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Exhibit 10.16(l)
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made and entered into by and
between ▇▇▇▇ ▇▇▇▇▇▇▇ ("Executive") and RURAL/METRO CORPORATION, its
subsidiaries, affiliates, joint ventures and partnerships ("Rural/Metro"). The
Effective Date of this Agreement is February 22, 2000.
R E C I T A L S
A. The Board of Directors of Rural/Metro believes it is in the best
interests of Rural/Metro to employ Executive as the President and Chief
Executive Officer of Rural/Metro.
B. Rural/Metro has decided to offer Executive an employment agreement,
the terms and provisions of which are set forth below.
NOW, THEREFORE, IT IS HEREBY MUTUALLY AGREED AS FOLLOWS:
1. POSITION AND DUTIES.
Executive will be employed as the President and Chief
Executive Officer of Rural/Metro and shall report only to the Board of Directors
of Rural/Metro (the "Board"). Executive shall perform the duties of his
position, as determined by the Board, in accordance with the policies, practices
and bylaws of Rural/Metro.
Executive shall serve Rural/Metro faithfully, loyally,
honestly and to the best of his ability. Executive will devote his best efforts
to the performance of his duties for, and in the business and affairs of,
Rural/Metro.
Rural/Metro reserves the right, in its sole discretion, to
change or modify Executive's position, title and duties during the term of this
Agreement, subject to Executive's rights under Section 7.
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2. COMPENSATION.
As of the Effective Date, Executive's annual compensation will
be Four Hundred and Thirty-Six Thousand Dollars. ($436,000) ("Base Salary").
Within thirty (30) days of the execution of this Agreement, Rural/Metro will
make a special payment to Executive to compensate him retroactively for the
amount of his Base Salary earned since the Effective Date over and above his
prior Base Salary of $280,000. Executive's Base Salary will be paid in
substantially equal periodic installments, as determined by Rural/Metro.
Executive's Base Salary will be reviewed at least annually in accordance with
Rural/Metro's executive compensation review policies and practices, all as
determined by the Board, in its sole discretion.
3. MANAGEMENT INCENTIVE PROGRAM.
Executive shall be eligible to participate in the Rural/Metro
Management Incentive Program ("MIP") (or any other plan that is designated by
the Board as replacing the MIP) and to receive such additional compensation as
may be provided by the MIP from time to time.
4. STOCK OPTIONS; OTHER AGREEMENTS.
Executive will be granted options to purchase 200,000 shares
of Rural/Metro stock at its closing price on April 20, 2000 (the date on which
the Board granted the options), with the terms and conditions of the options to
be set forth in a separate Stock Option Agreement to be entered into by and
between Executive and Rural/Metro. The Stock Option Agreement shall provide that
options for 50,000 shares shall be fully vested and exercisable at the time of
the grant, and the remaining options shall vest in increments of 50,000 shares
on each successive April 20, beginning on April 20, 2001.
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Nothing in this Agreement is intended to alter or modify any
Stock Option Agreements previously entered into by the parties, which shall
continue in full force and effect following the execution of this Agreement.
5. TERM AND TERMINATION.
This Agreement will continue in full force and effect until it
is terminated by the parties. This Agreement may be terminated in any of the
following ways: (a) it may be renegotiated and replaced by a written agreement
signed by both parties; (b) Rural/Metro may elect to terminate this Agreement
with or without "Cause", as defined below; (c) Executive may elect to terminate
this Agreement with or without "Good Reason", as defined below; or (d) either
party may serve notice on the other of its desire to terminate this Agreement at
the end of the "Initial Term" or any "Renewal Term".
The "Initial Term" of this Agreement shall expire by its terms
two (2) years from the Effective Date of this Agreement, unless sooner
terminated in accordance with the provisions of this Agreement. This Agreement
will be renewed at the end of the Initial Term for additional one-year periods
(a "Renewal Term"), unless either party serves notice of its desire not to renew
or of its desire to modify this Agreement on the other. Such notice must be
given at least forty-five (45) days before the end of the Initial Term or the
applicable Renewal Term.
If Rural/Metro notifies Executive of its desire not to renew
this Agreement pursuant to this paragraph 5 and at the time of such notification
Rural/Metro does not have "Cause" to terminate this Agreement pursuant to
paragraph 6A, Executive shall receive the Severance Benefits pursuant to
paragraph 9.
If Executive notifies Rural/Metro of his desire not to renew
this Agreement pursuant to this paragraph 5 and at the time of such notification
Executive has Good Reason to
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terminate this Agreement pursuant to paragraph 7A, Executive shall receive the
Severance Benefits pursuant to paragraph 9. Executive also shall receive the
Severance Benefits pursuant to paragraph 9 if Rural/Metro proposes to modify
this Agreement in a manner that gives rise to Good Reason pursuant to paragraph
7A for Executive's termination of employment and Executive rejects such proposed
modifications. Severance Benefits will not be payable pursuant to the preceding
sentence if Rural/Metro rescinds the proposed modifications and offers Executive
a new Agreement that does not include any proposed modifications that give rise
to Good Reason for Executive's termination of employment.
6. TERMINATION BY RURAL/METRO.
A. TERMINATION FOR CAUSE.
Rural/Metro may terminate this Agreement and
Executive's employment for Cause at any time upon written notice. This means
that Rural/Metro has the right to terminate the employment relationship for
Cause at any time should there be Cause to do so.
For purposes of this Agreement, "Cause" shall be
limited to discharge resulting from a determination by the Board that Executive:
(a) has been convicted of (or has pleaded guilty or no contest to) a felony
involving dishonesty, fraud, theft or embezzlement; (b) has repeatedly failed or
refused, after written notice from Rural/Metro, in a material respect to follow
reasonable policies or directives established by Rural/Metro; (c) has willfully
and persistently failed, after written notice from Rural/Metro, to attend to
material duties or obligations imposed upon him under this Agreement; (d) has
performed an act or failed to act, which, if he were prosecuted and convicted,
would constitute a felony involving One Thousand Dollars ($1,000) or more of
money or property of Rural/Metro; or (e) has misrepresented or concealed a
material fact for purposes of securing employment with Rural/Metro or this
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Employment Agreement. The existence of "Cause" shall be determined by
Rural/Metro's Board of Directors acting in good faith after prior notice to
Executive and after providing Executive with an opportunity to be heard.
Because Executive is in a position which involves
great responsibilities, Rural/Metro is not required to utilize its progressive
discipline policy. In addition, no generally applicable grievance policy shall
apply to grievances by Executive regarding his employment relationship with
Rural/Metro.
If this Agreement and Executive's employment is
terminated for Cause, Executive shall receive no Severance Benefits.
B. TERMINATION WITHOUT CAUSE.
Rural/Metro also may terminate this Agreement and
Executive's employment without Cause at any time. In the event this Agreement
and Executive's employment are terminated by Rural/Metro without Cause,
Executive shall receive the Severance Benefits pursuant to paragraph 9.
Rural/Metro may place Executive on a paid administrative leave, and bar or
restrict Executive's access to Rural/Metro facilities, contemporaneously with or
at any time following the delivery of the written notice to Executive.
7. TERMINATION BY EXECUTIVE.
Executive may terminate this Agreement and his employment with
or without "Good Reason" in accordance with the provisions of this paragraph 7.
A. TERMINATION FOR GOOD REASON.
Executive may terminate this Agreement and his
employment for "Good Reason" by giving written notice to Rural/Metro within
sixty (60) days, or such longer period as
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may be agreed to in writing by Rural/Metro, of Executive's receipt of notice of
the occurrence of any event constituting "Good Reason", as described below.
Executive shall have "Good Reason" to terminate this
Agreement and his employment upon the occurrence of any of the following events:
(a) Executive is assigned duties inconsistent with the positions, duties,
responsibility and status of the President and Chief Executive Officer of
Rural/Metro; (b) Executive is required to relocate to an employment location
that is more than fifty (50) miles from his current employment location (which
the parties agree is Rural/Metro's present Scottsdale headquarters); (c)
Executive's Base Salary rate is reduced to a level that is at least ten percent
(10%) less than the salary paid to Executive during any prior calendar year,
unless Executive has agreed to said reduction or unless Rural/Metro makes an
across-the-board reduction that applies to all executives; or (d) the potential
incentive compensation (or bonus) to which Executive may become entitled under
the MIP at any level of performance by the Executive or Rural/Metro is reduced
by seventy-five percent (75%) or more as compared to any prior year.
Notwithstanding the above provisions, Executive shall
not have "Good Reason" to terminate this Agreement and his employment if, within
thirty (30) days of the written notice of Good Reason provided to Rural/Metro by
Executive, Rural/Metro corrects, remedies or reverses any event which resulted
in Good Reason.
If Executive terminates this Agreement and his
employment for Good Reason, Executive shall be entitled to receive Severance
Benefits pursuant to paragraph 9.
B. TERMINATION WITHOUT GOOD REASON.
Executive also may terminate this Agreement and his
employment without Good Reason at any time by giving sixty (60) days notice to
Rural/Metro. If Executive
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terminates this Agreement and his employment without Good Reason, Executive
shall not receive Severance Benefits pursuant to paragraph 9.
C. ADMINISTRATIVE LEAVE.
Rural/Metro may place Executive on a paid
administrative leave, and bar or restrict Executive's access to Rural/Metro
facilities, contemporaneously with or at any time following the delivery of the
written notice of termination by Executive pursuant to paragraph 7A or 7B.
8. DEATH OR DISABILITY.
This Agreement will terminate automatically on Executive's
death. Any compensation or other amounts due to Executive for services rendered
prior to his death shall be paid to Executive's surviving spouse, or if
Executive does not leave a surviving spouse, to Executive's estate. No other
benefits shall be payable to Executive's heirs pursuant to this Agreement, but
amounts may be payable pursuant to any life insurance or other benefit plans
maintained by Rural/Metro.
In the event Executive becomes "Disabled", Executive's
employment hereunder and Rural/Metro's obligation to pay Executive's Base Salary
(less any amounts payable to Executive pursuant to any long-term disability
insurance policy paid for by Rural/Metro) shall continue for a period of six (6)
months from the date as of which Executive is determined to have become
Disabled, at which point, Executive's employment hereunder shall automatically
cease and terminate. Executive shall be considered "Disabled" or to be suffering
from a "Disability" for purposes of this paragraph 8 if Executive is unable,
after any reasonable accommodations required by the Americans with Disabilities
Act or other applicable law, to perform the essential functions of his position
because of a physical or mental impairment. In the absence of
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agreement between Rural/Metro and Executive as to whether Executive is Disabled
or suffering from a Disability (and the date as of which Executive became
Disabled) will be determined by a licensed physician selected by Rural/Metro. If
a licensed physician selected by Executive disagrees with the determination of
the physician selected by Rural/Metro, the two (2) physicians shall select a
third (3rd) physician. The decision of the third (3rd) physician concerning
Executive's Disability then shall be binding and conclusive on all interested
parties.
9. SEVERANCE BENEFITS.
If during the Initial Term or any Renewal Term, this Agreement
and Executive's employment are terminated without Cause by Rural/Metro pursuant
to paragraph 6B prior to the last day of the Initial Term or any Renewal Term,
or if Executive elects to terminate this Agreement for Good Reason pursuant to
paragraph 7A, Executive shall receive the "Severance Benefits" provided by this
paragraph. To the extent provided in paragraph 5, Executive also shall receive
the Severance Benefits if this Agreement is not renewed. In addition, Executive
also shall receive the Severance Benefits if his employment is terminated due to
Disability pursuant to paragraph 8.
The Severance Benefits shall begin immediately following the
effective date of termination of employment and, except as otherwise provided
herein, will continue to be payable for a period of twenty-four (24) months
thereafter.
The Executive's Severance Benefits shall consist of the
continuation of the Executive's then Base Salary for a period of twenty-four
(24) months, which shall be paid in lieu of any accrued sick leave, vacation,
etc. The Severance Benefits also shall consist of the continuation of any
health, life, disability, or other insurance benefits that Executive was
receiving as of his last day of active employment for a period of twenty-four
(24) months. If a
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particular insurance benefit may not be continued for any reason, Rural/Metro
shall pay a "Benefit Allowance" to the Executive. The "Benefit Allowance" will
equal 145% of the cost to Rural/Metro of providing the unavailable insurance
benefit to a similarly situated employee. The Benefit Allowance shall be paid on
a monthly basis or in a single lump sum. The cost of providing the unavailable
benefit to a similarly situated employee and whether the Benefit Allowance will
be paid in monthly installments or in a lump sum will be determined by
Rural/Metro in the exercise of its discretion.
If Executive voluntarily terminates this Agreement and his
employment without Good Reason prior to the end of the Initial Term or any
Renewal Term, or if Rural/Metro terminates the Agreement and Executive's
employment for Cause, no Severance Benefits shall be paid to Executive. No
Severance Benefits are payable in the event of Executive's death while in the
active employ of Rural/Metro.
Severance Benefits will cease if Executive elects to forgo
future Severance Benefits pursuant to paragraph 12F in order to avoid any
further restrictions on his ability to engage in a competing business or to
solicit employees or clients. If Executive makes an election pursuant to
paragraph 12F, the Severance Benefits will cease as of the effective date of the
election. As a general rule, notwithstanding any contrary provision in any Stock
Option Agreement, Executive will not be allowed to exercise any options
following the effective date of an election made pursuant to paragraph 12F.
Severance Benefits also shall immediately cease if Executive
commits a material violation of any of the terms of this Agreement relating to
confidentiality and non-disclosure, as set forth in paragraph 11, or the
Covenant-Not-To-Compete, as set forth in paragraph 12. Only material violations
will result in the loss of Severance Benefits. In addition, if a violation, even
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if material, is one that may be cured, the violation will not be considered to
be material unless Executive fails to cure said violation within thirty (30)
days after receiving written notice of said violation from Rural/Metro or unless
Executive repeats said violation at any time after receiving said notice.
The payment of Severance Benefits shall not be affected by
whether Executive seeks or obtains other employment. Executive shall have no
obligation to seek or obtain other employment and Executive's Severance Benefits
shall not be impacted by Executive's failure to "mitigate."
In order to receive the Severance Benefits, Executive must
execute any release reasonably requested by Rural/Metro of claims that Executive
may have in connection with his employment with Rural/Metro.
10. BENEFITS.
A. BENEFIT PLANS, INSURANCE, OPTIONS, ETC.
Executive will be entitled to participate in any
benefit plans, including, but not limited to, retirement plans, stock option
plans, disability plans, life insurance plans and health and dental plans
available to other Rural/Metro executive employees, subject to any restrictions
(including waiting periods) specified in said plans.
B. VACATION.
Executive is entitled to four (4) weeks of paid
vacation per calendar year, with such vacation to be scheduled and taken in
accordance with Rural/Metro's standard vacation policies. If Executive does not
take the full vacation available in any year, the unused vacation may not be
carried over to the next calendar year, and Executive will not be compensated
for it.
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11. CONFIDENTIALITY AND NON-DISCLOSURE.
During the course of his employment, Executive will
become exposed to a substantial amount of confidential and proprietary
information, including, but not limited to financial information, annual
reports, audited and unaudited financial reports, operational budgets and
strategies, methods of operation, customer lists, strategic plans, business
plans, marketing plans and strategies, new business strategies, merger and
acquisition strategies, management systems programs, computer systems, personnel
and compensation information and payroll data, and other such reports, documents
or information (collectively the "Confidential and Proprietary Information"). In
the event his employment is terminated by either party for any reason, Executive
promises that he will not take with him any copies of such Confidential and
Proprietary Information in any form, format, or manner whatsoever (including
computer print-outs, computer tapes, floppy disks, CD-ROMs, etc.) nor will he
disclose the same in whole or in part to any person or entity, in any manner
either directly or indirectly. Excluded from this Agreement is information that
is already disclosed to third parties and is in the public domain or that
Rural/Metro consents to be disclosed, with such consent to be in writing. The
provisions of this paragraph shall survive the termination of this Agreement.
12. COVENANT-NOT-TO-COMPETE.
A. INTERESTS TO BE PROTECTED.
The parties acknowledge that during the term of his
employment, Executive will perform essential services for Rural/Metro, its
employees and shareholders, and for clients of Rural/Metro. Therefore, Executive
will be given an opportunity to meet, work with and develop close working
relationships with Rural/Metro's clients on a first-hand basis and will gain
valuable insight as to the clients' operations, personnel and need for services.
In addition,
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Executive will be exposed to, have access to, and be required to work with, a
considerable amount of Rural/Metro's Confidential and Proprietary Information.
The parties also expressly recognize and acknowledge
that the personnel of Rural/Metro have been trained by, and are valuable to
Rural/Metro, and that if Rural/Metro must hire new personnel or retrain existing
personnel to fill vacancies it will incur substantial expense in recruiting and
training such personnel. The parties expressly recognize that should Executive
compete with Rural/Metro in any manner whatsoever, it could seriously impair the
goodwill and diminish the value of Rural/Metro's business.
The parties acknowledge that this covenant has an
extended duration; however, they agree that this covenant is reasonable and it
is necessary for the protection of Rural/Metro, its shareholders and employees.
For these and other reasons, and the fact that there
are many other employment opportunities available to Executive if he should
terminate, the parties are in full and complete agreement that the following
restrictive covenants (which together are referred to as the
"Covenant-Not-To-Compete") are fair and reasonable and are freely, voluntarily
and knowingly entered into. Further, each party has been given the opportunity
to consult with independent legal counsel before entering into this Agreement.
B. DEVOTION TO EMPLOYMENT.
Executive shall devote substantially all his business
time and efforts to the performance of his duties on behalf of Rural/Metro.
During his term of employment, Executive shall not at any time or place or to
any extent whatsoever, either directly or indirectly, without the express
written consent of Rural/Metro, engage in any outside employment, or in any
activity competitive with or adverse to Rural/Metro's business, practice or
affairs, whether alone or as
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partner, officer, director, employee, shareholder of any corporation or as a
trustee, fiduciary, consultant or other representative. This is not intended to
prohibit Executive from engaging in nonprofessional activities such as personal
investments or conducting to a reasonable extent private business affairs which
may include other boards of directors' activity, as long as they do not conflict
with Rural/Metro. Participation to a reasonable extent in civic, social or
community activities is encouraged.
C. NON-SOLICITATION OF CLIENTS.
During the term of Executive's employment with
Rural/Metro and for a period of twenty-four (24) months after the termination of
employment with Rural/Metro, regardless of who initiates the termination and for
whatever reason, Executive shall not directly or indirectly, for himself, or on
behalf of, or in conjunction with, any other person(s), company, partnership,
corporation, or governmental entity, in any manner whatsoever, call upon,
contact, encourage, handle or solicit client(s) of Rural/Metro with whom he has
worked as an employee of Rural/Metro at any time prior to termination, or at the
time of termination, for the purpose of soliciting or selling such customer the
same, similar, or related services that he provided on behalf of Rural/Metro.
D. NON-SOLICITATION OF EMPLOYEES.
During the term of Executive's employment with
Rural/Metro and for a period of twenty-four (24) months after the termination of
employment with Rural/Metro, regardless of who initiates the termination and for
any reason, Executive shall not knowingly, directly or indirectly, for himself,
or on behalf of, or in conjunction with, any other person(s), company,
partnership, corporation, or governmental entity, seek to hire, and/or hire any
of Rural/Metro's personnel or employees for the purpose of having such employee
engage in
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services that are the same, similar or related to the services that such
employee provided for Rural/Metro.
E. COMPETING BUSINESS.
During the term of this Agreement and for a period of
twenty-four (24) months after the termination of employment with Rural/Metro,
regardless of who initiates the termination and for any reason, Executive shall
not, directly or indirectly, for himself, or on behalf of, or in conjunction
with, any other person(s), company, partnership, corporation, or governmental
entity, in any manner whatsoever, engage in the same or similar business as
Rural/Metro, which would be in direct competition with any Rural/Metro line of
business, in any geographical service area where Rural/Metro is engaged in
business, or was considering engaging in business at any time prior to the
termination or at time of termination. For the purposes of this provision, the
term "competition" shall mean directly or indirectly engaging in or having a
substantial interest in a business or operation which is, or will be, performing
the same services provided by Rural/Metro.
F. ELECTION TO SHORTEN PERIOD.
Executive may elect to shorten the twenty-four (24)
month period referred to in subparagraphs C, D and E to any period of at least
twelve (12) months. In order to make this election, Executive must provide
Rural/Metro with written notice at least sixty (60) days prior to the expiration
of the shortened period. As provided in paragraph 9, if Executive makes this
election, any Severance Benefits provided by paragraph 9 will be discontinued as
of the effective date of the election.
For example, assume that Executive's employment is
terminated on November 1, 2000 under circumstances that entitle Executive to
receive Severance Benefits. Executive will be precluded from soliciting
Rural/Metro clients and employees and engaging in a
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competing business until November 1, 2002. Executive may elect to begin engaging
in a competing business, and/or soliciting clients or employees, at any time on
or after November 1, 2001 by making an election pursuant to this subparagraph F.
If Executive chooses to solicit employees or clients, or engage in a competing
business effective as of December 1, 2001, Executive must file the notice called
for by this subparagraph at least sixty (60) days before December 1, 2001.
G. AUTOMATIC REDUCTION OF PERIOD.
The twenty-four (24) month period referred to in
subparagraphs C, D and E will be shortened to twelve (12) months if Executive is
not entitled to receive Severance Benefits pursuant to paragraph 9 at the time
of his termination or employment.
H. JUDICIAL AMENDMENT.
If the scope of any provision of this Agreement is
found by the Court to be too broad to permit enforcement to its full extent,
then such provision shall be enforced to the maximum extent permitted by law.
The parties agree that the scope of any provision of this Agreement may be
modified by a judge in any proceeding to enforce this Agreement, so that such
provision can be enforced to the maximum extent permitted by law. If any
provision of this Agreement is found to be invalid or unenforceable for any
reason, it shall not affect the validity of the remaining provisions of this
Agreement.
I. INJUNCTIVE RELIEF, DAMAGES AND FORFEITURE.
Due to the nature of Executive's position with
Rural/Metro, and with full realization that a violation of this Agreement will
cause immediate and irreparable injury and damage, which is not readily
measurable, and to protect Rural/Metro's interests, Executive understands and
agrees that in addition to instituting legal proceedings to recover damages
resulting from a breach of this Agreement, Rural/Metro may seek to enforce this
Agreement with
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an action for injunctive relief, to cease or prevent any actual or threatened
violation of this Agreement on the part of Executive.
J. SURVIVAL.
The provisions of this paragraph 12 shall survive the
termination of this Agreement.
13. DEFERRAL OF AMOUNTS PAYABLE UNDER THIS AGREEMENT.
A payment due pursuant to this Agreement or the MIP may be deferred if
and to the extent that the payment does not satisfy the requirements to be
"qualified performance-based compensation" (as such term is defined by the
regulations issued under Section 162(m) of the Internal Revenue Code of 1986
(the "Code")) and when combined with all other payments received during the year
that are subject to the limitations on deductibility under Section 162(m) of the
Code, the payment exceeds the limitations on deductibility under Section 162(m)
of the Code. The deferral of payments shall be in the discretion of the
Compensation Committee of Rural/Metro, and shall be made pursuant to a Deferred
Compensation Agreement or Plan acceptable to Rural/Metro and Executive. Such
deferred amounts, with interest at the rate of 8% per annum, shall be paid as
soon as possible but in no event later than the sixtieth (60th) day after the
end of the next succeeding calendar year, provided that such payment, when
combined with any other payments subject to the Section 162(m) limitations
received during the year, does not exceed the limitations on deductibility under
Section 162(m) of the Code. If the payments in such succeeding calendar year
exceed the limitations on deductibility under Section 162(m) of the Code, such
payments shall continue to be deferred to the next succeeding year. The above
procedure shall be repeated until such payments can be paid without exceeding
the limitation on deductibility under Section 162(m) of the Code.
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14. BUSINESS EXPENSES.
Rural/Metro will reimburse Executive for any and all
necessary, customary, and usual expenses, properly receipted in accordance with
Rural/Metro's policies, incurred by Executive on behalf of Rural/Metro.
15. AMENDMENTS.
This Agreement, the Executive's Stock Option Agreements and
the Executive's Change of Control Agreement constitute the entire agreement
between the parties as to the subject matter hereof. Accordingly, there are no
side agreements or verbal agreements other than those which are stated above.
Any amendment, modification or change in this Agreement must be done so in
writing and signed by both parties.
16. SEVERABILITY.
In the event a court or arbitrator declares that any provision
of this Agreement is invalid or unenforceable, it shall not affect or invalidate
any of the remaining provisions. Further, the court shall have the authority to
re-write that portion of the Agreement it deems unenforceable, to make it
enforceable.
17. GOVERNING LAW.
The law of the State of Arizona shall govern the
interpretation and application of all of the provisions of this Agreement.
18. INDEMNITY
Executive shall be indemnified in his position to the fullest
extent permitted or required by the laws of the State of Delaware.
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19. DISPUTE RESOLUTION
A. MEDIATION.
Any and all disputes arising under, pertaining to or
touching upon this Agreement or the statutory rights or obligations of either
party hereto, shall, if not settled by negotiation, be subject to non-binding
mediation before an independent mediator selected by the parties pursuant to
paragraph 19D. Notwithstanding the foregoing, both Executive and Rural/Metro may
seek preliminary judicial relief if such action is necessary to avoid
irreparable damage during the pendency of the proceedings described in this
paragraph 19. Any demand for mediation shall be made in writing and served upon
the other party to the dispute, by certified mail, return receipt requested, at
the business address of Rural/Metro, or at the last known residence address of
Executive, respectively. The demand shall set forth with reasonable specificity
the basis of the dispute and the relief sought. The mediation hearing will occur
at a time and place convenient to the parties in Maricopa County, Arizona,
within thirty (30) days of the date of selection or appointment of the mediator.
B. ARBITRATION.
In the event that the dispute is not settled through
mediation, the parties shall then proceed to binding arbitration before a single
independent arbitrator selected pursuant to paragraph 19D. The mediator shall
not serve as arbitrator. TO THE EXTENT ALLOWABLE UNDER APPLICABLE LAW, ALL
DISPUTES INVOLVING ALLEGED UNLAWFUL EMPLOYMENT DISCRIMINATION, BREACH OF
CONTRACT OR POLICY, OR EMPLOYMENT TORT COMMITTED BY RURAL/METRO OR A
REPRESENTATIVE OF RURAL/METRO, INCLUDING CLAIMS OF VIOLATIONS OF FEDERAL OR
STATE DISCRIMINATION STATUTES OR PUBLIC POLICY, SHALL BE RESOLVED
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PURSUANT TO THIS POLICY AND THERE SHALL BE NO RECOURSE TO COURT, WITH OR WITHOUT
A JURY TRIAL. The arbitration hearing shall occur at a time and place convenient
to the parties in Maricopa County, Arizona, within thirty (30) days of selection
or appointment of the arbitrator. If Rural/Metro has adopted a policy that is
applicable to arbitrations with executives, the arbitration shall be conducted
in accordance with said policy to the extent that the policy is consistent with
this Agreement and the Federal Arbitration Act, 9 U.S.C. Sections 1-16. If
no such policy has been adopted, the arbitration shall be governed by the
National Rules for the Resolution of Employment Disputes of AAA in effect on the
date of the first notice of demand for arbitration. The arbitrator shall issue
written findings of fact and conclusions of law, and an award, within fifteen
(15) days of the date of the hearing unless the parties otherwise agree.
C. DAMAGES.
In cases of breach of contract or policy, damages
shall be limited to contract damages. In cases of discrimination claims
prohibited by statute, the arbitrator may direct payment consistent with the
applicable statute. In cases of employment tort, the arbitrator may award
punitive damages if proved by clear and convincing evidence. The arbitrator may
award fees to the prevailing party and assess costs of the arbitration to the
non-prevailing party. Issues of procedure, arbitrability, or confirmation of
award shall be governed by the Federal Arbitration Act, 9 U.S.C. Sections
1-16, except that Court review of the arbitrator's award shall be that of an
appellate court reviewing a decision of a trial judge sitting without a jury.
D. SELECTION OF MEDIATORS OR ARBITRATORS.
The parties shall select the mediator or arbitrator
from a panel list made available by the AAA. If the parties are unable to agree
to a mediator or arbitrator within ten
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(10) days of receipt of a demand for mediation or arbitration, the mediator or
arbitrator will be chosen by alternatively striking from a list of five (5)
mediators or arbitrators obtained by Rural/Metro from AAA. Executive shall have
the first strike.
IN WITNESS WHEREOF, Rural/Metro and Executive have executed this
Agreement on this day of _______________, 2000.
EXECUTIVE RURAL/METRO CORPORATION
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇ By:
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▇▇▇▇ ▇▇▇▇▇▇▇ Cor ▇▇▇▇▇▇▇
Chairman, Board of Directors
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chairman, Compensation Committee
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