EXHIBIT 10.12
NONCOMPETITION AGREEMENT
AGREEMENT by and between Borg-Warner Security Corporation, a Delaware
corporation (the "Company"), and Timothy M. Wood (the "Executive"), dated as of
September 5, 1997.
WHEREAS, the Executive is currently serving as the Vice President--Chief
Financial Officer of the Company pursuant to an Amended and Restated Letter
Agreement between the Company and the Executive dated as of September 5, 1997
(the "Letter Agreement");
WHEREAS, due to the highly competitive nature of the business of the
Company, the Company has determined that it is desirable to enter into a non-
competition agreement with the Executive on the terms and conditions set forth
in this Agreement; and
WHEREAS, the Executive is willing to enter into such non-competition
agreement upon such terms and conditions;
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Noncompetition. (a) In the event the Executive's employment under the
Letter Agreement is terminated by the Company without Cause or by the Executive
for Good Reason (as so defined)
(i) During the Noncompetition Period (as defined below), the Executive
shall not, without the prior written consent of the Board of
Directors of the Company (the "Board"), engage in or become associated with
a Competitive Activity.
(ii) During the one year period beginning on the termination of the
Executive's Employment under the Letter Agreement, the Executive will not
directly or indirectly induce any employee of the Company to engage in any
activity in which the Executive is prohibited from engaging by paragraph
(i) above or to terminate his employment with the Company, and will not
directly or indirectly employ or offer employment to any person who is
employed by the Company.
(iii) For purposes of Section 1(a)(i): (x) the "Noncompetition Period"
means the period beginning on such termination of the Executive's
employment under the Letter Agreement the third anniversary of the
Executive's termination of employment under the Letter Agreement; (y) a
"Competitive Activity" means any service business or other endeavor that
provides guard and investigative services, alarm systems installation and
monitoring services, armored transport or automated teller machine (ATM)
services or overnight or same day courier delivery services; and (z) the
Executive shall be considered to have become "associated with a Competitive
Activity" if he becomes directly or indirectly involved as an owner,
employee, officer, director, independent contractor, agent, partner,
advisor, or in any other capacity
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calling for the rendition of the Executive's personal services, with any
individual, partnership, corporation or other organization that is engaged
in a Competitive Activity. Notwithstanding the foregoing, the Executive may
make and retain investments during the Noncompetition Period and thereafter
in not more than five percent of the equity of any entity engaged in a
Competitive Activity, if such equity is listed on a national securities
exchange or regularly traded in an over-the-counter market.
(b) Immediately upon the termination of the Executive's employment by the
Company without Cause or by the Executive for Good Reason (each as defined in
the Letter Agreement), in consideration of the Executive's entering into this
Agreement, the Company shall pay the Executive an amount equal to the sum of (I)
the Base Guarantee (as defined in the Letter Agreement), (II) the Severance
Bonus (as defined in the Letter Agreement) and (III) the annual supplemental
benefit compensation which, absent termination, would have been payable for the
twelve month period following such termination at the rate in effect at the date
of the Executive's termination of employment.
(c) The Executive acknowledges and agrees that his obligations under this
Section 1 are of a special, unique and extraordinary character and that a
failure to perform any such obligation or a violation thereof may cause
irreparable injury to the Company, the amount of which will be impossible to
estimate or determine
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and which cannot be adequately compensated. Therefore, the Executive agrees that
the Company shall be entitled, as a matter of course, to an injunction,
restraining order, writ of mandamus or other equitable relief from any court of
competent jurisdiction, including relief in the form of specific performance,
restraining any violation or threatened violation of any term of this Section 1,
or requiring compliance with or performance of any obligation under this Section
1 by the Executive and such other persons as the court shall order. The rights
and remedies provided the Company hereunder are cumulative and shall be in
addition to the rights and remedies otherwise available to the Company under any
other agreement or applicable law. In addition, the Executive agrees that if he
breaches any provision of this Section 1, the Executive shall remit to the
Company any amounts paid to him pursuant to paragraph (b) above. The Executive
acknowledges and agrees that the provisions of this paragraph (c) are reasonable
and necessary for the protection of the Company.
2. Arbitration; Attorneys' Fees. Except as provided in Section 1(c)
above, any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in the State of Illinois,
in accordance with the rules of the American Arbitration Association then in
effect, and judgment may be entered on the arbitrator's award in any court
having jurisdiction. If the Executive shall prevail, in whole or in part, as to
any material issue in any contest (whether initiated by the Executive or by the
Company) as to
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the validity, enforceability or interpretation of any provision of this
Agreement, the Company shall pay all reasonable expenses incurred by the
Executive with respect to such contest, including, without limitation, his
reasonable attorney's fees.
3. Successors. (a) This Agreement is personal to the Executive and,
without the prior written consent of the Company, shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns.
(c) The Company shall 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 expressly to assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would have been required to perform it if no such succession had taken
place. As used in this Agreement, "Company" shall mean both the Company as
defined above and any such successor that assumes and agrees to perform this
Agreement, by operation of law or otherwise.
4. Miscellaneous. (a) This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, without
reference to principles of conflict of laws. The captions of this Agreement are
not part of the
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provisions hereof and shall have no force or effect. This Agreement may not be
amended or modified except by a written agreement executed by the parties hereto
or their respective successors and legal representatives.
(b) All notices and other communications under this Agreement shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive:
Timothy M. Wood
6733 LeRoy
Lincolnwood, Illinois 60646
If to the Company:
Borg-Warner Security Corporation
200 South Michigan Avenue
Chicago, Illinois 60604
Attention: General Counsel
or to such other address as either party furnishes to the other in writing in
accordance with this Section 4(b). Notices and communications shall be effective
when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement. If any provision of this Agreement shall be held invalid or
unenforceable in part, the remaining portion of such provision, together with
all other provisions of this Agreement, shall remain valid and enforceable and
continue in full force and effect to the fullest extent consistent with law.
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(d) Notwithstanding any other provision of this Agreement, the Company may
withhold from amounts payable under this Agreement all federal, state, local and
foreign taxes that are required to be withheld by applicable laws or
regulations.
(e) The failure of the Executive or the Company to insist upon strict
compliance with any provision of, or to assert any right under, this Agreement
shall not be deemed to be a waiver of such provision or right or of any other
provision of or right under this Agreement.
(f) This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, and which together shall constitute one
instrument.
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IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization of the Board, the Company has caused this
Agreement to be executed in its name on its behalf, all as of the day and year
first above written.
/s/ Timothy M. Wood
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Timothy M. Wood
BORG-WARNER SECURITY
CORPORATION
By: /s/ J. Joe Adorjan
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Name:
Title:
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