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EXHIBIT 10(z)
AGREEMENT
AGREEMENT, made as of the 29th day of October, 1997, by and between
Sensormatic Electronics Corporation, a Delaware corporation having its
principal place of business at 000 Xxxxxx Xxxx, Xxxx Xxxxx, Xxxxxxx 00000-0000
(hereinafter referred to as the "Corporation"), and Xxxxxxx X. Xxxxxx, residing
at 0000 Xxxxxxx Xxxxx, Xxxxxxxxxx, XX 00000 (hereinafter referred to as the
"Employee");
WITNESSETH:
WHEREAS, the Employee is an executive officer and employee of the
Corporation, and has made, and is expected to continue to make, a significant
contribution to the performance and growth of the Corporation; and
WHEREAS, in order to best dedicate himself to his duties with the
Corporation, and to avoid the distractions and market pressures which may arise
as a result of an employment-at-will relationship, the Employee wishes to be
assured of receiving, or continuing to receive for a certain period, certain
compensation and benefits in the event of the termination of his employment
without cause by the Corporation; and
WHEREAS, the Corporation has determined that the continued services of
the Employee to the Corporation are in the best interest of the Corporation and
its stockholders, and desires to assure such continued services by agreeing to
provide the Employee certain rights as to termination compensation, subject to
certain reasonable limitations on the Employee's future employment necessary to
protect the legitimate interests of the Corporation in fair competition, and
subject to such other conditions as are set forth hereunder;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto agree as follows:
1. EMPLOYMENT AT WILL. The Employee shall continue to serve the
Corporation as Senior Vice President-Supply Chain Operations and shall serve in
such other executive capacity as may be reasonably determined by the President
and the Board of Directors and is reasonably acceptable to him. The parties
acknowledge and agree that the Employee's employment with the Corporation is
not contracted for any fixed term, but shall continue until terminated by
either party, with or without cause, by giving written notice to the other
party pursuant to Section 3 hereunder. The provisions of this Agreement which
are intended to apply and be effective subsequent to such termination of
employment shall survive and continue to be enforceable.
2. COMPENSATION.
(a) The Employee's present base salary is $215,000 per year and the
Employee's present targeted bonus is $85,000 per year. In addition, the
Employee presently participates in or benefits from the Corporation's group
medical, dental and life insurance plans, Executive Medical Reimbursement Plan,
SensorSave and ESOP pension plans, Senior Executive Defined Contribution
Retirement Plan, Employee Stock Purchase Plan, Stock Incentive Plan, and
certain other fringe benefit plans or policies as the Corporation makes
available to or has in effect for its executive personnel from time to time.
After the date of this Agreement, such compensation and benefits may be
increased or decreased, discontinued or modified, as determined by the
Corporation's Board of Directors or the Compensation Committee thereof, subject
to the provisions of Section 3(c)(i) below.
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(b) Except as hereinafter provided, the Corporation shall pay the
Employee, for any period that this Agreement is in effect during which he is
unable fully to perform his duties because of physical or mental disability or
incapacity, an amount equal to the base salary due him for such period based on
his rate of base salary just prior to the disability, less the aggregate amount
of all income disability benefits which for such period he may receive or to
which he may be entitled under or by reason of (i) any group health insurance
plan; (ii) any applicable compulsory state disability law; (iii) the Federal
Social Security Act; (iv) any applicable workmen's compensation law or similar
law; and (v) any plan towards which the Corporation or any parent, subsidiary
or affiliate of the Corporation has contributed or for which it has made
payroll deductions, such as group accident or health policies or the Key
Executive Supplemental Retirement Plan.
3. COMPENSATION UPON TERMINATION.
(a) The Employee may terminate his employment with the Corporation at
any time by giving thirty (30) days written notice to the Corporation. The
Corporation may waive any or all of this notice period. Except as provided in
Section 3(c) below, the Corporation's sole obligation to the Employee in such
event is (i) to pay the Employee's base salary to the date of termination, (ii)
to pay any non-discretionary incentive compensation which had been earned but
not yet paid for any evaluation period completed prior to the date of notice of
termination, and (iii) to complete any obligations required to be discharged
under the terms of group benefit plans. No further compensation (including,
without limitation, payment of severance compensation, discretionary bonus
compensation for any period, or incentive compensation for the current
evaluation period as of the date of notice, whether through discretionary or
targeted plans) shall be paid to the Employee, pro-rata or otherwise, and all
other benefits and perquisites (including, without limitation, stock options,
executive medical reimbursement and auto allowances) shall be canceled as of
the date of termination.
(b) The Corporation may terminate the Employee's employment with the
Corporation at any time by giving written notice to the Employee. In the event
of such termination (except for cause pursuant to Section 4 hereunder, and
subject to the Employee's continued compliance with the provisions of Sections
5, 6 and 7 below), the Employee shall be entitled to:
(i) base salary through the date of termination of his
employment;
(ii) non-discretionary incentive compensation which had been
earned but not yet paid for any evaluation period completed prior to the date
of termination;
(iii) base salary, at the annualized rate in effect on the
date of termination of employment (or in the event a reduction in base salary
is the basis for a termination pursuant to Section 3(c) below, then the base
salary in effect immediately prior to such reduction), for a period of 18
months following such termination (the "Continuation Period"), payable at the
same regular intervals as in effect prior to the termination, provided,
however, that in the event the Employee procures full time employment at any
time during the Continuation Period, base salary payable hereunder shall
continue to be paid only for a period equal to one-half of the remainder of the
Continuation Period;
(iv) a thirty (30) day period following termination in which
the Employee may exercise any vested stock options (all unvested options, as
well as shares of restricted stock issued under the Corporation's long-term
incentive plan/Success Sharing Program, or any subsequently adopted similar
plan, shall automatically terminate and be canceled upon the Employee's
termination of employment);
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(v) participation until the end of the Continuation Period,
through Corporation-paid COBRA premiums, in medical and dental insurance
coverage equivalent to that in which he was participating on the date of the
termination of his employment (including spouse or family coverage, if
applicable); provided that the Corporation's obligations under this clause
shall be reduced to the extent that the Employee is eligible for similar
coverage and benefits under the plans and programs of a subsequent employer;
and
(vi) other or additional benefits in accordance with
applicable group plans and programs of the Corporation.
Except as provided above, no further compensation (including,
without limitation, payment of discretionary bonus compensation for any period
or incentive compensation for the current evaluation period as of the date of
termination, whether through discretionary or targeted plans) shall be paid to
the Employee, pro-rata or otherwise, and all other benefits and perquisites
(including, without limitation, stock options, executive medical reimbursement
and auto allowances) shall be canceled as of the date of termination.
(c) In the event that any of the following events occur, the Employee
may terminate his employment with the Corporation by giving written notice to
the Corporation, and shall thereupon be entitled to the payments, entitlements
and benefits provided in Section 3(b) above as if the Corporation had
terminated the Employee's employment with the Corporation pursuant to Section
3(b) above.
(i) a reduction in the Employee's then current base salary,
or a reduction in the Employee's targeted bonus under a non-discretionary
incentive compensation plan not offset by a corresponding increase in base
salary, or the termination or material reduction of any employee benefit or
perquisite enjoyed by him without his permission or agreement (in each case,
other than as part of an across-the-board reduction of such compensation,
benefit or perquisite applicable to all executive officers of the Corporation);
(ii) a material diminution in the Employee's duties, or the
assignment to the Employee of duties, such that the remaining duties are
materially inconsistent with the duties of a senior officer of the Corporation;
or
(iii) the failure of the Corporation to obtain the assumption
in writing of its obligation to perform this Agreement by any successor to all
or substantially all of the assets of the Corporation within 15 days after a
merger, consolidation, sale or similar transaction.
(d) In the event that the aggregate of all payments or benefits made
or provided to the Employee following a change in control of the Corporation
under this Agreement and under all other plans and programs of the Corporation
(the "Aggregate Payment") is determined to include an excess parachute payment,
as such term is defined in Section 280G(b)(1) of the Internal Revenue Code, the
Corporation shall pay to the Employee, prior to the time any excise tax imposed
by Section 4999 of the Internal Revenue Code ("Excise Tax") is payable with
respect to such excess parachute payment, an additional amount which, after the
imposition of all income and excise taxes thereon, is equal to the Excise Tax
on the excess parachute payment. The determination of whether the Aggregate
Payment includes an excess parachute payment and, if so, the amount to be paid
to the Employee and the time of payment pursuant to this Section 3(d) shall be
made by an independent auditor (the "Auditor") jointly selected by the
Corporation and the Employee and paid by the Corporation. The Auditor shall be
a nationally recognized United States public
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accounting firm which has not, during the two years preceding the date of its
selection, acted in any way on behalf of the Corporation or any affiliate
thereof. If the Employee and the Corporation cannot agree on the firm to serve
as the Auditor, then the Employee and the Corporation shall each select one
accounting firm and those two firms shall jointly select the accounting firm to
serve as the Auditor.
4. TERMINATION FOR CERTAIN CAUSES. Notwithstanding anything to the
contrary set forth elsewhere herein, in the event of the willful misconduct of
the Employee in the performance of his duties hereunder resulting in
significant economic harm to the Corporation or the conviction of the Employee
for a felony under federal or state law relating to the assets, business or
affairs of the Corporation or involving moral turpitude, the Employee's
employment with the Corporation may be terminated by the Corporation by written
notice to the Employee, provided that the Employee 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. The Employee shall be entitled
to a hearing before the Board before such termination becomes effective.
5. DISCLOSURE AND ASSIGNMENT OF DISCOVERIES. The Employee shall
(without any additional compensation) promptly disclose in writing to the Board
of Directors of the Corporation all ideas, formulae, programs, systems, devices,
processes, business concepts, discoveries and inventions (hereinafter referred
to collectively as "discoveries") whether or not patentable, which the Employee,
while employed by the Corporation, conceives, makes, develops, acquires or
reduces to practice, whether alone or with others and whether during or after
usual working hours, and which are related to the Corporation's business or
interests, or are used or usable by the Corporation; and the Employee hereby
transfers and assigns to the Corporation all right, title and interest in and to
said discoveries, including any and all domestic and foreign patent rights
therein and any renewals thereof. On request of the Corporation, the Employee
shall (without any additional compensation), from time to time during or after
the expiration or termination of his employment, execute such further
instruments (including, without limitation, applications for letters patent and
assignments thereof) and do all such other acts and things as may be deemed
necessary or desirable by the Corporation to protect and/or enforce its rights
in respect of said discoveries. All expenses of filing or prosecuting any patent
applications shall be borne by the Corporation, but the Employee shall cooperate
in filing and/or prosecuting any such applications.
6. CONFIDENTIALITY. The Employee agrees that all patent rights,
inventions, technical information and know-how and trade secrets relating to the
Corporation's electronic security systems and any other products in development
or marketed by the Corporation, any information relating thereto, and any other
information relating to the business or interests of the Corporation which he
knows or should know, is regarded as confidential and valuable by the
Corporation (whether or not any of the foregoing information is actually novel
or unique or is actually known to others), made available to the Employee by the
Corporation or acquired by the Employee from the Corporation, other than that
which legally and legitimately is or becomes of general public knowledge or
passes into the public domain from authorized sources other than the Employee,
will be held in confidence and will not be divulged (or caused or permitted to
be divulged) by the Employee, without the prior written consent of the
Corporation, to any person or entity, except to responsible officers and
employees of the Corporation and other responsible persons who are in a
contractual or fiduciary relationship with the Corporation or who have a need
for such information for purposes in the interest of the Corporation or
otherwise in the course of carrying out his duties hereunder and except when
required to disclose such information by a court of law, by any governmental
agency having supervisory authority over the business of the Company or by any
administrative or legislative body (including a committee thereof) with the
apparent jurisdiction to order him to
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divulge, disclose or make accessible such information. The Employee further
agrees that his obligations of secrecy and confidentiality under this Section 6
shall survive any termination of this Agreement unless specifically waived in
writting by the Corporation and, in the event of any such termination, the
Employee shall never use or market, nor disclose to others nor assist others in
using or marketing, any of the information or property rights of the Corporation
referred to in this Section 6, other than that which legally and legitimately is
or becomes of general public knowledge or passes into the pulic domain from
authorized sources other than the Employee.
7. NON-COMPETITION. In order to protect the legitimate business
interests of the Corporation, such as, without limitation, in its trade
secrets, confidential and professional information, substantial relationships
with existing and prospective customers, and investments in extraordinary and
specialized training, the Employee shall not, directly or indirectly:
(a) engage in the business of manufacturing, leasing, selling,
maintaining, or servicing, anywhere in the world, anti-shoplifting, theft
detection, inventory/asset control, closed circuit television, access control,
article surveillance devices or other products which are similar to or purport
to accomplish results similar to the Corporation's electronic article
surveillance, closed circuit television and access control systems and other
products being developed or marketed by the Corporation during the Employee's
employment with the Corporation;
(b) render any services as an officer, director, employee, partner,
consultant or otherwise to, or have any interest as a stockholder, partner,
lender or otherwise in, any entity which is so engaged;
(c) solicit or attempt to solicit business of any customers of the
Corporation for products or services the same or similar to those offered,
sold, produced or under development by the Corporation during the Employee's
employment with the Corporation;
(d) solicit or attempt to solicit for any business endeavor any
employee of the Corporation;
(e) accept any orders for products or services or any other business
from any customers of the Corporation for products or services the same or
similar to those offered, sold, produced or under development by the
Corporation during the Employee's employment with the Corporation; or
(f) hire or retain as a consultant - or render any services as an
officer, director, employee, partner, consultant or otherwise to, or have any
interest as a stockholder, partner, lender or otherwise in, any entity which
hires or retains as a consultant - any person which, within six (6) months prior
to the date of such hiring or retention, had been employed by the Corporation
in a sales, marketing, managerial or professional (e.g. accounting,
engineering, legal) capacity;
during the term of the Employee's employment with the Corporation and for a
period of eighteen (18) months from and after the date of termination of such
employment, or for such lesser area or lesser period as may be determined by a
court of law or equity to be a reasonable limitation on the competitive
activity of the Employee, it being understood and agreed by the parties hereto
that this provision is reasonably necessary to protect the patent rights,
inventions, technical information and knowhow, trademarks and the good will and
reputation of the Corporation. For the purpose of this Section 7, the term
"Corporation" shall include any and all affiliates of
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the Corporation in existence from time to time. Notwithstanding anything to the
contrary contained in this Section 7, the provisions hereof shall not prevent
the Employee from purchasing or owning up to two (2%) percent of the voting
securities of any corporation, the stock of which is publicly traded.
8. TERMINATION OF BENEFITS AND INJUNCTIVE RELIEF. In the event of a
breach or threatened breach by the Employee of any of the provisions of
Sections 5, 6 and 7, the Corporation shall be entitled, if it shall so elect,
to (a) terminate any remaining benefits (including any unpaid severance payments
or unexercised options) otherwise due or outstanding pursuant to Section 3,
and/or (b) except in the case of a breach or threatened breach of Section 7(e)
or (f), institute legal proceedings to obtain damages or to enforce the specific
performance of such provisions by the Employee and to enjoin the Employee from
any further violation of such provisions and to exercise such remedies
cumulatively or in conjunction with all other rights and remedies provided by
law. The Employee acknowledges, however, that the remedies at law for any breach
or threatened breach by him of such provisions may be inadequate and that the
Corporation shall be entitled to injunctive relief against him in the event of
any breach or threatened breach.
9. ENTIRE AGREEMENT. This Agreement supersedes all prior agreements
and understandings between the parties pertaining to the subject matter hereof
(other than (i) any additional terms set forth in the offer letter agreement
dated July 11, 1997 from Xxxxxx Xxxxxxxx to the Employee, and (ii) the plans and
policies referred to in Sections 2 hereof and any other agreements or
understandings pertaining thereto) and may not be changed or terminated orally,
and no change, termination or attempted waiver of any of the provisions hereof
shall be binding unless in writing and signed by the party against whom the
same is sought to be enforced; provided, however, that the Employee's
compensation and/or benefits may be increased at any time by the Corporation
without in any way affecting any of the other terms and conditions of this
Agreement, which in all other respects shall remain in full force and effect.
10. SUCCESSORS AND ASSIGNS. Neither party shall have the right to
assign this personal Agreement, or any rights or obligations hereunder, without
the consent of the other party, provided, however, that upon the sale of all or
substantially all of the assets, business and goodwill of the Corporation to
another corporation, or upon the merger or consolidation of the Corporation with
another corporation, this Agreement shall inure to the benefit of, and be
binding upon, both the Employee and the corporation purchasing such assets,
business and goodwill, or surviving such merger or consolidation, as the case
may be, in the same manner and to the same extent as though such other
corporation were the Corporation. In the event of a sale, merger or
consolidation described in the preceding sentence, the Corporation shall take
whatever action it legally can in order to cause such other corporation to
expressly assume the liabilities, obligations and duties of the Corporation
hereunder. Subject to the foregoing, this Agreement shall inure to the benefit
of, and bind, the parties hereto and their legal representatives, heirs,
successors and assigns.
11. GOVERNING LAW. This Agreement is made and executed and shall be
governed by the laws of the State of Florida, without giving effect to choice
of law principles.
12. INDEMNIFICATION.
(a) The Corporation agrees that if the Employee is made a
party, or is threatened to be made a party, to any action, suit or proceeding,
whether civil, criminal, administrative or investigative (a "Proceeding"), by
reason of the fact that he is or was a director, officer, or employee of the
Corporation or is or was serving at the
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request of the Corporation as a director, officer, member, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans, whether or not the
basis of such Proceeding is the Employee's alleged action in an official
capacity while serving as a director, officer, member, employee or agent, the
Employee shall be indemnified and held harmless by the Corporation to the
fullest extent legally permitted or authorized by the Corporation's certificate
of incorporation or bylaws or resolutions of the Company's Board of Directors
or, if greater, by the laws of the State of Delaware against all cost, expense,
liability and loss (including, without limitation, attorney's fees, judgments,
fines, ERISA excise taxes or penalties and amounts paid or to be paid in
settlement) reasonably incurred or suffered by the Employee in connection
therewith, and such indemnification shall continue as to the Employee even if he
has ceased to be a director, officer, member, employee or agent of the
Corporation or other entity and shall inure to the benefit of the Employee's
heirs, executors and administrators. The Corporation shall advance to the
Employee all reasonable costs and expenses incurred by him in connection with a
Proceeding within 20 days after receipt by the Corporation of a written request
for such advance. Such request shall include an undertaking by the Employee to
repay the amount of such advance if it shall ultimately be determined that he is
not entitled to be indemnified against such costs and expenses.
(b) Neither the failure of the Corporation (including its
board of directors, independent legal counsel or stockholders) to have made a
determination prior to the commencement of any Proceeding concerning payment of
amounts claimed by the Employee under Section 12(a) above that indemnification
of the Employee is proper because he has met the applicable standard of conduct,
nor a determination by the Corporation (including its board of directors,
independent legal counsel or stockholders) that the Employee has not met such
applicable standard of conduct, shall create a presumption that the Employee has
not met the applicable standard of conduct.
(c) The Corporation agrees to continue and maintain a
directors and officers' liability insurance policy covering the Employee to the
extent the Corporation provides such coverage for its other executive officers.
13. REPRESENTATION. The Corporation represents and warrants that it is
fully authorized and empowered by action of the Board of Directors 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.
14. SEVERABILITY. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, in
whole or in part, the remaining provisions of this Agreement shall be
unaffected thereby and shall remain in full force and effect to the fullest
extent permitted by law.
15. SURVIVORSHIP, The respective rights and obligations of the parties
hereunder shall survive any termination of the Employee's employment to the
extent necessary to the intended preservation of such rights and obligations.
16. BENEFICIARIES/REFERENCES. The Employee shall be entitled, to the
extent permitted under the applicable law, to select and change a beneficiary
or beneficiaries to receive any compensation or benefit payable hereunder
following the Employee's death by giving the Company written notice thereof. In
the event of the Employee's death or a judicial determination of his
incompetence, reference in this Agreement to the Employee shall be deemed,
where appropriate, to refer to his beneficiary, estate or other legal
representative.
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17. RESOLUTION OF DISPUTES. Except for disputes which are subject to
the provisions of Section 8, any disputes arising under or in connection with
this Agreement shall, at the election of the Employee or the Company, be
resolved by binding arbitration, to be held in Ft. Lauderdale, Florida in
accordance with the rules and procedures of the American Arbitration
Association. Judgment upon the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof. Any judgment or order entered
in such action shall contain a specific provision providing for the prevailing
party's recovery of its attorneys' fees and costs in bringing the action and
enforcing the judgment from the losing party. "Prevailing Party" shall mean the
party which has been granted the relief or remedy sought, or which has obtained
judgment for damages of at least 50 percent of the amount claimed.
18. NOTICES. Any notice given to a party shall be in writing and shall
be deemed to have been given when delivered personally or sent 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 have specified by written notice
hereunder.
19. HEADINGS The headings of the sections contained in this Agreement
are for convenience only and shall not be deemed to control or affect the
meaning or construction of any provision of this Agreement.
20. COUNTERPARTS. This Agreement may be executed in two or more
counterparts.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement as of the day and year first above written.
SENSORMATIC ELECTRONICS CORPORATION XXXXXXX X. XXXXXX
By: /s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxxxx
President and Chief Executive Officer
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