EXHIBIT 10.3
INTEGRATED ALARM SERVICES GROUP, INC.
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made as of this 1st day of October, 2002 by and
between INTEGRATED ALARM SERVICES GROUP, INC., a Delaware corporation, having an
office at One Capital Center, 00 Xxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000
(hereinafter referred to as "Employer") and Xxxxxx X. Few, Sr., an individual
residing at 0 Xxxx Xxxxx, Xxxxxxx, Xxx Xxxxxx, 00000 (hereinafter referred to as
"Employee");
W I T N E S S E T H:
WHEREAS, Employer desires to employ Employee as President and Chief
Operating Officer of Employer; and
WHEREAS, Employee is willing to be employed as the President and Chief
Operating Officer of Employer in the manner provided for herein, and to perform
the duties of the President and Chief Operating Officer of Employer upon the
terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein set forth it is agreed as follows:
1. Employment of President and Chief Operating Officer. Employer
hereby employs Employee as President and Chief Operating Officer.
2. Term.
a. Subject to Section 9 and Section 10 below, the term
of this Agreement shall be for a period of thirty-six (36) months commencing on
October 1, 2002. The Term of this Agreement shall initially be automatically
extended for an additional thirty-six (36) month period, and thereafter shall be
automatically extended for additional one (1) year periods, unless either party
notifies the other in writing at least ninety (90) days prior to the expiration
of the then existing Term of its intention not to extend the Term. During the
Term, Employee shall devote substantially all of his business time and efforts
to Employer and its subsidiaries and affiliates.
3. Duties. The Employee shall perform those functions generally
performed by persons of such title and position, shall attend all meetings of
the stockholders and the Board, shall perform any and all related duties and
shall have any and all powers as may be prescribed by resolution of the Board,
and shall be available to confer and consult with and advise the officers and
directors of Employer at such times that may be required by Employer. Employee
shall report directly and solely to the Board.
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4. Compensation.
a. (i) Employee shall be paid a minimum of $480,000
per year during the Term of this Agreement. Employee shall be paid periodically
in accordance with the policies of the Employer during the term of this
Agreement, but not less than monthly.
(ii) Employee is eligible for an annual bonus, if
any, which will be determined and paid in accordance with policies set from time
to time by the Board.
b. Employee shall receive a leased car of his choice
paid for by the Employer, at a cost not to exceed $1,000 per month.
c. Employer shall include Employee in its health
insurance program available to Employer's executive officers and shall pay 100%
of the premiums for such program.
d. Employee shall have the right to participate in any
other employee benefit plans established by Employer.
e. (i) In the event of a "Change of Control" whereby:
(A) A person (other than a person who is an officer or a Director
of Employer on the effective date hereof), including a "group" as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, becomes, or obtains the
right to become, the beneficial owner of Employer securities having 50% or more
of the combined voting power of then outstanding securities of the Employer that
may be cast for the election of directors of the Employer;
(B) At any time, a majority of the Board-nominated slate of
candidates for the Board is not elected;
(C) Employer consummates a merger in which it is not the surviving
entity;
(D) Substantially all Employer's assets are sold; or
(E) Employer's stockholders approve the dissolution or liquidation
of Employer; then
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(ii) (A) All stock options and warrants ("Rights") granted by
Employer to Employee under any plan or otherwise prior to the effective date of
the Change of Control, shall become vested, accelerate and become immediately
exercisable.
(B) If at any time within two years of the said Change of
Control, Employee is not retained by Employer or the surviving entity, as
applicable, under terms and conditions substantially similar to those herein, or
if Employee's duties require employee to move to a location not acceptable to
Employee, then in addition, Employee shall be eligible to receive a one-time
cash bonus, equal on an after-tax basis to two times his average compensation
for the three previous fiscal years. Such compensation shall include salary,
bonus, and any other compensation pursuant hereto. Said bonus shall be paid
within thirty(30) days of the change of Employee's employment conditions.
5. Expenses. Employee shall be reimbursed for all of his actual
out-of-pocket expenses incurred in the performance of his duties hereunder,
provided such expenses are acceptable to Employer, which approval shall not be
unreasonably withheld, for business related travel and entertainment expenses,
and that Employee shall submit to Employer reasonably detailed receipts with
respect thereto.
6. Vacation. Employee shall be entitled to receive four (4) weeks
paid vacation time after each year of employment upon dates agreed upon by
Employer. Upon separation of employment, for any reason, vacation time accrued
and not used shall be paid at the salary rate of Employee in effect at the time
of employment separation.
7. Secrecy. At no time shall Employee disclose to anyone any
confidential or secret information (not already constituting information
available to the public) concerning the internal affairs, business operations,
and trade secrets of Employer.
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8. Covenant Not to Compete.
(a) Subject to, and limited by, Section 10(b), Employee will not,
at any time, during the term of this Agreement, and for one (1) year thereafter,
either directly or indirectly, engage in, with or for any enterprise,
institution, whether or not for profit, business, or company, competitive with
the business (as identified herein) of Employer as such business may be
conducted on the date thereof, as a creditor, guarantor, or financial backer,
stockholder, director, officer, consultant, advisor, employee, member, or
otherwise of or through any corporation, partnership, association, sole
proprietorship or other entity; provided, that an investment by Employee, his
spouse or his children is permitted if such investment is not more than four
percent (4%) of the total debt or equity capital of any such competitive
enterprise or business and further provided that said competitive enterprise or
business is a publicly held entity whose stock is listed and traded on a
national stock exchange, the NASDAQ Stock Market, or the over-the-counter
bulletin board or any successor thereto. As used in this Agreement, the business
of Employer shall be deemed to include wholesale monitoring and related support
services, and financing solutions and products, within the security alarm
industry.
(b) For a period one year from the date of termination of this
agreement Employee shall not contact or solicit any of the Employer's dealers,
customers, employees or suppliers.
9. Termination.
a. Termination by Employer
(i) Employer may terminate this Agreement upon
written notice for Cause. For purposes hereof, "Cause" shall mean (A) Employee's
misconduct as could reasonably be expected to have a material adverse effect on
the business and affairs of Employer, (B) the Employee's disregard of lawful
instructions of Employer's Board of Directors consistent with Employee's
position relating to the business of Employer or neglect of duties or failure to
act, which, in each case, could reasonably be expected to have a material
adverse effect on the business and affairs of Employer,(C) engaging by the
Employee in conduct that constitutes activity in competition with Employer; (D)
the conviction of Employee for the commission of a felony; and/or (E) the
habitual abuse of alcohol or controlled substances. Notwithstanding anything to
the contrary in this Section 9(a)(i), Employer may not terminate Employee's
employment under this Agreement for Cause unless Employee shall have first
received notice from the Board advising Employee of the specific acts or
omissions alleged to constitute Cause, and such acts or omissions continue after
Employee shall have had a reasonable opportunity (at least 10 days from the date
Employee receives the notice from the Board) to correct the acts or omissions so
complained of. In no event shall alleged incompetence of Employee in the
performance of Employee's duties be deemed grounds for termination for Cause.
(ii) This agreement automatically shall terminate
upon the death of Employee, except that Employee's estate shall be entitled to
receive any amount accrued under Section 4(a).
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b. Termination by Employee
(i) Employee shall have the right to terminate
his employment under this Agreement upon 30 days' notice to Employer given
within 90 days following the occurrence of any of the following events (A)
through (G):
(A) Employee is not elected or retained
as Co-Chief Executive Officer.
(B) Employer acts to materially reduce
Employee's duties and responsibilities hereunder. Employee's duties and
responsibilities shall not be deemed materially reduced for purposes hereof
solely by virtue of the fact that Employer is (or substantially all of its
assets are) sold to, or is combined with, another entity, provided that Employee
shall continue to have the same duties and responsibilities with respect to
Employer's business, and Employee shall report directly to the chief executive
officer and/or board of directors of the entity (or individual) that acquires
Employer or its assets.
(C) Employer acts to change the
geographic location of the performance of Employee's duties from the Albany, New
York area. For purposes of this Agreement, the Albany, New York area shall be
deemed to be the area within 30 miles of the current address of the Employer as
set forth above.
(D) A Material Reduction (as
hereinafter defined) in Employee's rate of base compensation, or Employee's
other benefits. "Material Reduction" shall mean a ten percent (10%)
differential;
(E) A failure by Employer to obtain the
assumption of this Agreement by any successor;
(F) A material breach of this Agreement
by Employer, which is not cured within thirty (30) days of written notice of
such breach by Employer;
(G) A Change of Control.
(ii) Anything herein to the contrary
notwithstanding, Employee may terminate this Agreement upon thirty (30) days
written notice.
(iii) If Employee shall terminate this Agreement
under Section 9(b)(i), Employee shall be entitled to receive 12 months salary.
Other than the payment of 12 months salary to Employee, Employer shall have no
further obligation to compensate Employee pursuant to Section 4 above. If
Employee shall terminate this Agreement pursuant to Section 9(b)(ii), Employee
shall only be entitled to any accrued and unpaid compensation as of the date of
termination as provided in Section 4(a)(i).
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10. Consequences of Breach by Employer; Employment Termination
a. If this Agreement is terminated pursuant to Section
9(b)(i) hereof, or if Employer shall terminate Employee's employment under this
Agreement in any way that is a breach of this Agreement by Employer, the
following shall apply:
(i) Employee shall be entitled to payment of 24
months salary; and
(ii) Employee shall be entitled to payment of any
previously declared bonus as provided in Section 4(a) above.
b. In the event of termination of Employee's employment
pursuant to Section 9(b)(i) of this Agreement, the provisions of Section 8 shall
not apply to Employee.
11. Remedies
Employer recognizes that because of Employee's special
talents, stature and opportunities in the computer industry, and because of the
special creative nature of and compensation practices of said industry and the
material impact that individual projects can have on the Company's results of
operations, in the event of termination by Employer hereunder (except under
Section 9(a)(i) or (iii), or in the event of termination by Employee under
Section 9(b)(i) before the end of the agreed term, the Employer acknowledges and
agrees that the provisions of this Agreement regarding further payments of base
salary, bonuses and the exercisability of Rights constitute fair and reasonable
provisions for the consequences of such termination, do not constitute a
penalty, and such payments and benefits shall not be limited or reduced by
amounts' Employee might earn or be able to earn from any other employment or
ventures during the remainder of the agreed term of this Agreement.
12. Excise Tax. In the event that any payment or benefit received
or to be received by Employee in connection with a termination of his employment
with Employer would constitute a "parachute payment" within the meaning of Code
Section 280G or any similar or successor provision to 280G and/or would be
subject to any excise tax imposed by Code Section 4999 or any similar or
successor provision then Employer shall assume all liability for the payment of
any such tax and Employer shall immediately reimburse Employee on a "grossed-up"
basis for any income taxes attributable to Employee by reason of such Employer
payment and reimbursements.
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13. Attorneys' Fees and Costs. If any action at law or in equity
is necessary to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorney's fees, costs and necessary
disbursements in addition to any other relief to which he may be entitled.
14. Entire Agreement; Survival. This Agreement contains the entire
agreement between the parties with respect to the transactions contemplated
herein and supersedes, effective as of the date hereof any prior agreement or
understanding between Employer and Employee with respect to Employee's
employment by Employer. The unenforceability of any provision of this Agreement
shall not effect the enforceability of any other provision. This Agreement may
not be amended except by an agreement in writing signed by the Employee and the
Employer, or any waiver, change, discharge or modification as sought. Waiver of
or failure to exercise any rights provided by this Agreement and in any respect
shall not be deemed a waiver of any further or future rights.
b. The provisions of Sections 4, 7, 8, 9(a)(ii), 9(c),
10, 11, 12, 14, 16, 17 and 18 shall survive the termination of this Agreement.
15. Assignment. This Agreement shall not be assigned to other
parties.
16. Governing Law. This Agreement and all the amendments hereof,
and waivers and consents with respect thereto shall be governed by the internal
laws of the State of New York, without regard to the conflicts of laws
principles thereof.
17. Notices. All notices, responses, demands or other
communications under this Agreement shall be in writing and shall be deemed to
have been given when
a. delivered by hand;
b. sent be telex or telefax, (with receipt confirmed),
provided that a copy is mailed by registered or certified mail, return receipt
requested; or
c. received by the addressee as sent be express delivery
service (receipt requested) in each case to the appropriate addresses, telex
numbers and telefax numbers as the party may designate to itself by notice to
the other parties:
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(i) if to the Employer:
Integrated Alarm Services Group, Inc.
00 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxx Xxxx
Attention: Xxxx Xxx XxXxxx
Telefax: (000) 000-0000
Telephone: (000) 000-0000
Xxxxxxx, Savage, Kaplowitz,
Wolf & Marcus LLP
000 Xxxx 00xx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Telefax: (000) 000-0000
Telephone: (000) 000-0000
(ii) if to the Employee:
Xxxxxx X. Few, Sr.
0 Xxxx Xxxxx
Xxxxxxx, Xxx Xxxxxx 00000
18. Severability of Agreement. Should any part of this Agreement
for any reason be declared invalid by a court of competent jurisdiction, such
decision shall not affect the validity of any remaining portion, which remaining
provisions shall remain in full force and effect as if this Agreement had been
executed with the invalid portion thereof eliminated, and it is hereby declared
the intention of the parties that they would have executed the remaining
portions of this Agreement without including any such part, parts or portions
which may, for any reason, be hereafter declared invalid.
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IN WITNESS WHEREOF, the undersigned have executed this agreement as of
the day and year first above written.
INTEGRATED ALARM SERVICES GROUP, INC.
By: /s/ Xxxxxxx X. XxXxxx
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Xxxxxxx X. XxXxxx
Chief Executive Officer
/s/ Xxxxxx X. Few
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Xxxxxx X. Few, Sr.
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