Employment Agreement - Pierce Leahy Corp. and J. Peter Pierce
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made this 1st day of February, 2000, by and between
Pierce Leahy Corp., a Pennsylvania corporation (hereinafter called "Employer"),
and J. Peter Pierce, an individual residing at 269 Hilldale Road, Villanova,
Pennsylvania 19085 (hereinafter called "Executive").
BACKGROUND
A. Executive has been President and Chief Executive Officer of
Employer prior to the execution of this Agreement.
B. Concurrent with the execution of this Agreement, Iron Mountain
Incorporated ("Iron Mountain") is merging into Employer (the "Merger") and as
a condition to the Merger Employer and Executive are entering into this
Agreement.
C. Employer wishes to employ Executive and Executive wishes to
continue his employment by Employer on the terms and conditions contained in
this Agreement.
NOW, THEREFORE, in consideration of the facts, mutual promises and
covenants contained herein and intending to be legally bound hereby, Employer
and Executive agree as follows:
1. EMPLOYMENT. Employer hereby agrees to employ Executive and
Executive hereby accepts employment by Employer for the period and upon the
terms and conditions specified in this Agreement.
2. OFFICE AND DUTIES.
(a) Executive shall serve Employer generally as (i) President of
Employer and (ii) President, Chief Operating Officer and the most senior officer
of Employer's paper records management operations operating in the Americas
(I.E. North America, South America and Central America). Executive shall have
the duties, authority and responsibilities consistent with the duties, authority
and responsibilities typically performed by persons serving in such capacities
of businesses of similar size. In such capacities, Executive shall report
directly to C. Richard Reese ("Reese").
(b) Executive shall serve as a member of the Board of Directors
of Employer unless he is not elected by the shareholders of Employer.
(c) So long as Executive shall remain an employee of Employer,
Executive agrees to devote his best efforts and substantially all his working
time, energy and skill to the performance of his duties hereunder.
Notwithstanding the foregoing, Executive may engage in charitable, civic,
fraternal and professional association activities and may manage personal
investments so long as they do not unreasonably interfere with the carrying out
of his duties and responsibilities hereunder.
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(d) The principal place of employment of Executive shall be
within a twenty-five mile radius of King of Prussia, Pennsylvania, or such other
location as is consented to by Executive. It is understood however and agreed
that Executive may be required in connection with the performance of his duties,
to travel from time to time to other locations. When required to travel to
and/or spend time at such other locations, Executive's reasonable travel
expenses shall be reimbursed by Employer, upon submittal of vouchers in
accordance with the general reimbursement policies of Employer, or at
Executive's request, he shall be entitled to receive reasonable advances of such
travel expenses.
3. TERM. The term of employment ("Term of Employment") of Executive
pursuant to this Agreement shall be four (4) years, commencing on the date the
Merger is effective (as determined pursuant to the Agreement and Plan of Merger
by and among Iron Mountain and Employer dated as of October 20, 1999). Unless
either party elects to terminate this Agreement at the end of the initial or any
renewal term by giving the other party written notice of such election at least
ninety (90) days before the expiration of the then current term, the Term of
Employment shall be deemed to have been renewed for an additional term of one
(1) year commencing on the day after the expiration of the then current term.
4. COMPENSATION.
(a) For all of the service rendered by Executive to Employer,
Executive shall receive: (i) Base Compensation at the gross annual rate (without
regard to authorized or legally required deductions and withholdings) of Three
Hundred Twenty-Five Thousand Dollars ($325,000), payable in substantially equal
installments in accordance with Employer's regular payroll practices in effect
from time to time and (ii) bonus(es) in such amounts as are determined from time
to time by Employer's Board of Directors (or any committee thereof), provided
Executive shall have the same opportunity to participate in Employer's bonus
plans and arrangements as Reese.
(b) Base Compensation will be reviewed at the first time after the
date hereof that Employer generally reviews its senior executives and annually
thereafter, and may be increased in connection with such review if and to the
extent such an increase is determined to be appropriate by the Board of
Directors of Employer. Executive's Base Compensation in any year shall not be
less than the Base Compensation in the preceding year.
(c) Executive shall receive stock options in the same number and
under the same terms as Reese receives such options. "Stock options" for the
purposes of this paragraph shall be defined broadly and shall include by way of
example stock appreciation rights, restricted stock awards and other incentive
equity based compensation arrangements.
5. FRINGE BENEFITS.
As an inducement to Executive to enter into this Agreement, and in
consideration of Executive's covenants under this Agreement, Executive shall be
entitled to the benefits set forth below during the Term of Employment.
(a) Executive shall have the opportunity to participate in Employer's
benefit plans on the same basis as Reese, including but not limited to:
automobile allowance; health insurance; life insurance; accident insurance;
disability insurance, short term
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and long term; paid time off (including vacation, sick, and personal time); club
and professional memberships; legal, tax, or accounting services; coverage under
general liability and director and officers liability insurance; and profit
sharing, 401(k), pension, employee stock ownership, and other retirement plans.
Executive shall enjoy such benefits on the same terms and basis as Reese.
(b) Employer will reimburse Executive for all reasonable expenses
incurred by Executive in connection with the performance of Executive's duties
hereunder upon receipt of documentation therefor in accordance with Employer's
regular reimbursement procedures and practices in effect from time to time.
(c) Employer shall provide Executive with a fully furnished office,
and the facilities of Employer shall be generally available to Executive in the
performance of Executive's duties, it being understood that all equipment,
supplies, secretarial staff and other office personnel required in the
performance of Executive's duties shall be supplied by Employer.
6. DISABILITY. If Executive suffers a Disability (as defined below),
Employer may terminate this Agreement at any time thereafter by giving Executive
thirty (30) days written notice of termination. "Disability" shall mean
Executive's inability for a period of one hundred eighty (180) consecutive days,
to perform the essential duties of Executive's position, with any reasonable
accommodation required by law, due to a mental or physical impairment which
substantially limits one or more major life activities.
7. DEATH. If Executive dies during the Term of Employment, the Term of
Employment and Executive's employment with Employer shall terminate as of the
date of death.
8. DEATH AND DISABILITY PAYMENTS. In the event of the termination of
Executive's employment due to Executive's death or Disability, Executive or
Executive's legal representatives, as the case may be, shall be entitled to:
(a) in the case of death, unpaid Base Compensation earned through
Executive's date of death and continued Base Compensation at a rate in effect at
the time of death for a period of twelve (12) months following the month in
which such termination of employment due to death occurs, or in the case of
Disability, unpaid Base Compensation earned through Executive's date of
termination plus the disability benefit available under Employer's normal
procedures and policies for its most senior executives;
(b) any performance or special incentive bonus earned but not yet
paid;
(c) pro rata bonus or other bonus(es) for the year in which
employment terminates due to death or Disability;
(d) reimbursement for expenses incurred but not yet reimbursed by
Employer; and
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(e) any other compensation and benefits to which Executive or
Executive's legal representatives may be entitled under applicable plans,
programs and agreements of Employer to the extent permitted under the terms
hereof.
9. TERMINATION FOR CAUSE.
(a) Employer may terminate Executive's employment relationship with
Employer at any time for Cause in the manner set forth below.
"Cause" shall mean:
(i) Executive is imprisoned for more than thirty (30)
consecutive days for any crime or convicted of a FELONY or other crime involving
moral turpitude or has entered a plea of nolo contendere (or similar plea) to a
charge of such an offense;
(ii) Executive's willful misconduct in the performance of his
duties and responsibilities hereunder or Executive's material neglect, refusal
or failure to perform his employment duties and responsibilities on more than
one occasion, other than for reasons of sickness, accident or similar causes
beyond Executive's control; or
(iii) Executive willfully violates Section 13 of this Agreement.
(b) If Employer believes that an event constituting Cause has
occurred, Employer must give Executive written notice of its intention to
terminate this Agreement for Cause. The preceding sentence notwithstanding,
Executive's employment shall not be deemed to have been terminated for Cause
unless (i) Employer has given or delivered to Executive reasonable notice
setting forth the reasons for Employer's intention to terminate Executive's
employment for Cause; (ii) if the written notice is of an event constituting
Cause as defined herein and if and only if the event is capable of being
cured, Executive shall have thirty (30) days following actual receipt of such
notice in which to cure; (iii) Executive shall have been given a reasonable
opportunity at any time during the 30-day period after Executive's receipt of
such notice, for Executive, together with Executive's counsel, to be heard
before the Board of Directors of Employer; and (iv) if such a Board hearing
occurs, a second written notice from Employer stating that, in the good faith
opinion of not less than a majority of the entire membership of the Board,
Executive was guilty of the conduct giving rise to termination for Cause as
defined herein. In the event Executive's employment is terminated by Employer
for Cause, Executive shall be entitled to:
(i) Unpaid Base Compensation earned at the rate in effect at
the time of Executive's termination through the date of termination of
Executive's employment;
(ii) any performance or special incentive bonus earned to the
date of employment termination but not yet paid;
(iii) reimbursement for expenses incurred but not yet
reimbursed by Employer; and
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(iv) any other compensation and benefits to which Executive
may be entitled under applicable documents relating to plans, programs and
agreements of Employer.
10. RESIGNATION FOR GOOD REASON. Executive may resign and terminate his
employment relationship for Good Reason upon ten (10) days prior written notice
by Executive to Employer, in which event he shall be entitled to the payments
set forth in Section 11; provided, however, that if Executive does not send a
notice to Employer invoking his rights under this section within one year after
the occurrence of the specific event constituting Good Reason, Executive shall
no longer be able to invoke his rights under this section with respect to such
specific event. "Good Reason" shall mean any of the following:
(a) Executive is removed by Employer from, either or both of the
positions described in Section 2(a) other than for Cause;
(b) there is a diminution in Executive's authority, duties or
responsibilities normally associated with either of Executive's positions or
there are assigned to Executive duties and responsibilities materially
inconsistent with those normally associated with either of such positions other
than for Cause, which is not cured within thirty (30) days after written notice
to Employer; provided, however, that Executive shall not be required to give
notice and provide Employer an opportunity to cure pursuant to this subsection
(b) more than once in any twelve month period prior to terminating this
Agreement pursuant to this subsection (b);
(c) the failure of the Board of Directors to nominate Executive for
re-election as a director other than for Cause, or the removal of Executive as a
director other than for Cause;
(d) any change in the reporting relationships described in Section
2, which is not cured within thirty (30) days after written notice to
Employer; provided, however, that Executive shall not be required to give
notice and provide Employer an opportunity to cure pursuant to this
subsection (d) more than once in any twelve month period prior to terminating
this Agreement pursuant to this subsection (d);
(e) any failure by Employer to comply with any of the provisions of
this Agreement and/or any breach by Employer of any of the terms of this
Agreement which is not cured within thirty (30) days after written notice to
Employer; provided, however, that Executive shall not be required to give notice
and provide Employer an opportunity to cure pursuant to this subsection (e) more
than once in any twelve month period prior to terminating this Agreement
pursuant to this subsection (e);
(f) any purported termination by Employer of Executive's employment
otherwise than as expressly permitted by this Agreement;
(g) any action taken by Employer, including without limitation, a
restructuring, which reduces materially the assets, net worth, cash flow or
earnings of Executive's business unit;
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(h) Reese ceases to be the most senior executive officer of Employer;
(i) Executive's benefits under any material benefit plan or program
of Employer or Executive's incentive or equity opportunity under any material
incentive or equity program of Employer is or are reduced other than a reduction
caused by changes that are applicable to all other senior executives in a
similar manner;
(j) Employer requires Executive to move to an office more than
twenty-five (25) miles from King of Prussia, Pennsylvania; or
(k) the assignment of Executive to office space which is not
commensurate with his position and title, the failure of Employer to provide the
ministerial, administrative and secretarial support customarily associated with
the title and position or the withdrawal by Employer of any such ministerial,
administrative and secretarial support.
11. TERMINATION PAYMENTS. In the event Executive's employment is
terminated by Employer without Cause, or in the event Executive resigns for Good
Reason, Executive shall receive his Base Compensation for the greater of the
remaining term of this Agreement or one year (such length of time being the
"Payment Term") in a lump sum (minus applicable withholding taxes) within five
(5) days after the date Executive's employment terminates. In addition, Employer
shall pay (a) the premiums in connection with Executive's continued
participation in Employer's group health plan pursuant to COBRA or otherwise for
the length of the Payment Term; and (b) reimbursement for expenses incurred but
not yet reimbursed by Employer.
12. EMPLOYER PROPERTY. All advertising, sales, manufacturers' and other
materials or articles or information, including without limitation data
processing reports, computer programs, software, customer information and
records, business records, price lists or information, samples, or any other
materials or data of any kind furnished to Executive by Employer or developed by
Executive on behalf of Employer or at Employer's direction or for Employer's use
or otherwise in connection with Executive's employment hereunder, are and shall
remain the sole property of Employer, including in each case all copies thereof
in any medium, including computer tapes and other forms of information storage.
If Employer requests the return of such materials at any time at or after the
termination of Executive's employment, Executive shall deliver all copies of the
same to Employer immediately.
13. CONFIDENTIALITY, NON-COMPETITION AND NON-SOLICITATION.
(a) Except with the prior written consent of Employer, during
Executive's active employment with Employer and for a period of one (1) year
after the termination of Executive's employment with Employer, but in no event
less than five (5) years after the date hereof (the "Restricted Period"),
Executive agrees that he shall not disclose or make available, directly or
indirectly, to others or use for his or others' benefit confidential
information, whether or not reduced to written or other recorded from, related
to Employer and its subsidiaries, including the names of customers, the contact
persons at customers, pricing, the software programs utilized by Employer and
its subsidiaries in the operation of its business and all other information
material to the operation, management, marketing or financing of Employer
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and its subsidiaries which is not known or generally available to the public or
competitors in the records management or records storage industries.
The confidentiality obligations of this Section shall not apply to
information:
(i) which is required to be disclosed by judicial or
administrative process or order, or by other requirements of law;
(ii) which is or becomes generally available to the public other
than as a result of a breach of this Section 13;
(iii) which is received from a third party who obtained such
information other than under an obligation of confidentiality; or
(iv) which the Employer discloses on a non-confidential basis or
otherwise makes available to the general public or the trade.
(b) Executive agrees that during the Restricted Period, he shall not
directly or indirectly own, manage, engage in, participate in, provide advice
to, be employed by, have a financial interest in, or solicit or attempt to
obtain business from any customer of Employer or any of its subsidiaries on
behalf of, any enterprise which provides records management or records storage
and related services to business facilities (including, without limitation, the
management, handling, storage, filing, processing and retrieval of medical
records used by hospitals, private practitioners, and other medical
institutions) located in the geographic areas in which Executive oversees
operations at the time of the termination of his employment (the "Restricted
Area"). Section 13(b) shall not prohibit Executive from owning equity securities
of Employer or acquiring up to five percent (5%) of any class of securities
registered pursuant to the Securities Exchange Act of 1934, as amended, of any
corporation which may engage in the records management storage services in
direct competition with the business of Employer and its subsidiaries within the
Restricted Area.
(c) Executive agrees that during the Restricted Period, Executive
shall not on his own behalf or on behalf of any other person under his control
or on behalf of others, directly or indirectly solicit for employment (including
as an independent contractor), or endeavor to entice away, any of the officers,
employees or independent contractors of Employer and its subsidiaries who
perform services for Employer and its subsidiaries. For the avoidance of doubt,
Employer acknowledges that this Section 13(c) shall not prohibit Executive from
employing, on his own behalf or on behalf of any other person under his control
or on behalf of others, a former officer, employee or independent contractor of
Employer and its subsidiaries who has ceased to perform services for Employer
and its subsidiaries without enticement by Executive and who seeks employment
(including as an independent contractor) by Executive without solicitation by
Executive.
(d) Executive acknowledges that he has carefully read all the terms
herein stated and agrees that the same are necessary for the reasonable and
proper protection of Employer; and that each and every covenant is reasonable
with respect to such matter, length of time, and the geographical area
described; and that irrespective of all other conditions, the covenants and
restrictions hereinabove provided shall be operative during the full period and
throughout the geographical area described. In the event any court finds any
such
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restraint or limitation to be unreasonable, then it is the intent of the parties
that such court should determine the maximum restraint or limitation which is
reasonable and enforcement will be of that restraint or limitation.
(e) Executive acknowledges that confidential information in his
possession related to the Employer and its subsidiaries has particular value,
the loss of confidentiality of which by communication to unauthorized persons
cannot be reasonably or adequately compensated for by damages alone. Moreover,
Executive agrees that any breach of paragraphs (a) (b) and (c) of this Section
13 would give rise to damages which would be difficult to calculate. Therefore,
the parties hereby agree that in the event of a breach of any of the terms and
conditions of this Section 13, the Employer shall be entitled to equitable
relief by way of an injunction. This Section 13 shall not be construed as a
limitation upon the Employer's remedies for such breach.
(f) The restrictions contained in this Section 13 shall be broadly
construed by any court having jurisdiction of the matter in order to protect the
Employer to the maximum degree possible.
14. INDEMNIFICATION.
(a) Employer shall indemnify Executive to the fullest extent
permitted by Pennsylvania law in effect on the date hereof against all costs,
expenses, liabilities and losses (including, without limitation, attorneys'
fees, judgments, fines, penalties, ERISA excise taxes, penalties and amounts
paid in settlement) reasonably incurred by Executive in connection with a
Proceeding. For the purposes of this Section 14, a "Proceeding" shall mean any
action, suit or proceeding, whether civil, criminal, administrative or
investigative, in which Executive is made, or is threatened to be made, a party
to, or a witness in, such action, suit or proceeding by reason of the fact that
he is or was an officer, director or employee of Employer or is or was serving
as an officer, director, member, employee, trustee or agent of any other entity
at the request of Employer.
(b) Employer shall advance to Executive all reasonable costs and
expenses incurred in connection with a Proceeding within 20 days after receipt
by Employer of a written request for such advance. Such request shall include an
itemized list of the costs and expenses and an undertaking by Executive to repay
the amount of such advance if ultimately it shall be determined that he is not
entitled to be indemnified against such costs and expenses.
(c) If Executive in fact meets the applicable standard of conduct, he
shall be entitled to indemnification whether or not Employer (whether by the
Board, the shareholders, independent legal counsel or other party) determines
that indemnification is proper because he has met such applicable standard of
conduct. Neither the failure of Employer to have made such a determination prior
to the commencement by Executive of any suit or arbitration proceeding seeking
indemnification, nor a determination by Employer that Executive has not met such
applicable standard of conduct, shall create a presumption that Executive has
not met the applicable standard of conduct.
(d) Employer shall not settle any Proceeding or claim in any manner
which would impose on Executive any penalty or limitation without Executive's
prior
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written consent. Neither Employer nor Executive will withhold consent to any
proposed settlement unreasonably.
(e) Employer shall maintain a policy of directors and officers
liability insurance in a reasonable amount of coverage.
15. NO MITIGATION: NO OFFSET. In the event of any termination of
Executive's employment under this Agreement, Executive shall be under no
obligation to seek other employment, and there shall be no offset against
amounts due under this Agreement on account of any remuneration attributable to
any subsequent employment that Executive may obtain.
16. NATURE OF PAYMENTS. Any amounts due Executive under this Agreement in
the event of any termination of Executive's employment with Employer are in the
nature of severance payments, or liquidated damages which contemplate both
direct damages and consequential damages that may be suffered as a result of the
termination of Executive's employment, or both, and are not in the nature of a
penalty.
17. MISCELLANEOUS.
(a) INDULGENCES. ETC. Neither the failure nor any delay on the part
of either party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any other right, remedy, power or privilege, nor
shall any waiver of any right, remedy, power or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power or privilege
with respect to any other occurrence. No waiver shall be effective unless it is
in writing and is signed by the party asserted to have granted such waiver.
(b) CONTROLLING LAW. This Agreement and all questions relating to its
validity, interpretation, performance and enforcement (including, without
limitation, provisions concerning limitations of actions), shall be governed by
and construed in accordance with the laws of the Commonwealth of Pennsylvania,
notwithstanding any conflict-of-laws doctrines of such jurisdiction to the
contrary, and without the aid of any canon, custom or rule of law requiring
construction against the draftsman.
(c) NOTICES. All notices, requests, demands and other communications
required or permitted under this Agreement shall be in writing and shall be
deemed to have been duly given, made and received when delivered (personally, by
recognized national courier service, or by other messenger, for delivery to the
intended addressee) or upon actual receipt of registered or certified mail,
postage prepaid, return receipt requested, addressed as set forth below:
(i) If to Executive:
J. Peter Pierce
269 Hilldale Road
Villanova, Pennsylvania 19085
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(ii) If to Employer:
Iron Mountain Incorporated
745 Atlantic Avenue
Boston, Massachusetts 02111
Any party may alter the address to which communications or copies are
to be sent by giving notice of such change of address in conformity with the
provisions of this Section for the giving of notice.
(d) BINDING NATURE OF AGREEMENT. This Agreement shall be binding upon
and shall inure to the benefit of Employer, its permitted successors and
permitted assigns and shall be binding upon Executive and shall inure to the
benefit of Executive and his estate and personal representatives. This Agreement
may not be assigned by either party (including by operation of law) without the
prior written consent of the other party.
(e) EXECUTION IN COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall
together constitute one and the same instrument. This Agreement shall become
binding when one or more counterparts hereof, individually or taken together,
shall bear the signatures of all of the parties reflected hereon as the
signatories. Any photographic copy of this Agreement, with all signatures
reproduced on one or more sets of signature pages, shall be considered for all
purposes as if it were an executed counterpart of this Agreement.
(f) ENTIRE AGREEMENT. This Agreement contains the entire
understanding among the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements and
understandings, inducements or conditions, express or implied, oral or written,
except as herein contained. The express terms hereof control and supersede any
course of performance and/or usage of the trade inconsistent with any of the
terms hereof. This Agreement may not be modified or amended other than by an
agreement in writing.
(g) SECTION HEADINGS. The Section headings in this Agreement are for
convenience only; they form no part of this Agreement and shall not affect its
interpretation.
(h) NUMBER OF DAYS. Except as otherwise provided herein, in computing
the number of days for purposes of this Agreement, all days shall be counted,
including Saturdays, Sundays and holidays; provided, however, that if the final
day of any time period falls on a Saturday, Sunday or holiday on which federal
banks are or may elect to be closed, then the final day shall be deemed to be
the next day which is not a Saturday, Sunday or such holiday.
(i) SETTLEMENT OF DISPUTES. Any disputes regarding the interpretation
of the Agreement or relating to Executive's employment shall be resolved by
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binding arbitration to be held in Philadelphia, Pennsylvania in accordance with
the Employment Dispute Resolution Rules of the American Arbitration Association
then in effect.
IN WITNESS WHEREOF, the parties have duly executed and delivered this
Agreement in King of Prussia, Pennsylvania on the date first above written.
PIERCE LEAHY CORP.
By: /s/ DOUGLAS B. HUNTLEY
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Name: Douglas B. Huntley
Title: Vice President
Attest: /s/ JOSEPH P. LINAUGH
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Name: Joseph P. Linaugh
Title: Secretary
/s/ J. PETER PIERCE
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J. Peter Pierce
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