurred by Executive in such arbitration or in connection
with any appeal therefrom or any action brought to enforce or collect any such
award or judgment thereon, shall be reimbursed by Sensormatic, provided, that
Sensormatic shall not be required to reimburse Executive hereunder in the event
that the arbitral panel or appeals court finds that Executive's claims and/or
defenses are substantially without reasonable basis.
18 Survival. This Agreement shall be binding on, enforceable
--------
against and inure to the benefit of Executive and his heirs, executors,
administrators, personal representatives, successors and assigns and Sensormatic
and its successors and assigns, including, without limitation, any corporation
with or into which Sensormatic is merged or consolidated, or any entity which
acquires all or substantially all of the business and assets of Sensormatic, in
connection with any Change in Control. In connection with any sale, merger or
consolidation described in the preceding sentence, Sensormatic shall take all
actions permissible under applicable law in order to cause such other
corporation to expressly assume Sensormatic's liabilities, obligations and
duties hereunder.
16
19 Notices. Any notice given to a party pursuant to or in
-------
connection with this Agreement shall be in writing and shall be deemed to have
been given when delivered personally or sent by Federal Express or a similar
overnight courier service or by certified or registered mail, postage prepaid,
return receipt requested, duly addressed to the party concerned at the address
indicated at the beginning of this Agreement or to such changed address as such
party may subsequently give such notice of.
20 Severability. If any provision of this Agreement is found to be
------------
invalid or unenforceable by a court of competent jurisdiction or an arbitral
panel under Section 17 hereof, this Agreement shall be interpreted and
enforceable as if such provision were severed or limited, but only to the extent
necessary to render such provision and this Agreement enforceable.
21 Governing Law. This Agreement shall in all respects be governed
-------------
by and construed in accordance with the laws of the State of Florida applicable
to agreements made and fully to be performed in such state, without giving
effect to conflicts of law principles.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first set forth above.
SENSORMATIC ELECTRONICS CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------------
Xxxxxxx X. Xxxxxx
Senior Vice President and Chief Financial
Officer
/s/ Per-Xxxx Xxxx
--------------------------------------------------
Per-Xxxx Xxxx
17
Exhibit (e)(4)(xv)
------------------
AMENDMENT TO AGREEMENT
This is an Amendment dated July 31, 2001 (the "Amendment") to the
Agreement dated as of August 23, 1999 (the "Change in Control Agreement")
between Sensormatic Electronics Corporation, a Delaware corporation
("Sensormatic") and Per-Xxxx Xxxx ("Executive").
Background
----------
The Executive is currently employed by Sensormatic pursuant to the
terms of an Employment Agreement between Sensormatic and Executive dated as of
August 23, 1999 (the "Employment Agreement"). Concurrently with the execution
of the Employment Agreement, the parties hereto entered into the Change in
Control Agreement.
Executive is a participant in Sensormatic's Supplemental Executive
Retirement Plan For Vice President Level Employees and Officers Effective July
15, 1998, as Amended and Restated as of December 1, 1998 (the "SERP") as further
amended through the date hereof, including pursuant to Section 3(f) of the
Employment Agreement. The parties desire to amend the Change in Control
Agreement to clarify certain matters with respect to Executive's participation
in, and vesting schedule with respect to, the SERP including without limitation,
following a Change in Control.
In consideration of the foregoing, the mutual covenants and agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Change in Control Agreement is
hereby amended as follows:
Terms
-----
1. The foregoing recitals are true and correct and incorporated
herein by reference. Any capitalized terms used but not defined herein shall
have the same meaning ascribed to them in the Change in Control Agreement.
2. The parenthetical phrase beginning with the word "and" in the
eighth (8th) line of the introductory paragraph of Section 3 of the Change in
Control Agreement and ending with the word "thereunder" in the twelfth (12th)
line of the introductory paragraph of Section 3 of the Change in Control
Agreement is hereby amended and restated to read in its entirety as follows:
"(and, in addition, there shall not, at any time following a Change in
Control, be any change in Sensormatic's Supplemental Executive
Retirement Plan For Vice President Level Employees and Officers
Effective July 15, 1998, as Amended and Restated as of December 1,
1998 or any similar or successor plan (the "SERP," which shall
include, for all purposes of this Agreement, any Supplemental
Executive Retirement Plan Agreement between Sensormatic and Executive
under the SERP) resulting in a reduction of Executive's benefits
thereunder)"
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3. All references in the Change in Control Agreement to the term
"Senior Executive Plan" and the term "Plan" as used in relation thereto shall be
deemed to be references to the SERP.
4. The introductory clause of Section 7(a) of the Change in Control
Agreement is hereby amended and restated in its entirety to read as follows:
"Termination at Any Time After Change in Control. In the event of any
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termination (including without limitation, any involuntary termination
pursuant to the events set forth in Section 10 hereof or otherwise),
other than termination by Sensormatic for Cause, of Executive's
employment with Sensormatic at any time following a Change in Control,
Executive shall be entitled to the following benefits:"
5. The introductory clause of Section 7(b) of the Change in Control
Agreement is hereby amended and restated in its entirety to read as follows:
"Involuntary Termination Within 36 Months After Change in Control. In
----------------------------------------------------------------
the event of the involuntary termination (including without
limitation, any involuntary termination pursuant to the events set
forth in Section 10 hereof or otherwise), other than termination by
Sensormatic for Cause, of Executive's employment with Sensormatic
within the 36-month period immediately following a Change in Control:"
6. Subsection 7(b)(ii)(x) of the Change in Control Agreement is
hereby amended and restated in its entirety to read as follows:
"Sensormatic shall continue to provide to Executive the fringe
benefits enumerated in Sections 3(a), (b), (c), (e) and (f) hereof on
at least the same basis as in effect immediately prior to the Change
in Control, Executive's benefits under the SERP shall continue to vest
in accordance with Section 3(f) of the Employment Agreement, and
Sensormatic shall, if requested by Executive, provide Executive with
office space appropriate for his level and in close proximity to the
office occupied at the time of the Change in Control, secretarial help
and local and long distance telephone service; and"
7. Section 15 of the Change in Control Agreement is hereby amended
and restated in its entirety to read as follows:
"Conflicts with Other Agreements. Nothing contained in or arising out
-------------------------------
of this Agreement shall be deemed to discharge, release or modify the
obligations of Sensormatic to Executive under the provisions of the
Employment Agreement (including without limitation Sections 3(j) and
4(b)(v) thereof) or of any other agreement between them or of any plan
or program of Sensormatic, regardless of whether the subject matter of
any provision thereof is the same or similar to that of any provision
of this Agreement, the rights and remedies of Executive under this
Agreement and any other such agreement, plan or program being
cumulative
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and not in substitution of each other; provided, however, that nothing
in this Agreement shall entitle Executive to receive duplicative
payments of salary, bonus or other benefits. Further, nothing in this
Agreement shall diminish or otherwise adversely affect Executive's
rights or benefits accruing as a consequence of his death or
disability, at any time after a Change in Control, under the terms and
conditions of the plans or programs of Sensormatic in which Executive
is a participant immediately prior to any Change in Control and any
additional plan or program of Sensormatic in which Executive is a
participant at the time of Executive's death or disability.
8. The provisions of Section 3(f) of the Employment Agreement and
their effect on Executive's rights under the SERP are hereby clarified as
follows: Executive's right to the benefits to be paid under the SERP shall be
based on 50% of the average of Executive's last three years' cash compensation
referred to in such Section 3(f), and shall vest in accordance with such
Section, without any reduction in benefit levels based on less than ten years of
service, notwithstanding any contrary provision of the SERP.
9. Except as specifically set forth above, the Change in Control
Agreement shall remain in full force and effect.
10. This Amendment may be executed in any number of counterparts,
each of which shall be deemed to be an original, and all of which together shall
constitute one document.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first written above.
SENSORMATIC ELECTRONICS
CORPORATION
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
/s/ Per-Xxxx Xxxx
-----------------------------------
Per-Xxxx Xxxx
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