EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the
“Agreement”),
entered into as of February 9, 2010 (the “Effective Date”),
between COMMAND SECURITY
CORPORATION, a New York corporation (the “Company”), and XXXXX X. XXXXXXXXXX (the
“Executive”). The
Company and the Executive are sometimes referred to in this Agreement
individually as a “Party” and
collectively as the “Parties.”
RECITAL
The
Company desires to provide for the continued service and employment of the
Executive with the Company and the Executive wishes to perform services for the
Company, all in accordance with the terms and conditions provided
herein. All references herein to Sections shall be deemed to refer to
the Sections of this Agreement, unless otherwise specified.
Accordingly,
in consideration of the premises and the respective covenants and agreements of
the Parties herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound hereby, the Parties agree as follows:
1.
Employment. The Company
hereby agrees to employ the Executive, and the Executive hereby agrees to serve
the Company, on the terms and conditions set forth herein.
2.
Term.
The term of employment of the Executive by the Company hereunder (the “Term”) will commence
as of the Effective Date and will end on the third anniversary of the Effective
Date, unless further extended or sooner terminated as hereinafter
provided. Commencing on the third anniversary of the Effective Date,
and on the first day of each one-year anniversary thereafter, the Term shall
automatically be extended for one additional year unless either Party shall have
given notice to the other Party (a “Non-Renewal Notice”)
that it does not wish to extend the Term at least 90 days prior to such
anniversary. References herein to the Term shall refer to both the
initial term and any extended term hereunder. Notwithstanding the
foregoing, the Term shall end on the Date of Termination (as defined in Section
6(c)). If, pursuant to this Section 2, the
Company provides the 90-day advance notice of its intent not to extend the Term,
the expiration of the Term and the termination of this Agreement as a result
thereof shall be deemed a “Termination Other Than for Cause, Disability or Death
or for Good Reason” pursuant to Section 6(e) herein;
provided that
for the purpose of Section 9, the
failure of the Term to be automatically extended resulting from the delivery by
the Company to the Executive of a Non-Renewal Notice shall be treated in
accordance with
Section 9(a)(iii), and the Executive shall be subject to the restrictions
and covenants set forth in paragraphs (x), (y) and (z) of Section
9.
3.
Nature of
Performance.
(a) Position and
Duties. During the Term, the Executive shall serve as
President and Chief Financial Officer of the Company and shall have such
responsibilities, duties and authority as are customary to such position
including, without limitation, overall responsibility for the corporate strategy
of the Company. The Executive shall report directly to, and be
subject to the direction and authority of, the Chief Executive Officer of the
Company (the “CEO”). The
Executive shall devote all of his working time and efforts to the business and
affairs of the Company and shall not engage in activities that interfere with
such performance; provided that this
Agreement shall not be interpreted to prohibit the Executive from managing his
personal investments and affairs, engaging in charitable activities or serving
on the board of directors of any other corporation so long as such activities do
not interfere with the performance of his duties hereunder, subject to
compliance with the Company Policies referred to in Section
7.
(b) Indemnification. To
the fullest extent permitted by law and the Company's Certificate of
Incorporation and By-laws, and by the New York Business Corporation Law, the
Company shall promptly indemnify the Executive for all amounts (including,
without limitation, judgments, fines, settlement payments, losses, damages,
costs and expenses (including reasonable attorneys' fees)) incurred or paid by
the Executive in connection with any action, proceeding, suit or investigation
(a “Proceeding”) arising
out of or relating to the performance by the Executive of services for, or
acting as a fiduciary of any employee benefit plans, programs or arrangements of
the Company or as a director, officer or employee of, the Company or any
subsidiary thereof. The Company shall advance to the Executive all
reasonable costs and expenses incurred by him in connection with a Proceeding
within 15 days after receipt by the Company of a written request from the
Executive for such advance. The Company also agrees to maintain a
directors’ and officers' liability insurance policy covering the Executive to
the maximum extent the Company provides such coverage for any of its other
executive officers. Following the Term, the Company shall continue to
indemnify and maintain such insurance for the benefit of the Executive with
respect to such services performed during the Term, to the same extent as the
Company indemnifies or maintains such insurance for any of its officers,
directors, employees or fiduciaries, as applicable.
4.
Place
of Performance. In
connection with the Executive's employment by the Company, the Executive shall
be based at the current principal executive offices of the Company or at any
other location as designated by the Board of Directors of the Company (the
“Board”) that
is within 45 miles of the Borough of Manhattan, in New York, New York, except
for travel as reasonably required in connection with the performance of the
Executive’s duties hereunder.
5.
Compensation and
Related Matters.
(a) Annual
Compensation.
(i) Base
Salary. For services rendered by the Executive to the Company
pursuant to this Agreement, the Company shall pay to the Executive an annual
base salary at an annual rate of $275,000, such salary to be paid in conformity
with the Company's policies relating to salaried employees. The Base Salary may
from time to time be increased as determined by the Compensation Committee (the
“Committee”) of
the Board and, once increased, the Base Salary shall not be reduced or
diminished. The annual base salary as in effect from time to time
hereunder is hereinafter referred to as the “Base
Salary”.
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(ii) Annual
Bonus. The Executive shall be eligible to participate in any
annual incentive plan of the Company in effect from time to time, and shall be
entitled to receive such amounts (each, a “Bonus”) as may be
authorized, declared and paid by the Company pursuant to the terms of such plan
or, in the absence of such a plan, such Bonus shall be as determined by the
Committee.
(b) Participation in Stock
Option Plans, Long-Term Incentive Plan and Similar Plans. The
Executive shall be eligible to receive grants under the Company’s stock option
plans, long-term incentive plan and similar plans in effect from time to time
for the benefit of the Company’s executives generally, as determined from time
to time by the Committee.
(c) Company Defined Benefit
Plans. During the Term, the Executive shall be entitled to
participate in all “defined benefit plans” (as defined in Section 3(35) of the
Employee Retirement Income Security Act of 1974, as amended) or plans, including
excess benefit or supplemental retirement plans or agreements, maintained by the
Company, as now or hereinafter in effect, that are applicable to the Company's
employees generally or to any of its executive officers, subject to and on a
basis consistent with the terms, conditions and overall administration of such
plans, programs and arrangements.
(d) Other
Benefits. During the Term, the Executive shall be entitled to
participate in all other employee benefit plans, programs and arrangements of
the Company, as now or hereinafter in effect, that are applicable to the
Company's employees generally or to any of its executive officers, as the case
may be, subject to and on a basis consistent with the terms, conditions and
overall administration of such plans, programs and arrangements, and subject to
Section 5(c).
During the Term, the Company shall provide to the Executive all of the fringe
benefits and perquisites that are available to the Company's employees generally
or to any of its executive officers, as the case may be, subject to and on a
basis consistent with the terms, conditions and overall administration of such
benefits and perquisites; provided that the
Executive shall be entitled to (i) an automobile
allowance of $2,500 per month (inclusive of insurance costs and other expenses,
which shall be borne by the Executive and not the Company) and (ii) reimbursement of
all gas and toll charges relating to his commute between his residence and any
of the Company’s offices or to the Company’s customers and for business
travel..
(e) Vacations and Other
Leaves. During the Term, the Executive shall be entitled to
paid vacation of five weeks annually and other paid absence for holidays in
which banks in New York are closed, in accordance with policies applicable
generally to executive officers of the Company; provided that the
Executive shall use his best efforts to ensure that the timing and duration of
vacations do not materially interfere with the normal functioning of the
Company’s business activities or the performance of the Executive’s duties
hereunder. The Executive shall be entitled to cash compensation
(based on his prevailing Base Salary) for up to two weeks of any vacation time
unused by Executive in each calendar year within the Term.
(f) Expenses. During
the Term, the Executive shall be entitled to receive prompt reimbursement for
all reasonable expenses incurred by the Executive in performing services
hereunder, including all expenses of travel and accommodations while away from
home on business or at the request of and in the service of the Company; provided that such
expenses are incurred and accounted for in accordance with the Company
Policies.
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(g) Other
Services. The Company shall furnish the Executive with office
space, secretarial assistance and such other facilities and services as shall be
suitable to the Executive's position and adequate for the performance of his
duties hereunder.
6.
Termination.
(a)
The Executive's employment hereunder may be
terminated without breach of this Agreement only under the following
circumstances:
(i) Death. The
Executive's employment hereunder shall terminate upon his death.
(ii) Cause. The
Company may terminate the Executive's employment hereunder for “Cause.” For
purposes of this Agreement, “Cause” shall mean the
Executive’s:
(A) failure
to timely cure any material violation of any of the terms and conditions of this
Agreement or any written agreements the Executive may from time to time have
with the Company following written notice thereof (as specified
below);
(B) failure
to timely cure any material failure to perform his assigned duties and
responsibilities for any reason other than as a result of his Disability (as
defined in Section
6(a)(iii)) following written notice thereof (as specified
below);
(C) conviction
of or plea of guilty or no contest to a (1) criminal
misdemeanor that either (x) involves
dishonesty or theft or (y) results in the
Executive receiving a sentence of imprisonment or confinement of six months or
more or (2)
felony;
(D) conviction
of or plea of guilty or no contest to a crime involving moral turpitude;
or
(E) failure
to timely cure any unsatisfactory performance of his duties or responsibilities
hereunder as a consequence of alcohol or drug abuse by the Executive following
written notice thereof (as specified below).
A
termination for Cause pursuant to clauses (A), (B), or (E) of this Section 6(a)(ii)
shall not take effect unless the following provisions of this paragraph are
complied with. The Executive shall be given written notice by the
Board of its intention to terminate him for Cause. Such notice shall
(1) state in
detail the particular act or acts or failure or failures to act that constitute
the grounds on which the proposed termination for Cause is based and (2) be given within
three months of the Board learning of such act or acts or failure or failures to
act. The Executive shall have 30 days after the date that such
written notice has been received by the Executive to cure such
conduct. Upon receipt of such written notice, the Executive shall be
entitled to a hearing before the Board. Such hearing shall be held
within 15 days of such notice to the Executive, provided he requests such
hearing within ten days of the written notice from the Board of the intention to
terminate him for Cause. If, within five days following such hearing,
the Board provides the Executive with written notice confirming that, in its
judgment, grounds exist for termination for Cause on the basis of the original
notice, the employment of the Executive shall terminate for
Cause.
–4–
(iii) Disability. The
Company may terminate the Executive's employment hereunder for
“Disability.” For purposes of this Agreement, “Disability” shall
mean the Executive’s material inability, by reason of illness or other physical
or mental disability, to perform the principal duties required by the position
held by the Executive at the inception of such illness or disability, for any
consecutive 180-day period. A determination of Disability shall be
subject to the certification of a qualified medical doctor agreed to by the
Company and the Executive or, if the Executive is unable to designate a doctor
as a consequence of his condition, by the Executive’s legal
representative. If the Company and the Executive cannot agree on the
designation of a doctor, then each Party shall nominate a qualified medical
doctor and the two doctors shall select a third doctor, and the third doctor
shall make the determination as to Disability.
(iv) Termination by the
Executive. The Executive may terminate his employment
hereunder (A)
for Good Reason or (B) by voluntarily
resigning without Good Reason. For the purpose of this Agreement,
“Good Reason”
shall mean (1)
any material diminution in the Executive’s title, position or duties described
in Section
3(a); (2) any material
breach of the provisions of Section 4 with
respect to the place of performance of the Executive’s services hereunder; or
(3) any breach
by the Company of the provisions of Section 5 with
respect to compensation and related matters.
(b) Notice of
Termination. Any termination of the Executive's employment by
the Company or by the Executive (other than termination under Section 6(a)(i))
shall be communicated by written Notice of Termination to the other Party in
accordance with Section
11. For purposes of this Agreement, a “Notice of
Termination” shall mean a written notice that shall indicate the specific
termination provision in this Agreement relied upon and, in the case of a
termination for Cause, shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated.
(c) Date of
Termination. “Date of Termination” shall
mean (i) if the
Executive's employment is terminated by his death, the date of his death; (ii) if the applicable
Term expires because either Party has provided the other Party notice of its
desire not to extend the Term, in accordance with Section 2, the date
of the expiration of the prevailing Term; or (iii) if the
Executive's employment is terminated for any other reason, the date specified in
the Notice of Termination, subject to compliance with the terms and conditions
of this Agreement.
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(d) Termination Upon Death;
Disability; for Cause; Voluntary Termination (other than for Good
Reason). If the Executive's employment is terminated or this
Agreement terminates (i) by reason of the
Executive's death or Disability; (ii) by the Company
for Cause; or (iii) voluntarily by
the Executive (other than for Good Reason), including as a result of the
delivery by the Executive to the Company of a Non-Renewal Notice, (A) the Company shall,
as soon as practicable after the Date of Termination but no later than is
required by applicable law, pay the Executive (or the Executive's beneficiary,
as the case may be) all unpaid amounts, if any, to which the Executive is
entitled through the Date of Termination under Sections 5(a), 5(d) and 5(e) (to the extent
earned but not yet taken) and shall reimburse the Executive for expenses
incurred by the Executive but not reimbursed prior to the Date of Termination,
subject to and in accordance with Section 5(f), and
shall pay to the Executive, in accordance with the terms of the applicable plan
or program, all other unpaid amounts to which Executive is then entitled under
any compensation or benefit plan or program of the Company, including, without
limitation, benefits provided in accordance with the provisions of Sections 5(c) and
5(d), and
(B) the
Executive's entitlements in respect of stock options, share units and any other
long-term incentive awards which are outstanding as of the Date of Termination
shall be as provided for in the respective agreements setting forth the terms
and conditions of each award, it being specifically understood that any unvested
awards shall, upon termination of the Executive’s employment pursuant to this
Section 6(d),
be forfeited as of the Date of Termination; provided that any
stock options or other rights to acquire capital stock of the Company that have
vested and may be exercised by the Executive (or his estate) as of the Date of
Termination must be exercised, if at all, (1) within 180 days
following the Date of Termination in connection with a termination upon the
Executive’s death or Disability or for Cause and (2) within 90 days
following the Date of Termination in the event that the Executive has
voluntarily terminated this Agreement by resigning (other than for Good Reason)
or this Agreement has terminated upon the expiration of the Term because the
Executive has provided the Company with a Non-Renewal Notice, after which time,
such options and rights shall expire and terminate (the matters referred to in
clauses (A) and
(B) above,
together with the Pro Rata Bonus referred to below, if applicable, being
referred to herein collectively as “Accrued
Obligations”). In addition, if the Executive's employment is
terminated by reason of the Executive's death or Disability, then the Company
shall, at the same time that annual incentive awards are paid to senior level
executives of the Company for the year in which the Executive’s employment so
terminates, make a payment (the “Pro Rata Bonus”) to
the Executive (or his beneficiary or estate, as the case may be) an amount equal
to (x) the
target bonus for the Executive for the current year multiplied by a fraction,
the numerator of which equals the number of days during which the Executive has
been employed in such current year through and including the Date of
Termination, and the denominator of which equals 365, minus (y) any bonus amounts
paid or still to be paid with respect to the Executive for such year under any
annual bonus or incentive compensation plan or program maintained by
the Company; provided that the
Executive’s performance through the current year prior to such termination makes
it possible that the Company could have achieved the targets related to the
target bonus in such year. Upon satisfaction of the Accrued
Obligations, the Company shall have no further obligations to the Executive
under this Agreement, other than those obligations that by their nature or by
the terms of this Agreement are intended to extend beyond the termination of the
Executive's employment hereunder.
–6–
(e) Termination Other than for
Cause, Disability or Death or for Good Reason. If the
Executive's employment is terminated or this Agreement terminates (i) by the Company
(other than for Cause or upon the Executive’s Disability or death) or (ii) by the Executive
for Good Reason, then, subject to compliance with the provisions of Sections 7 and 8 and except as
otherwise provided in Section 6(f), the
Company shall:
(i)
within 20 days following the Date of Termination or
otherwise in accordance with the terms of the applicable plan or program, pay to
the Executive or otherwise cause to be satisfied the Accrued Obligations;
and
(ii) pay
the Executive following the Date of Termination an amount equal to the greater of: (A) the annual Base
Salary as of the Date of Termination or (B) the Base Salary
due to the Executive through the remainder of the Term of this Agreement, in
each case in immediately available funds and in a lump sum; and
(iii) during
either a time period equal to one year following the Date of Termination or the
period from the Date of Termination through the remainder of the Term of this
Agreement, whichever is longer (the “Continuation
Period”), the Company shall continue to keep in full force and effect all
programs of medical, dental, vision, disability, life insurance, including
optional term life insurance, and other similar health or welfare programs with
respect to the Executive and his dependents with the same level of coverage,
upon the same terms and otherwise to the same extent as such programs shall have
been in effect immediately prior to the Notice of Termination, and the Company
shall pay in full the costs of the continuation of such insurance coverage or,
if the terms of such programs do not permit continued participation by the
Executive (or if the Company otherwise determines it advisable to amend, modify
or discontinue such programs for employees generally), the Company shall
otherwise provide benefits substantially similar to and no less favorable to the
Executive in terms of cost or benefits (“Equivalent Benefits”)
than he was entitled to receive at the end of the period of coverage, for the
duration of the Continuation Period. All benefits that the Company is
required by this Section 6(e)(iii) to
provide, that will not be provided by the Company’s programs described herein,
shall be provided through the purchase of insurance unless the Executive is
uninsurable. If the Executive is uninsurable, the Company will
provide the benefits out of its general assets; and
(iv) reimburse
the Executive for expenses incurred by the Executive but not reimbursed prior to
the Date of Termination, subject to and in accordance with Section 5(f);
and
(v) pay
the Executive any other compensation or benefits that may be owed or provided to
the Executive in accordance with the terms and conditions of any applicable
plans and programs of the Company including, without limitation or duplication,
the Accrued Obligations.
–7–
If the
Company terminates Executive’s employment without Cause or the Executive resigns
for Good Reason, the Executive's entitlements in respect of stock options, share
units and any other long-term incentive awards which are outstanding as of the
Date of Termination shall be as provided for in the respective agreements
setting forth the terms and conditions of each award; provided that, upon
termination of the Executive’s employment pursuant to this Section 6(e), all
then outstanding options, restricted stock and other equity-based awards granted
to the Executive but which have not vested as of the Date of Termination shall
become fully vested, and all options not yet exercisable shall become
exercisable, in each case as of the Date of Termination; provided further that, upon
termination of the Executive’s employment pursuant to this Section 6(e), any
stock options or other rights to acquire capital stock of the Company that have
vested and may be exercised by the Executive as of the Date of Termination must
be exercised, if at all, within 180 days following the Date of Termination,
after which time, such options and rights shall expire and
terminate.
Notwithstanding
the foregoing, if the Executive obtains other employment during the Continuation
Period which provides comparable health or welfare benefits of the type
described in Section
6(e)(iii) (“Other Coverage”),
then Executive shall notify the Company promptly of such other employment and
Other Coverage and the Company shall thereafter not provide the Executive and
his dependents the benefits described in Section 6(e)(iii) to
the extent that such comparable benefits are provided under the Other Coverage
without charge to the Executive. Under such circumstances, the
Executive shall make all claims first under the Other Coverage and then, only to
the extent not paid or reimbursed by the Other Coverage, under the plans and
programs described in Section
6(e)(iii).
(f) Termination of Employment
Following a Change in Control. If, within six months preceding or two
years following a Change in Control (as defined below), (i) the Company (or
any successor to the Company by virtue of such Change in Control, as the case
may be) shall terminate the Executive's employment (other than for Cause, or
upon the Executive’s Disability or death) or (ii) the Executive
shall terminate his employment for Good Reason, the Executive shall be entitled
to the payments and benefits provided in Section
6(e). Also, immediately upon a termination referred to in this
Section within six months preceding or two years following a Change in Control,
all then outstanding options, restricted stock and other equity-based awards
granted to the Executive but which have not vested as of the Date of Termination
shall become fully vested and all options not yet exercisable shall become
exercisable, in each case as of the Date of Termination. For the
purpose of this Agreement, a “Change in Control”
shall mean the occurrence of any of the following events:
(A) any
“person” or
“group,” (as
such terms are defined and applied in Section 13(d) of the Securities Exchange
Act of 1934 (the “1934
Act”)) that is not the beneficial owner (within the meaning of Rule 13d-3
promulgated under the 1934 Act), directly or indirectly, of more than ten
percent (10%) of the Company’s issued and outstanding voting securities as of
the Effective Date is or becomes (directly or indirectly) the “beneficial owner”
(within the meaning of Rule 13d-3 promulgated under the 1934 Act), of the voting
securities of the Company representing more than 50% of the total issued and
outstanding voting securities of the Company; or
(B) a
majority of the Board consists of individuals other than “Incumbent Directors,”
which term means the members of the Board on the Effective Date; provided that any
individual becoming a director subsequent to such date whose election or
nomination for election was supported by two-thirds of the directors who then
comprised the Incumbent Directors shall be considered to be an Incumbent
Director; or
–8–
(C) the
Board adopts any plan of liquidation providing for the distribution of all or
substantially all of the Company’s assets or business, other than in connection
with a bankruptcy, insolvency or similar event involving the Company;
or
(D) all
or substantially all of the assets or business of the Company is disposed of
pursuant to a merger, consolidation or other transaction (unless the
stockholders of the Company immediately prior to such merger, consolidation or
other transaction beneficially own, directly or indirectly, in substantially the
same proportion as they owned the voting securities of the Company, all of the
voting securities or other ownership interests of the entity or entities, if
any, that succeed to the business of the Company); or
(E) the
Company combines with another company and is the surviving corporation but,
immediately after the combination, the holders of voting securities of the
Company immediately prior to the combination hold, directly or indirectly, 50%
or less of the voting securities (measured by number of votes entitled to be
cast) of the combined company (there being excluded from the number of shares
held by such stockholders, but not from the voting securities of the combined
company, any shares received by affiliates of such other company in exchange for
stock of such other company).
Further, in the event that the
Executive voluntarily resigns (other than for Good Reason) within 120 days
following such time as any “person” or “group,” as such terms are defined and
applied in Section 13(d) of the 1934 Act, other than a stockholder of the
Company as of the Effective Date, is or becomes (directly or indirectly) the
“beneficial owner” (within the meaning of Rule 13d-3 promulgated under the 1934
Act), of the voting securities of the Company representing more than 20% of the
total issued and outstanding voting securities of the Company, then the
Executive shall be entitled to the payments and benefits provided in Section
6(e).
(g) Nature of Payment.
Any amounts due under this Section 6 are in the
nature of severance payments considered to be reasonable by the Company and are
not in the nature of a penalty.
–9–
7.
Company
Policies.
(a) The
Executive shall strictly follow and adhere to all written policies of the
Company (“Company
Policies”) that are not inconsistent with this Agreement or applicable
law including, without limitation, securities laws compliance (including,
without limitation, use or disclosure of material nonpublic information,
restrictions on sales of Company stock, and reporting requirements), conflicts
of interest (including, without limitation, doing business with the Company or
its affiliates without the prior approval of the Board), and employee
harassment.
(b) Whenever
any rights under this Agreement depend on the terms of a Company Policy, plan or
program established or maintained by the Company, any determination of these
rights shall be made on the basis of the policy, plan or program in effect at
the time as of which the determination is made. No reference in this
Agreement to any policy, plan or program established or maintained by the
Company shall preclude the Company from prospectively changing or amending or
terminating that policy, plan or program or adopting a new policy, plan or
program in lieu of the then-existing policy, plan or program.
8.
Confidentiality.
The Executive will not at any time (whether during or after Executive’s
employment with the Company) disclose or use for Executive’s own benefit or
purposes, or for the benefit or purpose of any other person, firm, partnership,
joint venture, association, corporation or other business organization, entity
or enterprise, any trade secrets or non-public information, data, or other
confidential information relating to customers, employees, job applicants,
services, development programs, prices, costs, marketing, trading, investment,
sales activities, promotion, processes, systems, credit and financial data,
financing methods, plans, proprietary computer software, request for proposal
documents, or the business and affairs of the Company generally, or of any
affiliate of the Company; provided, however, that the foregoing shall not apply
to information which is generally known to the industry or the public other than
as a result of the Executive’s breach of this covenant. The Executive
agrees that upon termination of his employment with the Company for any reason,
he will return to the Company immediately all memoranda, books, papers, plans,
information, letters and other data, and all copies thereof or therefrom
(whether in written, printed or electronic form), in any way relating to the
business of the Company and its affiliates. The Executive
acknowledges and agrees that the Company’s remedies at law for a breach or
threatened breach of any of the provisions of this Section 8 would be
inadequate and, in recognition of this fact, the Executive agrees that, in the
event of such a breach or threatened breach, in addition to any remedies at law,
the Company, without posting any bond, shall be entitled to obtain equitable
relief in the form of specific performance, a temporary restraining order, a
temporary or permanent injunction or any other equitable remedy which may then
be available.
9. Covenant Not to
Compete.
(a) In
General. The Executive agrees, in consideration of the
payments provided or to be provided to the Executive hereunder, that during
Executive’s employment with the Company and for a period of one year
after:
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(i) the
termination of such employment, other than (A) termination by the
Executive of his employment with the Company for Good Reason or (B) termination by the
Company other than for Cause;
(ii) the
voluntary termination of this Agreement by the Executive (other than termination
by the Executive of his employment with the Company for Good Reason), including
as a result of the delivery by the Executive to the Company of a Non-Renewal
Notice; or
(iii) the
failure of the Term to be automatically extended because the Company has
provided the Executive a Non-Renewal Notice in accordance with Section
2;
the
Executive shall not, in any state or country in which the Company is conducting
business at the time of such termination:
(x) engage
in any business, whether as an employee, consultant, partner, principal, agent,
representative or stockholder (other than as a stockholder of less than a one
percent equity interest) or in any other corporate or representative capacity
with any other business, whether in corporate, proprietorship, or partnership
form or otherwise, where such business is engaged in any activity which competes
with the business of the Company or its affiliates as conducted on the date the
Executive’s employment terminated or during the 180 day period prior thereto, or
which will compete with any proposed business activity of the Company in the
planning stage on such date or during such period, subject to the last paragraph
of this Section
9(a);
(y) solicit
business from, or perform services for, or induce others to perform services
for, any company or other business entity which at any time during the one (1)
year period immediately preceding the Executive’s termination of employment with
the Company was a client of the Company or its affiliates; or
(z) offer,
or cause to be offered, employment with any business, whether in corporate,
proprietorship, or partnership form or otherwise, either on a full-time,
part-time or consulting basis, to any person who was employed by the Company or
its affiliates, in either case at any time during the one year period
immediately preceding the date the Executive’s termination of employment with
the Company.
Notwithstanding the foregoing, the
restrictions and covenants set forth in paragraphs (x), (y) and (z) of this Section 9 shall not
apply to the Executive in the event that the Executive’s employment is
terminated by the Company without Cause or by the Executive for Good
Reason. For purposes of this Section 9 and this
paragraph in particular, the Company shall not be deemed to have terminated the
Executive’s employment without Cause if such employment terminates because
(A) the
Executive has voluntary terminated this Agreement or resigned as an employee of
the Company (other than for Good Reason), or (B) the Term has not
been extended because either Party has provided a Non-Renewal Notice to the
Party. For purposes of this Agreement, affiliates of the Company
include subsidiaries 50% or more owned by the Company.
–11–
(b) Consideration. The
consideration for the foregoing covenant not to compete, the sufficiency of
which is hereby acknowledged, is the Company’s agreement to employ the Executive
and provide compensation and benefits pursuant to this Agreement.
(c) Equitable Relief and Other
Remedies. The Executive acknowledges and agrees that the
Company’s remedies at law for a breach or threatened breach of any of the
provisions of this Section would be inadequate and, in recognition of this fact,
the Executive agrees that, in the event of such a breach or threatened breach,
in addition to any remedies at law, the Company, without posting any bond, shall
be entitled to obtain equitable relief in the form of specific performance,
temporary restraining order, a temporary or permanent injunction or any other
equitable remedy which may then be available.
(d) Reformation. If
the foregoing covenant not to compete would otherwise be determined invalid or
unenforceable by a court of competent jurisdiction, such court shall exercise
its discretion in reforming the provisions of this Section to the end that the
Executive be subject to a covenant not to compete, reasonable under the
circumstances, enforceable by the Company.
10.
Successors; Binding
Agreement.
(a) Neither
this Agreement nor any rights hereunder shall be assignable or otherwise subject
to hypothecation by the Executive (except by will or by operation of the laws of
intestate succession or except as expressly provided in this Agreement or in any
plan or agreement that is the subject matter hereof) or by the Company, except
that the Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company, by agreement in form and substance
reasonably satisfactory to the Executive, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
As used in this Agreement, “Company” shall mean the Company as herein before
defined and any successor to its business and/or assets as aforesaid which
executes and delivers the agreement provided for in this Section 10 or that
otherwise becomes bound by the terms and provisions of this Agreement by
operation of law.
(b) This
Agreement and all rights of the Executive hereunder shall inure to the benefit
of and be enforceable by the Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If the Executive should die while any amounts would still be payable
to him hereunder if he had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to
the Executive's devisee, legatee, or other designee or, if there be no such
designee, to the Executive's estate.
11.
Notices. For the
purposes of this Agreement, notices, demands and all other communications
provided for in this Agreement shall be in writing and shall be deemed to have
been duly given when delivered personally, dispatched by private courier such as
Federal Express or United Parcel Service, or (unless otherwise specified) mailed
by United States certified or registered mail, return receipt requested, postage
prepaid, addressed as follows:
–12–
If to the
Company:
Command
Security Corporation
X.X Xxx 000
0000 Xxx. 00, Xxxxx X
Xxxxxxxxxxxxx, XX 00000
Attn: Chief
Executive Officer
with a copy
to:
Akin Gump
Xxxxxxx Xxxxx & Xxxx LLP
Xxx
Xxxxxx Xxxx
Xxx Xxxx,
XX 00000
Attn:
Xxxxxx Xxxxx, Esq.
xxxxxx@xxxxxxxx.xxx
If to the
Executive:
Xxxxx X.
Xxxxxxxxxx
00 Xxxx
Xxxxx
Xxxx
Xxxxxxxx, XX 00000
or to
such other address as any Party may have furnished to the other Party in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
12. Miscellaneous. No
provisions of this Agreement may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in writing signed by the
Executive and a duly authorized officer of the Company. No waiver by either
Party at any time of any breach by the other Party of, or compliance with, any
condition or provision of this Agreement to be performed by such other Party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by either Party that are not set forth expressly in this
Agreement. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of New York without regard
to its conflicts of law principles. All payments hereunder shall be subject to
applicable federal, State and local tax withholding requirements.
13.
Company's and
Executive's Representations and Warranties.
(a) The
Company represents and warrants that it is fully authorized and empowered to
enter into this Agreement and that the performance of its obligations under this
Agreement will not violate any agreement between it and any other person, firm
or organization.
–13–
(b) The
Executive represents and warrants that he has the legal right to enter into this
Agreement and perform all of the material obligations on his part to be
performed hereunder in accordance with its terms and that he is not a party to
any agreement or understanding, written or oral, that prevents him from entering
into this Agreement or performing his material obligations hereunder.
Notwithstanding any other provision of this Agreement, in the event of a breach
of such representation or warranty on the Executive's part, the Company shall
have the right to terminate this Agreement forthwith, but in no event before
complying with the notice provisions set forth in Section 6(a)(ii), and
the Company shall have no further obligations to the Executive except as
otherwise provided for hereunder.
14.
Validity. The
invalidity or unenforceability of any provision or provisions of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.
15.
Counterparts. This
Agreement may be executed in one or more counterparts, including by facsimile,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
16. Arbitration. Any
dispute or controversy arising under or in connection with this Agreement shall
be settled exclusively by arbitration, conducted before one arbitrator to be
mutually agreed upon by the Parties. In the event the Parties are unable to
agree upon an arbitrator, the Company and the Executive shall each appoint an
arbitrator, and these two arbitrators shall select a third, who shall be the
arbitrator. Arbitration shall be held in New York, New York, in the Borough of
Manhattan, in accordance with the rules of the American Arbitration Association
then in effect. Judgment may be entered on the arbitrator's award in
any court having jurisdiction; provided however, that the Company shall be
entitled to seek a restraining order or injunction in any court of competent
jurisdiction to prevent any continuation of any violation of the provisions of
Section 8 or
9 of the
Agreement and the Executive hereby consents that such restraining order or
injunction may be granted without the necessity of the Company's posting any
bond, it being acknowledged and agreed that any breach or threatened breach of
the provisions of Section 8 or 9 will cause
irreparable injury to the Company and that money damages will not provide an
adequate remedy to the Company. Each Party shall bear its own costs
and expenses (including, without limitation, legal fees) in connection with any
arbitration proceeding instituted hereunder. Each party shall bear
its own costs and expenses (including, without limitation, legal fees) in
connection with any arbitration proceeding instituted hereunder.
17.
Survival. The
respective rights and obligations of the Parties hereunder shall survive any
termination of the Executive's employment to the extent necessary to the
intended preservation of such rights and obligations.
18. Expenses
in connection with this Agreement. The Company shall pay all
of the Executive’s reasonable legal fees and expenses in connection with the
preparation, negotiation and execution of this Agreement.
–14–
19.
Entire
Agreement.
This Agreement sets forth the entire agreement of the Parties in respect of the
subject matter contained herein and all other prior agreements, promises,
covenants, arrangements, communications, representations or warranties, whether
oral or written, by any officer, employee or representative of any Party, and
any prior agreement of the Parties in respect of the subject matter contained
herein is hereby terminated and cancelled. To the extent that this Agreement and
any other agreement between the Parties provide duplicative payments or
benefits, this Agreement and any such other agreement shall be construed so as
to prevent such duplication.
IN WITNESS WHEREOF, the
Parties have executed this Agreement as of the Effective Date.
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COMMAND
SECURITY CORPORATION
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By:
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Name: Xxxxxx
X. Xxxxxx
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Title: Chief
Executive Officer
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EXECUTIVE
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Xxxxx
X. Xxxxxxxxxx
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–15–
