Exhibit 10(f)
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made and entered into
this 9th day of March, 1998, by and between Guardian International, Inc., a
Nevada corporation ("Employer"), and Xxx Xxxxxxxx ("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 March 9, 1998 and continue for a three-year term ending on
March 8, 2001. Thereafter, this Agreement shall renew automatically for one-year
terms unless one month advance written notice of termination is given by either
party.
3. DUTIES. During the term of his employment hereunder, Employee shall
serve as Regional Manager of Employer in the region of Florida comprising the
metropolitan Tampa area and, at Employer's option, the metropolitan Orlando area
of Florida. 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 officer in accordance with the Bylaws of Employer. During the
term of his employment hereunder, the Employee agrees to maintain his status as
the "qualifier" for the licenses
listed on Acquired Assets Schedule of the Asset Purchase Agreement effective as
of March 9, 1998 by and among Employer, Employee, Xxxxx Xxxxxxxx and Gator
Telecom, Inc., a Florida corporation, 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; provided, however, the Employee may
terminate his status as a "qualifier" under the applicable Licesnes upon breach
of this Agreement by the Employer. The place of Employee's employment shall be
Tampa, Florida 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, 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 less than a 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 Seventy-Two Thousand Dollars ($72,000) 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 shall be entitled to a bonus from time to time
during the Term pursuant to Schedule 5(b).
c. During the term of the Employee's employment hereunder, the
Employer shall pay an automobile allowance of $500 per month to the Employee.
d. Employee shall be entitled, in addition to the above, to
any benefits and perquisites to which 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 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 officers are
eligible under every plan or program to the extent permissible under the general
terms and provisions thereof. The
2
foregoing notwithstanding, Employer may change or discontinue any such benefits
in its sole discretion.
6. 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.
7. VACATION. During the term of his employment hereunder, Employee,
during each year of the term of this Agreement, shall be entitled to three 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 one week without the prior consent of his
direct supervisor. Vacation shall not accumulate or carry over from year to
year.
8. 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 and group disability insurance.
9. 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 such notice to Employee. For purposes of
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, 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) 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, then
by at least three members of the Board of Directors of Employer; 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 (i) for a period of 90 or more days if
such disability occurs as a result of Employee's performance of his duties under
this Agreement or (ii) for
3
a period 30 or more days if such disability occurs as a result of Employee's
activities outside the scope of this Agreement, 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.
10. PAYMENTS UPON TERMINATION OR EXPIRATION.
a. In the event that this Agreement, and Employee's employment
hereunder, is terminated pursuant to Section 9 hereof, then, in such event, (i)
Employer shall have no obligation whatsoever to make any payment including,
without limitation, any payment of Salary, Bonus, or any insurance premium, to
or on behalf of Employee for any period subsequent to the date of such
termination; and (ii) Employer may, subject to the terms of such plans and
applicable law, remove Employee from coverage under any medical, life,
disability or other insurance plans or programs made available to Employee by
Employer.
b. In the event that this Agreement, and Employee's employment
hereunder, is terminated by Employer without cause during the term set forth in
Section 2 hereof, then, in such event, in addition to such amounts as have
accrued prior to the date of termination and have not previously been paid,
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; provided, however, that
if the Employee is terminated not for cause, the Employer shall pay to Employee
any Bonus to which the Employee is entitled pursuant to Schedule 5(b) pro rated
for the period in which the Employee was employed by the Company.
11. 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 relating to the Business of Employer
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: financial information, supply and
4
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 11 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 11 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 11 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.
12. 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 any county in which the Employee has
supervisory responsibility over the business, affair and operations of the
Employer in such county, 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 (i) hold an investment representing less than a 5% interest in any publicly
held entity engaging in a business that competes with the Business and (ii) be
an employee, employer, consultant, agent, principal, partner, stockholder,
corporate officer, director or other representative of an entity that does not
engage in burglar alarm, fire alarm, closed circuit television and electronic
access and control and central monitoring services; provided, however, that
Employee agrees to refer customers seeking monitoring services to Employer In
the event any court shall refuse to enforce any portion of the covenant set
forth in this Section 12, 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.
5
13. COVENANTS AGAINST OTHER ACTIONS DAMAGING TO 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 solicitation of any employee of Employer or its subsidiaries.
Employee further agrees that, during his employment with Employer and for an
unlimited period thereafter, 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 13,
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.
14. 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 and the Florida Civil Rights Act of 1992) 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 Broward County, Florida 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.
15. 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
6
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 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.
16. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida, without reference to the
conflicts of laws principles thereof.
17. 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.
18. 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.
0000 Xxxxx 00xx Xxxxxxx
Xxxxxxxxx, Xxxxxxx 00000
If to Employee: Xxx Xxxxxxxx
000 Xxxxxxxxxxx Xxxx
Xxxx, XX 00000
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.
19. 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.
20. 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.
7
21. 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.
22. 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.
23. EQUITABLE REMEDIES. Employee acknowledges that Employer would not
have an adequate remedy at law for money damages if Employee breaches Sections
11, 12 or 13. 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.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the day and year first above written.
EMPLOYER:
GUARDIAN INTERNATIONAL, INC.,
a Nevada corporation
By: /s/ XXXXXXX XXXXXXXX
---------------------------------
Xxxxxxx Xxxxxxxx, President and
Chief Executive Officer
EMPLOYEE:
/s/ XXX XXXXXXXX
-------------------------------------
Xxx Xxxxxxxx, Individually
8
SCHEDULE 5(B)
BONUS
The Employee shall receive a bonus upon achievement of the performance
goals and in the amounts described below.
ATTRITION
Overall Performance Goal: Maintain or reduce current customer
attrition rate
Base Line: Maximum attrition permitted is 10%
Attrition Calculation: Total MRI for the applicable calendar year
divided by average MRI for the applicable
calendar year
Specific Targets and Applicable Annual Bonus Amount:
TARGET BONUS AMOUNT
------ ------------
(% of Attrition)
6.1%-7.0% $20,000
7.1%-8.0% $15,000
8.1%-9.0% $10,000
Date Payable: Not later than January 31 in the year following the year
in which the bonus is earned
ACQUISITIONS
Overall Performance Goal: Introduce the Employer to as many third
party companies as possible
Base Line: N/A
Specific Target: Acquire additional MRI each quarter
Annual Bonus Amount:
2.5% of first $1,000,000 of purchase price
2.0% of second $1,000,000 of purchase price
1.5% of third $1,000,000 of purchase price
1.0% of fourth $1,000,000 of purchase price
.5% of balance of purchase price
Date Payable: In the same consideration and proportions and at the
same time as seller receives consideration from the
Employer.
MANAGEMENT FEE
A management fee of $1.00 per monitored account (under contract) at the
end of each month in excess of the number of monitored accounts as of
the Closing Date. Eligible monitored accounts shall be those monitored
accounts under the direct supervision of Employee, including
pre-existing monitored accounts assigned to Employee's supervision and
monitored accounts acquired during the term of Employee's employment.
The management fee shall be added to payroll and shall be paid at the
same intervals as the Employee is paid the Salary.
MRI
Overall Performance Goal: Increase MRI at a faster rate than
historically increased while at the same
time maintaining paybacks on customer
premise equipment
Base Line: Based on the largest monthly increase in MRI for the months
prior to the applicable month
Specific Target: N/A
Annual Bonus Amount: 100% of the increase in MRI each month up to
$25,000 commencing March 1, 1998 and each month
thereafter during the term of the Agreement. The
increase shall be based on the largest monthly
increase in MRI achieved during the preceding
months. For example, to calculate the increase in
MRI for the month ended June 30, 1998, the MRI as
of May 31, 1998 will be used as the base line,
unless the month end MRI in a preceding month
exceeded the May 1998 MRI.
Date Payable: No later than the 15th day of the month following the
month for which the increase in MRI is calculated
HOMEOWNERS ASSOCIATION CONTRACTS
Employee shall be entitled to a commission on multi-year contracts
between the Employer and any Homeowners Associations to the extent the
contract is obtained through the efforts of Employee as follows:
Year 1 of Applicable Contract: 100% of MRI as of January 31
Year 2 of Applicable Contract: 75% of MRI as of January 31
Year 3 of Applicable Contract
and each year thereafter: 50% of MRI as of January 31
BONUS ELECTION FOR YEAR 1 OF EMPLOYMENT AGREEMENT
During the first year of the Agreement, Employee may elect to receive
an incentive equal to two times the MRI fee calculated under "MRI"
above instead of the incentives described under "MANAGEMENT FEE"and
"MRI" described above. Employee must make this election in writing and
deliver it to the Employer not later than December 31, 1998.
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 Broward County, Florida, 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 Florida (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 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.
