ISECURETRAC Corp. Omaha, NE 68137 EXECUTIVE EMPLOYMENT AGREEMENT
Exhibit
10.27
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THIS
EMPLOYMENT AGREEMENT is made by and between ISECURETRAC
Corp.
(“ISECURETRAC”), on behalf of itself and ISECURETRAC Services, Inc., and
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(hereinafter referred to as the “Executive”) on the date this Employment
Agreement is signed by Executive (“Effective Date”).
ISECURETRAC
and Executive desire to enter into this Employment Agreement to clarify and
formalize the understanding each has of the employment relationship.
During
the course of employment with ISECURETRAC, Executive will have access to
information deemed confidential by ISECURETRAC, whether or not such information
is proprietary to ISECURETRAC, and Executive is obligated to safeguard such
information. A confidentiality agreement, as contained herein, is necessary
to
assure adherence to ISECURETRAC’s non-disclosure policies and agreements between
ISECURETRAC and other parties.
Executive
may be asked to develop, improve or modify products and processes for
ISECURETRAC. The ownership of work products provision in this Employment
Agreement assures ISECURETRAC’s ownership in any work in which Executive may
become engaged which is related to ISECURETRAC’s business. THEREFORE,
in consideration of Executive’s employment with ISECURETRAC, the remuneration
now and hereafter paid to Executive by ISECURETRAC and/or other good and
valuable consideration, Executive and ISECURETRAC agree as follows:
1.0
DEFINITIONS
1.1
“ISECURETRAC” as used herein shall include ISECURETRAC Corp., ISECURETRAC
Services, Inc. and any corporation hereinafter acquired and/or majority owned
by
ISECURETRAC Corp.
1.2
“Confidential Information” shall mean all information related to ISECURETRAC’s
business affairs, services, products, research and development which is not
generally available from public sources, whether or not such information is
in
written or tangible form. Such information includes, without limitation, trade
secrets, financial information, marketing and sales plans, strategic business
plans, software and related documentation, hardware specifications and drawings,
designs and technical documentation, price lists, new product development and
processes, sales and marketing plans and processes, manufacturing information,
compensation plans, any information related to ISECURETRAC customers, including,
but not limited to, customer names, contact information, preferences, contract
terms and information that has been designated as confidential by such customer,
Work Products (as defined below) and any information pertaining to ISECURETRAC
executives that is deemed confidential by either the Executive or ISECURETRAC.
1.3
“Work
Products” shall mean any and all products, processes and materials developed and
produced by Executive for ISECURETRAC, including, without limitation, drawings,
plans, proposals, documentation, financial projections, charts, product
prototypes, software, specifications, cost estimates, letters, notes, manuals,
notebooks, reports, presentations and the like and shall specifically include
inventions, discoveries, improvements or enhancements related to ISECURETRAC’s
business or products that Executive may develop or conceive and reduce to
practice while employed at ISECURETRAC or within six (6) months after the
termination of such employment, at any time, alone or with others, with or
without the use of ISECURETRAC’s resources, regardless of whether patent,
copyright or trade secret law may technically be applied.
2.0
EMPLOYMENT
2.1
Executive hereby accepts employment or continued employment with ISECURETRAC
on
the terms and conditions stated in this Employment Agreement. Executive is
hereby employed to serve as ISECURETRAC’s Vice
President of Sales and Marketing.
Executive shall provide senior management services and shall perform such duties
relating thereto as may be determined and assigned to Executive from time to
time by ISECURETRAC’s Chief Executive Officer, to whom Executive shall report.
2.2
Termination
For Cause.
ISECURETRAC may terminate this Agreement and Executive’s employment at any time
without prior notice for "Cause" (as defined below) with no severance or other
obligation to Executive, other than payment of earned salary and unused vacation
accrued to the date of such termination. For purposes of this Agreement, "Cause"
shall consist of (a) any act of dishonesty or fraud by Executive in connection
with his duties or intended to result in his substantial personal enrichment;
(b) Executive's conviction or a plea of nolo contendre to a crime that the
Board
reasonably believes has had or will have a materially detrimental effect on
the
ISECURETRAC’s business or reputation, provided, traffic infractions shall not be
deemed a crime; (c) Executive's material breach of this Agreement or failure
to
properly perform his job duties, if such breach or failures are not promptly
cured within 10 days after written notice is provided to Executive; (d)
Executive’s gross negligence or willful misconduct in the performance of his
duties, which includes, but is not limited to conduct that is inconsistent
with
ISECURETRAC’s then-established practices or places ISECURETRAC at risk of
liability; (e) Executive’s failure to abide by the lawful policies and
directives of the Board; (f) Executive’s absence from work for a period in
excess of ninety (90) days in any twelve month period regardless of the reason,
including disability; (g) action or conduct determined by the Board acting
in
reasonable good faith to be of material detriment to ISECURETRAC; or (h)
Executive’s death.
2.3
Termination
Without Cause.
Subject
to the obligation to pay severance benefits as stated herein, which shall
survive such termination, ISECURETRAC may terminate this Agreement and
Executive’s employment, without Cause, at any time for any reason, or no reason,
and with or without notice.
2.4
Voluntary
Termination By Executive Upon Good Reason.
This
Agreement may be terminated by Executive for Good Reason upon thirty days
notice. For purposes of this Agreement, “Good Reason” shall exist (a) if there
is a material diminution in the Executive’s compensation, or (b) if Executive is
required by ISECURETRAC to relocate to a distance more than 50 miles from the
ISECURETRAC’s present location in Omaha, Nebraska,.
2.5
Severance
Benefits.
In the
event Executive’s employment is terminated (a) by ISECURETRAC without Cause, or
(b) by Executive for Good Reason, subject to the conditions stated herein,
ISECURETRAC shall: (i) pay Executive an amount equal to six (6) months of
Executive’s salary in accordance with the Company’s standard payroll procedures,
minus all applicable taxes, withholding and lawful deductions, plus any accrued
vacation; and (ii) Executive shall be eligible to elect continued group health
coverage for himself and his eligible dependents under the Consolidated Omnibus
Budget Reconciliation Act of 1985 (“COBRA”). If Executive chooses such
continuation health insurance coverage, the Executive will only pay such portion
of insurance premiums as he was paying immediately prior to termination of
employment and the Company will subsidize the remaining costs which are normally
the responsibility of the former employee through the earlier of six (6) months
from the date employment is terminated or until the Executive is eligible to
obtain insurance through another employer. Thereafter, Executive shall be solely
responsible for paying the premiums for COBRA continuation coverage. Any
severance benefits payable hereunder (or under Section 2.12 shall be
reduced by any long-term disability benefits received by Executive.
Notwithstanding the foregoing, ISECURETRAC’s obligation to provide the severance
benefits hereunder is expressly conditioned upon the Executive’s ongoing
compliance with the Confidentiality and Non-Solicitation provisions of this
Agreement, and upon Executive’s execution of a release of all claims against
ISECURETRAC, including, but not limited to those related to his employment
and/or termination (other than obligations owed under this subsection and/or
claims related solely to Executive’s status as a shareholder.) Executive agrees
that severance benefits as provided herein shall be the sole consideration
to
which he is entitled in the event of the termination of his employment without
Cause, that severance will not be paid in the event of termination with Cause
or
resignation without Good Reason, and Executive expressly waives and relinquishes
any claim to other or further consideration.
2.6
During the term of this Agreement, Executive shall devote his best efforts,
knowledge and skill and shall devote substantially all of his working time
and
attention to the performance of his duties as aforesaid, except during such
period as Executive shall be ill, disabled or on vacation.
2.7
Executive agrees to be bound by the policies and procedures adopted from time
to
time, and as modified, by ISECURETRAC, in its sole discretion, with or without
notice to Executive, including, but not limited to, those contained with
ISECURETRAC’s Executive Handbook.
2.8
ISECURETRAC shall pay for or reimburse Executive in accordance with
ISECURETRAC’s standard policies for reimbursement of expenses incurred by its
executive officers for all expenses incurred by Executive in performing
Executive’s services and carrying out Executive’s duties pursuant to this
Agreement.
2.9
ISECURETRAC will reimburse Executive for mileage and parking associated with
ISECURETRAC business, except mileage related to commuting. The rate per mile
will be set periodically by ISECURETRAC in its sole discretion according to
ISECURETRAC’s mileage policies.
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2.10
ISECURETRAC will reimburse Executive for reasonable relocation expenses as
provided in the terms of the offer letter ISECURETRAC extended to Executive
on
or about April 2, 2007, the terms of which are incorporated herein by reference.
2.11
In
the event Executive voluntarily leaves his employment with ISECURETRAC without
Good Reason prior to completing twelve (12) full months of service with
ISECURETRAC, Executive agrees to reimburse ISECURETRAC the relocation expenses
as outlined in the offer letter as follows:
·
If Executive voluntarily terminates employment prior to completing
twelve
(12) full, consecutive months of active service and has less than six (6)
full,
consecutive months of active service, Executive will immediately refund all
relocation expenses paid by ISECURETRAC.
·
If Executive voluntarily terminates
employment prior to completing twelve (12) full, consecutive months of active
service, but does complete six (6) or more full, consecutive months of active
service, Executive will immediately refund an amount which is equal to the
total
relocation expense amount paid by ISECURTRAC multiplied by a fraction equal
to
the number of full, consecutive months of active service, divided by twelve
(12).
·
If any refund for relocation expenses is
due, Executive agrees that the amount is payable in full immediately via
personal check and/or payroll deduction, and Executive permits ISECURETRAC
to
deduct the refund from any monies or benefits, including vacation pay, that
may
be due to Executive (including wages, bonuses, and/or expenses).
2.12
In
the event a Change of Control occurs that leads to the termination of
Executive’s employment (i) by ISECURETRAC or (ii) by Executive following a
material change in his position and essential job duties within six (6) months
of the Change of Control, Executive shall receive a lump sum amount equal to
six
(6) months of Executive’s salary, minus all applicable taxes, withholding and
lawful deductions, plus any accrued vacation. Such payment shall be in lieu
of
the severance benefits set forth in Section 2.5 above. For purposes of this
Agreement, Change of Control shall mean (1) a transfer of all or substantially
all of ISECURETRAC's assets, whether by sale, merger, consolidation or other
transaction, to an unaffiliated transferee or purchaser in a single transaction
or a series of transactions; or (2) a transaction that results in Sponsor
Investments no longer holding, directly or indirectly, 50% or more of the total
outstanding voting power of the ISECURETRAC’s capital stock; provided, however,
that a Change of Control shall not occur if Sponsor Investments continues to
directly or indirectly maintain the power to elect a majority of the Board
of
Directors of the ISECURETRAC. Notwithstanding the foregoing, ISECURETRAC’s
obligation to provide the severance benefits hereunder is expressly conditioned
upon the Executive’s ongoing compliance with the Confidentiality and
Non-Solicitation provisions of this Agreement, and upon Executive’s execution of
a release of all claims against ISECURETRAC, including, but not limited to
those
related to his employment and/or termination (other than obligations owed under
this subsection and/or claims related solely to Executive’s status as a
shareholder.) Executive agrees that severance benefits as provided herein shall
be the sole consideration to which he is entitled in the event of the
termination of his employment without Cause, that severance will not be paid
in
the event of termination with Cause or resignation without Good Reason, and
Executive expressly waives and relinquishes any claim to other or further
consideration.
3.0
CONFIDENTIALITY
3.1
Executive hereby agrees to safeguard and protect Confidential Information by
all
reasonable and necessary means, observe and be bound by the provisions of this
Agreement and observe and adhere to all rules and policies which ISECURETRAC
may
announce from time to time to protect its Confidential Information.
3.2
Executive hereby agrees, both during the period of employment with ISECURETRAC
and thereafter, that Executive shall not disclose Confidential Information
to
any person or permit any person to obtain Confidential Information, except
as
specifically authorized in writing by ISECURETRAC or as required by Executive’s
duties to ISECURETRAC.
3.3
Executive shall not disclose Confidential Information to any person who has
not
executed an appropriate non-disclosure agreement with ISECURETRAC.
3.4
Upon
termination of employment, for any reason, Executive shall immediately return
Confidential Information then in his possession to ISECURETRAC and keep no
copies thereof without the express written permission of ISECURETRAC.
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4.0
OWNERSHIP
ISECURETRAC
shall be the sole and exclusive owner of any and all Work Products. All Work
Products shall be considered as work made for hire by Executive for ISECURETRAC.
To the extent that ISECURETRAC needs to protect its ownership in any Work
Product(s), Executive shall assign and transfer to ISECURETRAC, without further
consideration, any and all proprietary rights in such Work Product(s) and to
execute and deliver all documents and do all acts necessary to secure to
ISECURETRAC, its successors, assigns or nominees, the entire right, title and
interest in and to such Work Products, including applications for and/or Letters
of Patent of the United States and other countries.
5.0
NON-SOLICITATION
5.1
For
the purpose of protecting ISECURETRAC’s legitimate interest in its Confidential
Information and customer goodwill, for the duration of his employment, and
for a
period of nine (9) months thereafter, Executive will not, either for Executive’s
benefit or the benefit of any other individual or entity, either directly or
indirectly, call on, solicit, canvass, induce, influence or assist any
ISECURETRAC client or customer with whom Executive had personal contact during
his employment or about whom Executive possessed or had access to Confidential
Information during his employment to: (i) purchase any products or services
that
compete with or which are offered by ISECURETRAC or (ii) relinquish, surrender,
modify, replace or lapse any business relationship or contract between
ISECURETRAC and its clients or customers to the detriment of ISECURETRAC.
5.2
Executive agrees that ISECURETRAC is engaged in a highly competitive business
providing GPS tracking products and services to criminal justice agencies
throughout the United States of America, Canada and the United Kingdom for
tracking and monitoring persons on pre-trial release, probation or parole (the
“ISECURETRAC Marketplace”), and that the Confidential Information and knowledge
of ISECURETRAC’s business techniques, contacts, and programs are crucial to
enabling it to compete in the markets in the ISECURETRAC Marketplace.
5.3
Executive acknowledges that ISECURETRAC has invested large amounts of time
and
money in its research and development, development of business techniques,
Executive training and development of proprietary and Confidential Information,
which if divulged to or used by competing entities would result in irreparable
injury to ISECURETRAC.
5.4
Executive acknowledges and agrees that the restriction placed upon him in
paragraph 5.1 above is (i) reasonable and necessary to protect the legitimate
business interests of ISECURETRAC; (ii) will not unreasonably impede him from
seeking and obtaining gainful employment in the event of his or her termination
of employment with ISECURETRAC; and (iii) may be enforced by ISECURETRAC through
equitable relief obtained from any Court of competent jurisdiction without
having to post bond.
5.5
In
the event paragraph 5.1 above is held to be, in any respect, an unreasonable
restriction upon Executive, the Court so holding may reduce the territory and
period of time to which the restriction pertains or effect any other change
to
the extent necessary to render paragraph 5.1 enforceable and without affecting
the validity and enforceability of the remainder of this Agreement.
6.0
PRIOR
EMPLOYMENT
Executive
hereby represents and warrants that the execution of this Employment Agreement
and the performance of his/her duties and obligations hereunder will not breach
or be in conflict with any other agreement to which he is a party or by which
he
is bound, and that he is not now subject to any covenant against competition
or
similar covenant which would affect the performance of his duties hereunder.
Executive acknowledges that a breach of said representation and warranty may
be
cause for immediate employment termination with Cause, without prior written
notice, and, furthermore, Executive shall be responsible for and indemnify
ISECURETRAC and hold it harmless from any claims, losses, damages, costs or
expenses, including attorney’s fees, resulting from such a breach.
7.0
RETURN OF ISECURETRAC MATERIALS AND PROPERTY UPON TERMINATION
Executive
hereby agrees that upon Executive’s termination of employment with ISECURETRAC,
for any reason, Executive shall immediately turn over to ISECURETRAC all Work
Products and all Confidential Information in tangible form which are then in
his
possession and keep no copies thereof. Furthermore, Executive shall return
all
other ISECURETRAC property then in the possession of Executive to ISECURETRAC
upon termination, unless a longer retention is specifically allowed, in writing,
by ISECURETRAC.
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8.0
GENERAL TERMS
8.1
Nothing contained in this Employment Agreement shall be construed or deemed
to
confer any right with respect to continuance of employment by ISECURETRAC for
a
specific duration.
8.2
This
Agreement is the complete and exclusive agreement between Executive and
ISECURETRAC concerning the subject matter hereof and supersedes any and all
oral
or written agreements regarding such subject matter. Any provision in any
Executive handbook or statement of employment policies (“Executive Handbook”)
shall not affect this Employment Agreement. No statement in the Executive
Handbook shall confer any right of employment upon Executive, nor shall any
such
statement constitute a contract between Executive and ISECURETRAC.
8.3
If
any severable provision of this Employment Agreement is held to be invalid
or
unenforceable by any judgment of a court of competent jurisdiction, the
remainder of this Agreement shall not be affected by such judgment, and the
Agreement shall be carried out as nearly as possible according to the original
terms and intent.
8.4
The
waiver by either party of a breach of any provision of this Agreement by the
other party shall not operate or be construed as a waiver of any subsequent
breach or violation thereof.
8.5
Executive acknowledges that he has completely read this Employment Agreement,
understands its provisions and freely signs below, intending to be bound hereby.
8.6
This
Agreement represents the entire agreement and understanding of ISECURETRAC
and
Executive with respect to the subject matter hereof and supersedes all prior
and
contemporaneous statements, understandings and agreements of the parties and
may
not be altered except by an agreement in writing, duly executed by ISECURETRAC
and Executive.
8.7
This
Agreement shall be deemed to have been executed in and shall be construed in
accordance with the laws of the State of Nebraska.
8.8
ISECURETRAC and Executive hereby acknowledge and agree that the sole and
exclusive jurisdiction and venue for all actions shall be the State or Federal
courts located in Nebraska and both parties hereby consent to such jurisdiction
and venue.
IN
WITNESS WHEREOF, Executive and ISECURETRAC have executed this Agreement as
of
the Effective Date.
| AGREED AND ACCEPTED: | |||
| EXECUTIVE: |
ISECURETRAC CORP. for and on behalf
of itself and ISECURETRAC Services Corp.
(“ISECURETRAC”)
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| Signature: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ | /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | ||
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| Address: Personal Residence | President and Chief Executive Officer | ||
| Date: May 1, 2007 | Date: May 1, 2007 |
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April
2,
2007
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Dear
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On
behalf
of ISECURETRAC Corporation, we are pleased to extend this formal offer of
employment for the position of Vice President of Sales and Marketing. In this
capacity, your semi-monthly rate of pay will be $6,041.67, if annualized equates
to $145,000.00. Your start date will be Tuesday, May 1, 2007.
Your
first paycheck will be issued on June 1, 2007 for the period of May
1st
through
May 15th.
All
ISECURETRAC employees are paid on a semi-monthly basis on the 1st
and
16th
of each
month. Should the 1st
or
16th
fall on
a weekend or holiday, all employees receive their pay the Friday
before.
Upon
commencing your employment with iSECUREtrac, we will recommend to the Board
of
Directors that you receive 35,000 options of ISECURETRAC’s common stock under
the terms of our 2006 Omnibus Equity Incentive Plan. Additionally, you will
be
extended all of ISECURETRAC’s standard benefits commencing the first of the
month following 30 days of hire, except that you will accrue 3 weeks of
vacation.
In
addition to your base salary, you are eligible for an annual performance based
bonus. Your 2007 and 2008 bonus target is 20% of your annual salary with a
guaranteed amount of $10,000.00 for 2007. Bonuses will be paid annually based
on
your individual performance and the company’s financial goals in the quarter
immediately after the end of the calendar year. Performance goals will be
determined by the company in its sole discretion.
You
will
also be eligible for reimbursement of the following relocation-related
expenses:
Transportation
of Household Goods
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·
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The
cost of packing, moving, a reasonable amount of insurance coverage,
and
unpacking household goods associated with the “normal” household will be
reimbursed. Reimbursement of storage charges on household goods is
specifically excluded. Pre-approval is required before expenses are
incurred.
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Reimbursement
of Other Relocation Expenses
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·
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Reasonable
lodging and transportation expenses in Omaha while arranging for
suitable
housing are reimbursable for up to a total of 60 days. Trips home
are
authorized for every other weekend during the 60 days. Pre-approval
is
required before expenses are incurred.
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·
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Reasonable
transportation, meals, and lodging expense, including rental car,
for your
family to make advances trips to evaluate and arrange for suitable
housing
are reimbursable for up to two round trips. Expenses incurred that
are not
directly related to the move will not be reimbursed. Pre-approval
is
required before expenses are incurred.
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·
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You
will be paid an allowance of $5,000 to cover miscellaneous moving
expenses
incurred, which are not specifically provided for under the provisions
of
this section.
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·
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If
you purchase a home in Omaha, you will be reimbursed for reasonable
closing costs. Pre-approval is required before expenses are incurred.
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Under
IRS
Rules, reimbursements that are not considered “qualified moving expenses” must
be included in your gross income as compensation. Therefore, you will receive
a
“gross-up” of reimbursements for non-deductible expenses to ensure that you
receive the appropriate amount on a “net basis” to cover the applicable cost.
You will be responsible for working with the Accounting Department to calculate
the appropriate “gross-up.”
Please
be
informed that this offer is contingent upon the successful completion of a
ninety (90) day orientation period, acceptable results and findings from a
mandatory company drug test, criminal background investigation, and reference
checks.
Employment
with ISECURETRAC Corp. is considered “at will,” meaning that employment with
ISECURETRAC, Corp is voluntarily entered into and the employee is free to resign
at will, at any time, with or without cause. Similarly, the employer may
terminate the employment relationship at will, at any time, with or without
cause.
We
look
forward to hearing from you about this offer. Please indicate your acceptance
of
our offer by signing below and returning one copy of the letter, with your
original signature. Also, please find the enclosed employment agreement for
your
review, execution and return with your offer letter. Should you choose to accept
our offer of employment you will need to bring two pieces of identification
with
you on your first day of employment to verify that you are legally eligible
for
employment in the United States.
| Sincerely, | |||
| /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ | ||
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ |
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| President and Chief Executive Officer | Human Resources Manager | ||
| Signature: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ | Date: May 29, 2007 | ||
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| Enclosure |
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