EXHIBIT 99.10
SEVERANCE AGREEMENT
AGREEMENT made this 26th day of February, 1997 by and between
ADT Security Services, Inc., a Delaware corporation (the "Company") and
Xxxxxxx Xxxxx ("Executive").
WITNESSETH
WHEREAS, Executive is presently employed by the Company; and
WHEREAS, the parties wish to provide Executive with severance
arrangements upon a change of control of Parent (as hereinafter defined);
NOW, THEREFORE, in consideration of the mutual promises and
covenants contained herein, it is agreed as follows:
1. DEFINITIONS
The following terms used in this Agreement shall have the following
meanings (all terms defined in the singular have the correlative meanings when
used in the plural and vice versa).
"Board" shall mean the Board of Directors of Parent.
"Change in Control" shall mean the occurrence of any of the following
events:
(i) any "person" or "group" (as defined under Sections 13(d) and
14(d) of the Exchange Act) is or becomes the direct or indirect
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act), of securities representing 50% or more of the combined
voting power of Parent's then outstanding voting securities;
(ii) beginning on or after the date of this Agreement, individuals
who either (a) were members of the Board at the beginning of such
period or (b) whose election by the Board of whose nomination for
election by the shareholders of Parent was approved by a vote of 66
2/3% of the directors then still in office who were either directors
at the beginning of such period or whose election or nomination for
election was previously approved as provided for in this clause (b)
cease for any reason (including as a result of any proxy contest
involving the solicitation of revocable proxies under Section 14(a)
of the Exchange Act) to constitute a majority of the Board;
(iii) any "person" or "group" possesses, directly or indirectly, the
legal right to direct the management and policies of Parent, whether
through the ownership of securities, by contract or otherwise (other
than solely by virtue of membership on the Board or any committee
thereof); or
(iv) the shareholders of Parent shall approve a merger or
consolidation in which Parent is not the surviving entity, or a sale
or disposition of all, or substantially all, of the assets of Parent.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended and the rules and regulations thereunder.
"Parent" shall mean ADT Limited, a Bermuda corporation.
2. TERM
2.1 Term. Unless sooner terminated pursuant to the provisions of
this Agreement, the term of this Agreement shall be for a period commencing
February 10, 1997 and ending February 9, 2000.
3. TERMINATION
3.1 Termination following Change of Control. If a Change of Control
has occurred and Executive's employment is terminated within two years
following such Change of Control, other than on account of Executive's death,
disability or retirement, (i) by the Company other than for Cause (as
hereinafter defined) or (ii) by the Executive for Good Reason (as hereinafter
defined), Executive shall be entitled to the benefits provided in Section 4
hereof.
3.2 Termination for Cause.
3.2.1 The Company may by written notice terminate Executive's
employment for Cause. For purposes of this Agreement, "Cause" shall consist
of (i) a conviction of any of the following: (a) a felony, (b) embezzlement
or (c) misappropriation of funds or property of the Company or any of its
affiliates, (ii) habitual drunkenness or drug addiction, or (iii) the
Executive's consistent refusal or inability to perform his employment duties
in a material manner or willful misconduct in the performance of his
employment duties and obligations.
3.2.2 In order to terminate the Executive's employment for Cause,
the Company's Board of Directors shall be required to give written notice to
Executive specifying the claimed cause and Executive shall have failed to
correct the claimed breach, if such breach is curable, or alter the
objectionable pattern of conduct specified in the applicable written notice,
no later than thirty (30) days after receipt of the applicable notice.
3.3 Termination for Good Reason. Executive may by written notice
terminate his employment for Good Reason. For purposes of this Agreement,
"Good Reason" shall mean, without the express written consent of Executive,
any of the following (i) Executive is removed from his position for any reason
(other than for Cause); (ii) the assignment to Executive of any duties or
responsibilities that are inconsistent, in a material respect, with the scope
of duties and responsibilities associated with his position, including,
without limitation, any such difference in scope resulting from Parent no
longer being a public company or from the Company's becoming a subsidiary of
another entity; (iii) the Company's failure or refusal to provide Executive
his fixed annual compensation or incentive compensation; (iv) a substantial
diminution of Executive's benefits (including, without limitation, benefits
under the Company's or Parent's life insurance, health and accident,
disability, deferred compensation or savings plans in which Executive is
participating) or (v) the Company's required relocation of Executive without
his prior written consent, to a place of employment (except for travel
reasonably required in the performance of Executive's responsibilities).
3.4 Date of Termination. In the case of termination for Cause,
Executive's date of termination shall be thirty (30) days following the date
specified in the relevant notice of termination and, in the case of
termination for Good Reason, the date of termination of Executive's employment
shall be the date specified in the relevant notice of termination; provided
that if, within thirty (30) days after any notice of termination is given, the
party receiving such notice of termination notifies the other party that a
dispute exists concerning the termination, Executive's date of termination
shall be the date on which the dispute is finally determined (either by mutual
written agreement or by a final judgment, order or decree of an arbitration
tribunal or a court of competent jurisdiction). Notwithstanding any dispute
regarding the date of termination of Executive's employment, the Company shall
continue (i) to pay Executive his full compensation, including, without
limitation, his base salary in effect when the notice giving rise to the
dispute was given (or, if higher, the base salary in effect as of the
Change in Control) and (ii) Executive's participation in all equity
incentive, compensation, benefit and insurance plans in which Executive was
participating when the notice giving rise to the dispute was given, until
the dispute is finally resolved in accordance with this subsection.
Amounts paid under this subsection are in addition to all other amounts due
under this Agreement and shall not be offset against or reduce any other
amounts due under this Agreement.
4. COMPENSATION UPON TERMINATION.
4.1 Compensation. Following a Change of Control, upon termination
of Executive's employment, Executive shall be entitled to the following
benefits:
4.1.1. If the Executive's employment is terminated by the
Company for Cause or by Executive other than for Good Reason, disability,
death or retirement, the Company shall pay Executive his full base salary
through the date of termination at the rate in effect at the time notice of
termination is given plus any amounts to be paid to Executive pursuant to the
Company's retirement and other benefit plans of the Company then in effect,
and the Company shall have no further obligations to Executive under this
Agreement.
4.1.2. If Executive's employment shall be terminated by the
Company or by Executive for retirement or disability, or by reason of
Executive's death, Executive's benefits shall be determined in accordance with
the Company's retirement, benefit and insurance programs then in effect.
4.1.3. If Executive's employment by the Company shall be
terminated (i) by the Company other than for Cause and other than because of
Executive's death, disability or retirement or (ii) by Executive for Good
Reason, then the Company shall provide Executive:
(a) an amount equal to two times (2x) the total of (x) the higher of
his annual full base salary as of the date of termination or as of
the Change of Control, calculated on an annualized basis, plus (y)
the amount of the bonus awarded to Executive, if any, in the year
prior to the date of termination (collectively, the "Salary"); and
(b) for the twelve month period following such termination, life,
disability, accident and health insurance benefits and Executive's
automobile or automobile allowance substantially similar to those
which Executive is receiving immediately prior to the date of
termination or, if higher, the Change of Control.
Executive shall receive the Salary, at Executive's option, either in the form
of a one-time lump sum severance payment or on a monthly basis. Executive
shall have ten (10) days from the date of termination to provide the Company
with notice as to the method that Executive chooses to receive the Salary (the
"Salary Notice"). If Executive elects to receive the Salary in the form of a
lump sum severance payment, Company shall pay Executive the Salary ten (10)
days following the receipt of the Salary Notice.
4.2. Pension Plans. Nothing in this Agreement shall alter the terms
of any pension plans in which Executive participates which would otherwise
terminate on the termination of Executive's employment.
5. GENERAL PROVISIONS
5.1 Successors; Binding Agreement.
5.1.1. 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 to 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. Such assumption and agreement shall be in express terms and shall be
obtained prior to the effectiveness of any such succession. As used in this
Agreement, "Company" shall mean the Company as herein before defined and any
direct or indirect successor to its business and/or assets as aforesaid.
5.1.2. This Agreement shall be binding and inure to the
benefit of Executive, his successors and assigns and the Company, its
successors and assigns. If Executive dies while any amount is 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 his devisee, legatee or other designee or, if there is no such devisee,
legatee or other designee to the personal representatives of his estate.
Neither the Company nor Executive may, without the express written consent of
the other party, assign or pledge any rights or obligations under this
Agreement to any person, firm or company, save that Executive may transfer by
will or by operation of law (or by designation of beneficiary where a plan or
other agreement so provides) any rights to compensation or benefits hereunder.
5.2 Entire Agreement. This writing constitutes the entire agreement
between the parties dealing with subject matter, supersedes all other and
prior agreements and shall not be modified or amended except in writing and
signed by the parties.
5.3 Notices. All notices hereunder shall be in writing and sent by
hand, telecopier or by certified mail if to the Company at 1750 Xxxxx Xxxxx
Road, X.X. Xxx 0000, Xxxx Xxxxx, XX 00000, Attention: President; facsimile
(000) 000-0000, and if to Executive at his last known residence. Either may
by such notice change its or his address for notices.
5.4 Choice of Law. This Agreement shall be interpreted in
accordance with the laws of Florida.
IN WITNESS WHEREOF, the parties have caused these presents to be signed the
day and year first above written.
ADT SECURITY SERVICES, INC.
By:_________________________
Name:
Title:
XXXXXXX XXXXX
____________________________
UNCONDITIONAL GUARANTEE
ADT LIMITED, a Bermuda corporation, hereby irrevocably and unconditionally
guarantees the due and punctual performance and observance of each and every
agreement, covenant and obligation of ADT SECURITY SERVICES, INC. under this
Agreement, irrespective of any circumstance, including any statute of
limitations, that might otherwise constitute a defense available to, or a
discharge of, any such agreement, covenant or obligation.
ADT LIMITED
By:_________________________
Name:
Title:
