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EXHIBIT 10.16(a)
FORM OF
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made and entered into as of
the date set forth below (the "Effective Date"), by and between
__________________ ("Executive") and RURAL/METRO CORPORATION, its subsidiaries,
affiliates, joint ventures and partnerships ("Rural/Metro").
R E C I T A L S
Executive is currently employed by Rural/Metro in the position of
__________________.
Rural/Metro has decided to offer Executive an Employment Agreement, the
terms 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_____________________________
of Rural/Metro and shall perform the duties of his position, as determined by
the Board of Directors and Chief Executive Officer of Rural/Metro, 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.
2. SALARY.
During the first year of this Agreement, Executive's
semimonthly salary will be based upon annual compensation of $______________.
Thereafter, the salary will be
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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. OTHER AGREEMENTS.
Rural/Metro and Executive have entered into one or more Stock
Option Agreements and a Change of Control Agreement, which will provide the
Executive with certain additional protections if his employment is terminated in
certain instances following a "change of control". Nothing in this Agreement is
intended to alter or modify the Stock Option Agreements or the Change of Control
Agreement, 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
on December 31, 1999, 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
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one-year periods commencing on each January 1 and ending on the following
December 31 (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 ninety (90) 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 be entitled to receive 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 terminate this Agreement pursuant to paragraph 7A,
Executive shall be entitled to receive Severance Benefits pursuant to paragraph
9. Executive also shall be entitled to receive Severance Benefits pursuant to
paragraph 9 if Rural/Metro proposes to modify this Agreement pursuant to this
paragraph 5 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 Rural/Metro that Executive: (a) has been
convicted of
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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 $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.
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 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 thirty (30) days, or such longer period as may be mutually
agreed to
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in writing by Executive and 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 50 miles from his employment location on
the date of the execution of this Agreement; (c) Executive's annualized 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 an equal or greater reduction applies to all
executives of the same and higher level; 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 9.
B. Termination Without Good Reason. Executive also may terminate
this Agreement and his employment without Good Reason at any time by giving
ninety (90) 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 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.
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8. 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," and as a result is
unable to continue the proper performance of his duties hereunder, Executive's
employment hereunder and Rural/Metro's obligation to pay Executive's salary
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 any applicable state law, to
perform the essential functions of his position because of a physical or mental
impairment. In the absence of agreement between Rural/Metro and Executive,
whether Executive is Disabled or is 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 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
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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 limited extent provided in
paragraph 5, Executive also shall be entitled to receive Severance Benefits if
this Agreement is not renewed. In addition, Executive shall be entitled to
receive Severance Benefits if his employment is terminated due to Disability
pursuant to paragraph 8. 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 twelve (12) months; or (c) or 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 pursuant to paragraph 2 and the
continuation of any health, life, 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
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.
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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 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
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.
10. BENEFITS; OPTIONS.
Executive will be entitled to participate in any benefit
plans, including, but not limited to, retirement plans, stock option 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.
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.
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"). Executive
promises that he will not make or retain any copies of such Confidential and
Proprietary
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Information in any form, format or manner whatsoever (including
computer print-outs, computer tapes, floppy disks, CD roms, etc.) nor will he
use or 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 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 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
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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 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. This non-solicitation provision applies
even if
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Executive is terminated by Rural/Metro due to the cessation of operations in any
geographical service area where he was employed prior to termination, or at the
time of termination.
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 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 or arbitrator 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
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modified by a judge or arbitrator 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.
13. ENTIRE AGREEMENT; AMENDMENTS.
This Agreement, the Change of Control Agreement and any Stock
Option Agreements constitute the entire agreement between the parties as to the
subject matters dealt with in such Agreements. Accordingly, there are no side
agreements or verbal agreements other than those which are stated in this
document or in the Change of Control Agreement or any Stock Option Agreements.
Any amendment, modification or change in said Agreements must be done so in
writing and signed by both parties.
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14. 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.
15. GOVERNING LAW.
The law of the Sate of Arizona shall govern the interpretation
and application of all of the provisions of this Agreement.
16. INDEMNITY.
Executive shall be indemnified in his position to the fullest
extent permitted or required by the laws of the State of Delaware.
17. 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 under the National Rules for the Resolution of
Employment Disputes of the American Arbitration Association ("AAA") in effect on
the date of the first notice of demand for mediation, before an independent
mediator selected by the parties pursuant to paragraph 17.D. 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 17. 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.
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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 17.D. The
mediator shall not serve as arbitrator. 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 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-
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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
(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 _________________, 1997.
RURAL/METRO CORPORATION
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By:
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Warren Rustand, its Chairman of the Board
"EXECUTIVE"
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