Exhibit 10.51
MONITRONICS INTERNATIONAL, INC.
EMPLOYMENT AGREEMENT
The Employment Agreement (the "Agreement") is executed on and effective as
of September 1, 2003 (the "Effective Date") by and between Monitronics
International, Inc, a Texas corporation (the "Corporation"), and Xxxxxxx X.
Xxxxxx ("Employee").
RECITAL:
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The Corporation and the Employee desire to enter into an employment
agreement on the terms and subject to the conditions set forth in this
Agreement.
AGREEMENTS:
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The Employee and the Corporation agree as follows:
1. Employment. The Corporation hereby employs the Employee and the Employee
hereby accepts employment with the Corporation, on the terms and conditions set
forth in the Agreement.
2. Term. The term of the Employee's employment under this Agreement shall
commence with the date hereof and terminate on August 31, 2006, provided, such
employment shall be renewable, commencing on September 1, 2006 and each
September 1 thereafter, for successive one year periods expiring on August 31 of
the following year, unless written notice of nonrenewal is given by the
Corporation to the Employee on or before August 1, 2006 or August 1 during any
subsequent renewal period (the Employee's term of employment is referred to as
the "Employment Period"). If the Corporation terminates the Agreement, it will
be deemed to be a termination without "Cause", subject to section 6(c), unless
the Agreement is then being reviewed and renegotiated in good faith by the
Corporation.
3. Duties. The Employee will faithfully and to the best of his ability perform
the duties of Chief Financial Officer, Vice President and Assistant Secretary of
the Corporation or any other duties assigned to him by the board of directors of
the Corporation (the "Board of Directors") from time to time.
4. Compensation.
(a) Base Salary. The Employee shall receive a base salary of $230,000 (the
"Base Salary") (such Base Salary shall be payable in regular and equal
semi-monthly installments). The Base Salary will be increased annually at a rate
determined by the Chief Executive Officer and Board of Directors during the
Employment Period.
(b) Incentive Compensation. The Board of Directors and Chief Executive
Officer shall evaluate the Employee's performance annually. The Employee shall
be eligible for such bonuses as the Board of Directors, in its sole discretion,
deems appropriate.
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(c) Indemnification. The Employee shall be entitled to indemnification as
an officer and director of the Corporation to the same extent as the other
executive officers and directors of the Corporation.
(d) Stock Options. At the first date following the date of this Agreement
that the Company grants any employee of the Company stock options to purchase
shares of the Company's common stock, the Company will also grant the Employee
additional stock options.
5. Fringe Benefits.
(a) Generally. The Employee shall receive such fringe benefits as are made
available by the Board of directors to executive officers of the Corporation and
such other benefits as the Board of Directors may from time to time, in its sole
discretion, make available to the Employee.
Vacation. The Employee shall be entitled to receive three (3) weeks paid
vacation annually, or more if the Corporation's vacation policy so provides,
provided that the Employee may take no more than two (2) consecutive weeks of
vacation at a time.
6. Termination of Employment.
(a) Termination for Cause. During the term of this Agreement, the
Corporation shall be entitled to terminate the Employee's employment at any time
*(subject to the 10-day notice period provided in paragraph 6(b) in the event of
Nonperformance by Employee) with Cause immediately upon written notice to the
Employee specifying the Cause, and the date of termination. For this purpose,
"Cause" shall mean (i) the Employee's death or disability as defined in the
disability insurance policy to be obtained by the Corporation for Employee or,
in the absence thereof, a disability which in the reasonable opinion of the
Board of Directors renders the Employee unable in any material respect to
perform his duties under this Agreement for a period of at least six consecutive
months, (ii) any act by Employee which renders or could reasonably be expected
to render Employee or the Corporation ineligible to obtain any material license
or other material authorization necessary to conduct the business of the
Corporation, (iii) any wrongful act to enrich Employee at the expense of the
Corporation, (iv) any act or failure to act by or of the Employee constituting
gross negligence, fraud or willful misconduct in the course of employment, (v)
Employee's commission of a felony, or (vi) Employee's repeated failure to follow
lawful and reasonable directions given by or on behalf of the Board of
Directors. A voluntary termination by Employee shall be deemed to be a
termination for "Cause." In the event of termination for Cause, payments for
Base Salary shall be prorated to the date of termination and the Corporation
shall have no further liability to the Employee.
(b) Termination for Nonperformance by Employee. During the term of this
Agreement, the Corporation shall be entitled to terminate the Employee's
employment at any time upon ten days prior notice for a material adverse
deviation between the Corporation's actual results from operation or financial
condition as compared with the Corporation's business plan or future plans
approved on an annual basis by the Board of Directors ("Nonperformance by
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Employee"). In the event of a termination for Nonperformance by Employee, as the
Employee's sole remedy against the Corporation, the Corporation shall continue
to pay the employee his semi-monthly installments of Base Salary, and provide
for health insurance at the cost of the Corporation, for a period equal to the
greater of six months or until the next anniversary date of this Agreement.
(c) Termination Without Cause. If this Agreement is terminated by the
Corporation for any reason other than for Cause or Nonperformance by Employee,
or if the Agreement is terminated by the Corporation for what the Corporation
believes is Cause and it is ultimately determined that the Employee was
terminated without Cause, as the Employee's sole remedy against the Corporation,
the Corporation shall continue to pay the employee his semi-monthly installments
of Base Salary, and provide for health insurance at the cost of the Corporation,
for a period equal to the greater of nine months or until the next anniversary
of this Agreement and the Employee shall have such vesting rights as may be
provided under the Employee's Restricted Stock Ownership Agreement dated April
19, 2002 with the Corporation.
(d) Duty to Mitigate; Restrictions of Ability to Pay. After any termination
to which section 6(b) or section 6(c) applies, the Employee shall as promptly as
practicable use his good faith best efforts to gain new employment or equivalent
salary and benefits. The corporation's post-termination payment obligations
under section 6(b) or section 6(c) shall terminate upon Employee's first day of
new employment.
7. Inventions and Improvements. Concurrently with the execution and delivery
of this Agreement, as a condition to Employee's employment, the Employee and the
Corporation shall enter into the Proprietary Information Agreement attached as
Exhibit B.
8. Nondisclosure; Non-solicitation.
(a) In the Employee's position of employment, he will have access to
confidential information and trade secrets ("Confidential Information")
pertaining to, or arising from, the business of the Corporation. The Employee
acknowledges that such Confidential Information is unique and valuable to the
Corporation's business and that the Corporation would suffer irreparable injury
if this information were divulged to those in competition with the Corporation.
Therefore, the Employee agrees to keep in strict secrecy and confidence, both
during and after the period of his employment, any and all information which the
Employee acquires, or to which the Employee has access, during employment with
the Corporation, that has not been publicly disclosed by the Corporation or that
is not a matter of common knowledge by the Corporation's competitors. The
Confidential Information covered by this Agreement shall include, but shall not
be limited to, information relating to any inventions, processes, formulae,
plans, devices, compilations of information, technical data, distribution
methods, arrangements entered into with suppliers and customers, including but
not limited to pricing information, terms of purchase and sale, proposed
expansion plans of the Corporation, marketing and pricing strategies and trade
secrets of the Corporation.
(b) Except with prior written approval of the Corporation, during or after
the Employee's employment under this Agreement the Employee will neither (i)
disclose any
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Confidential Information to any person except authorized personnel of the
Corporation, or its subsidiaries or affiliated companies, nor (ii) use
Confidential Information in any way. Upon termination of the Employee's
employment, whether voluntary or involuntary the Employee will promptly return
to the Corporation all documents, records or other memorializations including
copies of documents and any notes which the Employee has prepared, that contain
Confidential Information or relate to the Corporation's business.
(c) Without the prior written consent of the Corporation, during the term
of Employee's employment by the Corporation and for twelve months after
termination of Employee's employment, neither the Employee nor any entity owned
or controlled by the Employee will, for the Employee's benefit or the benefit of
any third party, directly solicit the employment of any employee of the
Corporation, or any of its subsidiaries or affiliated companies or influence or
induce any such employee to leave or decline employment by the Corporation, or
any of its subsidiaries or affiliated companies. Employee shall not be
prohibited from hiring a former employee of the Corporation as long as such
employee's employment with the Corporation has been terminated (whether by the
Corporation or by such employee) for at least one year.
9. Noncompetition.
(a) During the term of this Agreement and for a period of two years
following termination of this Agreement for any reason, except for termination
without Cause, the Employee will not and will cause any Affiliate (as defined
below) of the Employee (collectively, the "Bound Parties") not to, directly or
indirectly manage, operate, control, participate or engage in, or become
interested in or connected with in any way (including, without limitation, as a
partner, stockholder, investor, owner, director, officer, employee, agent or
consultant, except the ownership of five percent or less of the outstanding
capital stock or partnership interests of a publicly traded corporation or
partnership), or lend any money to or guaranty any obligations of (except for
the ownership of five percent or less of the outstanding debt securities of a
publicly traded corporation or partnership), any person, business, firm or
entity (each a "Person") engaged in any security alarm monitoring services
business or any other related or similar activity within, based in, or into, the
Protected Market. The "Protected Market" means the United States of America and
Canada. The term "Affiliate" means any person directly or indirectly
controlling, controlled by, or under common control with, the person with
respect to whom the term "Affiliate" is used. The Bound Parties shall not be
bound by any covenant not to complete if Employee's employment (i) was
terminated by the Corporation without Cause or (ii) if the Employment Period is
not renewed by the Corporation, unless Employee refuses to accept an offer by
the Corporation to renew the Employment Period on terms substantially similar to
those in effect immediately prior to the expiration of the Employment Period.
(b) As consideration for the Bound Parties' agreement not to compete with
the Corporation as provided in this Agreement, the Corporation has entered into
and consummated the transactions contemplated in the Asset Purchase Agreement
dated this date between the Corporation and My Alarm, Inc., an Iowa corporation,
and the Stock Purchase Agreement dated this date between the Corporation and the
Purchasers (as defined therein).
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(c) This Agreement is necessary for the protection of the legitimate
business interests of the Corporation. The scope of this Agreement in time,
geography and types and limits of activities is reasonable.
(d) Because of the confusion to the customers of the Corporation and to the
public that a breach of this Agreement would create, the Corporation will not
have an adequate remedy at law if any of the Bound Parties breaches this
Agreement. The Corporation will be entitled to apply to any court of competent
jurisdiction for an injunction prohibiting any violations of the provisions of
this Agreement, and a restraining order and/or injunction may issue against any
of the Bound Parties, in addition to any other rights the Corporation may have.
The Bound Parties hereby waive the claim or defense that an adequate remedy at
law exists, and none of the Bound Parties will urge in any such action or
proceeding that any such remedy at law exists
10. Specific Performance. In the event of any controversy concerning the rights
or obligations of the parties under this Agreement, such rights or obligations
shall be enforceable in a court of equity by a decree of specific performance.
Such remedy, however, shall be cumulative and nonexclusive and shall be in
addition to any other remedy to which the parties may be entitled. If either
party successfully prosecutes an action to enforce its rights under this
Agreement, such party shall be entitled to receive attorney's fees and costs in
addition to any other remedy to which it may be entitled.
11. Waiver. The failure of either party to insist, in any one or more
instances, upon performance of the terms or conditions of this Agreement shall
not be construed as a waiver or a relinquishment of any right granted under this
Agreement or of the future performance of any other remedy to which it may be
entitled.
12. Notices. Any notice to be given under this Agreement shall be deemed
sufficient if addressed in writing, and delivered by registered or certified
mail or delivered personally, in the case of the Corporation to its principal
business office and in the case of the Employee, to his address appearing on the
records of the Corporation, or to such other address as he may have designated
in writing to the Corporation.
13. Severability. In the event that any provision shall be held to be invalid
or unenforceable for any reason whatsoever, it is agreed such invalidity or
unenforceability shall not affect any other provision of this Agreement and the
remaining covenants, restrictions and provisions hereof shall remain in full
force and effect and any court of competent jurisdiction may so modify the
objectionable provision as to make it valid, reasonable and enforceable.
14. Amendment. This Agreement may only be amended with the prior written
consent of the Board of Directors and by an agreement in writing signed by all
of the parties hereto.
15. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws but not the law of conflicts of the State of
Texas.
16. Benefit. This Agreement shall be binding upon and inure to the benefit of
and shall be enforceable by and against the Corporation, its successors and
assigns, and Employee, his heirs, beneficiaries and legal representatives. It is
agreed that the rights and obligation of the Employee may not be assigned or
delegated except as specifically set forth in this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Employment Agreement as
of the Effective Date.
EMPLOYEE:
/s/ XXXXXXX X. XXXXXX
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Xxxxxxx X. Xxxxxx
CORPORATION:
Monitronics International, Inc.
By: /s/ XXXXX X. XXXX
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Xxxxx X. Xxxx
President
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