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EXHIBIT 10.16(d)
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made this 3rd day of
November, 1995, by and between Warren Rustand ("Executive") and RURAL/METRO
CORPORATION, its subsidiaries, affiliates, joint ventures and partnerships
("Rural/Metro"), effective October 1, 1995 ("Effective Date").
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 Chairman of the Board and
team leader of the Office of the Chief Executive.
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 Chairman of the Board of
Rural/Metro and shall perform the duties of his position, as determined by the
Board of Directors of Rural/Metro, in accordance with the policies, practices
and bylaws of Rural/Metro. Executive shall also serve as the team leader of the
Office of the Chief Executive.
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, at which time Executive may be entitled to terminate this Agreement
for Good Reason as provided in paragraph 8.
2. SALARY.
During the first year of this Agreement, Executive's
semimonthly salary will be based upon annual compensation of Two Hundred
Seventy-Five Thousand and 00/100 Dollars ($275,000.00). Thereafter, the salary
will be reviewed at least annually in accordance with Rural/Metro's executive
compensation review policies and practices, all as determined by Rural/Metro, 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. SUPPLEMENTAL BENEFITS.
A. RESTRICTED STOCK.
Rural/Metro will recommend to the Senior Committee that
Executive receive a grant of Twenty-Seven Thousand Five Hundred (27,500) shares
of restricted stock pursuant to the terms and conditions of a separate
Restricted Stock Agreement to be entered into by and between Executive and
Rural/Metro.
B. STOCK OPTIONS.
Rural/Metro will recommend to the Senior Committee that
Executive be given a grant of options on Two Hundred Fifty Thousand (250,000)
shares of Rural/Metro stock 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.
C. DEFERRED COMPENSATION.
Executive will be credited with One Hundred Thousand and
00/100 Dollars ($100,000.00) per year in deferred compensation, such deferred
compensation to be payable in accordance with the terms and conditions of a
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separate Deferred Compensation Agreement to be entered into by and between
Executive and Rural/Metro. Alternatively, Rural/Metro may elect to credit such
amount to Executive's account under a Deferred Compensation Plan to be adopted
by Rural/Metro. The amount of annual deferred compensation may be adjusted from
time to time as the parties may agree.
D. SPLIT DOLLAR LIFE INSURANCE.
Rural/Metro will assist Executive in purchasing a permanent
life insurance contract (i.e., a traditional whole life insurance contract, a
universal life insurance contract, or a variable life insurance contract) in an
amount of up to Two Million and 00/100 Dollars ($2,000,000.00) pursuant to the
terms of a Split Dollar Life Insurance Agreement, the terms of which shall be
agreed to by Executive and Rural/Metro.
E. ANCILLARY AGREEMENTS.
Rural/Metro and Executive shall enter into a Restricted Stock
Agreement, one or more Stock Option Agreements, a Deferred Compensation
Agreement or Plan, a Split Dollar Life Insurance Agreement and a Change of
Control Agreement (collectively, the "Ancillary Agreements"). Nothing in this
Agreement is intended to alter or modify the Ancillary Agreements.
5. EXPENSE REIMBURSEMENTS.
A. MOVING ALLOWANCE.
Executive will receive a Thirty Thousand Dollar ($30,000)
moving allowance when and if Executive relocates his principal residence to
Phoenix.
B. INTERIM EXPENSES.
Until such time as Executive relocates his principal residence
to Phoenix, but in no event beyond thirty-six (36) months from the date of
execution of this Agreement, Executive shall be reimbursed for the following
expenses or Rural/Metro will pay such expenses on Executive's behalf:
(1) Temporary housing, such as an apartment, condominium,
or hotel, for Executive's use while in Phoenix on Rural/Metro business.
Executive shall provide Rural/Metro's Compensation Committee with an estimate of
the anticipated expenses and the expenses shall then be reimbursed or paid in
accordance with any policies established by the Committee, which policies may
but need not also provide for a related tax gross-up.
(2) Travel expenses between Tucson and Phoenix incurred
pursuant to Executive's employment by Rural/Metro.
(3) Executive's office in Tucson. The office will remain
open at Rural/Metro's expense and Rural/Metro will install a computer system
compatible with Rural/Metro's Phoenix office system. In addition, Executive will
be provided with an administrative assistant.
(4) Reasonable dues paid to join or renew membership in
professional or civic organizations.
6. 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
on December 31, 1998, 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 commencing on each January 1 and ending on the
following December 31 (a
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"Renewal Term"), unless either party serves notice of desire to terminate or
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.
7. 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 Rural/Metro that Executive: (a) has
been convicted of 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 Employment Agreement. The existence of "Cause" shall be
determined by Rural/Metro's Board of Directors after 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.
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 by
giving thirty (30) days written notice to Executive. In the event this Agreement
and Executive's employment are terminated by Rural/Metro without Cause,
Executive shall be entitled to receive Severance Benefits pursuant to paragraph
10.
8. TERMINATION BY EXECUTIVE.
Executive may terminate this Agreement and his employment with
or without "Good Reason" in accordance with the provisions of this paragraph 8.
A. Termination For Good Reason. Executive may terminate
this Agreement and his employment for "Good Reason" by giving written notice to
Rural/Metro within thirty (30) days, or such longer period as 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 demoted to a position of less stature or importance within
Rural/Metro than the position described in paragraph 1; (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 annualized
salary rate is reduced to a level that is at least twenty percent (20%) less
than the salary paid to Executive during any prior calendar year, unless
Executive has agreed to said reduction; 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.
If Executive terminates this Agreement and his employment for
Good Reason, Executive shall be entitled to receive Severance Benefits pursuant
to paragraph 10.
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B. Termination Without Good Reason. Executive also may
terminate this Agreement and his employment without Good Reason at any time by
giving thirty (30) days notice to Rural/Metro. If Executive terminates this
Agreement and his employment without Good Reason, Executive shall not be
entitled to receive Severance Benefits pursuant to paragraph 10.
9. DEATH OR DISABILITY.
This Agreement will terminate automatically on Executive's
death. Any salary 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 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 twelve
(12) months from the date of Executive's initial absence due to such Disability.
If at the end of said twelve (12) month period Executive has not recovered from
such Disability, 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 9 if, in the judgment of a licensed
physician selected by the Board of Directors of Rural/Metro and confirmed by a
licensed physician designated by Executive, he is unable to perform the
essential functions of his position due to a physical or mental impairment, with
or without reasonable accommodations, and such incapacity is expected to
continue for a period of at least twelve (12) months from the date of the
initial absence due to such incapacity. The determination by said physicians
shall be binding and conclusive for all purposes. If the physician selected by
the Board and the physician selected by Executive cannot agree, 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.
10. SEVERANCE BENEFITS.
If this Agreement and Executive's employment are terminated
without Cause by Rural/Metro pursuant to paragraph 7.B. 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 8.A., Executive shall receive
the "Severance Benefits" provided by this paragraph. Executive also shall
receive Severance Benefits if his employment is terminated due to Disability
pursuant to paragraph 9. The Severance Benefits shall begin immediately
following termination of employment and will continue to be payable until the
latest of (a) the last day of the Initial Term or the then current Renewal Term,
as the case may be; (b) for twenty-four (24) months; or (c) for the number of
weeks determined in accordance with Rural/Metro's standard severance benefit
policies, as in effect at the time of the execution of this Agreement.
The Executive's "Severance Benefits" shall consist of the
continuation of the Executive's salary then in effect pursuant to paragraph 2
and the continuation of any health, life (including the Split Dollar Life
Insurance Agreement referred to in paragraph 4.D.), disability, or other
insurance benefits that Executive was receiving as of his last day of active
employment. If a particular insurance benefit may not be continued for any
reason, Rural/Metro shall pay the cash equivalent to the Executive on a monthly
basis or in a single lump sum. The amount of the cash equivalent of the benefit
and whether the cash equivalent 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
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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 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 12, or the
Covenant-Not- To-Compete, as set forth in paragraph 13. Only material violations
will result in the loss of Severance Benefits. In addition, if a violation, even
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.
If, at the end of the Initial Term of this Agreement, the
parties elect not to renew or renegotiate its terms and Executive's employment
is terminated, Executive shall receive Severance Benefits for twenty-four (24)
months. If this Agreement is renewed and if at the end of the Renewal Term the
parties elect not to renew or renegotiate its terms and Executive's employment
is terminated, Executive also shall receive Severance Benefits for twenty-four
(24) months, unless the terms under which this Agreement is renewed provide
otherwise.
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.
11. BENEFITS.
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 employees, subject to any restrictions (including waiting
periods) specified in said plans.
Rural/Metro shall use its best efforts to increase the maximum
monthly benefit payable pursuant to the disability insurance plan to at least
Twenty Thousand Dollars ($20,000.00).
Executive is entitled to six (6) weeks of paid vacation per
calendar year, with such vacation to be scheduled and taken by Executive in his
discretion, provided that such vacation shall not interfere with the performance
of Executive's duties hereunder.
12. 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.
13. COVENANT-NOT-TO-COMPETE.
A. Interests to be Protected. The parties acknowledge
that prior to and during the term of his employment, Executive has been and will
continue to 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
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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, 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 best 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 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 with 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 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 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
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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 has been, is, or will be, performing the same
services provided by Rural/Metro.
F. 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.
G. 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 an action for injunctive
relief, to cease or prevent any actual or threatened violation of this Agreement
on the part of Executive.
H. Survival. The provisions of this paragraph shall
survive the termination of this Agreement.
14. 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 the
Deferred Compensation Agreement or Plan referred to in paragraph 4.C. Such
deferred amounts shall be paid no 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.
15. AMENDMENTS.
This Agreement and the Ancillary Agreements referred to in paragraph
4.E constitute the entire agreement between the parties as to the subject mater
hereof. Accordingly, there are no side agreements or verbal agreements other
than those which are stated in this document or in the Ancillary Agreements. Any
amendment, modification or change in this Agreement or the Ancillary Agreements
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.
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17. GOVERNING LAW.
The law of the Sate 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.
19. DISPUTE RESOLUTION.
A. Mediation. Any and all disputes arising under,
pertaining to or touching upon this Agreement (excepting the confidentiality and
non-disclosure provisions of paragraph 12 and the Covenant-Not-To-Compete
provisions of paragraph 13), 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 19.D. 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 19.D. The
mediator shall not serve as arbitrator. ALL DISPUTES INVOLVING ALLEGED UNLAWFUL
EMPLOYMENT DISCRIMINATION, TERMINATION BY ALLEGED BREACH OF CONTRACT OR POLICY,
OR ALLEGED 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 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 such procedures as the
parties may agree upon. 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 intentional
discrimination claims prohibited by statute, the arbitrator may direct payment
consistent with 42 U.S.C. Section 1981(a) and the Civil Rights Act of 1991. In
cases of employment tort, the arbitrator may award punitive damages if proved by
clear and convincing evidence. Any award of punitive damages shall not exceed
two times (2x) any compensatory award and, in any event, shall not exceed Two
Hundred Fifty Thousand Dollars ($250,000). 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
Arizona Litigation Alternatives ("ALA"). If the parties are unable to agree to a
mediator or arbitrator within ten (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 ALA. Executive shall have the first strike.
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IN WITNESS WHEREOF, Rural/Metro and Executive have executed this
Agreement on this 3rd day of November, 1995.
"EXECUTIVE" RURAL/METRO CORPORATION
By:
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Warren Rustand William C. Turner
Member, Board of Directors and
Compensation Committee
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