EXHIBIT 10.(e)
EXHIBIT 10(E)
EMPLOYMENT AGREEMENT
The Employment Agreement (this "Agreement") is made and entered into
this 1st day of February, 1998, by and among Mutual Central Alarm Services,
Inc., a New York corporation ("Employer"), Guardian International, Inc., a
Nevada corporation ("Guardian"), as guarantor and parent of Employer, and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ("Employee").
WITNESSETH
WHEREAS, the Board of Directors of Employer (the "Board") recognizes
that Employee will contribute to the future growth and success of the security
business of Employer, consisting of burglar alarm, fire alarm, closed circuit
television and electronic access and control and central station monitoring
services to residential and commercial customers (the "Business"), and the Board
therefore desires to assure Employer of Employee's services as an employee of,
and for the benefit of, Employer; and
WHEREAS, in order to induce Employee to remain in the employ of
Employer, this Agreement sets forth employment and other benefits which Employer
shall pay to Employee in connection with his employment, provides for Employee's
employment for a term of three years and provides for Employee's agreement not
to compete with the Business in the event of his termination of employment on
the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, the receipt and sufficiency of which
are mutually acknowledged, the parties hereto hereby agree as follows:
1. EMPLOYMENT. Employer hereby employs Employee, and Employee hereby
accepts such employment, upon the terms and conditions set forth in this
Agreement.
2. TERM. Subject to the provisions for termination contained in Section
10 hereof, the term of this Agreement, and the employment of Employee hereunder,
shall commence on February 1, 1998 and continue for a three-year term ending on
January 31, 2001. Thereafter, this Agreement shall renew automatically for
one-year terms unless six months advance notice of termination is given by
either party.
3. DUTIES. During the term of his employment hereunder, Employee shall
work 156 days per year and serve as Vice President of Employer. In such
capacity, Employee (i) shall perform those reasonable duties as directed by the
President of Employer, (ii) shall report to the President of Employer, and (iii)
shall perform such other duties as shall be usual and customary for such
executive officer in accordance with the Bylaws of Employer. Employee agrees to
maintain his status as the "qualifier" for the Licenses listed on Schedule 2.8
of the Purchase Agreement which
require an individual to serve as a "qualifier" and not to do anything that
would disqualify Employee from acting as a "qualifier" under the applicable
Licenses. The place of Employee's employment shall be New York, New York and
Employee shall travel as is necessary in the furtherance of his duties under
this Agreement.
4. EXCLUSIVITY OF SERVICES. Employee shall devote his full business
time, energy and ability exclusively to the business, affairs and interests of
Employer and matters related thereto in accordance with the provisions of
Section 3, shall use Employee's best efforts and abilities to promote Employer's
interests, and shall perform the services contemplated by this Agreement in
accordance with policies established by and under the direction of the Board.
During the term hereof, Employee shall not serve as an officer, director,
employee, consultant or advisor to any other business, and shall not engage in
any other business activities other than the Permitted Activities, as herein
defined. The Employee may (i) make and manage personal business investments of
his choice, provided, that the Employee shall hold no investment in any entity
which competes in any way with Employer or its subsidiaries, other than an
investment representing a less than 5% interest in any publicly held entity; and
(ii) serve in any capacity with any civic, educational or charitable
organization without seeking or obtaining approval by the Board, provided, that
the activities and services described in clauses (i) and (ii) (collectively, the
"Permitted Activities") do not interfere or conflict with the performance of
duties hereunder or create any conflict of interest with such duties. Employee
hereby confirms that he is under no contractual commitments inconsistent with
his obligations set forth in this Agreement.
5. COMPENSATION.
a. During the term of his employment hereunder, Employee shall
receive a salary of Ninety Thousand Dollars ($90,000) per annum (the "Salary"),
payable in equal installments no less frequently than semi-monthly. Salary
increases may be considered annually by the President of Employer.
b. Employee may be entitled to a bonus from time to time
during the term of his Agreement pursuant to such policies as are developed by
the President of Employer and adopted from time to time by the Board of
Directors of Employer. Employee shall receive 15% of any profits made from
off-shore ventures in which the Employee is actively involved.
c. Employee shall be entitled, in addition to the above, to
any benefits and perquisites to which executive officers of Employer may be or
may generally become entitled to receive under any present or future employment
benefit and perquisite plans or programs, or executive contingent compensation
plans, of Employer, and Employee shall be eligible to receive, during the period
of his employment under this Agreement, benefits and emoluments for which
corporate executive officers are eligible under every plan or program to the
extent permissible under the general terms and provisions thereof. The foregoing
notwithstanding, Employer may change or discontinue any such benefits in its
sole discretion.
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d. In addition to the above, upon execution of this Agreement,
Employer shall grant to Employee options to purchase 100,000 shares of
Employer's Class A Common Stock, par value $.001 per share (the "Common Stock"),
with an exercise price equal to the five-day average closing price of the Common
Stock for the five days prior to the public announcement of the transactions
contemplated by the Stock Purchase Agreement by and among Guardian and the
shareholders of Employer, dated as of February 1, 1998. Thirty-three and a third
percent (33-1/3%) of such options shall become exercisable on each anniversary
of the execution of this Agreement. If the Employee does not exercise all
exercisable options in any given year, such options may be exercised in
subsequent years. In the event that Employee's employment hereunder is
terminated under Section 10(a) prior to the vesting of all options, any such
unvested options shall be forfeited. In the event that Employee's employment
hereunder is terminated pursuant to Section 10(b) or (c), any such unvested
options shall vest automatically provided that Employee has been employed with
Employer at least 30 months from the date of the execution of this Agreement.
e. All options shall immediately vest upon a Change of Control. "Change
of Control" means either (i) the acquisition directly or indirectly, by any
"person" (as this term is used in Section 13(d) of the Securities Exchange Act
of 1934, as amended) of in excess of 50% of the Employer's combined voting power
of all then-outstanding securities; or (ii) the consummation of a merger,
consolidation, or other business combination of the Employer with any other
person (as defined immediately above), other than a merger, consolidation or
other business combination that would result in the Employer's outstanding
common stock immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into common stock of the surviving
entity or a parent or affiliate thereof) at least 50% of the Employer's
outstanding common stock or stock of the surviving entity or parent or affiliate
thereof outstanding immediately after such transaction.
6. AUTOMOBILE ALLOWANCE. During the term of his employment hereunder,
Employer shall furnish to Employee a Jeep Grand Cherokee automobile or
equivalent and will reimburse all expenses relating to such automobile including
gas, tolls, parking, maintenance and repairs.
7. EXPENSE REIMBURSEMENT. During the term of Employee's employment
hereunder, Employer, upon the submission of proper proof by Employee, shall
promptly reimburse Employee for reasonable business expenses actually and
necessarily paid or incurred by him in the Employee's discretion in connection
with the discharge of his duties hereunder.
8. VACATION. During the term of his employment hereunder, Employee,
during each year of the term of this Agreement, shall be entitled to four weeks
of vacation time as selected in consecutive or nonconsecutive periods or any
combination thereof by Employee in his reasonable discretion consistent with his
duties and responsibilities hereunder, during which vacation time Employee shall
be paid the applicable portion of his Salary provided, however, Employee shall
not take a vacation for longer than two weeks without the prior consent of the
Board. Vacation shall not accumulate or carry over from year to year.
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9. INSURANCE. During the term of his employment hereunder, Employer
shall at all times pay the reasonable premiums of medical insurance policies for
Employee and his immediate family and shall further provide and pay the premiums
of group term life insurance, group disability insurance and such other
insurance as is from time to time provided to all of Employer's executive
officers on terms no less favorable than that provided to Employer's other
executive officers.
10. TERMINATION.
a. Notwithstanding anything contained in this Agreement,
Employer by written notice to Employee shall at all times in its sole discretion
have the right to terminate this Agreement, and Employee's employment hereunder,
"for cause" effective upon delivery of notice to Employee. For purposes for this
Agreement, "for cause" shall mean: (i) any conviction of Employee of a felony or
any conduct which if proved would support conviction of a felony; (ii) conduct
amounting to a material act of fraud, gross misconduct or dishonesty involving
Employer; (iii) a material act of fraud or dishonesty not involving Employer
which has a material adverse effect upon the Business or reputation of Employer;
(iv) continuing material violation by Employee of his obligations under this
Agreement after written notice thereof to Employee and failure to cure such
violation within fifteen (15) days following such notice; (v) misuse of alcohol
that materially impairs Employee's ability to perform the duties of his
employment as determined by a physician retained by Employer or, if Employee
refuses to submit to appropriate examinations by such physician at the request
of the Board of Directors, then by at least three members of the Board of
Directors; or (vi) the unlawful use of drugs or other controlled substances.
b. Employer by written notice to Employee shall have the right
to terminate this Agreement and Employee's employment upon Employee's lack of
capacity to perform the essential functions of his duties under this Agreement,
with or without reasonable accommodation, because of physical or mental
disability ("Disability") of Employee, for a period of 120 or more days, either
consecutively or in the aggregate during any six-month period, as determined by
an impartial reputable physician agreed upon by the Board and Employee (or his
representative, as the case may be).
c. If Employee dies during the term of his employment
hereunder, this Agreement shall terminate automatically upon the date of
Employee's death.
11. PAYMENTS UPON TERMINATION OR EXPIRATION.
a. In the event that this Agreement, and Employee's employment
hereunder, is terminated for cause pursuant to Section 10(a) hereof, then, in
such event, (i) Employer shall have no obligation whatsoever to make any
payment, including, without limitation, any payment of Salary, bonus, automobile
expense reimbursement or any insurance premium, to or on behalf of Employee for
any period subsequent to the date of such termination; (ii) Employer may,
subject to the terms of such plans and applicable law, remove Employee from
coverage under any medical, life, disability
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or other insurance plans or programs made available to Employee by Employer; and
(iii) Employee shall, upon such termination, return the automobile provided
pursuant to Section 6.
b. In the event that this Agreement, and Employee's employment
hereunder, is terminated for death or Disability of Employee pursuant to Section
10(b) or 10(c) hereof, then, in any such event, Employer shall have no
obligation whatsoever to make any payment, including without limitation, any
payment of Salary, bonus, automobile expense reimbursement or any such insurance
premium, to or on behalf of Employee for any period subsequent to the date of
such termination or expiration and Employee shall, upon such termination, return
the automobile provided pursuant to Section 6. Notwithstanding the above, in the
event this Agreement is terminated for Disability of Employee pursuant to
Section 10(b) hereof, Employee shall have the right at Employer's expense
through the remaining term of this Agreement to continue such disability
insurance as Employer was providing as of the date of termination, and, at
Employee's own expense, to continue any group medical insurance then provided to
Employee and to such other benefits as he is then entitled under such insurance
and any disability plan or program of Employer.
c. In the event that this Agreement, and Employee's employment
hereunder, is terminated by Employer without cause during the terms set forth in
Section 2 hereof, or Employee shall terminate his employment with Employer as a
result of a material breach by Employer of the terms hereof, which breach is not
cured within fifteen (15) days following notice in writing from Employee to
Employer specifying the nature of such breach, then, in such event, in addition
to such amounts as have accrued prior to the date of termination and have not
previously been paid including any accrued vacation benefits, Employer shall pay
to Employee, payable at such time as such payments would otherwise be payable
hereunder, Employee's Salary and benefits that would have accrued to him, and
any bonus the Board has otherwise approved prior to termination, for the
remaining term of this Agreement.
12. RESERVED,
13. CONFIDENTIALITY.
a. For good consideration and as an inducement for Employer to
employ Employee, Employee agrees that, both during the term of this Agreement
and after the termination of this Agreement, Employee will hold in a fiduciary
capacity for the benefit of Employer, and shall not, directly or indirectly, use
or disclose, except as authorized by Employer in connection with the performance
of his duties, any Confidential Information (as defined below) that Employee may
have or acquire (whether or not developed or compiled by Employee and whether or
not Employee has been authorized to have access to such Confidential
Information) prior to or during the term of this Agreement. The term
"Confidential Information" as used in this Agreement shall mean and include any
material information, data and know-how specific to the Business of Employer and
not generally known in the industry that is disclosed to Employee by Employer or
known by him as a result of his relationship with Employer (or a company
acquired by Employer) and not generally within the public domain (whether
constituting a trade secret or not), including without limitation, the
following:
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financial information, supply and service information, marketing information,
personnel information, customer information and information with respect to any
corporate affairs that Employer treats as confidential.
The term "Confidential Information" does not include information that
has become generally available to the public by the act of Employer or by the
act of one who has the right to disclose such information without violating any
right of Employer or the customer to which such information pertains.
Nothing in this Section 13 shall prevent Employee from disclosing any
Confidential Information to the extent such disclosure is required by law or any
order of a court or government authority with jurisdiction, provided, however,
that Employee agrees to give Employer advance written notice as soon as possible
of the Confidential Information required to be disclosed, and at Employer's
request, to use his best efforts to obtain assurances that the Confidential
Information required to be disclosed will be maintained on a confidential basis
and will not be disclosed to a greater degree than required by law.
b. The covenant contained in this Section 13 shall survive the
termination of Employee's employment with Employer for any reason for a period
of two (2) years; provided, however, that with respect to those items of
Confidential Information which constitute trade secrets under applicable law,
Employee's obligations of confidentiality and non-disclosure as set forth in
this Section 13 shall continue to survive after said two (2) year period to the
greatest extent permitted by applicable law. These rights of Employer are in
addition to those rights Employer has under the common law or applicable
statutes for the protection of trade secrets.
14. COVENANT NOT TO COMPETE. For good consideration and as an
inducement for Employer to employ Employee, Employee agrees that he will not
engage or participate, directly or indirectly, in any business that competes
with the Business of Employer in the five Boroughs of New York, New York,
whether as employee, employer, consultant, agent, principal, partner,
stockholder, corporate officer, director, or other representative capacity, at
any time during Employee's employment with Employer and for a period of two (2)
years after the date of termination (for any reason) of Employee's employment
with Employer. Notwithstanding the foregoing, Employee may hold an investment
representing a less than 5% interest in any publicly held entity engaging in a
business that competes with the Business. In the event any court shall refuse to
enforce any portion of the covenant set forth in this Section 14, then such
unenforceable portion shall be deemed eliminated and severed from said contract
for the purposes of said court's proceedings to the extent necessary to permit
the remaining portions of the covenant to be enforced.
15. COVENANTS AGAINST OTHER ACTIONS DAMAGING EMPLOYER. Employee agrees
that he will not, at any time during his employment with Employer and forever
thereafter, for himself or on behalf of or in conjunction with any third party
solicit any employee of Employer or its subsidiaries to leave such employment;
provided that the posting by Employee or any entity with which Employee is
involved of general advertisements soliciting employees shall not constitute the
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solicitation of any employee of Employer or its subsidiaries. Employee further
agrees that, during his employment with Employer and for an unlimited period
hereafter, he will not directly or indirectly, on his own behalf or in the
service of or on behalf of others, solicit, divert or appropriate, or attempt to
solicit, divert or appropriate, to any competing business, any customers of
Employer or its subsidiaries existing as of the date of termination. If, during
the term of this agreement, Employee is engaged in or associated with the
planning or implementing of any project, program or venture involving Employer
and a third party or parties (a "Venture"), or any discussions, analysis or
negotiations with respect to an investment in, merger, acquisition or purchase,
directly or indirectly, of the stock, assets, or business of any entity (an
"Acquisition"), all rights in the Venture and the Acquisition and any
opportunity to make any investment in the entity to be so acquired (the
"Target") shall belong to Employer and shall constitute a corporate opportunity
belonging exclusively to Employer. Except as approved by the Board, Employee
shall not be entitled to any interest in any such Venture or to invest or
solicit any third party to invest in the Target or consummate the Acquisition,
or to any commission, finder's fee or other compensation in connection therewith
other than any Salary paid to Employee for performance of his duties in the
ordinary course of business. In the event any court shall refuse to enforce any
portion of the covenants set forth in this Section 15, then such unenforceable
portion shall be deemed eliminated and severed from said contract for the
purposes of said court's proceedings to the extent necessary to permit the
remaining portions of the covenant to be enforced.
16. ARBITRATION. All disputes or controversies between the parties
arising from or related to any matter that pertains to this Agreement, to the
employment of Employee by Employer, or to the termination Employee's employment
which otherwise would allow or require resort to a court, administrative, or
other governmental dispute resolution forum (whether the claim is legal or
equitable in nature, whether it is based on any tort, contract, or common law
theory of recovery, and whether it is based on any federal, state, or local
employment discrimination or civil rights statute, executive order, law,
regulation, or ordinance, including without limitation the Age Discrimination in
Employment Act of 1967, the Americans with Disabilities Act, Title VII of the
Civil Rights Act of 1964, the New York Sate Human Rights Law, and the New York
City Human Rights Law) shall be referred to binding, non-appealable arbitration
in accordance with the procedures set forth in Exhibit A hereto and without
recourse to any litigation except as set forth in Exhibit A. Each party hereby
submits to personal jurisdiction in New York, New York for the purpose of such
arbitration proceedings, and/or any suits to confirm same. Pending completion of
any arbitration proceedings, payments not in dispute shall continue to be made
and obligations not in dispute shall continue to be performed.
17. ASSIGNMENT. This Agreement is personal to Employee, and Employee
may not assign or transfer any of its benefits or obligations. Upon written
notice by Employer to Employee, Employer may assign its rights under this
Agreement to any entity (i) that controls or acquires control of Employer, (ii)
that is controlled by, is under common control with, or acquires an interest in
Employer, or (iii) in which Employer acquires a financial interest, provided
that such entity assumes Employer's obligations under this Agreement or that
Employer remains liable for its obligations under the Agreement. Upon written
notice by Employer to Employee, Employer may
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assign its rights to any entity that acquires substantially all of Employer's
assets, provided that such entity assumes Employer's obligations under this
Agreement.
18. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without reference to the
conflicts of laws principles thereof.
19. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto and supersedes all prior agreements, understandings
and arrangements, both oral and written, between the parties hereto with respect
to the subject matter hereof. This Agreement may not be modified in any way
unless in writing signed by both Employer and Employee.
20. NOTICES. Any notices required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been duly given when
delivered by hand and receipted or when received or refused if delivered by
United States mail, by registered or certified mail, return receipt requested,
postage prepaid, as follows:
If to Employer: Guardian International, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
If to Employee: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
or to such other addresses as either party hereto may from time to time give
notice of to the other on five days prior notice in the manner aforesaid.
21. BENEFITS; BINDING EFFECT. This Agreement shall be for the benefit
of and binding upon the parties hereto and their respective legal
representatives, successors and, where applicable, assigns.
22. SEVERABILITY. The invalidity of any one or more of the words,
phrases, sentences, clauses or sections contained in this Agreement shall not
affect the enforceability of the remaining portions of this Agreement or any
part hereof, all of which are inserted conditionally on their being valid in
law, and, in the event that anyone or more of the words, phrases, sentences,
clauses or sections contained in this Agreement declared invalid, this Agreement
shall be construed as if such invalid word or words, phrase or phrases, sentence
or sentences, clause or clauses, or section or sections had not been inserted.
23. WAIVERS. The waiver by either party hereto of a breach of any
provision of this Agreement shall not be construed as a waiver of any subsequent
breach.
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24. SECTION HEADINGS. The section headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
25. EQUITABLE REMEDIES. Employee acknowledges that Employer would not
have an adequate remedy at law for money damages if Employee breaches Sections
13, 14 or 15. Therefore, in addition to all other remedies to which Employer may
be entitled for a breach or threatened breach of this Agreement, Employer will
be entitled to specific enforcement of this Agreement and to injunctive or other
equitable relief as a remedy for a breach or threatened breach. In the event of
legal proceedings in connection with this Agreement, the non-prevailing party
shall pay all reasonable attorneys' fees and costs of the prevailing party at
trial and on appeal.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the day and year first above written.
EMPLOYER:
MUTUAL CENTRAL ALARM SERVICES, INC.,
a New York corporation
By: /S/ ▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: PRESIDENT
GUARANTOR AND PARENT OF EMPLOYER:
GUARDIAN INTERNATIONAL, INC.,
a Nevada corporation
By: /S/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President and
Chief Executive Officer
EMPLOYEE:
/S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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EXHIBIT A
ARBITRATION PROCEDURES
a. If a dispute or controversy arises, the parties hereto shall attempt
in good faith to resolve such dispute or controversy promptly by negotiation.
Any such dispute or controversy which has not been resolved by negotiation
within thirty (30) days after the initiation of discussions shall be resolved by
binding arbitration in accordance with the then current CPR Rules for
Non-Administered Arbitration of Business Disputes. Unless the parties agree
otherwise, the arbitration shall be conducted in New York, New York, by a panel
of three arbitrators. The disputing parties shall each select one arbitrator,
and the arbitrators so selected shall select an attorney as the third
arbitrator. If the arbitrators selected by the disputing parties fail to agree
on the third arbitrator within thirty (30) days of the date this arbitration
provision becomes operative, any person involved may request CPR to make the
appointment in accordance with its applicable rules.
b. The arbitrators shall decide the issues submitted to them in
accordance with the provisions and commercial purposes of this Agreement;
provided that, all substantive questions of law shall be determined under the
laws of the State of New York (without regard to its principles of conflicts of
laws).
c. The arbitration shall be governed by the United States Arbitration
Act, 9 U.S.C. /section/ 1, ET SEQ., and judgment upon the award rendered by the
arbitrators may be entered by any court having jurisdiction thereof. The
arbitrators may grant any remedy or relief which is just and equitable,
including injunctive relief or specific performance.
d. The parties hereto agree to facilitate the arbitration by: (i)
making available to one another and to the arbitrators for examination,
inspection and extraction all documents, books, records and personnel under
their control if determined by the arbitrators to be relevant to the dispute;
(ii) participating in reasonable discovery, including oral depositions; (iii)
conducting arbitration hearings to the greatest extent possible on successive
days; and (iv) observing strictly the time periods established by the Rules or
by the arbitrators for submission of evidence or briefs.
e. Initially, the disputing parties shall each pay one-half of the
costs (excluding attorneys' fees) of any arbitration; provided, however, that
the arbitrators shall divide all costs (excluding attorneys' fees) incurred in
conducting the arbitration in their final award in accordance with what they
deem just and equitable under the circumstances, and any party who is allocated
in excess of one-half of such costs shall reimburse the other for such excess
costs.
f. Notwithstanding the exclusivity of the dispute resolution procedures
specified herein, a party hereto, without prejudice to such procedures, may file
a complaint or seek a preliminary injunction or other provisional judicial
relief if in its sole judgment such action is necessary to avoid
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irreparable damage or to preserve the status quo. Despite any such action, the
parties shall continue to participate in good faith in the procedures specified
herein.
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