Employment Agreement
EXHIBIT
10.1
May
2,
2006
Mr.
Xxxxxxx Xxx
0000
XX
0xx
Xxxxx
Xxxx
Xxxxx, XX 00000
Dear
Mr.
May:
The
following sets forth the agreement ("Agreement")
between Integrated Alarm Services Group, Inc. ("Company")
and
you regarding the terms of your employment with the Company.
1.
Titles;
Duties; Employment Date.
(a) Effective
as of April 24, 2006, you will be employed as a Special Adviser to the Board
of
Directors of the Company (the "Board")
and,
effective as of June 1, 2006, as acting Chief Executive Officer and President
of
the Company.
(b) You
shall
report directly to the Non-Executive Chairman of the Board and to the full
Board
and shall have all of the duties and responsibilities assigned to such position
in accordance with the Company’s past practices and By-Laws.
(c) You
shall
devote substantially all of your business time, attention, skills and efforts
exclusively to the business and affairs of the Company. While you are employed
by the Company, you agree not to engage in any other employment, occupation,
or
consulting activity for any direct or indirect remuneration without the prior
approval of the Board. This Section 1(c) shall not apply to any positions
you
currently hold and have previously disclosed to the Company. It is understood
that you will a take a reasonable period of time off for such personal matters
and vacation as were previously disclosed to the Company.
(d) As
part
of your duties to the Company, you agree to assist the Board in the Board's
search for an individual to serve as permanent Chief Executive Officer. You
and
the Company acknowledge that it is not the present intent of either party
to
consider you for the position of permanent Chief Executive Officer of the
Company.
2.
Salary.
The
Company shall pay you a base salary at the rate of $35,000 per month, payable
in
accordance with the Company's normal payroll practices and subject to all
applicable income tax and other wage withholding. You will not be eligible
to
participate in the Company's annual incentive plan, but this sentence shall
not
preclude the Compensation Committee of the Board from awarding you, in
appropriate circumstances, additional incentive compensation based upon your
performance with the Company and such other factors as the Compensation
Committee may deem relevant.
3. Stock
Options.
The
Company will grant you on April 23, 2006 ("Grant
Date")
a
stock option ("Stock
Option")
to
purchase (i) 50,000 shares of common stock of the Company at an exercise
price
per share of $4.25, and (ii)100,000 shares of common stock of the Company
at an
exercise price per share of $5.25. Your Stock Option shall vest and become
non-forfeitable on November 1, 2006, provided that you are in the employ
of the
Company on that date, and shall become exercisable on the first anniversary
of
the Grant Date, to the extent then vested. The Option shall automatically
vest,
to the extent not then vested, if your employment is involuntarily terminated
by
the Company other than for just cause. The Option shall immediately vest
and
become fully exercisable, to the extent not then vested and exercisable,
upon a
"Change in Control" of the Company, as such term is defined in the Company's
2004 Stock Incentive Plan. Your Stock Option, once vested, shall remain
exercisable until the third anniversary of the Grant Date, except that,
notwithstanding the above, your Stock Option shall be forfeited immediately
(whether or not vested) if your employment with the Company is terminated
for
just cause. The Stock Option shall otherwise be subject to the terms of the
2004
Stock Incentive Plan and the Company's form of option agreement.
4. Termination.
(a) You
or
the Company may terminate your employment on 30 days' prior written notice.
If
the Company terminates your employment other than for just cause and you
continue to work through the end of the notice period, the Company will pay
you
within 15 days following your last day of employment an additional lump sum
payment equal to one month's salary. No other severance amounts will be payable
to you in connection with your termination of employment.
(b) The
Company shall have the right to terminate your employment immediately for
"just
cause," in which case no severance or other amounts will be payable to you
in
connection with such termination.
(c) Except
for the requirement to give 30 days' advance notice of your termination of
employment under Section 4(a), you shall be an "at will" employee of the
Company.
5. Business
Expenses.
The
Company shall reimburse you upon presentation by you of appropriate
documentation, in accordance with the Company's regular practices, for business
expenses reasonably incurred by you in connection with the performance of
your
duties as an officer and an employee of the Company.
6. Indemnification.
The
Company shall (i) indemnify, defend and hold you harmless, to the full extent
permitted under applicable law and the By-Laws of the Company, for, from
and
against any and all losses, claims, costs, expenses, damages, liabilities
or
actions (including security holder actions) related to or arising out of
your
employment with and service as an officer of the Company and (ii) pay as
incurred all reasonable costs, expense and attorneys' fees incurred by you
in
connection with or relating to the defense of any such losses, claims, costs,
expenses, damages, liabilities or actions or the enforcement of any
indemnification right hereunder.
2
7. Confidentiality.
You
recognize that the services you perform for the Company are special, unique
and
extraordinary in that you may acquire confidential information and trade
secrets
concerning the operations of the Company, the use or disclosure of which
could
cause the Company substantial loss and damages which could not be readily
calculated, and for which no remedy at law would be adequate. Accordingly,
you
covenant and agree with the Company that you will not at any time except
in
performance of your obligations to the Company hereunder or with the prior
written consent of the Board, disclose any secret or confidential information
that you may learn by reason of your association with the Company, except
as
required by law.
8 Your
Representation.
You
hereby represent and warrant to the Company that the execution and delivery
by
you of this Agreement to the Company and your performance of your obligations
hereunder will not breach the terms of any contract, agreement or understanding
to which you are a party, including any covenant not to compete against any
prior employer, and you acknowledge and agree that a breach of this
representation by you shall render this Agreement void ab
initio
and
without force and effect.
9. Governing
Law.
The
validity, interpretation, construction and performance of this Agreement
shall
be governed by the laws of the State of New York applicable to contracts
entered
into and performed in such state.
*
* * *
*
If
this
letter sets forth our agreement on the subject matter hereof, kindly sign
and
return to the Company the enclosed copy of this letter, which will then
constitute a legal binding obligation between us.
INTEGRATED
ALARM SERVICE GROUP,
INC.
By:
/s/ Xxxx X. Xxxxx
Title:
Director
Acknowledged
and agreed
as
of the
day and year first set forth above.
/s/
Xxxxxxx X. May
3