Contract
EXHIBIT
10.2
This
Employment Contract (“Agreement”) is executed and delivered as of February 12,
2007, by and between Xxxx Security International, Inc., a Delaware corporation
(“Company”), and Xxxxxx X. Xxxxxx, an individual (“Employee”).
RECITALS
The
Company conducts diversified businesses, including, without limitation,
electronic and personal security device marketing and car washes (“Business”).
The Employee is an executive with extensive experience in corporate management.
The Company and Employee are parties to an Employment Contract dated March
26,
1999 under which Employee is employed by the Company on a month to month
basis.
This Agreement replaces in its entirety, the Employment Contract dated March
26,
1999. The Company desires to retain Employee as Executive Vice President,
General Counsel and Corporate Secretary of the Company and the Employee desires
to remain employed as the Executive Vice President, General Counsel and
Corporate Secretary.
Employee
will be employed by Company in a confidential relationship wherein Employee,
in
the course of employment with Company, will become familiar with and aware
of
information as to the specific manner of doing business and the customers
of
Company and its affiliates and the Company’s future plans. The information
Employee has and will have knowledge of is trade secrets and constitutes
valuable goodwill of Company. Employee recognizes that the business of Company
is dependent upon a number of trade secrets and confidential business
information, including customer lists and customer data. The protection of
these
trade secrets is of critical importance to Company. Company will sustain
great
loss and damage if, for whatever reason, during the term of this Agreement
or
Employee’s employment with Company and for a period following the termination of
this Agreement or Employee’s employment, Employee should violate the provisions
of paragraph 4 of this Agreement. Further, Employee acknowledges that any
such
violation would cause irreparable harm to Company and that Company would
be
entitled, without limitation, to injunctive relief to remedy such
violation.
NOW,
THEREFORE,
in
consideration of the mutual promises, terms and conditions set forth herein
and
the performance of each, the parties hereby agree as follows:
1
1.
Services.
(a)
Company hereby employs Employee as its Executive Vice President, General
Counsel
and Secretary, and the material duties of Employee may not be changed without
the Employee’s consent. The Company shall provide Employee a furnished and
equipped office from where Employee is to perform his duties (“Office”) and a
staff sufficient for Employee to perform his duties (“Staff”). The location of
the Office, at the time this Agreement is executed is 0000 Xxxxxxxx Xxxxx,
Xxxxx
000, Xxxxx Xxxxxx, Xxx Xxxxxx. During any period that Xxxxx X. Xxxxxxx, Xx.
is
the Chief Executive Officer of the Company, the physical location of the
Office
and the number and type of Staff may be changed without the consent of Employee.
If Employee is not satisfied with the changed location of the Office or the
change in Staff, Employee’s only recourse is to resign his employment. During
any period that Xxxxx X. Xxxxxxx, Xx. is not the Chief Executive Officer
of the
Company, (i) changes in the physical location of the Office are limited to
a
twenty five mile radius from the physical location of the Office at the time
Xxxxx X. Xxxxxxx, Xx. resigned or was terminated as Chief Executive Officer
of
the Company, and (ii) the number and type of Staff may not be significantly
changed by the Company, unless the Employee consents to the Office or Staff
change in writing.
(b)
Employee hereby accepts employment upon the terms and conditions contained
in
this Agreement. Employee shall faithfully adhere to, execute and fulfill
all
directions and policies established by the Company for its
employees.
(c)
Employee’s employment shall be for a full time position. Employee shall not,
during the term of his employment, without the prior written consent of Company,
be engaged in any other business activity pursued for gain, profit or other
pecuniary advantage, if such activity prevents Employee from devoting a minimum
of forty hours per week to Employee’s duties and responsibilities under this
Agreement. Employee may make personal investments in any form or manner,
regardless of whether Employee provides services in the operation or affairs
of
the companies or enterprises in which such investments are made; provided
that
Employee does not violate the terms of Paragraph 4 of this Agreement and
devotes
a minimum of forty hours per week to Employee’s duties to the
Company.
2
2.
Compensation.
(a)
For
all services to be rendered by Employee to Company, Company shall pay Employee
an initial base annual salary computed and earned ratably over twelve months
at
the rate of Two Hundred Thirty Thousand Dollars ($230,000) per year, commencing
on the date hereof, payable in accordance with Company’s normal payroll
procedures. The Company’s Compensation Committee shall each calendar year
commission a compensation study for Employee’s position and shall review
Employee’s annual salary after taking into account the recommendations set forth
in the compensation study.
(b)
To
the extent that Company, from time to time in its sole discretion, offers
or
provides any of the following to its employees, Employee, on an equal basis
with
such other employees, shall be entitled to: (i) participation in all, if
any,
life, health, medical, hospital, accident and disability insurance programs
of
Company in existence for the benefit of its employees and for which Employee
qualifies; (ii) participation in all, if any, pension, retirement, profit
sharing or stock purchase plans for which Employee qualifies; and (iii)
participation in any other employee benefits which Company accords to its
employees and for which Employee qualifies.
(c)
During the term of Employee’s employment with Company, Employee shall be
entitled to reimbursement for reasonable business expenses, including gasoline,
incurred on behalf of Company. Reimbursement for business expenses will be
provided to Employee on the same basis and under the same guidelines as are
applicable to all of Company’s employees. The Company shall also provide the
Employee with a seven hundred dollars ($700.00) per month car allowance.
(d)
On
the date that is within two business days after this Agreement is executed
by
all parties to it, Employee shall be awarded an option grant exercisable
into
Sixty Thousand shares of the Corporation’s common stock (“Option”). The Option
shall be granted under the Corporation’s Stock Option Plan at an exercise price
equal to the close of market on the date of grant. The Option shall be a
ten
year option and shall vest over two years with the first twenty thousand
(20,000) option shares vesting on the date of grant, the next twenty thousand
(20,000) option shares vesting twelve months from the date of grant and the
last
twenty thousand (20,000) option shares vesting twenty four months from the
date
of grant. Notwithstanding the vesting schedule, the Option shall completely
vest
upon the occurrence of the Retention Payment Trigger Event, as defined in
Paragraph 2(e) below.
3
(e)
To
encourage, Employee to remain Employed with the Company, the Company shall
pay
Employee a Retention Payment, as hereafter defined, upon the occurrence of
the
Retention Payment Trigger Event, as hereafter defined; provided that Employee
is
employed by the Company at the time of the Retention Payment Trigger Event.
For
purposes of this Agreement, the term “Retention Payment” shall mean a lump sum
cash payment equal to the Employee’s then current annual base salary, without
consideration for any bonuses or the value of any option award. The Retention
Payment shall be paid to Employee within ten (10) business days after the
date
that the Retention Payment Trigger Event occurred. For purposes of this
Agreement the Retention Payment Trigger Event has occurred when both of the
following items have occurred (i) Xxxxx X. Xxxxxxx, Xx no longer serves as
the
Company’s Chief Executive Officer, and (ii) any one of the events set forth in
items (a) through and including (c) below have taken place. The Retention
Payment Trigger Event shall have occurred when both item (i) and (ii) occur
regardless of which of the items occurs first or whether there is a time
gap
between the items. By way of example, if any one of the items in (a) through
(c)
below occurs in October 1, 2007 and Xxxxx Xxxxxxx, Xx. remains the Chief
Executive Officer until December 30, 2007, the Retention Payment Trigger
Event
has not occurred until December 30, 2007. Items (a) through (c) are as follows:
(a)
the
acquisition in one or more transactions by any “Person”, excepting Employee, as
the term “Person” is used for purposes of Sections 13(d) or 14(d) of the
Securities Exchange Act of 1934, as amended (the “1934 Act”), of “Beneficial
Ownership” (as the term beneficial ownership is used for purposes or Rule 13d-3
promulgated under the 0000 Xxx) of the fifty percent (50%) or more of the
combined voting power of the Company’s then outstanding voting securities (the
“Voting Securities”). For purposes of this Paragraph 2(e)(a), Voting Securities
acquired directly from the Company and from third parties by any Person shall
be
included in the determination of such Person’s Beneficial Ownership of Voting
Securities.
(b)
the
approval by the shareholders of the Company and the consummation of: (A)
a
merger, reorganization or consolidation involving the Company, if the
shareholders of the Company immediately before such merger, reorganization
or
consolidation do not or will not own directly or indirectly immediately
following such merger, reorganization or consolidation, more than fifty percent
(50%) of the combined voting power of the outstanding Voting Securities of
the
corporation resulting from or surviving such merger, reorganization or
consolidation in substantially the same proportion as their ownership of
the
Voting Securities immediately before such merger, reorganization or
consolidation, or (B) a complete liquidation or dissolution of the Company,
or
(C) an agreement for the sale or other disposition of 50% or more of the
assets
of the Company and a distribution of the proceeds of the sale to the
shareholders.
4
(c)
the
acceptance by shareholders of the Company of shares in a share exchange,
if the
shareholders of the Company immediately before such share exchange do not
or
will not own directly or indirectly following such share exchange more than
fifty percent (50%) of the combined voting power of the outstanding Voting
Securities of the corporation resulting from or surviving such share exchange
in
substantially the same proportion as the ownership of the Voting Securities
outstanding immediately before such share exchange.
3.
Term.
The
period of Employee’s employment with the Company shall commence on the date of
this Agreement and shall continue for three years thereafter, unless sooner
terminated in accordance with the provisions of this Agreement (“Term”). After
expiration of the Term, Employee’s employment shall continue thereafter on an
at-will month-to-month basis, until terminated by either party to the Agreement.
During the month-to-month period the provisions of this Agreement shall no
longer apply, except for the provisions of Paragraph 15 which survive the
Term.
During the at-will month-to month period, Employee shall continue to be paid
the
Employee’s then current annual base salary under the provisions of Paragraph
2(a), benefits under Paragraph 2(b) and the car allowance under Paragraph
2(c).
4.
Noncompetition Covenants.
(a)
Employee agrees that the noncompetition covenants contained in this Paragraph
4
are a material and substantial part of this Agreement.
5
(b)
Employee covenants that during Employee’s employment with Company and for three
months following the termination of Employee’s employment (regardless of the
reason for the termination) the Employee shall not, directly or indirectly,
without the prior express written consent of Company, do any of the things
set
forth in item (i) through (v) below:
(i)
engage, as an officer, director, shareholder, owner, partner, joint venturer,
agent, or in a managerial capacity, whether as an employee, independent
contractor, consultant, advisor or sales representative, in the personal
security device industry or in the car wash services industry within the
United
States (the “Territory”);
(ii)
call
upon any person who is, at the time of the contact, an employee of Company
or
its affiliates, if the purpose and intent of the contact is to entice such
employee away from or out of the employ of Company or its
affiliates;
(iii)
call upon any person or entity which is, at the time of the contact, a customer
of the Company or its affiliates for the purpose of soliciting or selling
any of
the items or services which are the items or services offered by the Company
or
its affiliates;
(iv)
disclose the identity of the customers of Company or its affiliates, whether
in
existence or proposed, to any person, firm, partnership, corporation or other
entity whatsoever, for any reason or purpose whatsoever; or
(v)
promote, or assist, financially or otherwise, any person, firm, partnership,
corporation or other entity whatsoever to do any of the above.
For
the
purposes of this Agreement, the term “affiliates” shall mean one or more of: (A)
each subsidiary of Company, and (B) each other entity under the direct or
indirect control of the Company.
(c)
The
Company will sustain significant losses and damages, if Employee breaches
the
covenants in this Paragraph 4. There is no adequate monetary remedy for the
immediate and irreparable damage that would be caused to Company by Employee’s
breach of its non-competition covenants. Employee agrees that, in the event
of a
breach by him of the foregoing covenants, such covenants may be enforced
by
Company by, without limitation, injunctions and restraining orders.
(d)
It is
agreed by the parties that the covenants in this Paragraph 4 impose a reasonable
restraint on Employee in light of the activities and business of Company
on the
date of the execution of this Agreement and the future plans of
Company.
6
(e)
The
covenants in this Paragraph 4 are severable and separate, and the
unenforceability of any specific covenant shall not affect the provisions
of any
other covenant. If any court of competent jurisdiction shall determine that
the
scope, time or territorial restrictions set forth are unreasonable, then
it is
the intention of the parties that such restrictions be enforced to the fullest
extent which the court deems reasonable, and the Agreement shall thereby
be
reformed.
(f)
The
covenants in this Paragraph 4 shall be construed as independent of any other
provision of this Agreement and the existence of any claim or cause of action
of
Employee against Company whether predicated on this Agreement, or otherwise,
shall not constitute a defense to the enforcement by Company of such covenants.
It is specifically agreed that the duration of the noncompetition covenants
stated above shall be computed by excluding from such computation all time
during which Employee is in violation of any provision of this Paragraph
4 and
all time during which there is pending in any court of competent jurisdiction
any action (including any appeal from any judgment) brought by any person,
whether or not a party to this Agreement, in which action Company seeks to
enforce the agreements and covenants of Employee or in which any person contests
the validity of such agreements and covenants or their enforceability or
seeks
to avoid their performance or enforcement. Provided that, no such exclusion
shall include the period of time within which Employee has ceased violating
this
paragraph, whether or not as a result of being in compliance with Court
injunction or doing so voluntarily, and whether or not any action is pending
against Employee, and provided that no such exclusion shall include the time
an
action is pending, if the action is finally determined in Employee’s
favor.
5.
Confidential Information.
It is
expressly acknowledged by the Employee that customer lists, orders, current
and
closed out orders, prospect lists, documents containing the names or addresses
of existing or potential customers, information regarding the Company’s
financial condition or business plans, the methods by which the Company serves
its customers or conducts its operations, as well as other business procedures,
are the property of the Company and constitute confidential information or
trade
secrets of the Company (“Confidential Information”). Employee agrees to maintain
the confidentiality of the Confidential Information and further agrees that
Employee will not, directly or indirectly, use or disclose Confidential
Information to any natural or legal person, other than authorized employees
or
agents of the Company, during the Term or thereafter. All Confidential
Information and all correspondence, reports, charts, products, records, designs,
patents, plans, manuals, “field guides”, memoranda, advertising materials, lists
and other data or property collected by or delivered to Employee by or on
behalf
of Company, its representatives, customers and government entities (including,
without limitation, customers obtained for Company by Employee), and all
other
materials compiled by Employee which pertain to the business of Company shall
be
and shall remain the property of Company, shall be subject at all times to
its
discretion and control and shall be delivered, together with any and all
copies
thereof, promptly to Company upon request at any time and without request
upon
completion or other termination of Employee’s employment
hereunder.
7
6.
Inventions.
Employee shall disclose promptly to Company any and all conceptions and ideas
for inventions, improvements, and valuable discoveries, whether patentable
or
not, which are conceived or made by Employee solely or jointly with another
during the period of employment or within three months thereafter and which
are
related to the business or activities of Company. Employee hereby assigns
and
agrees to assign all his interests therein to Company or its nominee. Whenever
requested to do so by Company, Employee shall execute any and all applications,
assignments or other instruments that Company shall deem necessary to apply
for
and obtain Letters Patent of the United States or any foreign country or
to
otherwise protect Company’s interest therein. These obligations shall continue
beyond the termination of employment with respect to inventions, improvements
and valuable discoveries, whether patentable or not, conceived, made or acquired
by Employee during the period of employment, and shall be binding upon
Employee’s heirs, assigns, executors, administrators and other legal
representatives.
7.
Termination; Rights of Termination.
(a)
Employee’s employment under this Agreement may be terminated during the term
hereof in any one or more of the following ways:
(i)
Employee shall be terminated automatically upon the death or resignation
of
Employee. The parties agree that Employee may resign as Executive Vice
President, General Counsel and Secretary, at any time without such resignation
constituting a breach of this Agreement.
8
(ii)
Employee may be terminated by the Company upon Employee’s inability to perform
his duties under this Agreement because of illness or physical or mental
disability or other incapacity which continues for a period of 120 days
consecutively during any one-year period.
(iii)
Employee may be terminated by the Company upon written notice to the Employee
any time after: (a) the occurrence of the Retention Payment Trigger Event;
and
(b) the Employee having been paid the Retention Payment, as provided in
Paragraph 2(e) of this Agreement; and (c) the further payment of a lump sum
cash
payment equal to the Employee’s then current annual base salary.
(iv)
Employee may be terminated by the Company for Cause, as hereafter defined,
upon
fifteen (15) day advance written notice to Employee. Cause, is hereby defined
as: (a) Employee committing against the Company fraud, misrepresentation,
theft
or embezzlement, (b) Employee’s conviction of any felony, (c) Employee’s
material intentional violations of Company policies, or (d) a material breach
of
the provisions of this Agreement, including specifically the repeated failure
of
Employee to perform his duties after written notice of such failure from
the
Company. However, in the event of termination related to Employee’s performance,
Employee’s termination shall only be effective upon the expiration of a thirty
(30) day cure period following a lack of corrective action having been
undertaken by Employee during said cure period.
(b)
On a
breach or default of this Agreement on the part of the Company, including,
without limitation, changing the Employee’s duties, the location of the Office
or the number or amount Staff other then as permitted under Paragraph 1(a),
the
Employee is entitled to resign his employment and the Company shall immediately
pay to the Employee, the Employee’s then annual base salary paid prior to the
date of the Employee’s resignation, without consideration for any bonuses or the
value of any option award.
(c)
Upon
termination of Employee’s employment under Paragraph 7(a) for any reason or
resignation of Employee under Paragraph 7(b), Employee shall be entitled
to
receive Employee’s salary accrued through the date of termination, plus any
employee benefits which by their terms and provisions continue after such
termination, plus any Retention Payment owed by the Company at the time of
termination or resignation under the provisions of Paragraph 2(e) or which
would
have become due but for the Company’s breach or default of the
Agreement.
9
(d)
In
the event of termination of Employee’s employment under this Agreement for any
reason provided in this paragraph 7, or if Employee resigns prior to the
expiration of the term of this Agreement, all rights and obligations of Company
and Employee under this Agreement shall cease immediately, except that
Employee’s and the Company’s obligations under Paragraphs 4, 5, 6, 7 and 15
herein shall survive such termination. After such termination Employee shall
have no right to receive any compensation or payment hereunder, except as
set
forth this Paragraph 7.
8.
Complete Agreement.
This
Agreement is the final, complete and exclusive statement and expression of
the
agreement between Company and employee, it being understood that there are
no
oral representations, understandings or agreements covering the same subject
matter as this Agreement. This Agreement supersedes, and cannot be varied,
contradicted or supplemented by evidence of any prior or contemporaneous
discussions, correspondence, or oral or written agreements of any kind. This
Agreement may be modified, altered or otherwise amended only by a written
instrument executed by both Company and Employee.
9.
No Waiver; Remedies Cumulative.
No
waiver by the parties hereto of any default or breach of any term, condition
or
covenant of this Agreement shall be deemed to be a waiver of any subsequent
default or breach of the same or any other term, condition or covenant contained
herein. No right, remedy or election given by any term of this Agreement
shall
be deemed exclusive but each shall be cumulative with all other rights, remedies
and elections available at law or in equity.
10.
Assignment; Binding Effect.
Employee understands that Employee has been selected by Company on the basis
of
Employee’s personal qualifications, experience and skills. Employee agrees,
therefore, that he cannot assign all or any portion of this Agreement. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and Company’s successors and assigns. It is further understood and agreed that
Company may be merged or consolidated with another entity and that any such
entity shall automatically succeed to the rights, powers and duties of Company
hereunder.
11.
Notice.
All
notices or other communications required or permitted hereunder shall be
in
writing and may be given by depositing the same in the United States mail,
addressed to the party to be notified, postage prepaid and registered or
certified with return receipt requested, by overnight courier or by delivering
the same in person to such party.
10
To
Company: Chief
Executive Officer
0000
Xxxxxxxx Xxxxx
Xxxxx
Xxxxxx, Xxx Xxxxxx 00000
To
Employee: Xxxxxx
X.
Xxxxxx
0000
Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx,
Xxxxxxxxxxxx 00000
Notice
shall be deemed given and effective the day personally delivered, the day
after
being sent by overnight courier and three days after the deposit in the U.
S.
mail of a writing addressed as above and sent first class mail, certified,
return receipt requested, or when actually received, if earlier. Either party
may change the address for notice by notifying the other party of such change
in
accordance with this paragraph 11.
12.
Severability; Headings.
If any
portion of this Agreement is held invalid or inoperative, the other portions
of
this Agreement shall be deemed valid and operative and, so far as is reasonable
and possible, effect shall be given to the intent manifested by the portion
held
invalid or inoperative. The paragraph headings herein are for reference purposes
only and are not intended in any way to describe, interpret, define or limit
the
extent or intent of this Agreement or of any part hereof.
13.
Gender.
The use
of the masculine pronoun in this Agreement has been used for convenience
and
shall apply to the Employee.
14.
Governing Law.
This
Agreement shall in all respects be construed in accordance with the laws
of the
State of Delaware.
15.
Insurance and Indemnification.
(a)
Subject to applicable law, for a period of six (6) years following completion
of
the Term, the Company will: (i) indemnify Employee and his heirs and
representatives to the extent provided in the Company’s By-Laws in effect on the
date of this Agreement and will not amend, reduce or limit rights of indemnity
afforded to them or the ability of the Company to indemnify them, not hinder,
delay or make more difficult the exercise of such rights of indemnity and
(ii)
maintain director and officer liability insurance coverage providing Employee
with coverage (1) at least as favorable as the policies in effect immediately
prior to the date hereof covering the Company’s directors and officers or (2) as
favorable as is available at a cost to the Company of up to 125% of the premiums
currently being paid by the Company. The Company’s By-Law provision regarding
indemnification, in effect on the date of this Agreement is attached as Exhibit
“A” to this Agreement.
11
(b)
If
any claim is (or claims are) made against Employee and his heirs and
representatives, including legal counsel, arising from Employee’s services as a
director, officer and employee of the Company, within six (6) years from
the
expiration of the Term, the provisions of this Paragraph 15 respecting the
Company’s By-Laws shall continue in effect until the final disposition of all
such claims.
(c)
The
Company agrees to provide written notice to Employee immediately upon learning
of any claim or threatened claim against Employee by any third party relating
to
or arising out of the business of the Company or Employee’s prior service as a
director, officer, employee or controlling shareholder of the Company. The
Company further agrees to provide to Employee any complaints and other relevant
documentation related to such claims immediately upon receipt of such
documentation.
(d)
Employee agrees that he will cooperate with and assist the Company, as is
reasonably requested by the Company, in its defense of any action or proceeding
against the Company, its directors, officers, employees or affiliates arising
out of or in any way related to any transactions, events or other matters
which
occurred during the period of his employment with the Company, to the extent
that such cooperation and assistance will not impair Employee’s legal rights or
remedies or increase the likelihood that Employee will incur any liabilities
as
a result thereof. This Agreement shall not preclude Employee from testifying
in
such action or proceeding. In the event that Employee does cooperate with
and
assist the Company in its defenses of such an action or proceeding, the Company
agrees to reimburse Employee for all reasonable expenses incurred by Employee
in
providing such assistance.
16.
Arbitration.
(a)
Each
and every controversy or claim arising out of or relating to this Agreement
shall be settled by arbitration in Philadelphia, Pennsylvania, in accordance
with the commercial rules (the “Rules”) of the American Arbitration Association
then obtaining, and judgment upon the award rendered in such arbitration
shall
be final and binding upon the parties and may be confirmed in any court having
jurisdiction thereof. Notwithstanding the foregoing, this Agreement to arbitrate
shall not bar any party from seeking temporary or provisional remedies in
any
Court having jurisdiction. Notice of the demand for arbitration shall be
filed
in writing with the other party to this Agreement, which such demand shall
set
forth in the same degree of particularity as required for complaints under
the
Federal Rules of Civil Procedure the claims to be submitted to arbitration.
Additionally, the demand for arbitration shall be stated with reasonable
particularity with respect to such demand with documents attached as
appropriate. In no event shall the demand for arbitration be made after the
date
when institution of legal or equitable proceedings based on such claim, dispute
or other matter in question would be barred by the applicable statutes of
limitations.
12
(b)
The
arbitrators shall have the authority and jurisdiction to determine their
own
jurisdiction and enter any preliminary awards that would aid and assist the
conduct of the arbitration or preserve the parties’ rights with respect to the
arbitration as the arbitrators shall deem appropriate in their discretion.
The
award of the arbitrators shall be in writing and it shall specify in detail
the
issues submitted to arbitration and the award of the arbitrators with respect
to
each of the issues so submitted.
(c)
Within sixty (60) days after the commencement of any arbitration proceeding
under this Agreement, each party shall file with the arbitrators its
contemplated discovery plan outlining the desired documents to be produced,
the
depositions to be take, if ordered by the arbitrators in accordance with
the
Rules, and any other discovery action sought in the arbitration proceeding.
After a preliminary hearing, the arbitrators shall fix the scope and content
of
each party’s discovery plan as the arbitrators deem appropriate. The arbitrators
shall have the authority to modify, amend or change the discovery plans of
the
parties upon application by either party, if good cause appears for doing
so.
(d)
The
award pursuant to such arbitration will be final, binding and
conclusive.
(e)
Counsel to Company and Employee in connection with the negotiation of and
consummation of this Agreement shall be entitled to represent their respective
party in any and all proceedings under this Paragraph or in any other proceeding
(collectively, “Proceedings”). Company and Employee, respectively, waive the
right and agree they shall not seek to disqualify any such counsel in any
such
Proceedings for any reason, including but not limited to the fact that such
counsel or any member thereof may be a witness in any such Proceedings or
possess or have learned of information of a confidential or financial nature
of
the party whose interests are adverse to the party represented by such counsel
in any such Proceedings.
13
IN
WITNESS WHEREOF,
the
undersigned parties have executed this Agreement on the year and day above
written.
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XXXX
SECURITY INTERNATIONAL, INC.
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| By: | /s/ Xxxxx X. Xxxxxxx, Xx., President | |
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Xxxxx X. Xxxxxxx, Xx., President |
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|
/s/
Xxxxxx X. Xxxxxx
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|
Xxxxxx
X. Xxxxxx
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14
EXHIBIT
A
INDEMNIFICATION
OF DIRECTORS AND OFFICERS
Section
6.01. Indemnification.
Each
person who was or is made a party or is threatened to be made a party or
is
involved in any action, suit or proceeding, whether civil, criminal,
administrative or investigative (hereinafter a Aproceeding@),
by
reason of the fact that he or she, or a person of whom he or she is the legal
representative, is or was a director or officer, of the Corporation or is
or was
serving at the request of the Corporation as a director or officer (or person
performing similar function), employee or agent of another corporation or
of a
partnership, joint venture, trust or other enterprise, including service
with
respect to employee benefit plans, whether the basis of such proceeding is
alleged action in an official capacity as a director, officer, employee or
agent
or in any other capacity while serving as a director, officer, employee or
agent, shall be indemnified and held harmless by the Corporation to the fullest
extent authorized by the Delaware General Corporation Law, as the same exists
or
may hereafter be amended (but, in the case of any such amendment, only to
the
extent that such amendment permits the Corporation to provide broader
indemnification rights than said law permitted the Corporation to provide
prior
to such amendment), against all expense, liability and loss (including
attorney=s
fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid or to
be paid
in settlement) reasonably incurred or suffered by such person in connection
therewith and such indemnification shall continue as to a person who has
ceased
to be a director, officer, employee or agent and shall inure to the benefit
of
his or her heirs, executors and administrators: provided, however, that except
as provided in paragraph (b) hereof, the Corporation shall indemnify any
such
person seeking indemnification in connection with a proceeding (or part thereof)
initiated by such person only if such proceeding (or part thereof) was
authorized by the Board of Directors of the Corporation.
Section
6.02. Advances.
The
right to indemnification conferred by this Article 6 shall include the right
to
be paid by the Corporation the expenses incurred in defending any such
proceeding in advance of its final disposition, including, without limitation,
attorney=s
fees,
expert fees and all costs of litigation. Subject to the tender to the
Corporation of any undertaking then required under the Delaware General
Corporation law with respect to the repayment amounts of amounts advanced,
any
such expenses, including, without limitation, attorney=s
fees,
expert fees, and all costs of litigation, shall be paid automatically and
promptly upon tender by the director, officer, or employee, as applicable,
of a
demand therefor.
Section
6.03. Procedure.
If a
claim under this Article 6 is not paid in full by the Corporation within
thirty
days after a written claim has been received by the Corporation, the claimant
may at any time thereafter bring suit against the Corporation to recover
the
unpaid amount of the claim, and if successful in whole or in part, the claimant
shall be entitled to be paid also the expense of prosecuting such claim.
It
shall be a defense to any such action (other than an action brought to enforce
a
claim for expenses incurred in defending any proceeding in advance of its
final
disposition where the required undertaking, if any is required, has been
tendered to the Corporation) that the claimant has not met the standards
of
conduct which make it permissible under the Delaware General Corporation
Law for
the Corporation to indemnify the claimant for the amount claimed, but the
burden
of proving such defense shall be on the Corporation. Neither the failure
of the
Corporation (including its Board of Directors, independent legal counsel,
or its
stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he or she met the applicable standard of conduct set forth in the
Delaware General Corporation Law, nor an actual determination by the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) that the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that the claimant
has
not met the applicable standard of conduct.
15
Section
6.04. Other
Rights.
The
indemnification and advancement of expenses provided by this Article 6 shall
not
be deemed exclusive of any other rights to which those seeking indemnification
or advancement of expenses may be entitled under any insurance or other
agreement, vote of shareholders or disinterested directors or otherwise,
both as
to actions in their official capacity and as to actions in another capacity
while holding an office, and shall continue as to a person who has ceased
to be
a director or officer and shall inure to the benefit of the heirs, executors
and
administrators of such person.
Section
6.05. Insurance.
The
Corporation shall have power to purchase and maintain insurance on behalf
of any
person who is or was a director, officer, employee or agent of the Corporation
or is or was serving at the request of the Corporation as a director, officer,
employee, agent, fiduciary or other representative of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise,
against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the Corporation
would have the power to indemnify him against such liability under the
provisions of these Bylaws.
Section
6.06. Modification.
The
duties of the Corporation to indemnify and to advance expenses to a director
or
officer provided in this Article 6 shall be in the nature of a contract between
the Corporation and each such director or officer, and no amendment or repeal
of
any provision of this Article 6 shall alter, to the detriment of such director
or officer, the right of such person to the advancement of expenses or
indemnification related to a claim based on an act or failure to act which
took
place prior to such amendment, repeal or termination.
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