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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K/A
AMENDMENT 1
(X) ANNUAL REPORT ( ) TRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended Commission File
June 30, 1995 Number 0-3953
SENSORMATIC ELECTRONICS CORPORATION
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(Exact name of Registrant as specified in its charter)
Delaware 34-1024665
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(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
500 N.W. 12th Avenue
Deerfield Beach, Florida 33442
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(Address of principal executive (Zip Code)
offices)
Registrant's telephone number: (305) 420-2000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
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Common Stock (Par Value $.01 Per Share) New York Stock Exchange
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Securities registered pursuant to Section 12(g) of the Act:
None
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(Title of Class)
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. X
---
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
The aggregate market value of Common Stock (par value $.01 per share) held by
non-affiliates of the Registrant as of October 10, 1995 was $1,612,995,538
based on the sales prices of such Common Stock on such date as reported by the
New York Stock Exchange.
The Registrant had outstanding 73,317,979 shares of Common Stock (par value
$.01 per share) as of October 10, 1995.
Documents incorporated by reference:
Definitive proxy statement for the Company's 1995 Annual Meeting of
Stockholders (incorporated in Part III to the extent provided in Items 10, 11,
12 and 13 hereof).
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SENSORMATIC ELECTRONICS CORPORATION
INDEX TO EXHIBITS
(Item 14 (a)(3))
Exhibit
Number Description
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2(a) - Amended and Restated Agreement and Plan of Merger
dated as of August 14, 1994, between Sensormatic
Electronics Corporation, Knogo Corporation ("Knogo")
and Knogo North America Inc. ("Knogo North America")
(excluding schedules, but including: Exhibit A -
Form of Delaware Certificate of Merger, Exhibit B -
Form of New York Certificate of Merger, Exhibit C -
Form of Contribution and Divestiture Agreement
between Knogo and Knogo North America and certain
Exhibits thereto (incorporated by reference to
Exhibits 2(a), 2(b) and 2(c) to Registration
Statement No. 33-56619)).
(Copies of omitted schedules will be furnished
supplementally to the Securities and Exchange
Commission upon request.)
3(a) - Composite Restated Certificate of Incorporation of
the Company filed pursuant to Rule 232.102(c) of
Regulation S-T (incorporated by reference to Exhibit
4(d) to Registration Statement No. 33-61626).
Amended 3(b) - By-Laws of the Company, as amended through October
14, 1995.
4(a) - Article FOURTH of the Restated Certificate of
Incorporation of the Company (incorporated by
reference to Exhibit 4(d) to Registration Statement
No. 33-61626).
4(b) - Note Agreement, dated as of January 15, 1993, among
the Company, The Northwestern Mutual Life Insurance
Company and the other Purchasers named therein,
including the form of 8.21% Senior Notes due January
30, 2003, issued thereunder, and First Amendment to
such Note Agreement dated as of May 31, 1993
(incorporated by reference to Exhibit 4.4 to
Registration Statement No. 33- 62750).
1
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SENSORMATIC ELECTRONICS CORPORATION
INDEX TO EXHIBITS
(Item 14 (a)(3))
4(c) - The Registrant agrees to furnish copies of any
instrument defining the rights of holders of
long-term debt of the Registrant and its consolidated
subsidiaries that does not exceed 10 percent of the
total assets of the Registrant and its consolidated
subsidiaries, which is not required to be filed as an
exhibit, to the Commission upon request.
10(a) - Grant of Industrial Tax Exemption to Sensormatic
Electronics Corporation (Puerto Rico) from the
Commonwealth of Puerto Rico (incorporated by
reference to Exhibit 10(n) to Form 10-K for the
fiscal year ended May 31, 1986) and Order of
Conversion of Grant of Industrial Tax Exemption
(incorporated by reference to Exhibit 10(m) to Form
10-K for the fiscal year ended May 31, 1988).
10(b) - Description of Non-qualified Stock Option Plan
(incorporated by reference to Registration Statement
No. 2-74526) and representative form of non-qualified
stock option (incorporated by reference to Exhibit
3(c) to Registration Statement No. 2-74526).
10(c) - Amended 1989 Stock Incentive Plan and representative
forms of non-qualified stock option under such Plan
(incorporated by reference to Exhibit 10 (c) to Form
10-K for the fiscal year ended June 30, 1994).
10(d) - 1995 Stock Incentive Plan and representative forms of
non-qualified stock options and Restricted Stock
Agreement under such Plan.
10(e) - Directors Stock Option Plan and representative form
of a non-qualified stock option under such Plan
(incorporated by reference to Exhibit 10(h) to Form
10-K for the fiscal year ended May 31, 1992).
10(f) - Stock Purchase Loan Plan (incorporated by reference
to Exhibit 10(g) to Form 10-K for the fiscal year
ended May 31, 1986).
2
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SENSORMATIC ELECTRONICS CORPORATION
INDEX TO EXHIBITS
(Item 14 (a)(3))
10(g) - Executive Salary Continuation Plan and representative
form of agreement thereunder (incorporated by
reference to Exhibit 10(g) to Form 10-K for the
fiscal year ended May 31, 1989).
10(h) - Board of Directors Retirement Plan and representative
form of agreement thereunder (incorporated by
reference to Exhibit 10(h) to Form 10-K for the
fiscal year ended May 31, 1989).
10(i) - Senior Executive Defined Contribution Retirement Plan
and representative form of agreement thereunder
(incorporated by reference to Exhibit 10 (h) to Form
10-K for the fiscal year ended June 30, 1994).
10(j) - Employment Agreement, dated as of September 24, 1993,
between the Company and Ronald G. Assaf, Chairman of
the Board, President and Chief Executive Officer of
the Company (incorporated by reference to Exhibit
10(j) to Form 10-K for the fiscal year ended June 30,
1993).
10(k) - Employment Agreement, dated as of November 1, 1990,
between the Company and Gerd Witter, President of
Sensormatic Europe (incorporated by reference to
Exhibit 10(l) to Form 10-K for the fiscal year ended
May 31, 1991).
10(l) - Agreement, dated as of December 23, 1988, between the
Company and Ronald G. Assaf, Chairman of the Board,
President and Chief Executive Officer of the Company
(incorporated by reference to Exhibit 10(l) to Form
10-K for the fiscal year ended May 31, 1989).
10(m) - Agreement, dated as of December 23, 1988, between the
Company and James E. Lineberger, Chairman of the
Executive Committee and a director of the Company,
and amendment thereto, dated as of January 27, 1989
(incorporated by reference to Exhibit 10(m) to Form
10-K for the fiscal year ended May 31, 1989).
3
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SENSORMATIC ELECTRONICS CORPORATION
INDEX TO EXHIBITS
(Item 14 (a)(3))
10(n) - Agreement, dated as of December 23, 1988, between the
Company and Dennis C. Gillette, Senior Vice President
of the Company (incorporated by reference to Exhibit
10(o) to Form 10-K for the fiscal year ended May 31,
1989).
10(o) - Agreement, dated as of December 23, 1988, between the
Company and Gerd Witter, President of Sensormatic
Europe (incorporated by reference to Exhibit 10(p) to
Form 10-K for the fiscal year ended May 31, 1989).
10(p) - Service Agreement, dated as of July 27, 1992, between
Sensormatic Limited (successor to Securitag U.K.
Limited) and Charles Dawson Buck, Senior Vice
President and President of Sensormatic International
Division (incorporated by reference to Exhibit 10(q)
to Form 10-K for the fiscal year ended June 30,
1993).
10(q) - Form of Agreement, dated as of January 27, 1989,
between the Company and Dr. Arthur G. Milnes,
director of the Company (incorporated by reference to
Exhibit 10(r) to Form 10-K for the fiscal year ended
May 31, 1989).
10(r) - Agreement, dated as of December 23, 1988, between the
Company and Jerome M. LeWine, a director of the
Company, and amendment thereto, dated as of January
27, 1989 (incorporated by reference to Exhibit 10(s)
to Form 10-K for the fiscal year ended May 31, 1989).
10(s) - Termination Agreement dated as of June 5, 1995,
between the Company and Michael E. Pardue, former
Executive Vice President, Chief Operating Officer and
a director of the Company.
10(t) - Directors and Officers Liability Insurance Policies.
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SENSORMATIC ELECTRONICS CORPORATION
INDEX TO EXHIBITS
(Item 14 (a)(3))
10(u) - Credit Agreement, dated as of August 26, 1994,
between the Company, Wachovia Bank of Georgia, N.A.,
ABN Amro Bank N.V., the other Borrowers listed herein
and the domestic banks and foreign company banks
listed herein (incorporated by reference to Exhibit
10 (t) to Form 10-K for the fiscal year ended June
30, 1994).
Amended 10(v) - Employment Agreement, dated as of October 14, 1995,
between the Company and Robert A. Vanourek, President
and Chief Operating Officer of the Company.
11 - Computation of Earnings Per Common Share for the
years ended June 30, 1995, 1994 and 1993.
21 - List of Subsidiaries of the Company.
23 - Consents of Independent Certified Public Accountants.
27 - Financial Data Schedule.
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EXHIBIT 3(b)
As Amended through October 14, 1995
SENSORMATIC ELECTRONICS CORPORATION
BY-LAWS
ARTICLE I
Offices
Section 1. Registered Office. The registered office of the
Corporation shall be in the City of Dover, County of Kent, State of Delaware,
and the registered agent of the Corporation shall be The Prentice-Hall
Corporation System, Inc., whose address is 229 South State Street, Dover,
Delaware.
Section 2. Other Offices. The Corporation may also have offices
at such other places both within and without the State of Delaware as the Board
of Directors may from time to time determine or the business of the Corporation
may require.
ARTICLE II
Meetings of Stockholders
Section 1. Annual Meeting. The annual meeting of the stockholders
of the Corporation for the election of directors and for the transaction of
such other business as may properly come before the meeting shall be held on
the first Friday of November in each year, if not a legal holiday, and if a
legal holiday, then on the next succeeding day not a legal holiday, or on such
other date as may be fixed from time to time by resolution of the Board of
Directors, and at the principal office of the Corporation or at such other
place within or without the State of Delaware as shall be designated by the
Board of Directors. The Board of Directors may change the date and/or place of
any scheduled annual meeting, either before or after notice of such meeting has
been given.
Section 2. Special Meeting. Special meetings of the stockholders
may be called at any time only by the Chairman of the Board or the President of
the Corporation or the majority of the Board of Directors and may be so called
and held for any purpose or purposes as may be determined only by the Chairman
of the Board or the President of the Corporation or the majority of the Board
of Directors. Such meetings shall be held at such time and at such place
within or without the State of Delaware as shall be specified in the notice of
the meeting. The date, time and/or place of any scheduled special meeting of
the stockholders may subsequently be changed, either before or after notice of
such meeting has been given, by the Chairman of
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Section 3. Notice of Meetings. Notice of the place, date and time
of the holding of each annual and special meeting of the stockholders (and of
any change in such place, date and/or time) and the purpose or purposes thereof
shall be given personally or by mail in a postage prepaid envelope to each
stockholder entitled to vote at such meeting, not less than ten nor more than
sixty days before the date of such meeting, and, if mailed, it shall be
directed to such stockholder at his address as it appears on the records of the
Corporation, unless he shall have filed with the Secretary of the Corporation a
written request that notices to him be mailed to some other address, in which
case it shall be directed to him at such other address. Any such notice for
any meeting other than the annual meeting of stockholders shall indicate that
it is being issued at the direction of the Chairman of the Board, President, or
a majority of the Board of Directors. Notice of any meeting shall not be
required to be given to any stockholder who shall attend such meeting in person
or by proxy and shall not, at the beginning of such meeting, object to the
transaction of any business because the meeting is not lawfully called or
convened, or who shall, either before or after the meeting, submit a signed
waiver of notice, in person or by proxy. Unless the Board shall fix a new
record date for an adjourned meeting, notice of such adjourned meeting need not
be given if the time and place to which the meeting shall be adjourned were
announced at the meeting at which the adjournment is taken. At the adjourned
meeting the Corporation may transact any business which might have been
transacted at the original meeting. If the adjournment is for more than thirty
days, or if after the adjournment a new record date is fixed for the adjourned
meeting, a notice of the adjourned meeting shall be given to each stockholder
of record entitled to vote at the meeting.
Section 4. Quorum. At all meetings of the stockholders, the
holders of one-third of the shares of stock of the Corporation issued and
outstanding and entitled to vote and present in person or by proxy shall
constitute a quorum for the transaction of any business, except as otherwise
required by law or the Certificate of Incorporation in respect of the vote that
shall be required for a specified action. In the absence of a quorum, the
holders of a majority of the shares of stock present in person or by proxy and
entitled to vote, or if no stockholder entitled to vote is present, then any
officer of the Corporation, may adjourn the meeting from time to time. At any
such adjourned meeting at which a quorum may be present, any business may be
transacted which might have been transacted at the meeting as originally
called.
Section 5. Organization. At each meeting of the stockholders, the
President, or in his absence or inability to act, any person designated by the
President or the Board of Directors, or in the absence of any such designation
or the
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absence or inability to act of such a designee, any person chosen by majority
of those stockholders present or represented, shall act as chairman of the
meeting. The Secretary, or, in his absence or inability to act, an Assistant
Secretary or any other officer appointed by the chairman of the meeting, shall
act as secretary of the meeting and keep the minutes thereof.
Section 6. Order of Business. The order of business at all
meetings of the stockholders shall be as determined by the chairman of the
meeting.
Section 7. Voting. Except as otherwise provided by statute or the
Certificate of Incorporation, each holder of record of shares of stock of the
Corporation having voting power shall be entitled at each meeting of the
stockholders to one vote for every share of such stock standing in his name on
the record of stockholders of the Corporation (a) on the date fixed by the
Board of Directors as the record date for the determination of the stockholders
who shall be entitled to notice of and to vote at such meeting; or (b) if such
record date shall not have been so fixed, then at the close of business on the
day next preceding the day on which notice thereof shall be given; or (c) if
notice is waived, at the close of business on the day next preceding the day on
which the meeting is held. Each stockholder entitled to vote at any meeting of
stockholders may authorize another person or persons to act for him by a proxy
signed by such stockholder or his attorney-in-fact. Any such proxy shall be
delivered to the secretary of such meeting at or prior to the time designated
in the order of business for so delivering such proxies. No proxy shall be
valid after the expiration of three years from the date thereof, unless the
proxy provides for a longer period. Every proxy shall be revocable at the
pleasure of the stockholder executing it, except in those cases where an
irrevocable proxy is permitted by law. Except as otherwise required by law,
the Certificate of Incorporation or these By-Laws, any corporate action to be
taken by vote of the stockholders shall be authorized by a majority of the
total votes cast at a meeting of stockholders by the holders of shares present
in person or represented by proxy and entitled to vote on such action. Unless
required by statute, or determined by the chairman of the meeting to be
advisable, the vote on any question need not be by written ballot. On a vote
by written ballot, each ballot shall be signed by the stockholder voting, or by
his proxy, if there be such proxy, and shall state the number of shares voted.
Section 8. List of Stockholders. The officer who has charge of
the stock ledger of the Corporation shall prepare and make or cause to be
prepared and made, at least ten days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open
to the examination of any
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stockholder for any purpose germane to the meeting, during ordinary business
hours, for a period of at least ten days prior to the meeting, either at a
place within the city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or, if not so specified, at the place
where the meeting is to be held. The list shall also be produced and kept at
the time and place of the meeting during the whole time thereof, and may be
inspected by any stockholder who is present.
Section 9. Inspectors. The Board of Directors may, in advance of
any meeting of stockholders, appoint one or more inspectors to act at such
meeting or any adjournment thereof. If inspectors shall not be so appointed or
if any of them shall fail to appear or act, the chairman of the meeting may,
and on the request of any stockholder entitled to vote thereat shall, appoint
one or more inspectors. Each inspector, before entering upon the discharge of
his duties, shall take and sign an oath faithfully to execute the duties of
inspector at such meeting with strict impartiality and according to the best of
his ability. The inspectors shall determine the number of shares outstanding,
the number of shares represented at the meeting, the existence of a quorum, the
validity and effect of proxies, and shall receive votes, ballots or consents,
hear and determine all challenges and questions arising in connection with the
right to vote, count and tabulate all votes, ballots or consents, determine the
result, and do such acts as are proper to conduct the election or vote with
fairness to all stockholders. On request of the chairman of the meeting or any
stockholder entitled to vote thereat, the inspectors shall make a report in
writing of any challenge, request or matter determined by them and shall
execute a certificate of any fact found by them. No director or candidate for
the office of director shall act as inspector of an election of directors.
Inspectors need not be stockholders.
Section 10. No Action by Consent. No action required to be taken
or which may be taken at any annual or special meeting of stockholders of the
Corporation may be taken without a meeting and the power of stockholders to
consent in writing to the taking of any action is specifically denied.
Section 11. Notice of Stockholder Business. At an annual meeting
of stockholders, only such business shall be conducted as shall have been
properly brought before the meeting. To be properly brought before an annual
meeting, business must be (a) specified in the notice of meeting (or any
supplement thereto) given by or at the direction of the Board of Directors, (b)
otherwise properly brought before the meeting by or at the direction of the
Board of Directors or by the Chairman of the Board or the President of the
Corporation or (c) otherwise properly brought before the meeting by a
stockholder. For business to be properly brought before an annual meeting by a
stock-
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holder, the stockholder must have given timely notice thereof in writing to the
Secretary of the Corporation. To be timely, a stockholder's notice must be
received at the principal office of the Corporation not less than sixty (60)
days nor more than ninety (90) days prior to the meeting; provided, however,
that in the event that less than seventy (70) days' notice or prior public
disclosure of the date of the meeting is given or made to stockholders, notice
by the stockholder to be timely must be so received not later than the close of
business on the fifteenth day following the day on which such notice of the
date of the meeting was mailed or such public disclosure was made. As used in
this Section 11 and in paragraph B of Section 2 of Article III of these
By-Laws, the phrase "notice or prior public disclosure of the date of the
meeting" shall mean notice or prior public disclosure of the date on which the
meeting is originally scheduled to be called to order and shall not refer to
notice or prior public disclosure of any date to which such meeting may be
adjourned. A stockholder's notice to the Secretary shall set forth, as to each
matter the stockholder proposes to bring before the annual meeting, (a) a brief
description of the business desired to be brought before the annual meeting and
the reasons for conducting such business at the annual meeting, (b) the name
and address, as they appear on the Corporation's stock transfer books, of the
stockholder proposing such business, (c) the class and number of shares of
capital stock of the Corporation which are beneficially owned (such term being
used in this Section 11 and in paragraph B of Section 2 of Article III of these
By-Laws with the meaning ascribed to such term in Rule 13d-3 of the rules under
the Securities Exchange Act of 1934, as amended, as such Rule was in effect on
July 1, 1990) by the stockholder and (d) any material interest of the
stockholder in such business. Notwithstanding any other provision of these
By-Laws, no business shall be conducted at an annual meeting except in
accordance with the procedures set forth in this Section 11. If the presiding
officer of an annual meeting determines and declares that business was not
properly brought before the meeting in accordance with this Section 11, any
such business shall not be transacted.
ARTICLE III
Board of Directors
Section 1. General Powers. The property, business and affairs of
the Corporation shall be managed by the Board of Directors. The Board of
Directors may exercise all such authority and powers of the Corporation and do
all such lawful acts and things as are not by statute or the Certificate of
Incorporation or these By-Laws directed or required to be exercised or done by
the stockholders.
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Section 2. A. Number, Classification, Term of Office,
Qualifications and Election. The Board of Directors shall initially consist of
six directors. Thereafter, the number of directors of the Corporation shall be
determined by resolution approved by at least a majority of the then authorized
number of directors, but shall not be more than fifteen nor less than five.
The Board of Directors shall be divided into three classes as nearly equal in
number as possible, with the term of office of one class expiring each year.
The terms of office of the directors elected at the annual meeting of
stockholders in 1977 and initially classified shall be as follows: directors
of the first class shall hold office for a term expiring at the next succeeding
annual meeting; directors of the second class shall hold office for a term
expiring at the second succeeding annual meeting; and directors of the third
class shall hold office for a term expiring at the third succeeding annual
meeting. At each annual meeting of stockholders after the annual meeting in
1977, directors elected to succeed the class of directors whose terms expire at
such annual meeting shall be elected to hold office for a term expiring at the
third succeeding annual meeting after their election. When the number of
directors is changed, any newly created directorships or any decrease in
directorships shall be so apportioned among the classes as to make all classes
as nearly equal in number as possible. Subject to the foregoing, the
respective classes for which directors shall be selected or chosen shall be
determined by resolution approved by at least a majority of the then authorized
number of directors. Each director shall hold office for the specified term
and until his successor shall be duly elected and qualified, or until his
death, or until he shall have resigned or he shall have been removed, as
hereinafter provided in these By-Laws, or as otherwise provided by statute or
by the Certificate of Incorporation. All the directors shall be of full age.
Directors need not be stockholders. Except as otherwise required by statute or
the Certificate of Incorporation or these By-Laws, directors to be elected at
each annual meeting of stockholders shall be elected by a plurality of the
votes cast at the meeting by the holders of shares present in person or
represented by proxy and entitled to vote for the election of directors.
B. Nomination of Directors. Only persons who are nominated in
accordance with the procedures set forth in this paragraph B shall be eligible
for election as a director at any meeting of stockholders for the election of
directors (an "Election Meeting"). Nominations of candidates for election to
the Board of Directors of the Corporation at an Election Meeting may be made
only by or at the direction of the Board of Directors or by a stockholder
entitled to vote at such Election Meeting. All such nominations, except those
made by or at the direction of the Board of Directors, shall be made pursuant
to timely notice in writing to the Secretary of the Corporation of the
stockholder's intention to make such nomination. To be timely, any such notice
must be received at the principal office of the Corporation not
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less than sixty (60) nor more than ninety (90) days prior to the date of the
Election Meeting; provided, however, that in the event that less than 70 days'
notice or prior public disclosure of the date of the Election Meeting is given
or made to stockholders, notice by the stockholder to be timely must be
received not later than the close of business on the fifteenth day following
the day on which such notice of the date of the Election Meeting was mailed or
such public disclosure was made. Such stockholder's notice with respect to a
proposed nomination shall set forth (a) as to each person whom the stockholder
proposes to nominate as a candidate for election to the Board of Directors (i)
the name, age, business address and residence address and the principal
occupation or employment of such person, (ii) the class and number of shares of
capital stock of the Corporation which are beneficially owned by such person,
(iii) such other information concerning such person as would be required, under
the rules of the Securities and Exchange Commission, in a proxy statement
soliciting proxies for the election of such person and (iv) a signed consent of
such person to serve as a Director of the Corporation, if elected, and (b) as
to the stockholder giving the notice (i) the name and address of such
stockholder, as they appear in the Corporation's stock transfer books and (ii)
the class and number of shares of capital stock of the Corporation which are
beneficially owned by such stockholder. In the event that a person is validly
designated as a nominee in accordance with the procedures specified above and
shall thereafter become unable or unwilling to stand for election to the Board
of Directors, the Board of Directors or the stockholder who proposed such
nominee, as the case may be, may designate a substitute nominee; provided,
however, that in the case of persons not nominated by the Board of Directors,
such a substitution may be made only if notice as provided above in this
paragraph B is received at the principal office of the Corporation not later
than the later of (x) thirty (30) days prior to the date of the Election
Meeting or (y) five (5) days after the stockholder proposing the original
nominee first learned that such original nominee has become unable or unwilling
to stand for election. If the presiding officer of an Election Meeting
determines and declares that a Director nomination was not made in accordance
with the foregoing procedures, such nomination shall be void and shall be
disregarded for all purposes.
Section 3. Annual Meeting. The Board of Directors shall meet for
the purpose of organization, the election of officers and the transaction of
other business, as soon as practicable after each annual meeting of the
stockholders, on the same day and at the same place where such annual meeting
shall be held. Notice of such meeting need not be given. Such meeting may be
held at any other time or place (within or without the State of Delaware) which
shall be specified in a notice thereof given as hereinafter provided in Section
6 of this Article III, or in a waiver of notice thereof.
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Section 4. Regular Meetings. Regular meetings of the Board of
Directors shall be held at such times and places within or without the State of
Delaware as the Board of Directors may from time to time by resolution
determine. If any day fixed for a regular meeting shall be a legal holiday at
the place where the meeting is to be held, then the meeting which would
otherwise be held on that day shall be held at the same hour on the next
succeeding business day. Notice of regular meetings of the Board of Directors
need not be given except as otherwise required by statute or these By-Laws.
Section 5. Special Meetings. Special meetings of the Board of
Directors may be called at any time by the Chairman of the Board, the President
or any two directors of the Corporation and shall be held at such time and at
such place within or without the State of Delaware as shall be specified in the
notice of meeting or waiver thereof.
Section 6. Notice of Meetings. Notice of each special meeting of
the Board of Directors (and of each regular meeting for which notice shall be
required) shall be given by the Secretary as hereinafter provided in this
Section 6, in which notice shall be stated the time and place of the meeting.
Notice of each such meeting shall be delivered to each director, either
personally (including by courier) or by telephone, telex, telegraph, or
facsimile transmission at least twenty-four hours before the time at which such
meeting is to be held, or shall be mailed to each director by first-class mail
postage prepaid, addressed to him at his residence or usual place of business,
at least three days before the day on which such meeting is to be held. Notice
of any such meeting need not be given to any director who shall, either before
or after the meeting, submit a signed waiver of notice or who shall attend such
meeting without objecting, at the beginning of such meeting, to the transaction
of any business because the meeting is not lawfully called or convened. Except
as otherwise specifically required by these By-Laws, a notice or waiver of
notice of any regular or special meeting of the Board of Directors need not
state the purpose or purposes of such meeting.
Section 7. Quorum and Manner of Acting. Except as provided in
Section 5 of Article IX of these By-Laws, a majority of the directors shall be
present in person at any meeting of the Board of Directors in order to
constitute a quorum for the transaction of business at such meeting, and,
except as otherwise expressly required by statute or the Certificate of
Incorporation, the act of a majority of the directors present at any meeting at
which a quorum is present shall be the act of the Board of Directors. In the
absence of a quorum at any meeting of the Board of Directors, a majority of the
directors present thereat, or if no director be present, the Secretary, may
adjourn such meeting to another time and place, or such meeting, unless it be
the annual meeting of the Board of Directors, need not be
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held. At any adjourned meeting at which a quorum is present, any business may
be transacted which might have been transacted at the meeting as originally
called. Except as provided in Section 11 of this Article III, Article IV and
Section 4 of Article IX of these By-Laws and as otherwise specifically
authorized by resolution of the Board of Directors, the directors shall act
only as a Board of Directors and the individual directors shall have no power
as such.
Section 8. Organization. At each meeting of the Board of
Directors, the Chairman of the Board, or, in his absence or inability to act,
the President, or, in his absence or inability to act, another director chosen
by a majority of the directors present, shall act as chairman of the meeting
and preside thereat. The minutes of the meeting shall be recorded by any
officer of the Corporation present and designated by the chairman.
Section 9. Resignations. Any director of the Corporation may
resign at any time by giving written notice of his resignation to the Board of
Directors, the Chairman of the Board, the President or the Secretary of the
Corporation. Any such resignation shall take effect at the time specified
therein, or, if the time when it shall become effective shall not be specified
therein, immediately upon its receipt; and, unless otherwise specified therein,
the acceptance of such resignation shall not be necessary to make it effective.
Section 10. Removal of Directors. Except as otherwise provided in
the Certificate of Incorporation or in these By-Laws, any director may be
removed, but only for cause, at any time, by the affirmative vote of the
holders of a majority of the outstanding shares of stock entitled to vote for
the election of directors of the Company at a meeting of the stockholders
called and held for that purpose.
Section 11. Vacancies. Except as otherwise required by statute or
by the Certificate of Incorporation, during the intervals between annual
meetings of stockholders, any vacancies and any newly-created directorships
resulting from an increase in the authorized number of directors shall be
filled by a majority vote of the directors then in office, whether or not a
quorum, or by a sole remaining director, and the directors so chosen shall hold
office until the next election of the class for which such directors shall have
been chosen and until their successors shall be duly elected and qualified,
unless sooner displaced. If there are no directors in office, then a special
meeting of stockholders for the election of directors may be called and held in
the manner provided by statute. When one or more directors shall resign from
the Board of Directors, effective at a future date, a majority of the directors
then in office, including those who have so resigned, shall have power to fill
such vacancy or vacancies, the vote thereon to take effect when such
resignation
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or resignations shall become effective, and each director so chosen shall hold
office as provided in this section in the filling of other vacancies.
Section 12. Compensation. The Board of Directors or a committee
of the Board designated by it shall have authority to fix the compensation,
including without limitation fees and reimbursement of expenses, of directors
for services to the Corporation in any capacity; provided, however, that no
such payment shall preclude any director from serving the Corporation in any
other capacity and receiving compensation therefor.
Section 13. Action without Meeting. Any action required or
permitted to be taken at any meeting of the Board of Directors or of any
committee thereof may be taken without a meeting if all members of the Board or
committee, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the Board or committee.
Section 14. Participation in Meetings by Telephone and Other
Equipment. Members of the Board of Directors or of any committee thereof may
participate in a meeting of the Board or committee by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and participation in a
meeting pursuant to this Section shall constitute presence in person at such
meeting.
ARTICLE IV
Executive and Other Committees
Section 1. Executive and Other Committees. The Board of Directors
may, by a resolution passed by a majority of the whole Board, designate an
Executive Committee, to consist of three or more directors of the Corporation,
and one or more other committees, each such other committee to consist of one
or more of the directors of the Corporation. The Board of Directors may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of the committee. In
the absence or disqualification of any member of the Executive Committee or
such other committee or committees, the member or members thereof present at
any meeting and not disqualified from voting, whether or not he or they
constitute a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in the place of any such absent or disqualified
member. The Executive Committee, while the Board of Directors is not in
session, shall have and may exercise, and any such other committee to the
extent provided in the resolution of the Board of Directors, shall have and may
exercise, all the powers and authority of the Board of Directors in the
management of the business and affairs of the Corporation,
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and may authorize the seal of the Corporation to be affixed to all papers which
may require it; but no such committee shall have the power or authority in
reference to amending the Certificate of Incorporation, adopting an agreement
of merger or consolidation, recommending to the stockholders the sale, lease or
exchange of all or substantially all of the Corporation's property and assets,
recommending to the stockholders a dissolution of the Corporation or a
revocation of a dissolution, or amending the By-Laws of the Corporation; and,
unless the resolution or By-Laws expressly so provide, no such committee shall
have the power or authority to declare a dividend or to authorize the issuance
of stock. Each committee shall keep written minutes of its proceedings and
shall report such minutes to the Board of Directors when required. All such
proceedings shall be subject to revision or alteration by the Board of
Directors; provided, however, that rights of third parties shall not be
prejudiced by such revision or alteration. The Board of Directors, by action
of a majority of the entire Board, may at any time fill vacancies in, change
the membership of, or dissolve any such committee.
Section 2. Executive Committee: General. Regular meetings of the
Executive Committee shall be held at such times and places, within or without
the State of Delaware, as a majority of such Committee may from time to time by
resolution determine. Special meetings of the Executive Committee may be
called at the request of any member thereof and may be held at such times and
places, within or without the State of Delaware, as such Committee may from
time to time by resolution determine or as shall be specified in the respective
notices or waivers of notice thereof. Notice of regular meetings of such
Committee need not be given except as otherwise required by statute or these
By-Laws. Notice of each special meeting of such Committee shall be given to
each member of such Committee in the manner provided for in Section 6 of
Article III of these By-Laws. Subject to the provisions of this Article IV,
the Executive Committee, by resolution of a majority of such Committee, shall
fix its own rules of procedure. A majority of the Executive Committee shall be
present in person at any meeting of the Executive Committee in order to
constitute a quorum for the transaction of business at such meeting, and the
act of a majority of those present at any meeting at which a quorum is present
shall be the act of the Executive Committee. The members of the Executive
Committee shall act only as a committee, and the individual members shall have
no power as such.
Section 3. Other Committees: General. A majority of any
committee may fix its rules of procedure, determine its action, and fix the
time and place, within or without the State of Delaware, of its meetings,
unless the Board of Directors shall otherwise by resolution provide. Notice of
such meetings shall be given to each member of the committee in the manner
provided for in Section 6 of Article III of these By-Laws. Nothing in
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this Article IV shall be deemed to prevent the Board of Directors from
appointing one or more committees consisting in whole or in part of persons who
are not directors of the Corporation; provided, however, that no such committee
shall have or may exercise any authority of the Board.
ARTICLE V
Officers
Section 1. Number and Qualifications. The officers of the
Corporation shall be a Chairman of the Board, a President, a Vice President of
Finance, one or more other Vice Presidents, and a Secretary. Any two or more
offices may be held by the same person. Such officers shall be elected from
time to time by the Board of Directors, each to hold office until the meeting
of the Board following the next annual meeting of the stockholders, or until
his successor shall have been duly elected and shall have qualified, or until
his death, or until he shall have resigned or until he shall have been removed,
as hereinafter provided in these By-Laws. The Board of Directors shall
designate a Chief Executive Officer and may from time to time appoint such
other officers (including a Treasurer and one or more Assistant Treasurers and
Assistant Secretaries) and such agents as it may deem necessary or desirable
for the business of the Corporation. The Board of Directors may from time to
time authorize any principal officer or committee to appoint, and to prescribe
the authority and duties of, any such subordinate officers or agents. Each of
such other officers and agents shall have such authority, perform such duties,
and hold office for such period, as are provided in these By-Laws or as may be
prescribed by the Board of Directors or by the principal officer or committee
appointing such officer or agent.
Section 2. Resignations. Any officer of the Corporation may
resign at any time by giving written notice of his resignation to the Board of
Directors, the Chairman of the Board, the President or the Secretary. Any such
resignation shall take effect at the time specified therein or, if the time
when it shall become effective shall not be specified therein, immediately upon
its receipt; and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
Section 3. Removal. Any officer or agent of the Corporation may
be removed, either with or without cause, at any time, by the vote of the
majority of the entire Board of Directors at any meeting of the Board, or,
except in the case of an officer or agent elected or appointed by the Board, by
any principal officer or committee upon whom such power of removal may be
conferred by the Board.
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Section 4. Vacancies. A vacancy in any office, whether arising
from death, resignation, disqualification, removal or any other cause, may be
filled for the unexpired portion of the term of the office which shall be
vacant, in the manner prescribed in these By-Laws for the regular election or
appointment to such office.
Section 5. Chairman of the Board. The Chairman of the Board
shall, if present, preside at all meetings of the Board of Directors and the
stockholders. In general, the Chairman of the Board shall have such other
powers and perform such other duties as may be incidental to the office of
Chairman of the Board or as from time to time may be assigned to him by the
Board of Directors. Unless otherwise directed by the Board of Directors, when
there is no President, or in the absence or inability to act of the President,
the Chairman of the Board shall perform all the duties and functions and
exercise all the powers of the President.
Section 6. President. The President shall, in the absence or
inability to act of the Chairman of the Board, preside at all meetings of the
Board of Directors and the stockholders. In general, the President shall have
such other powers and perform such other duties as may usually pertain to the
office of President, or as from time to time may be assigned to him by the
Board of Directors or the Chairman of the Board, if the Chairman of the Board
is also the Chief Executive Officer. Unless otherwise directed by the Board of
Directors, when there is no Chairman of the Board, or in the absence or
inability to act of the Chairman of the Board, the President shall perform all
the duties and functions and exercise all the powers of the Chairman of the
Board.
Section 7. Chief Executive Officer. Either the Chairman of the
Board of Directors or the President, as the Board may designate, shall be the
Chief Executive Officer of the Corporation. The officer so designated shall
have, in addition to the powers and duties applicable to the office set forth
in Section 5 or 6 of this Article V of these By-laws, general and active
supervision and direction over the business and affairs of the Corporation and
over its several officers, agents and employees, subject, however, to the
control of the Board of Directors. The Chief Executive Officer shall see that
all orders and resolutions of the Board of Directors are carried into effect
and, in general, the Chief Executive Officer shall have such other powers and
perform such other duties as may be incidental to the position of Chief
Executive Officer or as from time to time may be assigned to him by the Board
of Directors.
Section 8. Vice President of Finance. The Vice President of
Finance shall:
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(a) keep full and accurate accounts of receipts and disbursements
in books belonging to the Corporation and have control of all books of account
of the Corporation;
(b) receive, and give receipts for, moneys due and payable to the
Corporation from any source whatsoever;
(c) disburse funds of the Corporation, taking proper vouchers
therefor;
(d) render to the Chairman of the Board, the President, the Board
or any committee thereof, whenever required, an account of the financial
condition of the Corporation and of his transactions as Vice President of
Finance; and
(e) in general, have such other powers and perform such other
duties as usually pertain to the office of Vice President of Finance or as from
time to time may be assigned to him by the Board of Directors, the Chairman of
the Board or by the President.
At the request of the Treasurer or in case of the absence or
inability to act of the Treasurer, the Vice President of Finance shall perform
all the duties of the Treasurer, and when so acting, shall have all the powers
of and be subject to all the restrictions upon the Treasurer.
Section 9. Other Vice Presidents. Each other Vice President,
including the Executive Vice President, if appointed, shall have such powers
and perform such duties as usually pertain to his office or as from time to
time may be assigned to him by the Board of Directors, the Chairman of the
Board or the President.
Section 10. Treasurer. The Treasurer shall:
(a) have charge and custody of, and be responsible for, all the
funds and securities of the Corporation;
(b) cause all moneys and other valuables to be deposited to the
credit of the Corporation in such depositaries as may be designated by the
Board of Directors;
(c) supervise the investment of the Corporation's funds as ordered
or authorized by the Board of Directors, taking proper vouchers therefor; and
(d) in general, have such other powers and perform such other
duties as from time to time may be assigned to him by the Board of Directors,
the Chairman of the Board or the President.
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At the request of the Vice President of Finance or in case of the
absence or inability to act of the Vice President of Finance, the Treasurer
shall perform all the duties of the Vice President of Finance, and when so
acting, shall have all the powers of and be subject to all the restrictions
upon the Vice President of Finance.
Section 11. Assistant Treasurers. Each Assistant Treasurer shall
have such powers and perform such duties as usually pertain to his office or as
from time to time may be assigned to him by the Board of Directors, the
Chairman of the Board, the President or the Treasurer.
Section 12. Secretary. The Secretary shall:
(a) keep, or cause to be kept, in one or more books provided for
the purpose, the minutes of all meetings of the Board of Directors, of the
committees of the Board and of the stockholders;
(b) see that all notices are duly given in accordance with the
provisions of these By-Laws and as required by law;
(c) be custodian of the records and the seal of the Corporation
and affix and attest the seal to all stock certificates of the Corporation
(unless the seal of the Corporation on such certificates shall be a facsimile,
as hereinafter provided) and affix and attest the seal to all other documents
to be executed on behalf of the Corporation under its seal;
(d) see that the books, reports, statements, certificates and
other documents and records required by law to be kept and filed are properly
kept and filed; and
(e) in general, have such other powers and perform such other
duties as usually pertain to the office of Secretary or as from time to time
may be assigned to him by the Board of Directors, the Chairman of the Board or
the President.
Section 13. Assistant Secretaries. At the request of the
Secretary or in case of his absence or inability to act, the Assistant
Secretary, or if there be more than one, the Assistant Secretary designated by
the Board of Directors or, in the absence of such designation, by the
President, shall perform all the duties of the Secretary, and when so acting,
shall have all the powers of and be subject to all the restrictions upon the
Secretary. In general, each Assistant Secretary shall have such other powers
and perform such other duties as from time to time may be assigned to him by
the Board of Directors, the Chairman of the Board, the President or the
Secretary.
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Section 14. Officers' Bonds or Other Security. If required by the
Board of Directors, any officer of the Corporation shall give a bond for the
faithful performance of his duties, for such term and in such amount and with
such surety or sureties as the Board may require.
Section 15. Compensation. The compensation of the officers of the
Corporation for their services as such officers shall be fixed from time to
time by the Board of Directors or a committee of the Board designated by it,
and no officer of the Corporation shall be prevented from receiving
compensation by reason of the fact that he is also a director of the
Corporation.
ARTICLE VI
Checks, Drafts, Bank Accounts, Etc.
Section 1. Checks, Drafts, etc. All checks, drafts, bills of
exchange or other orders for the payment of money out of the funds of the
Corporation, and all notes or other evidences of indebtedness of the
Corporation shall be signed in the name and on behalf of the Corporation by
such person or persons and in such manner as shall from time to time be
authorized by the Board of Directors.
Section 2. Deposits. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the Corporation
in such banks, trust companies or other depositaries as the Board of Directors
may from time to time designate or as may be designated by any officer or
officers of the Corporation to whom such power of designation may from time to
time be delegated by the Board of Directors. For the purpose of deposit and
for the purpose of collection for the account of the Corporation, checks,
drafts and other orders for the payment of money which are payable to the order
of the Corporation may be endorsed, assigned and delivered by any officer or
agent of the Corporation.
Section 3. General and Special Bank Accounts. The Board of
Directors may from time to time authorize the opening and keeping of general
and special bank accounts with such banks, trust companies or other
depositaries as the Board may designate or as may be designated by any officer
or officers of the Corporation to whom such power of designation may from time
to time be delegated by the Board of Directors. The Board of Directors may
make such special rules and regulations with respect to such bank accounts, not
inconsistent with provisions of these By-Laws, as it may deem expedient.
Section 4. Proxies in Respect of Securities of Other Corporations.
Unless otherwise provided by resolution adopted by the Board of Directors, the
Chairman of the Board, the President
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or any Vice President may from time to time appoint an attorney or attorneys or
agent or agents of the Corporation in the name and on behalf of the Corporation
to cast the votes which the Corporation may be entitled to cast as the holder
of stock or other securities in any other corporation, any of whose stock or
other securities may be held by the Corporation, at meetings of the holders of
the stock or other securities of such other corporation, or to consent in
writing in the name of the Corporation as such holder to any action by such
other corporation, and may instruct the person or persons so appointed as to
the manner of casting such votes or giving such consent, and may execute or
cause to be executed in the name and on behalf of the Corporation and under its
corporate seal, or otherwise, all such written proxies or other instruments as
he may deem necessary or proper in the premises.
ARTICLE VII
Shares and Their Transfer - Examination of Books
Section 1. Stock Certificates. Every holder of stock of the
Corporation shall be entitled to have a certificate, in such form as shall be
approved by the Board of Directors, certifying the number and class of shares
of stock of the Corporation owned by him. The certificates representing shares
of the respective classes of stock shall be numbered in order of their issue
and shall be signed in the name of the Corporation by the Chairman of the Board
or the President or a Vice President and by the Vice President of Finance, the
Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary,
and sealed with the seal of the Corporation (which seal may be a facsimile,
engraved or printed). Any or all the signatures on the certificate may be a
facsimile. In case any officer, transfer agent, or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
to be such officer, transfer agent, or registrar before such certificate is
issued, it may be issued by the Corporation with the same effect as if he were
such officer, transfer agent, or registrar at the date of issue.
Section 2. Books of Account and Record of Stockholders. The books
and records of the Corporation may be kept at such places, within or without
the State of Delaware, as the Board of Directors may from time to time
determine. The stock record books and the blank stock certificate books shall
be kept by the Secretary or by any other officer or agent designated by the
Board of Directors.
Section 3. Transfers of Shares. Transfers of shares of stock of
the Corporation shall be made on the stock records of the Corporation only upon
authorization by the registered holder thereof, or by his attorney thereunto
authorized by power of
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attorney duly executed and filed with the Secretary or with a transfer agent or
transfer clerk, and on surrender of the certificate or certificates for such
shares properly endorsed or accompanied by a duly executed stock transfer power
and the payment of all taxes thereon. Except as otherwise provided by law, the
Corporation shall be entitled to recognize the exclusive right of a person in
whose name any share or shares stand on the record of stockholders as the owner
of such share or shares for all purposes, including without limitation the
rights to receive dividends or other distributions and to vote as such owner,
and the Corporation may hold any such stockholder of record liable for calls
and assessments and the Corporation shall not be bound to recognize any
equitable or legal claim to or interest in any such share or shares on the part
of any other person, whether or not it shall have express or other notice
thereof. Whenever any transfers of shares shall be made for collateral
security and not absolutely, and both the transferor and transferee request the
Corporation to do so, such fact shall be stated in the entry of the transfer.
Section 4. Regulations. The Board of Directors may make such
additional rules and regulations, not inconsistent with these By-Laws, as it
may deem expedient concerning the issue, transfer and registration of
certificates for shares of stock of the Corporation. It may appoint, or
authorize any officer or officers to appoint, one or more transfer agents or
one or more transfer clerks and one or more registrars and may require all
certificates for shares of stock to bear the signature or signatures of any of
them.
Section 5. Lost, Destroyed or Mutilated Certificates. The holder
of any certificate representing shares of stock of the Corporation shall
immediately notify the Corporation of any loss, destruction or mutilation of
such certificate, and the Corporation may issue a new certificate of stock in
the place of any certificate theretofore issued by it which the owner thereof
shall allege to have been lost, stolen or destroyed or which shall have been
mutilated, and the Board of Directors may, in its discretion, require such
owner or his legal representatives to give the Corporation and/or any agent of
the Corporation designated by it a bond in such sum, limited or unlimited, and
in such form and with such surety or sureties as the Board in its absolute
discretion shall determine, to indemnify the Corporation and/or such agent
against any claim that may be made against it on account of the alleged loss
theft, or destruction of any such certificate, or the issuance of a new
certificate. Anything herein to the contrary notwithstanding, the Board of
Directors, in its absolute discretion, may refuse to issue any such new
certificate, except pursuant to legal proceedings under the laws of the State
of Delaware.
Section 6. Stockholder's Right of Inspection. Any stockholder of
record, in person or by attorney or other agent,
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shall, upon written demand under oath stating the purpose thereof, have the
right during the usual hours of business to inspect for any proper purpose the
Corporation's stock ledger, a list of its stockholders, and its other books and
records, and to make copies or extracts therefrom. A proper purpose shall mean
a purpose reasonably related to such person's interest as a stockholder. In
every instance where an attorney or other agent shall be the person who seeks
the right to inspection, the demand under oath shall be accompanied by a power
of attorney or such other writing which authorizes the attorney or other agent
to so act on behalf of the stockholder. The demand under oath shall be
directed to the Corporation at its registered office in the State of Delaware
or at its principal place of business.
Section 7. Fixing of Record Date. In order that the Corporation
may determine the stockholders entitled to notice of or to vote at any meeting
of stockholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock
or for the purpose of any other lawful action, the Board of Directors may fix,
in advance, a record date, which shall be not more than sixty nor less than ten
days before the date of such meeting, nor more than sixty days prior to any
other action. A determination of stockholders of record entitled to notice of
or to vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.
ARTICLE VIII
Dividends
Subject to the provisions of the Certificate of Incorporation
relating thereto, if any, dividends upon the capital stock of the Corporation
may be declared by the Board of Directors at any regular or special meeting,
pursuant to law. Subject to the provisions of the Certificate of
Incorporation, dividends may be paid in cash, in property or in shares of the
capital stock of the Corporation.
Before payment of any dividend, there may be set aside out of any
funds of the Corporation available for dividends such sum or sums as the Board
of Directors from time to time, in its absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the Corporation, or for such other
purpose or purposes as the Board of Directors shall determine to be in the
interest of the Corporation, and the Board of Directors may modify or abolish
any such reserve in the manner in which it was created.
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ARTICLE IX
Indemnification
Section 1. Right to Indemnification. The Corporation shall, to
the fullest extent permitted by applicable law as then in effect, indemnify any
person (the "Indemnitee") who was or is involved in any manner (including,
without limitation, as a party or a witness) or was or is threatened to be made
so involved in any threatened, pending or completed investigation, claim,
action, suit or proceeding, whether civil, criminal, administrative or
investigative (including, without limitation, any action, suit or proceeding by
or in the right of the Corporation to procure a judgment in its favor)(a
"Proceeding") by reason of the fact that he is or was a director or officer of
the Corporation, or is or was serving at the request of the Corporation as a
director or officer of another corporation or of a partnership, joint venture,
trust or other enterprise (including, without limitation, service with respect
to any employee benefit plan), whether the basis of any such Proceeding is
alleged action in an official capacity as a director or officer or in any other
capacity while serving as a director or officer, against all expenses,
liability and loss (including, without limitation, attorneys' fees, judgments,
fines, ERISA excise taxes or penalties and amounts paid or to be paid in
settlement) actually and reasonably incurred by him in connection with such
Proceeding. The right to indemnification conferred in this Article IX shall
include the right to receive payment in advance of any expenses incurred by the
Indemnitee in connection with such Proceeding, consistent with applicable law
as then in effect. All right to indemnification conferred in this Article IX,
including such right to advance payments and the evidentiary, procedural and
other provisions of this Article IX, shall be a contract right. The
Corporation may, by action of its Board of Directors, provide indemnification
for employees, agents, attorneys and representatives of the Corporation with up
to the same scope and extent as provided for officers and directors.
Section 2. Insurance, Contracts and Funding. The Corporation may
purchase and maintain insurance to protect itself and any person who is, was or
may become an officer, director, employee, agent, attorney or representative of
the Corporation or, at the request of the Corporation, an officer, director,
employee, agent, attorney or representative of another corporation or entity,
against any expense, liability or loss asserted against him or incurred by him
in connection with any Proceeding in any such capacity, or arising out of his
status as such, whether or not the Corporation would have the power to
indemnify him against such expense, liability or loss under the provisions of
this Article IX or otherwise. The Corporation may enter into contracts with
any director, officer, employee, agent, attorney or representative of the
Corporation, or any person
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serving as such at the request of the Corporation for another corporation or
entity, in furtherance of the provisions of Article TENTH of the Certificate of
Incorporation or this Article IX and may create a trust fund, grant a security
interest or use other means (including, without limitation, a letter of credit)
to ensure the payment of such amounts as may be necessary to effect
indemnification of any person entitled thereto.
Section 3. Indemnification; Not Exclusive Right. The right of
indemnification provided in this Article IX shall not be exclusive of any other
rights to which any person seeking indemnification may otherwise be entitled
under any provision of the Certificate of Incorporation, By-Laws or agreement
or otherwise. The provisions of this Article IX shall inure to the benefit of
the heirs and legal representatives of any person entitled to indemnity under
this Article IX and shall be applicable to all Proceedings, whether arising
from acts or omissions occurring before or after the adoption of this Article
IX. No amendment or repeal of any provision of this Article IX shall remove,
abridge or adversely affect any right of indemnification or any other benefits
of the Indemnitee under the provisions of this Article IX with respect to any
Proceeding involving any act or omission which occurred prior to such
amendment.
Section 4. Advancement of Expenses; Procedures; Presumptions and
Effect of Certain Proceedings; Remedies. In furtherance, but not in
limitation, of the provisions of the Certificate of Incorporation or the
foregoing provisions of this Article IX, the following procedures, presumptions
and remedies shall apply with respect to advancement of expenses and the right
to indemnification under the Certificate of Incorporation or this Article IX:
(a) Advancement of Expenses. All reasonable expenses incurred by
or on behalf of the Indemnitee in connection with any Proceeding shall be
advanced to the Indemnitee by the Corporation within 20 days after the receipt
by the Corporation of a statement or statements from the Indemnitee requesting
such advance or advances from time to time, whether prior to or after final
disposition of such Proceeding. Such statement or statements reasonably shall
evidence the expenses incurred by the Indemnitee and, if required by law at the
time of such advance, shall include or be accompanied by an undertaking by or
on behalf of the Indemnitee to repay the amounts advanced if it should
ultimately be determined that the Indemnitee is not entitled to be indemnified
against such expense pursuant to this Article IX.
(b) Procedure for Determination of Entitlement to Indemnification.
(i) To obtain indemnification, an Indemnitee shall
submit to the President or Secretary of the Corporation a
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written request, including such documentation and information as is
reasonably available to the Indemnitee and reasonably necessary to
determine whether and to what extent the Indemnitee is entitled to
indemnification (the "Supporting Documentation"). The determination
of the Indemnitee's entitlement to indemnification shall be made not
later than 60 days after receipt by the Corporation of the written
request for indemnification together with the Supporting
Documentation. The President or Secretary of the Corporation shall,
promptly upon receipt of such a request for indemnification, advise
the Board of Directors in writing that the Indemnitee has requested
indemnification.
(ii) The Indemnitee's entitlement to indemnification
shall be determined in one of the following ways: (A) by a majority
vote of the Disinterested Directors (as hereinafter defined) (or the
Disinterested Director, if only one); (B) by a written opinion of
Independent Counsel (as hereinafter defined) if (x) a Change in
Control (as hereinafter defined) shall have occurred and the
Indemnitee so requests or (y) there is no Disinterested Director or a
majority of the Disinterested Directors (or the Disinterested
Director, if only one) so directs; (C) by the stockholders of the
Corporation (but only if a majority of the Disinterested Directors (or
the Disinterested Director, if only one) determines that the issue of
entitlement to indemnification should be submitted to the stockholders
for their determination); or (D) as provided in Section 4(c) of this
Article IX.
(iii) In the event the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to
Section 4(b)(ii) of this Article IX, a majority of the Disinterested
Directors (or the Disinterested Director, if only one) shall select
the Independent Counsel, but only an Independent Counsel to which the
Indemnitee does not reasonably object; provided, however, that if a
Change in Control shall have occurred, the Indemnitee shall select
such Independent Counsel, but only an Independent Counsel to which the
Board of Directors does not reasonably object.
(c) Presumptions and Effect of Certain Proceedings.
Except as otherwise expressly provided in this Article IX, the Indemnitee shall
be presumed to be entitled to indemnification upon submission of a request for
indemnification together with the Supporting Documentation in accordance with
Section 4(b)(i) of this Article IX, and thereafter the Corporation shall have
the burden of proof to overcome that presumption in reaching a contrary
determination. In any event, if the person or persons empowered under Section
4(b) of this Article IX to determine entitlement to indemnification shall not
have been appointed or shall not have made a determination within 60 days after
receipt by the Corporation of the request therefor together with the
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Supporting Documentation, the Indemnitee shall be deemed to be entitled to
indemnification. With regard to the right to indemnification for expenses, if
and to the extent that the Indemnitee has been successful on the merits or
otherwise in any Proceeding, or if and to the extent that the Indemnitee was
not a party to the Proceeding or if a Proceeding was terminated without a
determination of liability on the part of the Indemnitee with respect to any
claim, issue or matter therein or without any payments in settlement or
compromise being made by the Indemnitee with respect to a claim, issue or
matter therein, the Indemnitee shall be deemed to be entitled to
indemnification, which entitlement shall not be diminished by any determination
which may be made pursuant to Sections (4)(b)(ii)(A), (B) or (C). In either
case, the Indemnitee shall be entitled to such indemnification, unless (A) the
Indemnitee misrepresented or failed to disclose a material fact in making the
request for indemnification or in the Supporting Documentation or (B) such
indemnification is prohibited by law, in either case as finally determined by
adjudication or, at the Indemnitee's sole option, arbitration (as provided in
Section 4(d)(i) of this Article IX). The termination of any Proceeding
described in Section 1 of this Article IX; or of any claim, issue or matter
therein, by judgment, order, settlement or conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, adversely affect the right
of the Indemnitee to indemnification or create any presumption with respect to
any standard of conduct or belief or any other matter which might form a basis
for a determination that the Indemnitee is not entitled to indemnification.
(d) Remedies of Indemnitee.
(i) In the event that a determination is made
pursuant to Section 4(b) of this Article IX that the Indemnitee is not
entitled to indemnification under this Article IX, (A) the Indemnitee
shall be entitled to seek an adjudication of his entitlement to such
indemnification either, at the Indemnitee's sole option, in (x) an
appropriate court of the State of Delaware or any other court of
competent jurisdiction or (y) an arbitration to be conducted by three
arbitrators (or, if the dispute involves less than $100,000, by a
single arbitrator) pursuant to the rules of the American Arbitration
Association; (B) any such judicial proceedings or arbitration shall be
de novo and the Indemnitee shall not be prejudiced by reason of such
adverse determination; and (C) in any such judicial proceeding or
arbitration the Corporation shall have the burden of proof that the
Indemnitee is not entitled to indemnification under this Article IX.
(ii) If a determination shall have been made or deemed
to have been made, pursuant to Section 4(b) or (c) of this Article IX,
that the Indemnitee is entitled to indemnification, the Corporation
shall be obligated to pay
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the amounts constituting such indemnification within five days after
such determination has been made or deemed to have been made and shall
be conclusively bound by such determination, unless (A) the Indemnitee
misrepresented or failed to disclose a material fact in making the
request for indemnification or in the Supporting Documentation or (B)
such indemnification is prohibited by law, in either case as finally
determined by adjudication or, at the Indemnitee's sole option,
arbitration (as provided in Section 4(d)(i) of this Article IX). In
the event that (C) advancement of expenses is not timely made pursuant
to Section 4(a) of this Article IX or (D) payment of indemnification
is not made within five days after a determination of entitlement to
indemnification has been made or deemed to have been made pursuant to
Section 4(b) or (c) of this Article IX, the Indemnitee shall be
entitled to seek judicial enforcement of the Corporation's obligation
to pay to the Indemnitee such advancement of expenses or
indemnification. Notwithstanding the foregoing, the Corporation may
bring an action, in an appropriate court in the State of Delaware or
any other court of competent jurisdiction, contesting the right of the
Indemnitee to receive indemnification hereunder due to the occurrence
of an event described in subclause (A) or (B) of this clause (ii) (a
"Disqualifying Event"), provided, however, that if the Indemnitee
shall elect, at his sole option, that such dispute shall be determined
by arbitration (as provided in Section 4(d)(I) of this Article IX),
the Corporation shall proceed by such arbitration. In any such
enforcement or other proceeding or action in which whether a
Disqualifying Event has occurred is an issue, the Corporation shall
have the burden of proving the occurrence of such Disqualifying Event.
(iii) The Corporation shall be precluded from asserting
in any judicial proceeding or arbitration commenced pursuant to this
Section 4(d) that the procedures and presumptions of this Article IX
are not valid, binding and enforceable and shall stipulate in any such
court or before any such arbitrator or arbitrators that the
Corporation is bound by all the provisions of this Article IX.
(iv) In the event that the Indemnitee, pursuant to
this Article IX, seeks a judicial adjudication of or an award in
arbitration to enforce his rights under, or to recover damages for
breach of, this Article IX, or is otherwise involved in any
adjudication or arbitration with respect to his right to
indemnification, the Indemnitee shall be entitled to recover from the
Corporation, and shall be indemnified by the Corporation against, any
expenses actually and reasonably incurred by him if the Indemnitee
prevails in such judicial adjudication or arbitration. If it shall be
determined in such judicial adjudication or arbitration that the
Indemnitee is entitled to receive part
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but not all of the indemnification or advancement of expenses sought,
the expenses incurred by the Indemnitee in connection with such
judicial adjudication or arbitration shall be prorated accordingly.
(e) Definitions. For purposes of this Section 4:
(i) "Change in Control" means a change in control of
the Corporation of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A promulgated
under the Securities Exchange Act of 1934 (the "Act"), as such Item
was in effect on July 1, 1990, whether or not the Corporation is then
subject to such reporting requirement; provided that, without
limitation, such a change in control shall be deemed to have occurred
if (A) any "person" (as such term is used in Sections 13(d) and 14(d)
of the Act) is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Act), directly or indirectly, of securities of the
Corporation representing 20 percent or more of the combined voting
power of the Corporation's then outstanding securities without the
prior approval of at least two-thirds of the members of the Board of
Directors in office immediately prior to such acquisition; (B) the
Corporation is a party to a merger, consolidation, sale of assets or
other reorganization, or a proxy contest, as a consequence of which
members of the Board of Directors in office immediately prior to such
transaction or event constitute less than a majority of the Board of
Directors thereafter; or (C) during any period of two consecutive
years, individuals who at the beginning of such period constituted the
Board of Directors (including for this purpose any new director whose
election or nomination for election by the Corporation's stockholders
was approved by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of such period)
cease for any reason to constitute at least a majority of the Board of
Directors.
(ii) "Disinterested Director" means a director of the
Corporation who is not or was not a material party to the Proceeding
in respect of which indemnification is sought by the Indemnitee.
(iii) "Independent Counsel" means a law firm or a
member of a law firm that neither presently is, nor in the past five
years has been, retained to represent: (A) the Corporation or the
Indemnitee in any matter or (B) any other party to the Proceeding
giving rise to a claim for indemnification under this Article IX.
Notwithstanding the foregoing, the term "Independent Counsel" shall
not include any person who, under the applicable standards of
professional conduct then prevailing under the law of the State of
Delaware, would have a conflict of interest in
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representing either the Corporation or the Indemnitee in an action to
determine the Indemnitee's rights under this Article IX.
Section 5. Acts of Disinterested Directors. Disinterested
Directors considering or acting on any indemnification matter under this
Article IX or otherwise may consider or take action as the Board of Directors
or may consider or take action as a committee or individually or otherwise. In
the event Disinterested Directors consider or take action as the Board of
Directors, one-third of the total number of directors shall constitute a
quorum.
Section 6. Severability. If any provision or provisions of
this Article IX shall be held to be invalid, illegal or unenforceable for any
reason whatsoever: (I) the validity, legality and enforceability of the
remaining provisions of this Article IX (including, without limitation, all
portions of any paragraph of this Article IX containing any such provision held
to be invalid, illegal or unenforceable, that are not themselves invalid,
illegal or unenforceable) shall not in any way be affected or impaired thereby;
and (ii) to the fullest extent possible, the provisions of this Article IX
(including, without limitation, all portions of any paragraph of this Article
IX containing any such provision held to be invalid, illegal or unenforceable,
that are not themselves invalid, illegal or unenforceable) shall be construed
so as to give effect to the intent manifested by the provision held invalid,
illegal or unenforceable.
ARTICLE X
Fiscal Year
The fiscal year of the Corporation shall be fixed by
resolution of the Board of Directors.
ARTICLE XI
Seal
The Board of Directors shall provide a corporate seal, which
shall be circular in form and bear the name of the Corporation and the words
and figures denoting its organization under the laws of the State of Delaware
and the year thereof.
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ARTICLE XII
Amendments
These By-Laws may be amended or repealed, or new By-Laws may
be adopted, except as provided in Section 3 of Article IX of these By-Laws, (a)
at any annual or special meeting of the stockholders, by a majority of the
total votes of the stockholders or when stockholders are entitled to vote by
class, by a majority of the appropriate class, present in person or represented
by proxy and entitled to vote on such action; provided, however, that the
notice of such meeting shall have been given as provided in these By-Laws,
which notice shall mention that amendment or repeal of these By-Laws or the
adoption of new By-Laws is one of the purposes of such meeting, or (b) by the
Board of Directors at any meeting thereof; provided, however, that notice of
such meeting shall have been given as provided in these By-Laws, which notice
shall mention that amendment or repeal of the By-Laws or the adoption of new
By-Laws is one of the purposes of such meeting; provided, further, that By-Laws
adopted by the Board of Directors may be amended or repealed by the
stockholders as hereinabove provided; provided, further, that the stockholders
may limit the power of the Board of Directors to make, amend, alter or repeal
the By-Laws of the Company. Notwithstanding the foregoing, the provisions of
these By-Laws with respect to the number, classification, term of office,
qualifications, election and removal of directors and the filling of vacancies
and newly created directorships, and the amendment thereof, that is, Sections
2, 10 and 11 of Article III and this Article XII, may be amended or repealed or
new By-Laws affecting such provisions may be adopted only with the unanimous
approval of the entire Board of Directors or by the affirmative vote of the
holders of at least 80% of the outstanding shares of stock of the Corporation
entitled to vote in elections of directors (except that if such proposed
amendment or repeal or adoption of new By-Laws shall be submitted to the
stockholders with the unanimous recommendation of the entire Board of
Directors, such provisions may be amended or repealed or such new By-Laws may
be adopted by the affirmative vote of the holders of a majority of such stock).
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EXHIBIT 10(v)
EMPLOYMENT AGREEMENT
AGREEMENT, made as of the 14th day of October, 1995, by and between
SENSORMATIC ELECTRONICS CORPORATION, a Delaware corporation having its
principal place of business at 500 Northwest 12th Avenue, Deerfield Beach,
Florida 33442 (hereinafter referred to as the "Corporation"), and Robert A.
Vanourek, residing at 5914 Colhurst Street, Dallas, Texas 75230 (hereinafter
referred to as the "Employee");
W I T N E S S E T H:
WHEREAS, the Corporation desires to employ the Employee as its President
and Chief Operating Officer, and the Employee is willing to accept such
employment, all subject to the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto agree as follows:
1. EMPLOYMENT AND TERM. Subject to the terms and conditions hereof, the
Corporation hereby employs the Employee, and the Employee hereby accepts
employment by the Corporation, for a period commencing on the date hereof and
continuing until terminated by either party, with or without cause, by giving
written notice to the other party pursuant to Section 4 hereunder (the "Term of
Employment").
2. DUTIES. The Employee shall serve the Corporation as a member of its
Board of Directors and shall hold the offices of President and Chief Operating
Officer and shall serve in such other executive capacity as may be reasonably
determined by the Board of Directors and is reasonably acceptable to him. The
Employee shall be responsible for all business units and functional units,
other than Engineering, Corporate Product Management, Corporate Marketing and
Legal, provided that the Chairman of the Board shall continue to be responsible
for the special Olympic project and direction of the Corporation's community
and philanthropic activities. The Employee shall perform such executive,
administrative and other services and duties as are incidental to the offices
he holds and as may, from time to time, be assigned to him by the Board of
Directors of the Corporation or a committee thereof. The Employee further
agrees to serve as an officer and/or director of any parent, subsidiary or
affiliate of the Corporation, upon request by the Board of Directors of the
Corporation or a committee thereof. It is the intention of the parties that
the Employee will become Chief Executive Officer no later than September 1,
1996 and shall thereafter be responsible for the general management of the
affairs of the Company, subject to the control of the Board of Directors. The
Employee shall report to the Chairman of the Board until he becomes Chief
Executive Officer and thereafter he shall report to the Corporation's Board of
Directors. During the term of this Agreement, the Employee shall devote
substantially all of his business time, attention and energies to the business
of the Corporation. Neither the Employee's participation in other
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businesses, as a director or otherwise, with the approval of the Corporation's
Board of Directors (which approval shall be deemed to include the Board of
Directors not objecting to such participation following disclosure thereof to
the Board of Directors by Employee, and which approval may not subsequently be
withdrawn without cause) nor the Employee's
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engaging in charitable activities and community affairs or managing his
personal investments and affairs shall be deemed to contravene the foregoing
provision.
3. COMPENSATION.
(a) As base compensation for the services to be rendered by the
Employee hereunder, the Corporation shall pay to the Employee a salary at the
rate of $425,000 per annum, to be paid in equal biweekly installments, during
the Term of Employment. The base salary shall be reviewed no less frequently
than annually for increase in the discretion of the Board of Directors of the
Corporation or a committee thereof.
(b) The Corporation shall pay the Employee bonus compensation, based
upon certain performance criteria, as shall be established by the Board of
Directors and agreed to by the Employee for each fiscal year during the Term of
Employment. Targeted bonus compensation shall be not less than $350,000 per
fiscal year. For the 12 months following the commencement of the Employee's
employment, Employee's bonus compensation shall be a guaranteed minimum of
$350,000 prorated between the fiscal year ended June 30, 1996 and the fiscal
year ended June 30, 1997, based on the portion of the fiscal year ended June
30, 1996 that he is employed (subject only to Employee's continued employment
through such period in accordance with the terms of this Agreement). Bonus
compensation shall be payable within sixty (60) days following the end of the
Corporation's fiscal year or within fifteen (15) days following the
Corporation's release of final earnings, whichever is later. If the Term of
Employment terminates on a date other than the last day of a fiscal year, the
bonus payment which the Employee receives for such fiscal year shall be
prorated based upon the portion of the fiscal year prior to termination.
(c) During the Term of Employment, the Employee shall be entitled to
reimbursement for all normal and reasonable travel, entertainment and other
expenses necessarily incurred by him in the performance of his obligations
hereunder. The Company shall also pay all reasonable legal expenses incurred
in connection with the preparation of the Employee's employment arrangements
with the Company.
(d) Until the time of his retirement, and thereafter in accordance
with their respective terms, the Employee shall be entitled to participate in
or benefit from such medical insurance, pension, retirement, life insurance,
bonus, profit-sharing, stock option, stock purchase, stock purchase loan, and
other fringe benefit plans or policies as the Corporation may make available to
or have in effect for its executive personnel from time to time. The Employee
shall also be entitled to vacations, sick leave and other fringe benefits in
accordance with the policies of the Corporation from time to time in effect for
executive personnel.
During the Term of Employment the Corporation shall provide and
maintain for the Employee's use an automobile of his reasonable choice. The
Corporation shall also provide the Employee with an
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annual allowance of $7,500 for fees involved in the preparation of the
Employee's federal income and state intangible property tax returns. The
Corporation shall also provide for the payment of such country club/golf club
fees and airline club room fees as are (i) necessary or advisable, in the
reasonable opinion of the Employee, for the Employee's professional activities,
including the entertainment of business associates/clients, and (ii)
commensurate with those currently provided to the Chairman of the Board.
(e) Except as hereinafter provided, the Corporation shall pay the
Employee, for any period that this Agreement is in effect during which he is
unable fully to perform his duties because of physical or mental disability or
incapacity, an amount equal to the compensation due him for such period in
accordance with this Agreement less the aggregate amount of all income
disability benefits which for such period he may receive or to which he may be
entitled under or by reason of (i) any group health insurance plan; (ii) any
applicable compulsory state disability law; (iii) the Federal Social Security
Act; (iv) any applicable workmen's compensation law or similar law; and (v) any
plan towards which the Corporation or any parent, subsidiary or affiliate of
the Corporation has contributed or for which it has made payroll deductions,
such as group accident or health policies or the Senior Executive Defined
Contribution Retirement Plan.
(f) During the Employee's employment hereunder, and thereafter upon
retirement in accordance with such Plan, the Employee shall be entitled to
participate in the Corporation's Senior Executive Defined Contribution
Retirement Plan. The Employee's annual Target Benefits thereunder shall be not
less than $387,500 (i.e., fifty percent (50%) of Employee's targeted annual
cash compensation as of the date of this Agreement). The Employee's rights
under such Plan shall vest at the rate of 25% per year, commencing with the
first anniversary of the date of this Agreement.
(g) Upon the commencement of the Employee's employment, the
Corporation shall grant him a 10-year option, substantially in the form
attached to this Agreement as Exhibit A, to purchase 450,000 shares of common
stock of the Corporation at an exercise price equal to the fair market value on
the date of the commencement of his employment. Such option shall vest and
become exercisable at the rate of 33 % on the first, second and third
anniversaries of the date of this Agreement. The Employee shall also be
entitled to participate in future stock option grants made by the Corporation
to its employees, as determined by the Board of Directors or a committee
thereof or under the relevant plans.
(h) The Employee shall be entitled to participate in the
Corporation's Success Sharing Program, Long-Term Incentive Plan, with a target
benefit of $1,600,000, a three-year performance period, a cumulative EPS target
of $6.14 and an allocation of 60% of the target benefit to stock options and
40% of the target benefit to restricted stock.
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(i) The Employee shall be entitled to all of the benefits of the
Corporation's Relocation and Moving Expense Policy. Without limiting the
foregoing, the Employee shall also be entitled to reimbursement of or for:
(i) reasonable expenses connected with the sale of his
present residence;
(ii) any loss incurred by reason of a sale of his present
residence at less than cost, including all capital improvements;
(iii) all reasonable travel, meals, lodging and related
expenses incurred in connection with looking for housing or schools in the
Deerfield Beach, Florida, area;
(iv) interest costs of any bridge loan incurred to purchase a
new residence if his present residence has not been sold before the new one is
purchased;
(v) for a period not to exceed one (1) year, temporary living
expenses in the Deerfield Beach, Florida, area and weekend round trip
transportation costs between Florida and Dallas, Texas, for Employee until the
Employee's family moves to Florida;
(vi) a lump sum miscellaneous expense allowance of one month's
base salary, which shall not be subject to the maximum amount set forth in the
Company's policy, to cover those expenses not otherwise covered.
4. COMPENSATION UPON TERMINATION.
(a) The Employee may terminate the Term of Employment at any time by
giving at least two (2) month's prior written notice to the Corporation.
Except as provided in Section 4(b) below, if the Employee provides less than
two (2) months' notice, he shall not be entitled to any bonus compensation (as
set forth in Section 3(b)) for the notice period.
(b) The Corporation may terminate the Term of Employment at any time
by giving at least 30 days' prior written notice to the Employee, if without
cause, or effective immediately on notice, if with cause (after compliance with
the provisions of Section 5). In the event of such termination (except for
cause pursuant to Section 5 hereunder), the Employee shall be entitled to:
(i) base salary through the date of termination of his
employment;
(ii) base salary, at the annualized rate in effect on the date
of termination of employment (or in the event a reduction in base salary is the
basis for a termination pursuant to Section 4(c) below, then the base salary in
effect immediately prior to such reduction), for a period of 24 months
following such termination (the
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"Continuation Period"), payable at the same regular intervals as in effect
prior to the termination;
(iii) pro rata annual bonus for the year in which termination
occurs based on the targeted bonus for such year, payable in a single
installment promptly following termination;
(iv) an amount equal to the targeted bonus for the year in
which termination occurs multiplied by 2, payable in equal monthly installments
over the Continuation Period;
(v) the balance of any incentive awards earned (but not yet
paid);
(vi) continued vesting of stock options during the
Continuation Period and the right to exercise any such option (in accordance
with its vesting and other terms) for the remainder of the original term of
such option;
(vii) any other amounts earned, accrued or owing to the
Employee but not yet paid;
(viii) continued participation in all medical, dental,
hospitalization and life insurance coverage and in other employee welfare
benefit plans or programs in which he was participating on the date of the
termination of his employment until the end of the Continuation Period;
provided that the Corporation's obligations under this clause shall be reduced
to the extent that the Employee is eligible for similar coverage and benefits
under the plans and programs of a subsequent employer; and provided further
that (x) if the Employee is precluded from continuing his participation in any
employee benefit plan or program as provided in this clause, he shall be
provided with the after-tax economic equivalent of the benefits provided under
the plan or program in which he is unable to participate for the period
specified in this clause, (y) the economic equivalent of any benefit foregone
shall be deemed to be the lowest cost that would be incurred by the Employee in
obtaining such benefit himself on an individual basis, and (z) payment of such
after-tax economic equivalent shall be made quarterly in advance; and
(ix) other or additional benefits in accordance with
applicable plans and programs of the Corporation.
(c) In the event that any of the following events occur, the
Employee may terminate the Term of Employment, without prior notice, by giving
written notice to the Corporation, and shall thereupon be entitled to the
payments, entitlements and benefits provided in Section 4(b) above as if the
Corporation had terminated the Term of Employment pursuant to Section 4(b)
above.
(i) a reduction in the Employee's then current base salary or
targeted bonus or the termination or material reduction of any employee benefit
or perquisite enjoyed by him (other than as part of an across-the-board
reduction of such benefit or perquisite applicable to all executive officers of
the Corporation);
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(ii) the failure to elect the Employee as Chief Executive
Officer to be effective on or before September 1, 1996;
(iii) the failure to elect or reelect the Employee as President
and Chief Operating Officer (or, after he becomes Chief Executive Officer, as
Chief Executive Officer) or director or removal of him from any such position;
(iv) a material diminution in the Employee's duties or the
assignment to the Employee of duties which are materially inconsistent with his
duties or which materially impair the Employee's ability to function as the
President or Chief Executive Officer of the Corporation, as the case may be;
(v) the relocation of the Corporation's principal office, or
the Employee's own office location as assigned to him by the Corporation, to a
location more than 35 miles from Deerfield Beach, Florida; or
(vi) the failure of the Corporation to obtain the assumption
in writing of its obligation to perform this Agreement by any successor to all
or substantially all of the assets of the Corporation within 15 days after a
merger, consolidation, sale or similar transaction.
(d) In the event that the aggregate of all payments or benefits made
or provided to the Employee following a change in control of the Corporation
under this Agreement and under all other plans and programs of the Corporation
(the "Aggregate Payment") is determined to include an excess parachute payment,
as such term is defined in Section 280G(b)(1) of the Internal Revenue Code, the
Corporation shall pay to the Employee, prior to the time any excise tax imposed
by Section 4999 of the Internal Revenue Code ("Excise Tax") is payable with
respect to such excess parachute payment, an additional amount which, after the
imposition of all income and excise taxes thereon, is equal to the Excise Tax
on the excess parachute payment. The determination of whether the Aggregate
Payment includes an excess parachute payment and, if so, the amount to be paid
to the Employee and the time of payment pursuant to this Section 4(d) shall be
made by an independent auditor (the "Auditor") jointly selected by the
Corporation and the Employee and paid by the Corporation. The Auditor shall be
a nationally recognized United States public accounting firm which has not,
during the two years preceding the date of its selection, acted in any way on
behalf of the Corporation or any affiliate thereof. If the Employee and the
Corporation cannot agree on the firm to serve as the Auditor, then the Employee
and the Corporation shall each select one accounting firm and those two firms
shall jointly select the accounting firm to serve as the Auditor.
(e) In the event of any termination of employment under this Section
4, the Employee shall be under no obligation to seek other employment and there
shall be no offset against amounts due the Employee under this Agreement on
account of any remuneration
-7-
<PAGE> 8
attributable to any subsequent employment that he may obtain except as
specifically provided in this Section 4.
5. TERMINATION FOR CERTAIN CAUSES. Notwithstanding anything to the
contrary set forth elsewhere herein, in the event of the willful misconduct of
the Employee in the performance of his duties hereunder resulting in material
economic harm to the Corporation or the conviction of the Employee for a felony
under federal or state law relating to the assets, business or affairs of the
Corporation or involving moral turpitude, the Term of Employment may be
terminated by the Corporation by written notice to the Employee, provided that
the Employee shall be given prior written notice by the Board of Directors of
the intention to terminate him for cause and the specific grounds for such
termination. The Employee shall be entitled to a hearing before the Board
before such termination becomes effective.
6. DISCLOSURE AND ASSIGNMENT OF DISCOVERIES. The Employee shall
(without any additional compensation) promptly disclose in writing to the Board
of Directors of the Corporation all ideas, formulae, programs, systems,
devices, processes, business concepts, discoveries and inventions (hereinafter
referred to collectively as "discoveries") whether or not patentable, which the
Employee, while employed by the Corporation, conceives, makes, develops,
acquires or reduces to practice, whether alone or with others and whether
during or after usual working hours, and which are related to the Corporation's
business or interests, or are used or usable by the Corporation; and the
Employee hereby transfers and assigns to the Corporation all right, title and
interest in and to said discoveries, including any and all domestic and foreign
patent rights therein and any renewals thereof. On request of the Corporation,
the Employee shall (without any additional compensation), from time to time
during or after the expiration or termination of his employment, execute such
further instruments (including, without limitation, applications for letters
patent and assignments thereof) and do all such other acts and things as may be
deemed necessary or desirable by the Corporation to protect and/or enforce its
rights in respect of said discoveries. All expenses of filing or prosecuting
any patent applications shall be borne by the Corporation, but the Employee
shall cooperate in filing and/or prosecuting any such applications.
7. CONFIDENTIALITY. The Employee agrees that all patent rights,
inventions, technical information and know-how and trade secrets relating to
the Corporation's electronic security systems and any other products marketed
by the Corporation, any information relating thereto, and any other information
relating to the business or interests of the Corporation which he knows or
should know, is regarded as confidential and valuable by the Corporation
(whether or not any of the foregoing information is actually novel or unique or
is actually known to others), made available to the Employee by the Corporation
or acquired by the Employee from the Corporation, other than that which legally
and legitimately is or becomes of general public knowledge or passes into the
public domain from authorized sources other than the Employee, will be held in
confidence and will not be divulged (or caused or permitted to be divulged) by
the
-8-
<PAGE> 9
Employee, without the prior written consent of the Corporation, to any person
or entity, except to responsible officers and employees of the Corporation and
other responsible persons who are in a contractual or fiduciary relationship
with the Corporation or who have a need for such information for purposes in
the interest of the Corporation or otherwise in the course of carrying out his
duties hereunder and except when required to disclose such information by a
court of law, by any governmental agency having supervisory authority over the
business of the Company or by any administrative or legislative body (including
a committee thereof) with the apparent jurisdiction to order him to divulge,
disclose or make accessible such information. The Employee further agrees that
his obligations of secrecy and confidentiality under this Section 7 shall
survive any termination of this Agreement unless specifically waived in writing
by the Corporation and, in the event of any such termination, the Employee
shall never use or market, nor disclose to others nor assist others in using or
marketing, any of the information or property rights of the Corporation
referred to in this Section 7, other than that which legally and legitimately
is or becomes of general public knowledge or passes into the public domain from
authorized sources other than the Employee.
8. NON-COMPETITION. The Employee shall not, directly or indirectly,
(a) engage in the business of manufacturing, leasing, selling,
maintaining, or servicing, anywhere in the world, anti-shoplifting, theft
detection, inventory/asset control, closed circuit television, access control,
or article surveillance devices which are similar to or purport to accomplish
results similar to the Corporation's electronic article surveillance, closed
circuit television and access control systems and other products marketed by
the Corporation;
(b) render any services as an officer, director, employee, partner,
consultant or otherwise to, or have any interest as a stockholder, partner,
lender or otherwise in, any person which is so engaged;
(c) solicit or attempt to solicit business of any customers of the
Corporation for products or services the same or similar to those offered,
sold, produced or under development by the Corporation during the Term of
Employment, or
(d) solicit or attempt to solicit for any business endeavor any
employee of the Corporation. during the Term of Employment and for a period of
two (2) years from and after the date of termination of the Term of Employment,
or for such lesser area or lesser period as may be determined by a court of law
or equity to be a reasonable limitation on the competitive activity of the
Employee, it being understood and agreed by the parties hereto that this
provision is reasonably necessary to protect the patent rights, inventions,
technical information and know-how, trademarks and the good will and reputation
of the Corporation. Notwithstanding the foregoing, the Employee shall not be
deemed to
-9-
<PAGE> 10
have violated this Section 8 if (i) the competitor's annual sales attributable
to the product or product lines involved equal less than 5% of the competitor's
total annual sales or (ii) the Employee is employed by a business of which a
unit is in competition with the Corporation but as to which unit he does not
have direct or supervisory authority over the product or product lines
involved. For the purpose of this Section 8, the term "Corporation" shall
include any and all affiliates of the Corporation in existence from time to
time. Notwithstanding anything to the contrary contained in this Section 8,
the provisions hereof shall not prevent the Employee from purchasing or owning
up to two (2%) percent of the voting securities of any corporation, the stock
of which is publicly traded.
9. INJUNCTIVE RELIEF. In the event of a breach or threatened breach by
the Employee of any of the provisions of Sections 6, 7 and 8, the Corporation
shall be entitled, if it shall so elect, to institute legal proceedings to
obtain damages or to enforce the specific performance of such provisions by the
Employee and to enjoin the Employee from any further violation of such
provisions and to exercise such remedies cumulatively or in conjunction with
all other rights and remedies provided by law. The Employee acknowledges,
however, that the remedies at law for any breach or threatened breach by him of
such provisions may be inadequate and that the Corporation shall be entitled to
injunctive relief against him in the event of any breach or threatened breach.
10. ENTIRE AGREEMENT. This Agreement supersedes all prior agreements and
understandings between the parties pertaining to the subject matter hereof
(other than the plans and policies referred to in Sections 3(d), 3(f) 3(g),
3(h) and 3(i) hereof and any other agreements or understandings pertaining
thereto) and may not be changed or terminated orally, and no change,
termination or attempted waiver of any of the provisions hereof shall be
binding unless in writing and signed by the party against whom the same is
sought to be enforced; provided, however, that the Employee's compensation
and/or benefits may be increased at any time by the Corporation without in any
way affecting any of the other terms and conditions of this Agreement, which in
all other respects shall remain in full force and effect.
11. SUCCESSORS AND ASSIGNS. Neither party shall have the right to assign
this personal Agreement, or any rights or obligations hereunder, without the
consent of the other party, provided, however, that upon the sale of all or
substantially all of the assets, business and goodwill of the Corporation to
another corporation, or upon the merger or consolidation of the Corporation
with another corporation, this Agreement shall inure to the benefit of, and be
binding upon, both the Employee and the corporation purchasing such assets,
business and goodwill, or surviving such merger or consolidation, as the case
may be, in the same manner and to the same extent as though such other
corporation were the Corporation. In the event of a sale, merger or
consolidation described in the preceding sentence, the Corporation shall take
whatever action it legally can in order to cause such other corporation to
expressly assume the liabilities, obligations and
-10-
<PAGE> 11
duties of the Corporation hereunder. Subject to the foregoing, this Agreement
shall inure to the benefit of, and bind, the parties hereto and their legal
representatives, heirs, successors and assigns.
12. GOVERNING LAW. This Agreement is made and executed and shall be
governed by the laws of the State of Florida, without giving effect to choice
of law principles.
13. INDEMNIFICATION.
(a) The Corporation agrees that if the Employee is made a party, or
is threatened to be made a party, to any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "Proceeding"), by reason of
the fact that he is or was a director, officer, or employee of the Corporation
or is or was serving at the request of the Corporation as a director, officer,
member, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, including service with respect to employee benefit
plans, whether or not the basis of such Proceeding is the Employee's alleged
action in an official capacity while serving as a director, officer, member,
employee or agent, the Employee shall be indemnified and held harmless by the
Corporation to the fullest extent legally permitted or authorized by the
Corporation's certificate of incorporation or bylaws or resolutions of the
Company's Board of Directors or, if greater, by the laws of the State of
Delaware against all cost, expense, liability and loss (including, without
limitation, attorney's fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid or to be paid in settlement) reasonably incurred or suffered
by the Employee in connection therewith, and such indemnification shall
continue as to the Employee even if he has ceased to be a director, officer,
member, employee or agent of the Corporation or other entity and shall inure to
the benefit of the Employee's heirs, executors and administrators. The
Corporation shall advance to the Employee all reasonable costs and expenses
incurred by him in connection with a Proceeding within 20 days after receipt by
the Corporation of a written request for such advance. Such request shall
include an undertaking by the Employee to repay the amount of such advance if
it shall ultimately be determined that he is not entitled to be indemnified
against such costs and expenses.
(b) Neither the failure of the Corporation (including its board of
directors, independent legal counsel or stockholders) to have made a
determination prior to the commencement of any Proceeding concerning payment of
amounts claimed by the Employee under Section 13(a) above that indemnification
of the Employee is proper because he has met the applicable standard of
conduct, nor a determination by the Corporation (including its board of
directors, independent legal counsel or stockholders) that the Employee has not
met such applicable standard of conduct, shall create a presumption that the
Employee has not met the applicable standard of conduct.
(c) The Corporation agrees to continue and maintain a directors and
officers' liability insurance policy covering the Employee to the extent the
Corporation provides such coverage for its other executive officers.
-11-
<PAGE> 12
14. REPRESENTATION. The Corporation represents and warrants that it is
fully authorized and empowered by action of the Board of Directors to enter
into this Agreement and that the performance if its obligations under this
Agreement will not violate any agreement between it and any other person, firm
or organization.
15. SEVERABILITY. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, in
whole or in part, the remaining provisions of this Agreement shall be
unaffected thereby and shall remain in full force and effect to the fullest
extent permitted by law.
16. SURVIVORSHIP. The respective rights and obligations of the parties
hereunder shall survive any termination of the Employee's employment to the
extent necessary to the intended preservation of such rights and obligations.
17. BENEFICIARIES/REFERENCES. The Employee shall be entitled, to the
extent permitted under the applicable law, to select and change a beneficiary
or beneficiaries to receive any compensation or benefit payable hereunder
following the Employee's death by giving the Company written notice thereof.
In the event of the Employee's death or a judicial determination of his
incompetence, reference in this Agreement to the Employee shall be deemed,
where appropriate, to refer to his beneficiary, estate or other legal
representative.
18. RESOLUTION OF DISPUTES. Except for disputes which are subject to the
provisions of Section 9, any disputes arising under or in connection with this
Agreement shall, at the election of the Executive or the Company, be resolved
by binding arbitration, to be held in Ft. Lauderdale, Florida in accordance
with the rules and procedures of the American Arbitration Association.
Judgment upon the award rendered by the arbitrator(s) may be entered in any
court having jurisdiction thereof. Costs of the arbitration or litigation,
including, without limitation, reasonable attorneys' fees of both parties,
shall be borne by the Corporation.
19. NOTICES. Any notice given to a party shall be in writing and shall
be deemed to have been given when delivered personally or sent by certified or
registered mail, postage prepaid, return receipt requested, duly addressed to
the party concerned at the address indicated at the beginning of this Agreement
or to such changed address as such party may subsequently give such notice of.
20. HEADINGS. The headings of the sections contained in this Agreement
are for convenience only and shall not be deemed to control or affect the
meaning or construction of any provision of this Agreement.
21. COUNTERPARTS. This Agreement may be executed in two or more
counterparts.
-12-
<PAGE> 13
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
SENSORMATIC ELECTRONICS CORPORATION ROBERT A. VANOUREK
By: /s/ Ronald G. Assaf By: /s/ Robert A. Vanourek
Print Name: Ronald G. Assaf
Title: Chairman of the Board and CEO
-13-
<PAGE> 14
EXHIBIT A
SENSORMATIC ELECTRONICS CORPORATION
NON-QUALIFIED STOCK OPTION
For valuable consideration, receipt of which is hereby acknowledged,
SENSORMATIC ELECTRONICS CORPORATION, a Delaware corporation (the "Company"),
hereby grants to ROBERT A. VANOUREK, who resides at 5914 COLHURST STREET,
DALLAS, TEXAS 75230 (the "Optionee"), a non-qualified stock option ("Option"),
subject to the terms and conditions hereof, to purchase from the Company an
aggregate of 450,000 shares of the Common Stock of the Company, par value $.01
per share (the "Common Stock"), at the price of $22.12 per share (the "Option
Price"), such option to be exercisable in installments as set forth below on or
before the day (the "Termination Date") preceding the tenth anniversary of the
date hereof.
This Option may be exercised as to one-third of the shares of Common
Stock subject hereto after the first anniversary of the date hereof, as to an
additional one-third of such shares after the second anniversary of the date
hereof, and as to the remaining one-third of such shares after the third
anniversary of the date hereof.
This Option is granted pursuant to the Company's 1995 Stock Incentive
Plan (the "Plan") and is subject to the terms and conditions thereof. The Plan
is administered by the Company's Stock Incentive Plan Committee (the
"Committee"). All determina-
<PAGE> 15
tions and acts of the Committee as to any matters concerning the Plan,
including interpretations or constructions of this Option and of the Plan,
shall be conclusive and binding on the Optionee and any parties claiming
through the Optionee.
Unless the Optionee ceases to be employed by the Company or a direct
or indirect subsidiary thereof, the right of the Optionee to purchase shares
subject to any installment may be exercised in whole at any time or in part
from time to time after the accrual of such respective installment and prior to
the Termination Date, except as otherwise provided herein. This Option may be
exercised only with respect to full shares.
Subject to the provisions of this Option, this Option may be exercised
by written notice (the "Notice") to the Company stating the number of shares of
Common Stock with respect to which it is being exercised. The Notice shall be
accompanied by the Optionee's payment in full of the Option Price for each of
the shares to be purchased by the Optionee, such payment to be made by (a)
certified or bank cashier's check payable to the order of the Company or (b)
any other means acceptable to the Committee.
As soon as practicable after receipt of the Notice and payment, and
subject to the next two paragraphs, the Company shall, without transfer or
issue tax or other incidental expense to the Optionee, deliver to the Optionee
a certificate or
-2-
<PAGE> 16
certificate for the shares of Common Stock so purchased. Such delivery shall
be made (a) at the offices of the Company at 500 Northwest 12th Avenue,
Deerfield Beach, Florida 33442, (b) at such other place as may be mutually
acceptable to the Company and the Optionee, or (c) at the election of the
Company, by certified mail addressed to the Optionee at (i) the Optionee's
address shown in the employment records of the Company or (ii) the location at
which the Optionee is employed by the Company.
The Company shall have the right to withhold an appropriate number of
shares of Common Stock (based on the fair market value thereof on the date of
exercise) for payment of taxes required by law or to take such other action as
may be necessary in the opinion of the Company to satisfy all tax withholding
obligations.
The Company may postpone the time of delivery of certificate(s) for
shares of Common Stock for such additional time as the Company shall deem
necessary or desirable to enable it to comply with the requirements of any
securities exchange upon which the Common Stock may be listed, or the
requirements of the Securities Act of 1933, as amended, the Securities
Exchange Act of 1934, as amended, any rules or regulations of the Securities
and Exchange Commission promulgated thereunder, or any applicable state laws
relating to the authorization, issuance or sale of securities.
-3-
<PAGE> 17
The issuance of the shares of Common Stock subject hereto and issuable
upon the exercise of this Option and the transfer or resale of such shares
shall be subject to such restrictions as are, in the opinion of the Company's
counsel, required to comply with the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder, and the certificate(s)
representing such shares shall, if it is deemed advisable by the Company's
counsel, bear a legend to such effect.
If, upon tender of delivery thereof, the Optionee fails to accept
delivery of and pay or have paid for all or any part of the number of shares of
Common Stock specified in the Notice, the Optionee's right to exercise this
Option with respect to such undelivered and unpaid for shares may be terminated
by the Company.
During the Optionee's lifetime, this Option shall be exercisable only
by the Optionee (except as otherwise provided below), and neither this Option
nor any right hereunder shall be assignable or transferable otherwise than by
will or the laws of descent and distribution (as provided below), or be subject
to attachment, execution or other similar process. In the event of any attempt
by the Optionee to alienate, assign, pledge, hypothecate or otherwise dispose
of this Option or of any right hereunder, except as provided for herein, or in
the event of any levy or any attachment, execution or similar process upon the
rights
-4-
<PAGE> 18
or interest hereby conferred, the Company may terminate this Option by notice
to the Optionee, and it shall become null and void.
If, prior to the Termination Date, the Optionee's employment with the
Company or its direct or indirect subsidiaries terminates for any reason
(otherwise than by reason of (i) the Optionee's death or disability (as defined
below), (ii) termination of the Optionee's employment by the Company without
cause (as defined in Section 5 of the Employment Agreement dated as of October
14, 1995 between the Company and the Optionee (the "Employment Agreement")) or
(iii) by termination of the Optionee's employment by the Optionee pursuant to
Section 4(c) of the Employment Agreement), this Option, and all rights
hereunder to the extent that such rights shall not have been exercised, shall
immediately terminate and become null and void.
In the event of the Optionee's death prior to the Termination Date,
and while the Optionee is employed by the Company or a direct or indirect
subsidiary thereof, this Option shall immediately become fully exercisable and
may be exercised within one year after the date of the Optionee's death by the
person(s) to whom the right passes pursuant to the following sentence, but in
no event may this Option be exercised later than the Termination Date. All
rights with respect to this Option, including the right to exercise it, shall
pass in the following
-5-
<PAGE> 19
order: (a) to such person(s) as the Optionee may designate in a writing duly
delivered to the Company (in the form available from the Company for such
purpose), or in the absence of such a designation, then (b) to the Optionee's
estate (the Option to be exercised by the legal representative).
In the event that the Optionee, prior to the Termination Date, ceases
to be employed by the Company or a direct or indirect subsidiary thereof
because the Optionee is deemed by the Company to be disabled, this Option shall
immediately become fully exercisable and may be exercised by the Optionee, if
legally competent, or by a committee or other legally designated guardian or
representative if the Optionee is legally incompetent, within one year after
the date the Optionee ceases to be employed by the Company or a direct or
indirect subsidiary thereof as a result of such disability, but in no event may
this Option be exercised later than the Termination Date. For purposes of this
Option, the Optionee shall be deemed by the Company to be disabled if the
Optionee is unable to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment which can be expected
to result in death or which has lasted or can be expected to last for a
continuous period of not less than twelve months. The Optionee shall not be
considered to be disabled unless the Optionee or the Optionee's representative
furnishes proof of the
-6-
<PAGE> 20
existence of such disability in such form and manner, and at such times, as may
be required by the Committee, and unless such proof shall be satisfactory to
the Committee. The determination by the Committee with respect to the
existence of such disability shall be conclusive and binding upon the Optionee
and any parties claiming through the Optionee.
In the event that the Optionee's employment is terminated prior to the
Termination Date by the Company without cause (as defined in Section 5 of the
Employment Agreement) or by the Optionee pursuant to Section 4(c) of the
Employment Agreement, this Option shall continue to become exercisable in
accordance with the second paragraph of this Option during the Continuation
Period (as defined in Section 4(b) of the Employment Agreement) and may be
exercised at any time on or prior to the Termination Date to the extent it
shall have become exercisable at the time of such exercise.
In the event of any change in the outstanding Common Stock by reason
of a stock split, stock dividend, combination or reclassification of shares,
recapitalization, merger or similar event, the Committee shall adjust
proportionally the number of shares of Common Stock covered by this Option and
the Option Price thereof. In the event of any other change affecting the
Common Stock or any distribution (other than normal cash
-7-
<PAGE> 21
dividends) to holder of Common Stock, such adjustments as may be deemed
equitable by the Committee, including adjustments to avoid fractional shares,
shall be made to give proper effect to such event. In the event of a corporate
merger, consolidation, acquisition of property or stock, separation,
reorganization or liquidation, the Committee may authorize the assumption of
this Option or the substitution of a new stock option for this Option, whether
or not in a transaction to which Section 424(a) of the Internal Revenue Code of
1986, as amended from time to time, applies. The judgment of the Committee
with respect to any matter referred to in this paragraph shall be conclusive
and binding upon the Optionee and any parties claiming through the Optionee.
Neither the Optionee nor any person or persons entitled to exercise
the Optionee's rights under this Option in accordance herewith shall have any
rights to dividends or any other rights of a stockholder with respect to any
shares of Common Stock subject to this Option, except to the extent that a
certificate for such shares shall have been issued upon the exercise of this
Option as provided herein.
Each notice relating to this Option shall be in writing and delivered
in person or by certified mail to the proper address. All notices to the
Company shall be addressed to it at its offices at 500 Northwest 12th Avenue,
Deerfield Beach,
-8-
<PAGE> 22
Florida 33442, attention of the Committee, c/o the Company's Secretary, and
shall become effective when received by the Secretary. All notices to the
Optionee or other person or persons then entitled to exercise any rights with
respect to this Option shall be addressed to the Optionee or such other person
or persons at (i) the Optionee's address shown in the employment records of the
Company or (ii) the location at which the Optionee is employed by the Company.
Anyone to whom a notice may be given under this Option may designate a new
address by notice to that effect.
Neither the adoption of the Plan nor the granting of this Option
confers on the Optionee any right to continued employment with the Company (or
any of its direct or indirect subsidiaries) or in any way interferes with or
alters the Company's (and its direct and indirect subsidiaries') right to
terminate the employment of the Optionee at any time, with or without cause,
and without liability therefor. This Option shall not be deemed a part of the
Optionee's regular, recurring compensation for any purpose, including, without
limitation, for the purposes of any termination indemnity or severance pay law
of any jurisdiction.
-9-
<PAGE> 23
This Option and all determinations made and actions taken pursuant
hereto, to the extent not otherwise governed by the Internal Revenue Code of
1986, as amended from time to time, or the securities laws of the United
States, shall be governed by and construed under the laws of the State of
Delaware.
IN WITNESS WHEREOF, SENSORMATIC ELECTRONICS CORPORATION has caused
this Option to be executed by its officers, thereunto duly authorized, as of
the 15th day of October, 1995.
SENSORMATIC ELECTRONICS
CORPORATION
By:
--------------------------------
Ronald G. Assaf
Chairman of the Board
and Chief Executive Officer
ATTEST:
- ----------------------------------
Marian E. Fetchik
Assistant Secretary
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<PAGE> 1
Exhibit 11
SENSORMATIC ELECTRONICS CORPORATION
COMPUTATION OF EARNINGS PER SHARE
(In thousands)
<TABLE>
<CAPTION>
Year ended June 30,
-------------------------------------------
Income: 1995 1994 1993
-------- -------- -------
<S> <C> <C> <C>
Income from continuing operations $69,551 $72,065 $54,084
Discontinued operations 4,100 - -
------- ------- -------
73,651 72,065 54,084
Add interest expense (net of tax) on 7% convertible
subordinated debentures - 4,902 5,133
------- ------- -------
Adjusted net income for fully diluted computation $73,651 $76,967 $59,217
======= ======= =======
Common shares (1):
Weighted average shares outstanding during the year 70,752 60,097 54,179
Potential dilutive exercise of stock options
and warrants (2) 1,227 1,788 1,849
------- ------- -------
Shares included in computation of primary
earnings per share 71,979 61,885 56,028
Shares issuable on conversion of 7%
convertible subordinated debentures - 6,359 7,287
Maximum dilution of stock options and warrants (3) 188 99 317
------- ------- -------
Shares included in computation of fully diluted
earnings per share 72,167 68,343 63,632
======= ======= =======
</TABLE>
<TABLE>
<S> <C>
(1) Share amounts reflect the three-for-two stock split declared in November 1993.
(2) Computed under the treasury stock method based on the average price during the periods.
(3) Computed under the treasury stock method based on stock price at end of periods if higher than the
average price during the periods.
</TABLE>
