Exhibit 10.1
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT
(“Agreement”) made as of the 15th day of February, 2008
by and among SpectaGuard Holding Corporation, a Delaware
corporation (“Holding”), Allied Security Holdings LLC,
a Delaware limited liability company (the “Company”),
and William C. Whitmore, Jr. (“Executive”).
WHEREAS, the Executive is employed as
President and Chief Executive Officer of the Company and Holding
pursuant to an employment agreement by and among the Executive,
Holding and the Company, dated February 19, 2003 (as amended on
August 2, 2004, the “Existing Agreement”);
and
WHEREAS, the parties desire to enter
into this Agreement, which supersedes and replaces the Existing
Agreement and governs the terms of the Executive’s employment
with Holding and the Company and its subsidiaries as of the date
hereof.
NOW, THEREFORE, in consideration of
the mutual covenants and promises hereinafter set forth and for
other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereby agree as
follows:
1.
Effective Date
. This Agreement shall become
effective as of the date of this Agreement (the “Effective
Date”).
2.
Title . During the Term, Executive shall continue to
serve as the President and Chief Executive Officer of Holding and
of the Company and such subsidiaries of the Company as in effect on
the date hereof and from time to time as designated by the Company.
In addition, the Executive agrees to serve as a member of the Board
of Directors of Holding (the “Board”) and of the Board
of Managers of the Company and such other board of directors or
board of managers of subsidiaries of the Company from time to time
determined by the Company. For purposes of this Agreement, actions
required or contemplated to be taken by the Board hereunder shall
be taken by the Board with the Executive recusing himself from
participation in such action.
3.
Duties and
Responsibilities .
Executive hereby agrees to perform in good faith and with due care
all services which may be required of Executive in such position
and to be available to render such services at all reasonable times
and places in accordance with such reasonable directions and
requests as the Board may from time to time reasonably specify.
Executive shall, during the Term (as defined below), devote
substantially all of his time, ability, energy and skill to the
performance of his duties and responsibilities hereunder. The
Executive shall be provided an office and secretary and such other
assistance and work accommodations as are deemed appropriate by the
Board for the performance of Executive’s duties. Executive
shall perform his responsibilities from, and his associated staff
shall be located in, the Company’s principal offices
currently located in King of Prussia, PA. Executive shall be
provided a computer and modem for his use at his home
office.
4.
Term . The term of this Agreement shall commence as of
the Effective Date and shall continue until the fifth anniversary
of the Effective Date, or if earlier, until the date the
Executive’s employment is terminated for any reason (the
“Term”).
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5.
Compensation
.
A. Base Salary . During the Term, Executive shall be paid a base
salary. The base salary for the first year of the Term shall be
U.S. $675,000 per annum (effective from and after February 19,
2008), and such base salary shall be increased for each subsequent
year during the Term as determined by the Compensation Committee of
the Board of Managers of the Company, taking into account available
information regarding chief executive officers’ salaries of
similarly situated companies headquartered in the Philadelphia,
Pennsylvania, geographic area, and the Committee shall use 4% as a
benchmark for annual salary increases in such determinations (the
“Base Salary”).
B. Method of Payment . Executive’s Base Salary shall be paid in
accordance with Holding’s standard payroll practices. Holding
shall deduct and withhold, or cause to be deducted and withheld,
from Executive’s compensation payable hereunder any and all
applicable foreign, federal, state and local income and employment
withholding taxes and any other amounts required to be deducted or
withheld by Holding under applicable statutes, regulations,
ordinances or orders governing or requiring the withholding or
deduction of amounts otherwise payable as compensation or wages to
employees.
C. Vacation .
Executive shall be entitled to such number of paid days of vacation
as the Company’s vacation policy provides for executive
officers and such number of paid days of sick leave as the
Company’s sick leave policy provides for executive
officers.
D. Bonus .
Executive shall be eligible to receive a bonus with respect to each
fiscal year ending during the Term (the “Annual Bonus”)
commencing with the fiscal year ending December 31, 2008, with a
target Annual Bonus of fifty percent (50%) of his Base Salary,
which Annual Bonus shall be determined based upon the achievement
of Company Adjusted EBITDA targets set with respect to the
applicable year by the Board of Managers (or the Compensation
Committee thereof) of the Company (“EBITDA Targets”);
provided, that in the event actual Adjusted EBITDA is greater or
less than the EBITDA Target for a particular year, then the
Executive’s Annual Bonus shall be calculated consistent with
the Company’s bonus plan then in effect with reference to
Executive’s target bonus level of 50% of Base Salary.
Applicable EBITDA Targets will be equitably adjusted by the Board
to reflect the pro forma effect of any significant
acquisition.
E. Equity Grants; Special
Payment .
(1) Class B Units . The Executive acknowledges that as of the date
hereof he holds 2,722 Class A Units, 27,894 Class B Units and
36,000 vested and unvested Class C Units (such vested and unvested
Class C Units, the “Existing Class C Units”) of the
Company and that such units are subject to the terms and conditions
set forth in the Operating Agreement of the Company dated as of
August 2, 2004.
(2) Incentive Plan . The Executive, Holding and the Company
acknowledge and agree that the parties will endeavor to establish a
new incentive plan for participating members of management of the
Company and the Executive shall participate in such plan in a
manner commensurate with his role as President and Chief Executive
Officer. The terms of any such plan and awards granted thereunder
are subject to good faith negotiations of the parties and any such
terms shall be set forth in definitive documentation with respect
thereto.
(3) Special Payment . The Executive acknowledges that he will receive
the Special Payment (as defined in the Existing Agreement) in full
satisfaction of Holding’s obligations thereof under the
Existing Agreement in accordance with the term of the Existing
Agreement on February 19, 2008.
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6.
Business Expense
Reimbursement . Executive
shall be entitled, in accordance with Holding’s written
expense reimbursement policies in effect from time to time, to
receive reimbursement from Holding for all travel and other
reasonable business expenses incurred by Executive in the
performance of his duties hereunder, provided Executive furnishes
Holding with vouchers, receipts and other details of such expenses
in accordance with the Holding’s written expense
reimbursement policies. Executive shall be provided with a
corporate credit card for his business use, and will be reimbursed
within fifteen (15) days of presentation for appropriate business
expenses as provided above.
7.
Benefits.
A. During the Term, the Company shall
provide Executive and his dependents with coverage under the
Company’s applicable medical, dental and/or vision plans and
other employee benefits as are applicable to senior executives of
the Company.
B. The Executive shall be entitled to
participate in the supplemental executive retirement plan of the
Company currently in effect.
C. During the Term, Holding or cause
to be paid will pay the premiums on a term life insurance policy
providing the Executive with a life insurance benefit for a term of
ten (10) years in the amount of five million dollars ($5,000,000).
The policy shall permit the Executive to designate the beneficiary
and Holding will allow the Executive to maintain the policy, at his
expense, following any termination of employment.
8.
Restrictive Covenant
.
A. For the purposes of this Section 8,
any reference to the “Company” shall mean Holding, the
Company and their respective subsidiaries and affiliates. In view
of the fact that the Executive’s work for the Company brings
the Executive into close contact with many confidential affairs of
the Company not readily available to the public, and plans for
further developments, the Executive agrees:
(a) That both during the entire term
of the Executive’s employment with the Company and
thereafter, the Executive will not publish or otherwise disclose to
persons other than those employed by the Company, without specific
permission from the Company, any Company proprietary or
confidential information which the Executive learns or acquires
during the course of employment with or as a result of performing
services with the Company, and will not use such information in any
way which might be detrimental to the interests of the Company. For
purposes of this Agreement, proprietary or confidential information
includes, but is not limited to:
(i) All information not generally
known to the public or within the federal, state or local
government sector(s) or the commercial sector(s) in which the
Company offers or provides its services, solutions or products,
pertaining to the Company’s marketing, bidding or cost plans,
strategies, forecasts or projections; practices, procedures,
policies, goals or objectives pertaining to the foregoing; contract
proposals, contract bids which have been prepared or submitted or
which are proposed to be prepared or submitted, or bidding and
pricing techniques; information on the Company’s cost
structure; quoting and pricing practices, procedures and policies;
customer data including customer list, contracts, contacts,
representatives, requirements and needs, specifications, data
provided by or about prospective customers; supplier information,
including joint venture and subcontractor proposals; employee and
consultants’ identities, skills, resumes, records and lists;
and the physical embodiments of any of the foregoing
information;
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(ii) All information concerning or
relating to the way the Company conducts its business which is not
generally known to the public or within the federal, state or local
government sector(s) or the commercial sector(s) in which the
Company offers or provides its services, solutions or products
(such as Company contracts, internal business procedures, controls,
plans, licensing techniques and practices, supplier, subcontractor
and prime contractor names and contacts and other vendor
information, Company processes, techniques, data, computer system
passwords and other computer security controls, financial
information, and distributor information) and the physical
embodiments of such information (such as check lists, samples,
service and operational manuals, contracts, proposals, printouts,
correspondence, forms, listings, ledgers, financial statements,
financial reports, financial and operational analyses, financial
and operational studies, management reports of every kind,
databases, and any other written or machine-readable expression of
such information as are filed in any tangible media);
(iii) All information not generally
known to the public or within the federal, state or local
government domain or the commercial sector(s) in which the Company
offers or provides its services, solutions or products concerning
development of new products, services or solutions, negotiations
for new business ventures or acquisitions, future business or
acquisition plans, and similar information and the physical
embodiments of such information;
(iv) Information which is not a public
record and is not generally known to the public or within the
federal, state or local government sector(s) or the commercial
sector(s) in which the Company offers or provides its services,
solutions or products regarding litigation and potential litigation
matters and the physical embodiments of such information;
and
(v) Any information which (i) is not
generally known to the public or within the federal, state or local
government sector(s) or the commercial sector(s) in which the
Company offers or provides its services, solutions or products,
(ii) gives the Company a significant advantage over its or their
competitors, or (iii) has significant economic value or potentially
significant economic value to the Company, including the physical
embodiments of such information.
(b) That both during the entire term
of the Executive’s employment with Company and thereafter
through any Severance Period (as defined below), the Executive
shall not:
(i) directly or indirectly, own,
manage, operate, control or participate in the ownership,
management, operation or control of, or be connected as an officer,
employee, consultant, partner, director or otherwise with, or have
any financial interest in, or aid or assist anyone else in the
conduct of any business which competes with any services, solutions
or products conducted, offered or provided by the Company (any such
service, solution or product, a “Company Operation”),
to any federal, state or local government sector(s) or the
commercial sector(s) if such Company Operation is being conducted
or developed at any time during the term of Executive’s
employment with the Company and at the later time in
question;
(ii) directly or indirectly, solicit
any customer or any former or prospective customer of the Company
with a view to inducing such customer to enter into an agreement,
or otherwise do business, involving a Company Operation with any
competitor of the Company or attempt to induce any customer to
terminate its relationship with the Company or to not enter into a
relationship with the Company, as the case may be; or
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(iii) solicit or attempt to solicit
the employment of any employee of the Company, or any person
employed by the Company during the prior six (6) month period, or
attempt to solicit or induce any such employee or person to leave
the employ of the Company.
(c) That, if the Company terminates
the Executive’s employment for Cause or the Executive resigns
or departs from the Company without Good Reason, the Executive
shall not engage in the conduct set forth in Section 8A(b) for a
period of two years from the date of termination of employment and
the Executive shall not be entitled to additional consideration
from the Company, and that such two year period shall constitute a
“Severance Period” for purposes of the duration of the
provisions set forth in Section 8A(b) hereof. If the Company
terminates the Executive’s employment without Cause or the
Executive resigns or departs from the Company with Good
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