EXHIBIT 99(c)(8)
EXECUTION COPY
TERMINATION AGREEMENT
TERMINATION AGREEMENT, dated as of February 19, 1999 (the
"Agreement"), among Pinkerton's, Inc., a Delaware corporation (the "Company"),
Securitas AB, a Swedish corporation ("Parent"), and Xxxxxx X. Xxxxxx ("Xxxxxx").
W I T N E S S E T H:
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WHEREAS, contemporaneously with the execution and delivery of this
Agreement, Parent, Securitas Acquisition Corp., a Delaware corporation and an
indirect wholly owned subsidiary of Parent ("Purchaser"), and the Company are
entering into an Agreement and Plan of Merger, dated as of the date hereof (the
"Merger Agreement"), which provides for, upon the terms and subject to the
conditions set forth therein, (i) the commencement by Purchaser of a tender
offer (the "Offer") for all of the issued and outstanding shares of common
stock, par value $.001 per share, of the Company, including the associated
rights to purchase the Company's Series A Junior Participating Preferred Stock,
at a price per share equal to the Per Share Amount (as defined in the Merger
Agreement), and (ii) the subsequent merger of Purchaser with and into the
Company;
WHEREAS, the Company and Xxxxxx are party to a Personal Services
Agreement, dated February 10, 1994 (the "Services Agreement");
WHEREAS, as a condition to their willingness to enter into the Merger
Agreement, Parent and Purchaser have requested that the Company and Xxxxxx enter
into this Agreement to terminate the Services Agreement; and
WHEREAS, in order to induce Parent and Purchaser to enter into the
Merger Agreement, the Company and Xxxxxx are willing to enter into this
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, the Company, Parent, and Xxxxxx hereby agree as follows:
ARTICLE I.
TERMINATION OF SERVICES AGREEMENT
SECTION 1.1. Termination of Services Agreement. The Services
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Agreement shall be terminated upon the date on which the Offer is consummated
(the "Effective Date"). Upon such termination, the Services Agreement shall
become void and have no effect, without any liability or obligation on the part
of the Company, Xxxxxx or Parent or any affiliate of Parent; provided, however,
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that Company shall pay Xxxxxx promptly following the Effective Date the cash
compensation, if any, that had become due
and payable prior to the Effective Date under Sections 4.01(a) and (b) of the
Services Agreement and remains unpaid at such time. If the Offer is terminated
or expires without any purchases thereunder of any shares of common stock of the
Company by Purchaser or Parent, then this Agreement shall terminate
automatically and shall become void and have no effect without any further
action by the parties hereto, effective as of the date of such termination or
expiration, and the Services Agreement shall continue in full force and effect.
ARTICLE II.
RETIREMENT BENEFIT
SECTION 2.2. Retirement Benefit. From and after the Effective Date,
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the Company shall continue to pay to Xxxxxx the pension of $300,000 per annum
which he currently receives under the Services Agreement, payable in equal
monthly installments, subject to the following provisions:
(a) If Xxxxxx dies before having received an aggregate of one hundred
eighty monthly installments under the Services Agreement and this Agreement, the
monthly installments shall be paid as designated in the Beneficiary Designation
and Election form executed by Xxxxxx in connection with the Company's
Supplemental Retirement Income Plan (the "SERP") until an aggregate of one
hundred eighty installments under the Services Agreement and this Agreement have
been paid to Xxxxxx and his designated beneficiary.
(b) The benefit provided in this Section 2.1 shall continue to be
fully vested, unless Xxxxxx breaches Section 5.1 hereof, in which case, the
Company's obligation to make any future payments under this Section 2.1 shall
lapse.
(c) These payments shall be made under, and in accordance with, the
SERP and Xxxxxx shall be considered a SERP Participant. In applying the SERP,
this Section 2.1 shall apply in lieu of any inconsistent SERP provisions and all
years of Xxxxxx'x service for the Company or any predecessor in any capacity
shall be taken into account in determining his rights under the SERP, other than
the amount of his benefit (which shall be determined under this Section 2.1).
(d) The Company shall have the right to withhold federal, state or
local taxes, to the extent, if any, required by law, from any amounts payable
under this Section 2.1.
(e) Parent irrevocably, absolutely and unconditionally guarantees to
Xxxxxx 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 waives any right to require Xxxxxx to file suit
and proceed against the Company.
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SECTION 2.2. Health Benefits.
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(a) The Company agrees to extend to Xxxxxx the same health care
programs, if any, it is contemporaneously providing to senior executives and on
the same terms (except that such coverage shall not extend to any spouse or
other family member of Xxxxxx), or to provide substantially comparable health
care benefits on substantially comparable terms. Except as provided in
subsection (d), this coverage shall be provided for the rest of Xxxxxx'x life.
(b) For the rest of Xxxxxx'x life, the Company shall reimburse Xxxxxx
for the cost of an annual physical examination. Xxxxxx shall cooperate with the
Company in connection with any insurance the Company obtains for the health care
benefits hereunder, including without limitation, submitting to periodic
physical examinations.
(c) To the extent Xxxxxx is eligible for government-provided health
coverage, the Company may reduce the benefits to be provided pursuant to this
Section 2.2 by treating the government-provided health coverage as provided by
the Company, subject to the following:
(i) That coverage cannot be taken into account to the extent, if
any, prohibited by law;
(ii) That coverage can only be taken into account if it is
provided without premium or similar charge to Xxxxxx or if the Company
reimburses Xxxxxx for such premiums or similar charges; and
(d) Benefits under this Section 2.2 shall terminate if Xxxxxx breaches
Section 5.1 hereof (prohibiting competition).
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF XXXXXX
Xxxxxx hereby represents and warrants to the Company and Parent as
follows:
SECTION 3.1. Enforceability, etc. This Agreement has been duly
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executed and delivered by Xxxxxx and constitutes a legal, valid and binding
obligation of Xxxxxx, enforceable against Xxxxxx in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency, moratorium or
other similar laws and except that the availability of equitable remedies,
including specific performance, is subject to the discretion of the court before
which any proceeding for such remedy may be brought.
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SECTION 3.2. No Conflicts; Required Filings and Consents.
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(a) The execution and delivery of this Agreement by Xxxxxx does not,
and the performance of this Agreement by Xxxxxx will not, (i) conflict with or
violate any law applicable to Xxxxxx or by which Xxxxxx or any of Xxxxxx'x
properties is bound or affected or (ii) result in any breach of or constitute a
default (or an event that with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, acceleration or
cancellation of, or result in the creation of a lien or encumbrance on any
assets of Xxxxxx, pursuant to any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which Xxxxxx is a party or by which Xxxxxx or any of Xxxxxx'x assets is bound
or affected, except, in the case of clauses (i) and (ii), for any such breaches,
defaults or other occurrences that would not prevent or delay the performance by
Xxxxxx of his obligations under this Agreement.
(b) The execution and delivery of this Agreement by Xxxxxx does not,
and the performance of this Agreement by Xxxxxx will not, require any consent,
approval, authorization or permit of, or filing with or notification to, any
governmental or regulatory authority, domestic or foreign, except where the
failure to obtain such consents, approvals, authorizations or permits, or to
make such filings or notifications, would not prevent or delay the performance
by Xxxxxx of such his obligations under this Agreement.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF
THE COMPANY AND PARENT
Each of the Company and Parent hereby severally represents and
warrants to Xxxxxx as follows:
SECTION 4.1. Due Organization, Authorization, etc. It is duly
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organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation. It has all requisite corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby by it have been
duly authorized by all necessary corporate action on its part. This Agreement
has been duly executed and delivered by it and constitutes a legal, valid and
binding obligation of it, enforceable against it in accordance with this
Agreement's terms, except as enforcement may be limited by bankruptcy,
insolvency, moratorium or other similar laws and except that the availability of
equitable remedies, including specific performance, is subject to the discretion
of the court before which any proceeding for such remedy may be brought.
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ARTICLE V.
NON-COMPETITION AND CONFIDENTIALITY
SECTION 5.1. Competitive Activities. Except to the extent approved
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by the Board of Directors of the Company prior to the date hereof, while
receiving any payments or benefits pursuant to this Agreement, Xxxxxx shall not,
directly or indirectly, engage or participate in any business that is in
competition in any manner whatsoever with the business of the Company (as
determined in good faith by the Board of Directors of the Company). Nothing
herein shall prevent Xxxxxx from owning up to five percent of any class of
publicly traded securities of any corporation or other entity. Xxxxxx shall hold
all confidential information in trust and confidence for the Company and, except
as may be authorized by the Company in writing, Xxxxxx shall not disclose to any
person any such confidential information. For the purposes of this Agreement,
"confidential information" shall include, but not be limited to, the Company's
business plans, budgets, marketing strategies, costs, profits, customer lists,
preferences and requirements and any other information known by Xxxxxx to be
confidential as long as such information is not publicly disclosed by the
Company.
ARTICLE VI.
RESIGNATIONS
SECTION 6.1. Resignations. Effective upon the Effective Date, Xxxxxx
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hereby resigns (i) as a member of the Board of Directors of the Company and as
an officer of the Company, and (ii) as a member of the Board of Directors of any
subsidiary of the Company on which he then serves and as an officer of any such
subsidiary. Xxxxxx shall continue to be "Chairman Emeritus" of the Company,
although Xxxxxx shall not have, nor represent to any third party that he has,
any power or authority to bind the Company.
ARTICLE VII.
RELEASE
SECTION 7.1. Release.
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(a) Xxxxxx, for and on behalf of himself and his heirs,
administrators, executors and assigns, does hereby, from and after the Effective
Date, fully and forever release, remise and discharge the Company and Parent and
each of their respective affiliates and each officer, director, employee and
stockholder of the Company and Parent and such affiliates in their capacities as
such (collectively, the "Xxxxxx Released Parties") of and from any and all
claims which he has had, may have had or now has against any Xxxxxx Released
Party for or by reason of any matter, cause or thing whatsoever.
Notwithstanding the foregoing, this
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Section 7.1(a) shall not apply to or release any claims (i) arising under this
Agreement, (ii) pursuant to Section 6.8 of the Merger Agreement, (iii) for
indemnification in Xxxxxx'x capacity as a director of the Company pursuant to
any indemnification agreement in effect on the date hereof, the Company's
Restated Certificate of Incorporation or By-Laws, or applicable law, (iv) Xxxxxx
may have to receive the Per Share Amount pursuant to the Offer or the Merger
Agreement or the Exercise Price pursuant to the Stockholders Agreement, dated as
of the date hereof, among Parent and certain stockholders of the Company or (v)
relating to options to acquire any shares of common stock of the Company.
(b) Each of the Company and Parent, for and on behalf of itself, its
subsidiaries and its successors and assigns, does hereby, from and after the
Effective Date, fully and forever release, remise and discharge Xxxxxx, his
heirs, administrators, executors and assigns (collectively, the "Company
Released Parties") of and from any and all claims which it has had, may have had
or now has against any Xxxxxx Released Party for or by reason of any matter,
cause or thing whatsoever. Notwithstanding the foregoing, this Section 7.1(b)
shall not apply to or release any claims (i) arising under this Agreement or
(ii) arising under the Stockholders Agreement, dated as of the date hereof,
among Parent and certain stockholders of the Company for whom Xxxxxx serves as
trustee.
(c) For the purposes of this Section 7.1, "claims" shall include any
and all claims, agreements, covenants, warranties, promises, undertakings,
actions, suits, causes of action, obligations, debts, accounts, judgments,
losses and liabilities, of whatsoever kind or nature, in law, equity or
otherwise.
(d) The foregoing provisions are subject to the provisions of Section
1542 of the California Civil Code, to the extent applicable to the parties
hereto.
ARTICLE VIII.
MISCELLANEOUS
SECTION 8.1. Specific Performance. Xxxxxx acknowledges that, if he
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fails to perform any of his obligations under Section 5.1 hereof, immediate and
irreparable harm or injury would be caused to the Company and Parent for which
money damages would not be an adequate remedy. In such event, Xxxxxx agrees that
each of the Company and Parent shall have the right, in addition to any other
rights it may have, to specific performance of such obligations. Accordingly,
if the Company or Parent should institute an action or proceeding seeking
specific enforcement of such obligations, Xxxxxx hereby waives the claim or
defense that the Company or Parent, as the case may be, has an adequate remedy
at law and hereby agrees not to assert in any such action or proceeding the
claim or defense that such a remedy at law exists.
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Xxxxxx further agrees to waive any requirements for the securing or posting of
any bond in connection with obtaining any such equitable relief.
SECTION 8.2. Headings. The headings contained in this Agreement are
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for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 8.3. Severability. If any term or other provision of this
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Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that transactions contemplated hereby are fulfilled to the maximum extent
possible.
SECTION 8.4. Entire Agreement; No Third-Party Beneficiaries. This
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Agreement constitutes the entire agreement and supersede any and all other prior
agreements and undertakings, both written and oral, among the parties, or any of
them, with respect to the subject matter hereof, and this Agreement is not
intended to confer upon any other person any rights or remedies hereunder;
provided, however, that the provisions of Section 2.1 are intended to be for the
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benefit of and enforceable by the person designated by Xxxxxx as his beneficiary
in the Beneficiary Designation and Election form under the SERP.
SECTION 8.5. Assignment. This Agreement shall not be assigned by
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operation of law or otherwise.
SECTION 8.6. Governing Law. This Agreement shall be governed by, and
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construed in accordance with, the laws of the State of California applicable to
contracts executed in and to be performed entirely within that State.
SECTION 8.7. Amendment. This Agreement may not be amended except by
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an instrument in writing signed by the parties hereto.
SECTION 8.8. Waiver. Any party hereto may (a) extend the time for
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the performance of any of the obligations or other acts of the other parties
hereto, (b) waive any inaccuracies in the representations and warranties of the
other parties hereto contained herein or in any document delivered pursuant
hereto and (c) waive compliance by the other parties hereto with any of their
agreements or conditions contained herein. Any agreement on the part of a party
hereto to any such extension or waiver
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shall be valid only as against such party and only if set forth in an instrument
in writing signed by such party. The failure of any party hereto to assert any
of its rights under this Agreement or otherwise shall not constitute a waiver of
those rights.
SECTION 8.9. Counterparts. This Agreement may be executed in one or
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more counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
shall constitute one and the same agreement.
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IN WITNESS WHEREOF, the Company, Parent and Xxxxxx have caused this
Agreement to be executed as of the date first written above.
PINKERTON'S, INC.
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: President and Chief Executive Officer
SECURITAS AB
By: /s/ Xxxxxx Xxxxxxxx
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Name: Xxxxxx Xxxxxxxx
Title: President and Chief Executive Officer
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
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