EXHIBIT 99(c)(4)
EXECUTION COPY
EMPLOYMENT AGREEMENT
Employment Agreement (this "Agreement") dated as of February 19, 1999
between Xxxxx X. Xxxxx (the "Executive"), PINKERTON'S INC. and PINKERTON
MANAGEMENT CORPORATION (together the "Company"), and SECURITAS AB (the "Parent
Company").
WHEREAS, the Company and Parent Company desire to employ the Executive
as the Company's President and Chief Executive Officer, and the Executive
desires to accept such employment, for the term and upon the other conditions
set forth below;
WHEREAS, this Agreement shall be effective from and after the
occurrence of the Effective Date, as hereinafter defined in Section 2.4;
NOW, THEREFORE, in consideration of the agreements and covenants
contained herein, the Executive, Company and Parent Company agree as follows:
ARTICLE I.
EMPLOYMENT
Section 1.1. Position; Term; Responsibilities
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The Company shall employ the Executive as its President and Chief
Executive Officer for a term commencing on the Effective Date and ending on the
third anniversary of the Effective Date. The term during which the Executive is
to be employed by the Company under this Agreement is hereinafter referred to as
the "Employment Period." The Executive shall report directly to the Board of
Directors of the Company (the "Board") and to the President and Chief Executive
Officer of the Parent Company. The Executive shall have the responsibility and
authority for the formulation and execution of corporate policy and the
administration of corporate affairs and operations of the Company, and such
other responsibilities and authorities as are customarily exercisable by the
chief executive officer of a major corporation which is a non-public separate
operating entity of a public company. The Parent Company currently contemplates
that the Company will be maintained by the Parent Company as a separate
operating entity responsible for all operations in North America, South America,
Asia and worldwide investigations, subject to changes determined by the Parent
Company in the event of future acquisitions or sales of businesses. The
Executive shall also perform such other executive and administrative duties (not
inconsistent with the positions of president and chief executive officer) on
behalf of the Company, its subsidiaries and affiliates (collectively, the
"Company"), as may from time to
time be authorized or directed by the President and Chief Executive Officer of
the Parent Company. The Executive shall also serve as a member of Group
Management of the Parent Company during the Employment Period, and the Parent
Company agrees to use its best efforts to cause the Executive to be elected to
serve as a member of the Board of Directors of the Parent Company during the
Employment Period. The Executive agrees to remain employed by the Company in all
such capacities for the Employment Period, subject to all of the covenants and
conditions hereinafter set forth.
Section 1.2. Duties. During the Employment Period, the Executive shall
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perform faithfully the duties assigned to him hereunder to the best of his
abilities and devote his full and undivided business time and attention to the
transaction of the Company's businesses and to use his best efforts to perform
faithfully and efficiently the responsibilities assigned to him. To the extent
not substantially interfering with the performance of his responsibilities under
this Agreement and to the extent consistent with current Board policy on
February 1, 1999, the Executive may continue to devote time to civic,
professional and charitable activities and continue to serve on the board of
directors of other companies, and shall not engage in any other business
activities except with the prior written approval of the President and Chief
Executive Officer of the Parent Company.
ARTICLE II.
COMPENSATION
Section 2.1. Base Salary. As compensation for the Executive's
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services hereunder, the Company shall pay to the Executive during the Employment
Period an annual salary of $705,495, subject to an agreed normal annual increase
in February, 1999, payable in installments in accordance with the Company's
normal payment schedule for its senior management. The Company shall conduct an
annual review of the Executive's performance and current Base Salary and, in its
discretion, may increase the Executive's annual base salary in any year during
the Employment Period. The Executive's annual salary in effect from time to
time under this Section 2.1 is hereinafter referred to as "Base Salary."
Section 2.2. Annual Incentive Compensation.
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(A) Formula for Determining. In addition to his Base Salary, the
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Executive shall be eligible to receive as annual incentive compensation ("Annual
Incentive Compensation"), in respect of each fiscal year of the Company or
portion thereof included within the Employment Period, a cash bonus determined
as follows:
(i) 1999 - The Executive shall be eligible to receive Annual
Incentive Compensation determined in accordance with the
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1999 Annual Incentive Program set forth in Appendix A hereto (the "1999 Program.
(ii) Subsequent Fiscal Years - The President and Chief Executive
Officer of the Parent Company, after consultation with the Executive, shall
establish annually an Annual Incentive Compensation program (similar to the 1999
Program) which shall provide the Executive with a target annual bonus
opportunity percentage equal to 60% of his Base Salary and a maximum annual
bonus opportunity percentage equal to 200% of his target annual bonus. The
Executive shall be eligible to receive a pro-rated bonus determined under the
program for the fiscal year in which he terminates employment (based on the
number of days from the beginning of the fiscal year through the date of
termination, divided by 365), which shall be paid at the time such bonuses are
normally payable, based on actual results for the completed fiscal year. The
Executive shall be entitled to receive not less than his target Annual Incentive
Compensation for all fiscal years of the Company during the Employment Period
which end after a future Change in Control (as defined in Section 3.1(B)) of the
Company or the Parent Company.
(B) Time of Payment. The amount of Annual Incentive Compensation
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earned hereunder shall be paid to the Executive as soon as reasonably
practicable following the delivery to the Board of audited financial statements
for the Company with respect to each completed fiscal year of the Company. The
Parent Company shall cause such statements to be prepared as soon as practicable
after the end of the Company's fiscal year, and in any event, the amount, if
any, required to be paid for any year under this Section 2.2 shall be determined
and paid not later than March 15 of the year next following the year for which
the bonus is paid.
Section 2.3. Long-Term Incentive Compensation.
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(A) Formula for Determining. In addition to his Base Salary and
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Annual Incentive Compensation, the Executive shall be eligible to receive as
long-term incentive compensation ("Long-Term Incentive Compensation"), in
respect of the Company's fiscal years from 1999 through 2001, a long-term
incentive cash bonus determined in accordance with the Long-Term Incentive
Program set forth in Appendix B hereto. The Long-Term Incentive Program shall
provide the Executive with a target long-term incentive bonus for fiscal years
1999 through 2001 equal to $1,800,000 and a maximum long-term incentive bonus
for such fiscal years equal to 150% of his target amount. The Executive shall
be entitled to receive not less than his target Long-Term Incentive Compensation
for fiscal years 1999 through 2001 if there is a future Change in Control (as
defined in Section 3.1(B)) of the Company or Parent Company prior to December
31, 2001.
(B) Time of Payment. The amount of Long-Term Incentive Compensation
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earned hereunder for fiscal years 1999
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through 2001 shall be paid to the Executive as soon as reasonably practicable
following delivery to the Board of audited financial statements for the
Company's fiscal year that ends in December, 2001. The Parent Company shall
cause such statements to be prepared as soon as practicable after the end of the
Company's fiscal year which ends in 2001 and in any event, the amount, if any,
required to be paid under Section 2.3 shall be determined and paid not later
than March 15, 2002.
Section 2.4. Supplemental Retirement Income Plan. The Executive's
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Benefit under Section 4.1 of the Company's Supplemental Retirement Income Plan,
as amended, and related Appendices I and II, which were furnished to Parent
Company prior to January 23, 1999 (together, the "Retirement Plan"), commencing
upon the Executive's Normal Retirement Age in the Normal Benefit Form, shall be
fifty-two and one-half percent (52.5%) of his Final Average Monthly
Compensation, and such Benefit shall be fully accrued and 100% Vested, effective
upon the Effective Date (as defined below), notwithstanding any contrary
provision of the Retirement Plan or of the Appendices. The Final Average
Monthly Compensation which is used to calculate the Executive's Benefit shall in
no event be less than it would have been if the Executive had terminated
employment on the Effective Date (or not less than $77,233.51). The terms
"Benefit", "Final Average Monthly Compensation", Normal Benefit Form, Normal
Retirement Age and "Vested" shall have the meanings set forth in the Retirement
Plan. The "Effective Date" shall mean the time that the Purchaser or the Parent
purchases any of the Shares of the Company pursuant to the Offer, as such terms
are defined in the Agreement and Plan of Merger among Target (herein the
"Company"), Parent (herein the "Parent Company") and Purchaser (a wholly-owned
subsidiary of the Parent Company) dated as of the same date hereof (the "Merger
Agreement"). Except as provided in this Section 2.4, the Executive's Benefit
shall be calculated and paid in accordance with the terms and conditions of the
Retirement Plan. The Retirement Plan shall automatically be amended to reflect
the provisions of this Section 2.4, effective as of the Effective Date, without
further action of the Company or the Executive.
Section 2.5. Incapacity. If at any time during the Employment Period
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the Executive is unable to perform fully his duties hereunder by reasons of
illness, accident or other disability (as confirmed by competent medical
evidence acceptable to a licensed physician selected by the Company)
(hereinafter "incapacity"), during the first six months of such incapacity he
shall be entitled to receive Base Salary and shall continue to be considered as
actively employed for purposes of determining his eligibility for target Annual
and Long-Term Incentive Compensation determined in accordance with Sections 2.1,
2.2 and 2.3. If the Executive shall resume the full performance of his duties
hereunder following any period of incapacity, he shall thereafter be entitled to
receive Base Salary and Annual and Long-Term Incentive Compensation as provided
in Sections 2.1, 2.2
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and 2.3. Notwithstanding the foregoing provisions of this Section 2.5, the
amounts payable to the Executive under this Section 2.5 shall be reduced by any
amounts received by the Executive with respect to any such incapacity pursuant
to any insurance policy, plan or other employee benefit provided to the
Executive and paid for or reimbursed by the Company. During any period of
incapacity in which the Executive does not receive Base Salary and Annual
Incentive Compensation, the Company will make available to the Executive until
his 65th Birthday disability benefits payable to the Executive aggregating at
least $300,000 per annum, payable in installments substantially in accordance
with the Company's normal salary payment schedule for its senior management. The
amount of disability benefits payable to the Executive shall be satisfied under
the Company's group disability insurance policy or other individual disability
insurance, if necessary. The Company shall pay the premium on any such
individual disability insurance policy. Any termination of the Executive's
employment during the Employment Period as a result of the Executive's
incapacity which results in his qualification for benefits under the Company's
long-term disability program covering the Executive shall be a qualifying
termination of employment under Section 3.2, and the Executive shall be entitled
to receive the payments specified in Section 3.2, less any disability benefits
provided through Company-provided disability benefits.
Section 2.6. Other Employee Benefits. The Company shall pay
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directly, or shall reimburse the Executive for, reasonable expenses up to a
maximum of $4,000 in any year in connection with (i) financial and estate
planning advice and (ii) the preparation of a federal and state income tax
returns. The Company shall also advance the initiation fee (unless heretofore
paid) and pay the annual dues and assessments during the Employment Period for
the Executive's membership in one country club and one luncheon club in the Los
Angles area. The Executive agrees to sell any such membership and to use the
proceeds of such sale (which shall be the only amount reimbursable to the
Company in respect of its advance) to reimburse the Company, as soon as
practicable following the termination of the Employment Period, if the rules of
the club permit the sale of a membership. The Executive may also retain any
such membership and repay the Company the amount of its initial advance for the
initiation fee within 12 months following the termination of the Employment
Period. The Executive shall also be entitled to participate in all employee
benefits plans and to receive all other fringe benefits that are from time to
time made generally available to senior management of the Company, including a
leased automobile (equivalent to his leased automobile as of the date of this
Agreement). The employee benefits made available to the Executive, other than
plans described in Section 2.2 and 2.3 and plans providing for benefits in the
form of, or investments in, Company stock ("Excluded Benefits"), in the
aggregate shall be at least comparable in value to the employee benefits (less
the Excluded Benefits) made
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available to the Executive immediately prior to the Effective Date.
In addition to the foregoing, the Company will continue to make
available to the Executive $3,000,000 of life insurance during the Employment
Period. The amount of life insurance coverage shall be satisfied by aggregating
the death benefits payable to the Executive's beneficiary under the Company's
group insurance policy and other individual life insurance. The Company agrees
to pay the annual premium on any such insurance policies up to a maximum of
$10,000 per year during the Employment Period. The Company also agrees to pay
the cost of annual physical exams for the Executive.
Section 2.7. Expense Reimbursements. The Company shall reimburse the
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Executive for all proper expenses incurred by him in the performance of his
duties hereunder in accordance with the policies and procedures established by
the Company.
ARTICLE III.
TERMINATION OF EMPLOYMENT
Section 3.1. Definition of Certain Terms. As used in this Agreement,
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the following terms shall have the respective meanings set forth below:
(A) "Cause" means (1) a material breach by the Executive of those
duties and responsibilities of the Executive which do not differ in any material
respect from the duties and responsibilities of the Executive on the date of
this Agreement (other than as a result of incapacity due to physical or mental
illness) which is demonstrably willful and deliberate on the Executive's part,
which is committed in bad faith or without reasonable belief that such breach is
in the best interests of the Company and which is not remedied in a reasonable
period of time after receipt of written notice from the Company specifying such
breach or (2) the commission by the Executive of a crime involving moral
turpitude.
(B) "Change in Control" of the Company means (i) any sale or transfer
of stock of the Company after which the Parent Company will no longer own,
directly or indirectly, a majority of the combined voting power of outstanding
securities of the Company or (ii) any sale or transfer of a majority of the
assets of the Company, after which the Parent Company will no longer own,
directly or indirectly, a majority of the combined voting power or other voting
interests of the entity to which such assets are transferred. "Change in
Control" of the Parent Company means any acquisition by any individual, entity
or group of securities of the Parent Company which have a majority of the
combined voting power of outstanding securities of the Parent Company.
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(C) "Good Reason" means, without the Executive's express written
consent, the occurrence of any of the following events, unless cured by the
Company or the Parent Company within a reasonable period of time after receipt
of written notice from the Executive specifying such breach:
(1) any of (i) the assignment to the Executive of duties which are
materially inconsistent with the Executive's position(s), duties,
responsibilities or status with the Company and Parent Company as described in
Section 1.1, (ii) a material change in the Executive's reporting
responsibilities, titles or offices with the Company and Parent Company as
described in Section 1.1, or (iii) any removal or involuntary termination of the
Executive from the Company otherwise than as expressly permitted by this
Agreement or any failure to elect or re-elect the Executive to any position with
the Company if held by the Executive as of the Effective Date of this Agreement
or if specifically provided for in this Agreement or to use the Parent Company's
best efforts to elect or re-elect the Executive to the Parent Company's Board
of Directors, or to appoint the Executive as a member of the Group Management of
the Parent Company;
(2) a reduction by the Company in the Executive's Base Salary as in
effect on the Effective Date of this Agreement or as the same may be increased
from time to time thereafter;
(3) any requirement of the Company that the Executive (i) be based
anywhere other than at a facility in the same metropolitan area as the facility
where the Executive is located on the Effective Date of this Agreement or (ii)
travel on the Company business to an extent substantially more burdensome than
the level of obligations of the Executive as of the Effective Date of this
Agreement (taking into account the expanded international scope of the
Executive's responsibilities following the Effective Date of this Agreement); or
(4) the failure of the Company to provide the benefits agreed to be
provided under this Agreement.
(D) "Nonqualifying Termination" means a termination of the
Executive's employment (1) by the Company for Cause, (2) by the Executive for
any reason other than a Good Reason, or (3) as a result of the Executive's
death. Any Nonqualifying Termination shall become effective on (i) the date set
forth in a written notice from the Company or the Executive (with respect to
clauses (1) and (2) above) or (ii) the date of the Executive's death (with
respect to clause (3) above). Termination of the Executive's employment during
the Employment Period as result of the Executive's incapacity which results in
his qualification for benefits under the Company's long-term disability program
covering the Executive shall be a qualifying termination of employment under
Section 3.2.
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Section 3.2. Qualifying Termination During Employment Period. If
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during the Employment Period the employment of the Executive shall terminate,
other than by reason of a Nonqualifying Termination, the Company shall pay to
the Executive (or the Executive's beneficiary or estate) within 30 days
following the date upon which the Executive's employment is terminated, as
compensation for services rendered to the Company:
(1) a cash amount equal to the sum of the Executive's Base Salary
earned through such date of termination, to the extent not theretofore paid, and
the Executive's Annual Incentive Compensation, to the extent not theretofore
paid, for fiscal years ending prior to the date of termination; and
(2) a lump-sum cash payment in an amount equal to the sum of the
Executive's (x) Base Salary plus target Annual Incentive Compensation for the
balance of the Employment Period (including the target Annual Incentive
Compensation for the entire fiscal year in which the Executive's employment is
terminated, but prorated as described in Section 2.2(A)(ii) with respect to
fiscal year 2002) plus (y) target Long-term Incentive Compensation for fiscal
years 1999 through 2001, each as in effect on such date of termination;
provided, however, that (A) if the Executive's employment is terminated by the
Executive for Good Reason during the Employment Period, the amount, if any,
payable with respect to Annual and Long-Term Incentive Compensation shall be
calculated on the basis of actual performance and paid as soon as practicable
after the Company's performance has been established, (B) if the Executive's
employment is terminated by the Company without Cause during the Employment
Period, the amount payable with respect to Annual and Long-Term Incentive
Compensation shall be based on target Annual Incentive Compensation for the
balance of the Employment Period (including the entire fiscal year in which the
Executive's employment is terminated, but prorated as described in Section
2.2(A)(ii) with respect to fiscal year 2002) and target Long-Term Incentive
Compensation for fiscal years 1999 through 2001, each as in effect on the date
of termination, such amount to be paid in a cash lump sum within 30 days of the
date of termination, and (C) any amount paid pursuant to this Section shall be
paid in lieu of all other severance, salary or bonus continuation, and Annual or
Long-Term Incentive Compensation to be received by the Executive upon
termination of employment of the Executive under any plan, policy or arrangement
of the Company. In addition, the Executive shall be entitled to receive his
fully accrued and 100% Vested Benefit commencing on the date determined under
the Retirement Plan, as provided in Section 2.4, and shall be entitled to
receive other employee benefits, as provided in Section 2.6, for the balance of
the Employment Period.
Section 3.3. Nonqualifying Termination During Employment Period. If
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the Executive's employment is terminated during the Employment Period due to a
Nonqualifying Termination, the Executive shall be entitled to receive his Base
Salary earned
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through the date of termination, any Annual Incentive Compensation earned for
the fiscal year preceding the date of termination, to the extent not theretofore
paid, and a pro-rata portion of the Executive's Annual Incentive Compensation
for the fiscal year in which the Executive's employment is terminated, based on
the number of days from the beginning of the fiscal year through the date of
termination, divided by 365, based on the extent to which annual incentive
targets are met, such amount, if any, to be determined and paid not later than
March 15 of the year next following the year for which the Annual Incentive
Compensation was earned, as well as his fully accrued and 100% Vested Benefit
under the Retirement Plan, as provided in Section 2.4.
Section 3.4. Release. All payments due under this Agreement upon
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termination of employment shall be subject to execution of a release in the form
of Exhibit A annexed.
ARTICLE IV.
QUALIFYING TERMINATION OF EMPLOYMENT WITHIN 24 MONTHS
FOLLOWING EFFECTIVE DATE
Section 4.1. Termination Within 24 Months Following Effective Date.
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If, within 24 months following the Effective Date, either (A) the Company or
Parent Company gives a notice of termination of the Executive's employment
without Cause, (B) the employment of the Executive is terminated by the
Executive, other than by (i) a Nonqualifying Termination or (ii) a Termination
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for Good Reason pursuant to Section 3.1(C)(1)(i) or (ii), after the Company or
the Parent Company has offered to assign the Executive other responsibilities
and to appoint or otherwise permit the Executive to continue his service on the
Board of Directors of the Parent Company (subject to continued election by
shareholders), in each case for the balance of the Employment Period, or (C) the
Company or Parent Company takes any action which would constitute Good Reason,
but the Executive declines to terminate his employment and continues to perform
the services which are assigned to him, and if any payments or benefits which
are payable to the Executive are deemed because of such action by the Company or
Parent Company to constitute "parachute payments" (as defined below), then in
any such event the Company shall pay to the Executive, in addition to amounts
payable under any other provision of this Agreement, the following additional
amounts:
(A) Gross-Up Payments for Excise Taxes. In the event that the
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payments or benefits provided for in this Agreement or otherwise payable to the
Executive (either before or after the date of this Agreement) constitute
"parachute payments" within the meaning of Section 280G of the Internal Revenue
Code of 1986, as amended (the "Code") (or comparable provisions of applicable
state laws) and will be subject to the excise tax imposed by Section 4999 of the
Code (or comparable provisions of applicable state laws), then the Company shall
pay to the Executive or to relevant tax authorities (i) an amount sufficient to
satisfy such
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excise tax, and (ii) an additional amount sufficient to pay the excise tax and
all taxes (including, but not limited to, federal and state income and
employment taxes) arising from the payments made by the Company to the Executive
or to relevant tax authorities pursuant to this sentence (collectively, the
"Gross-Up Payments"). All determinations of the Executive's excise tax liability
shall be made in writing by PricewaterhouseCoopers LLP (the "Accountants"). For
purposes of making the calculations required by this Section, the Accountants
may make reasonable assumptions and approximations concerning applicable taxes
and may rely on reasonable, good faith interpretations concerning the
application of Sections 280G and 4999 of the Code (or comparable provisions of
applicable state laws). The Company and the Executive shall furnish to the
Accountants such information and documents as the Accountants may reasonably
request in order to make a determination under this Section. The Company shall
bear all fees and costs the Accountants may reasonably charge or incur in
connection with any calculations contemplated by this Section. The Company
further agrees that, if at any time any tax authority determines that a greater
excise tax liability is due than the amount which is determined by the
Accountants, the Executive shall receive a further payment from the Company, or
the Company shall pay to the relevant tax authorities, an additional amount
sufficient to pay such additional excise tax liability and all taxes (including,
but not limited to, federal and state income and employment taxes) arising from
such further payment. The Executive further agrees that if at any time it is
determined, by IRS ruling or otherwise, that, with regard to tax liabilities
described in this paragraph, less or no tax is due, then the Executive agrees to
cooperate fully with the Company and the Accountants to apply for a refund or to
claim a credit against his other tax liability for any such taxes which were
previously paid and to promptly pay to the Company any such refunds which he
receives or any such credits which he actually utilizes to reduce his other tax
liabilities (net of any additional taxes which are payable by him on account of
receipt of such refund or claim of such credit); and to repay to the Company any
Gross-Up Payments which he received to cover any such taxes which have not yet
been paid (net of any adverse tax effect upon the Executive on account of
receipt of the Gross-Up Payments in one calendar year and refund of such amounts
in a subsequent calendar year); provided that the Company shall hold the
Executive harmless against all costs and expenses incurred in obtaining such
refund or in confirming the right to claim such credit.
ARTICLE V.
INCOMPATIBLE ACTIVITIES, CONFIDENTIAL INFORMATION
Section 5.1. Incompatible Activities. During the Employment Period
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and for a period of one year thereafter, the Executive:
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(A) shall not engage in any activities, whether as employer,
proprietor, partner, stockholder (other than the holder of less than 5% of the
stock of a corporation the securities of which are traded on a national
securities exchange or the NASDAQ National Market System), director, officer,
employee or otherwise, in competition with (1) the businesses conducted at the
date hereof by the Company or Parent Company or (2) any business in which the
Company or Parent Company is substantially engaged at any time during the
Employment Period;
(B) shall not solicit, directly or indirectly, either alone or
through any person with whom the Executive is affiliated, in competition with
the Company or Parent Company, any person who is a customer of the businesses
conducted by the Company or Parent Company at the date hereof or of any business
in which the Company or Parent Company is substantially engaged at any time
during the Employment Period; and
(C) shall not, directly or indirectly, either alone or through any
person with whom the Executive is affiliated, induce or attempt to persuade any
employee of the Company or Parent Company to terminate his or her employment
relationship in order to enter into competitive employment, or hire any such
person within six months of his termination of employment from the Company.
Section 5.2. Trade Secrets. The Executive shall not, at any time
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during the Employment Period or thereafter, make use of or divulge any trade
secrets or other confidential information of the Company or Parent Company,
except to the extent that such information becomes a matter of public record, is
published in a newspaper, magazine or other periodical available to the general
public, in each case, without unauthorized disclosure by the Executive, or as
the Company may so authorize in writing; and when the Executive shall cease to
be employed by the Company, the Executive shall surrender to the Company all
records and other documents obtained by him or entrusted to him during the
course of his employment hereunder (together with all copies thereof) which
pertain specifically to any of the businesses covered by the covenants in
Section 5.1 or which were paid for by the Company.
Section 5.3. Scope of Covenants; Remedies. The following provisions
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shall apply to the covenants of the Executive contained in Sections 5.1 and 5.2;
(A) the covenants contained in Section 5.1 shall apply within all the
territories in which the Company is actively engaged in the conduct of business
during the Employment Period, including, without limitation, the territories in
which customers are then being solicited;
(B) the Executive confirms and acknowledges that (i) he was
represented by counsel of his own choosing during the
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negotiation of the limitations set forth in this Article V, (ii) his strict
adherence to the limitations imposed upon him was a material factor in Parent
Company's entering into the Merger Agreement and consummating the transactions
contemplated thereby, and agreeing to pay the Executive the cash and other
compensation called for in this Agreement, (iii) the Company's ability to
maintain continuing relationships with its employees without disruption was a
material factor in Parent Company's entering into the Merger Agreement and
agreeing to consummate the transactions contemplated thereby, (iv) his failure
to adhere to the obligations imposed by this Article V will expose Parent
Company to substantial and irreparable harm. Accordingly, the Executive agrees
that the remedy at law for any breach by him of the covenants and agreements set
forth in this Article V may be inadequate and that in the event of any such
breach, the Company may, in addition to the other remedies that may be available
to it at law, seek injunctive relief prohibiting him (together with all those
persons associated with him) from breach of such covenants and agreements;
(C) each party intends and agrees that if in any action before any
court or agency legally empowered to enforce the covenants contained in Sections
5.1 and 5.2 any term, restriction, covenant or promise contained therein is
found to be unreasonable and accordingly unenforceable, then such term,
restriction, covenant or promise shall be deemed modified to the extent
necessary to make it enforceable by such court or agency; and
(D) the covenants contained in Sections 5.1 and 5.2 shall survive the
conclusion of the Executive's employment by the Company.
ARTICLE VI.
MISCELLANEOUS
Section 6.1. Agreement to Defend and Indemnify; Officers and
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Directors Liability Insurance. The Company shall indemnify, hold harmless and
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defend the Executive, and shall maintain officers and directors liability
insurance covering the Executive, subject to the provisions and for the period
specified in Section 6.8 of the Merger Agreement (as defined in Section 2.4
hereof). This section 6.1 shall survive the end of the Employment Period and
shall remain in effect for the period specified in Section 6.8 of the Merger
Agreement.
Section 6.2. Services as Officer or Director. Promptly following the
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commencement of, and at all times during, the Employment Period, the Executive
shall be entitled to be nominated for election as a director of the Company. If
elected or appointed, the Executive shall serve as a director of the Company and
as an officer and/or director of all current and future subsidiaries and
affiliates of the Company without any additional compensation for such services.
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Section 6.3. Key-Person Insurance. The Executive shall aid the
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Company in procuring any life, health, accident, disability or other insurance
which the Company should at any time apply for in its own name and at its own
expense to insure the Company's obligations hereunder, by submitting to the
usual and customary medical examinations and by completing, executing and
delivering such applications and other instruments in writing as may be
reasonably required by any insurance company or companies.
Section 6.4. Notices. Any notice or request required or permitted to
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be given hereunder shall be in writing and shall be made by hand delivery,
first-class mail (registered or certified, return receipt requested), telecopier
or overnight courier guaranteeing next business day delivery to the relevant
address set forth in the signature blocks below or to any other address
designated by either party by notice similarly given. Each such notice shall be
deemed to have been given, at the time delivered, if personally delivered or
mailed (with sufficient postage prepaid); when receipt is acknowledged, if
telecopied; and the next business day after timely delivery to the courier, if
sent by overnight air courier guaranteeing next business day delivery.
Section 6.5. Assignment and Succession. The rights and obligations
-------------------------
of the Company and Parent Company under this Agreement shall inure to the
benefit of and be binding upon their successors and assigns, and the Executive's
rights and obligations hereunder shall inure to the benefit of and be binding
upon his estate, legal representatives and guardians.
Section 6.6. Headings. The Article, Section, paragraph and
--------
subparagraph headings are for convenience of reference only and shall not define
or limit the provisions hereof.
Section 6.7. Joint Employment; Guaranty by Parent Company.
--------------------------------------------
Xxxxxxxxx'x Inc. ("Pinkerton") has a wholly owned subsidiary, Pinkerton
Management Corporation (f.k.a. District Security) ("PMC") for the purpose of
employing all of the employees located at Pinkerton world headquarters, and the
Executive shall be jointly employed by Pinkerton and PMC under the terms and
conditions set forth in this Agreement. Pinkerton and PMC shall be jointly and
severally liable for satisfying any obligation that Company may have under this
Agreement. Parent Company irrevocably, absolutely and unconditionally
guarantees to the Executive the full and timely performance of the Company's
financial obligations pursuant to this Agreement. This guaranty is a payment
guaranty and not a guaranty of collection. Parent Company waives any right to
require the Executive to file suit and proceed against the Company.
13
Section 6.8. Payment of Professional Fees. The Company shall pay the
----------------------------
professional fees incurred by the Executive in connection with entering into
this Agreement.
Section 6.9. Entire Agreement. This Agreement shall be effective
----------------
from and after the Effective Date and sets forth the entire and final agreement
and understanding of the Company, the Parent Company and the Executive and
contains all of the agreements made between them with respect to the subject
matter hereof. As of the Effective Date, this Agreement supersedes any and all
other agreements, either oral or in writing, between the Company and the
Executive with respect to the Executive's provision of services to the Company
and his termination of employment therefrom. No change or modification of this
Agreement shall be valid unless in writing and signed by the Company, the Parent
Company and the Executive. Until this Agreement becomes effective on the
Effective Date, the current employment agreement and arrangements which are in
effect between the Company and the Executive shall remain in full force and
effect.
Section 6.10. Applicable Law and Venue. This Agreement shall at all
------------------------
times be governed by and construed, interpreted and enforced in accordance with
the laws of the State of California without giving effect to its choice of law
rules. The parties agree that the courts of the State of California shall have
jurisdiction over all disputes which arise under this Agreement or otherwise
relate to the employment or termination of employment of the Executive by the
Company and Parent Company. The parties further agree that the courts chosen
for resolution of all such disputes shall be located in Los Angeles County,
California.
Section 6.11. Counterparts. This Agreement may be executed in one or
------------
more counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
Section 6.12. Waiver of Breach. A waiver by the Company or the
----------------
Parent Company of a breach of any provision of this Agreement by the Executive
shall not operate or be construed as a waiver of any subsequent breach by the
Executive. No waiver shall be valid unless it is in writing and signed by an
authorized officer of each of the Company (other than the Executive) and the
Parent Company.
Section 6.13. Assignment. The Executive acknowledges that the
----------
services he is to render are unique and personal. Accordingly, the Executive
may not assign any of his rights or delegate any of his duties or obligations
under this Agreement. The rights and obligations of the Company under this
Agreement shall inure to the benefit of and shall be binding upon the successors
and assigns of the Company.
14
Section 6.14. Tax Withholding. All payments under this Agreement
---------------
shall be subject to such deductions or withholdings for all taxes and other
purposes as shall at the time of such payment be required by applicable law.
IN WITNESS WHEREOF, the Company and Parent Company have caused this
Agreement to be signed by their duly authorized officers, and the Executive has
signed this Agreement as of the day and year first above written.
COMPANY: XXXXXXXXX'X, INC.
World Support Center
0000 Xxxx Xxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, XX 00000
BY: /s/ C. Xxxxxxx Xxxxxx
-----------------------------
PINKERTON MANAGEMENT CORPORATION
World Support Center
0000 Xxxx Xxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, XX 00000
BY: /s/ C. Xxxxxxx Xxxxxx
------------------------------
PARENT COMPANY: SECURITAS AB
Xxx 00000
0-000 00
Xxxxxxxxx, Xxxxxx
BY: /s/ Xxxxxx Xxxxxxxx
------------------------------
EXECUTIVE: Xxxxx X. Xxxxx
0000 Xx Xxxxx Xxxxxxx
Xxxxxx, XX 00000
BY: /s/ Xxxxx X. Xxxxx
------------------------------
15
EXHIBIT A
SEPARATION AND RELEASE AGREEMENT
This Separation and Release Agreement ("Agreement") is entered into as of
this ___ day of ___________, between [Company] and any successor thereto
(collectively, the "Company") and [Executive] (the "Executive").
The Executive and the Company agree as follows:
1. The employment relationship between the Executive and the Company
terminated on ____________ (the "Termination Date").
2. In accordance with the Employment Agreement between the Company and
Executive dated as of February 19, 1999, as amended (the "Employment
Agreement"), the Company has agreed to pay the Executive certain payments and to
make certain benefits available after the Termination Date, which are listed on
Schedule A annexed hereto.
3. The Company agrees to continue to be bound by Article IV and Sections 6.1
and 6.7 of the Employment Agreement.
4. In consideration of the above, the sufficiency of which the Executive
hereby acknowledges, the Executive, on behalf of the Executive and the
Executive's heirs, executors and assigns, hereby releases and forever discharges
the Company and its, parents, affiliates, subsidiaries, divisions, any and all
current and former directors, officers, employees, agents, and contractors and
their heirs and assigns, and any and all employee pension benefit or welfare
benefit plans of the Company, including current and former trustees and
administrators of such employee pension benefit and welfare benefit plans, from
all claims, charges, or demands, in law or in equity, whether known or unknown,
which may have existed or which may now exist from the beginning of time to the
date of this Agreement, including, without limitation, any claims the Executive
may have arising from or relating to the Executive's employment or termination
from employment with the Company, including a release of any rights or claims
the Executive may have under Title VII of the Civil Rights Act of 1964, as
amended, and the Civil Rights Act of 1991 (which prohibit discrimination in
employment based upon race, color, sex, religion, and national origin); the
Americans with Disabilities Act of 1990, as amended, and the Rehabilitation Act
of 1973 (which prohibit discrimination based upon disability); the Family and
Medical Leave Act of 1993 (which prohibits discrimination based on requesting or
taking a family or medical leave); Section 1981 of the Civil Rights Act of 1866
(which prohibits conspiracies to discriminate); the Employee Retirement Income
Security Act of 1974, as amended (which prohibits discrimination with regard to
benefits); any other federal, state, or local laws against discrimination; or
any other federal, state or local statute, or common law relating to employment,
wages, hours, or any other terms and conditions of
employment. This includes a release by the Executive of any claims for wrongful
discharge, breach of contract, torts or any other claims in any way related to
the Executive's employment with or resignation or termination from the Company.
This release also includes a release of any claims for age discrimination under
the Age Discrimination in Employment Act of 1967, as amended ("ADEA"). The ADEA
requires that the Executive be advised to consult with an attorney before the
Executive waives any claim under ADEA. In addition, the ADEA provides the
Executive with at least 21 days to decide whether to waive claims under ADEA and
seven days after the Executive signs the Agreement to revoke that waiver. This
release does not release the Company from any obligations due to the Executive
under the Company's Supplemental Retirement Income Plan, as amended by the
Employment Agreement, or under this Agreement.
5. This Agreement is not an admission by either the Executive or the Company
of any wrongdoing or liability.
6. The Executive waives any right to reinstatement or future employment with
the Company following the Executive's separation from the Company on the
Termination Date.
7. The Executive agrees not to engage in any act after execution of the
Separation and Release Agreement that is intended, or may reasonably be expected
to harm the reputation, business, prospects or operations of the Company, its
officers, directors, stockholders or employees, provided this paragraph shall
not extend the limitation on "incompatible activities" which is contained in
Section 5.1 of the Employment Agreement. The Company further agrees that it
will engage in no act which is intended, or may reasonably be expected to harm
the reputation, business or prospects of the Executive. This paragraph shall
not prohibit either party from cooperating with government agencies.
8. The Executive shall continue to be bound by Article V of the Employment
Agreement.
9. The Executive shall promptly return all the Company property in the
Executive's possession, including, but not limited to, the Company keys, credit
cards, cellular phones, computer equipment, software and peripherals and
originals or copies of books, records or other information pertaining to the
Company business.
10. This Agreement shall be governed by and construed in accordance with the
laws of the State of California, without reference to the principles of conflict
of laws. The jurisdiction and venue for any disputes arising under this
Agreement shall be governed by Section 6.10 of the Employment Agreement.
11. This Agreement represents the complete agreement between the Executive
and the Company concerning the subject
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matter in this Agreement and supersedes all prior agreements or understandings,
written or oral. This Agreement may not be amended or modified otherwise than by
a written agreement executed by the parties hereto or their respective
successors and legal representatives.
12. Each of the sections contained in this Agreement shall be enforceable
independently of every other section in this Agreement, and the invalidity or
nonenforceability of any section shall not invalidate or render unenforceable
any other section contained in this Agreement.
13. It is further understood that for a period of 7 days following the
execution of this Agreement in duplicate originals, the Executive may revoke
this Agreement, and this Agreement shall not become effective or enforceable
until the revocation period has expired. No revocation of this Agreement by the
Executive shall be effective unless the Company has received within the 7-day
revocation period, written notice of any revocation, all moneys received by the
Executive under this Agreement and all originals and copies of this Agreement.
14. This Agreement has been entered into voluntarily and not as a result of
coercion, duress, or undue influence. The Executive acknowledges that the
Executive has read and fully understands the terms of this Agreement and has
been advised to consult with an attorney before executing this Agreement.
Additionally, the Executive acknowledges that the Executive has been afforded
the opportunity of at least 21 days to consider this Agreement.
The parties to this Agreement have executed this Agreement as of the day
and year first written above.
[Company]
By:___________________________________
Name:
Title:
______________________________________
[Executive]
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