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EMPLOYMENT AGREEMENT

Employee Retention Agreement

EMPLOYMENT AGREEMENT | Document Parties: SECURUS TECHNOLOGIES, INC. | HIG Capital, LLC You are currently viewing:
This Employee Retention Agreement involves

SECURUS TECHNOLOGIES, INC. | HIG Capital, LLC

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Title: EMPLOYMENT AGREEMENT
Governing Law: Delaware     Date: 6/13/2008

EMPLOYMENT AGREEMENT, Parties: securus technologies  inc. , hig capital  llc
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Exhibit 10.1
EMPLOYMENT AGREEMENT
     THIS EMPLOYMENT AGREEMENT (the “ Agreement ”) is made and entered into as of June 11, 2008 by and between Securus Technologies, Inc., a Delaware corporation (the “ Corporation ”), and Richard A. Smith (the “ Executive ”).
RECITALS
     WHEREAS, the Corporation desires to employ the Executive in the capacity, hereinafter stated (referred to in Section 1 below), and the Executive desires to become employed by the Corporation in such capacity for the period and on the terms and conditions set forth herein; and
     WHEREAS, the Executive and the Corporation each acknowledge and agree that the terms and conditions of employment set forth below are reasonable and necessary in order to protect the legitimate business interests of the Corporation and to compensate the Executive for information, knowledge and experience brought to or gained from the Corporation.
     NOW, THEREFORE, in consideration of the premises and the mutual agreements set forth below, the parties hereby agree as follows:
     1. EMPLOYMENT / NOMINATION. Effective on June 23, 2008 (the “ Effective Date ”) the Corporation hereby agrees to employ the Executive as its Chairman and Chief Executive Officer, and the Executive hereby accepts such employment, on the terms and conditions hereinafter set forth. So long as the Executive continues to be employed by the Corporation, the Corporation agrees to cause the Executive to be nominated for election as a member of the Board of Directors (the “ Board ”) of the Corporation. The Executive’s appointment as Chairman shall be on January 6, 2009.
     2. EMPLOYMENT PERIOD. The period of employment of the Executive by the Corporation hereunder (the “ Employment Period ”) shall commence on the Effective Date, and the Employment Period shall terminate on the earlier of (i) July 1, 2012 (the “ Termination Date ”) or (ii) the date Executive’s employment hereunder is earlier terminated in accordance with Section 5 of this Agreement.
     3. POSITION AND DUTIES. The Executive shall devote substantially all of his business time, attention, skills and energies during the Employment Period to the business of the Corporation, performing such specific functions on behalf of the Corporation that are generally incident to and consistent with the Executive’s position as the Board may direct. The Executive shall hold the position of President and Chief Executive Officer of the Corporation and shall report directly to the Board and have all powers and duties which are associated with such position in the industries in which the Corporation is engaged. The Executive shall not, without prior written consent from the Board (which consent shall not be unreasonably withheld):
          (a) serve as or be a consultant to or employee, officer, agent or director of any corporation, partnership or other entity other than the Corporation and/or its subsidiaries (other than civic, charitable, or other public service organizations); or

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          (b) have more than a five percent (5%) ownership interest in any enterprise other than the Corporation if such ownership interest would have a material adverse effect upon the ability of the Executive to perform his duties hereunder.
Nothing herein shall preclude the Executive from performing charity work and managing his own personal investments and affairs so long as such activities do not materially interfere with the performance of the Executive’s duties hereunder.
     4. COMPENSATION AND RELATED MATTERS.
          (a) BASE SALARY. During the Employment Period, the Corporation shall pay the Executive a base salary at the rate specified in Exhibit A (the “ Base Salary ”), which Base Salary shall be paid in equal installments in accordance with the Corporation’s payroll policy, subject to Section 5 below.
          (b) BONUS. During the Employment Period, the Executive shall receive the bonuses as specified in Exhibit A .
          (c) RESTRICTED SHARES. The Executive shall be awarded restricted shares of the Corporation’s Class B Common Stock, no par value, per share (the “ Class B Stock ”), of the Corporation as specified in Exhibit A .
          (d) OTHER BENEFITS. During the Employment Period, the Executive shall be entitled to and eligible for group health insurance coverage and any other fringe benefits in accordance with policies applicable generally to salaried employees of the Corporation. The Executive shall also be entitled to five (5) weeks paid vacation and other paid absences during the Employment Period in accordance with policies applicable generally to salaried employees of the Corporation. The Executive shall be reimbursed for reasonable expenses incurred in connection with and directly related to the business of the Corporation and the performance of his duties hereunder in accordance with the policies established by the Corporation for reimbursement of such expenses.
          (e) MOVING EXPENSE REIMBURSEMENT. The Corporation shall reimburse the Executive up to $50,000 for reasonable documented expenses to relocate himself and his immediate family to Dallas, Texas, which shall be paid as soon as practicable following the submission of appropriate documentation, but no later than the end of the year following the year in which the expenses are incurred.
          (f) LIFE INSURANCE PREMIUMS. During the Employment Period, the Corporation shall reimburse the Executive up to $3,500 annually for premiums of an insurance policy on the life of the Executive, which shall be paid as soon as practicable following the submission of appropriate documentation, but no later than the end of the year following the year in which the expenses are incurred.
          (g) BI-ANNUAL PHYSICAL. The Corporation shall pay up to $10,000 bi-annually of the direct costs of an executive physical examination at the Mayo Clinic, which shall be paid as soon as practicable following the submission of appropriate documentation, but no later than the end of the year following the year in which the expenses are incurred.

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          (h) HOME AND WIRELESS INTERNET. The Executive shall be entitled to receive an expense reimbursement of up to $150 per month for home and wireless internet services during the Employment Period, which shall be paid as soon as practicable following the submission of appropriate documentation, but no later than the end of the year following the year in which the expenses are incurred.
     5. TERMINATION.
          (a) TERMINATION FOR CAUSE. Prior to the end of the Employment Period, the Corporation may terminate the Executive’s employment under this Agreement for “Cause.” For purposes of this Agreement, the Corporation shall have Cause to terminate the Executive’s employment hereunder in the event that: (i) the Executive becomes habitually addicted to alcohol or illegal drugs and such addiction materially and adversely affects (A) the performance of the Executive’s obligations under this Agreement or (B) the Corporation; (ii) the Executive discloses confidential information in violation of paragraph 6(a) and such disclosure has a material adverse effect on the Corporation, (iii) the Executive engages in competition in violation of paragraph 6(d) or 6(e); (iv) the Executive has committed any act of willful misconduct, embezzlement or wrongful conversion of money or property belonging to the Corporation or its subsidiaries, or any act of fraud against the Corporation or its subsidiaries or in the performance of his duties for the Corporation that adversely affects the business of the Corporation; (v) the Executive is convicted of a felony at any time hereafter, which is reasonably likely to either (A) have an adverse effect on the Corporation or its business or (B) result in the incarceration of the Executive; (vi) the Executive has failed to comply with any lawful (as determined by the Corporation’s outside counsel) and material directive of the Board related to and consistent with his employment duties promptly following notice to the Executive of such failure; (vii) the Executive has willfully failed to substantially perform his duties hereunder (other than any such failure resulting from the Executive’s death or health), and such failure continues for more than 15 days after written notice thereof to the Executive; or (viii) the Executive has been convicted of any criminal act of egregious misconduct involving serious moral turpitude to the extent that the Executive’s credibility and reputation no longer conform to the standard of the Corporation’s executives. Any determination of whether the Executive has failed to substantially perform his duties shall not be based solely on the performance or financial condition of the Corporation. The Executive will be furnished an opportunity upon at least 15 days prior written notice to state his case to the Board with counsel prior to any termination for “Cause.” If the Executive’s employment is terminated by the Corporation for Cause or the Executive voluntarily resigns other than as a result of Constructive Discharge, the Corporation shall pay the Executive any Base Salary accrued or owing to the Executive hereunder through the date of termination and shall reimburse the Executive for any expenses incurred prior to the date of termination and otherwise reimbursable pursuant to Section 4(e), less any amounts owed by the Executive to the Corporation, and the Corporation shall have no further liability or obligation to the Executive hereunder or in respect of his employment. Any amount due under this Section 5(a) shall be paid in a lump sum within 30 days after the end of the Employment Period.

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          (b) TERMINATION WITHOUT CAUSE. Prior to the end of the Employment Period, (i) the Corporation may terminate the Executive’s employment under this Agreement for a reason other than Cause or no reason whatsoever (i.e., without Cause); or (ii) the Executive may terminate his employment under this Agreement due to Constructive Discharge (as defined below) so long as the Executive gives the Board written notice of the event giving rise to such Constructive Discharge within sixty (60) days of the occurrence thereof and such Constructive Discharge remains uncured by the Corporation thirty (30) days after the Board’s receipt of such notice; provided that if the Corporation has not cured a breach of this Agreement within the thirty (30) day period referenced in clause (iii) of the definition of Constructive Discharge set forth below this sentence will not be deemed to grant the Corporation an additional thirty (30) day cure period with respect to such breach. If the Executive’s employment is terminated without Cause or by Constructive Discharge pursuant to this Section 5(b) prior to the expiration of the Employment Period, the Corporation shall pay to the Executive an amount equal to (A) the lesser of (1) two-times the Executive’s annual Base Salary or (2) the amount of remaining Base Salary that would have been payable to the Executive from the date of such termination of employment through the Termination Date; provided that such amount shall not be less than one-times the Executive’s annual Base Salary, plus (B) the benefits set forth in Sections 4(d) and 4(f) (other than accrued but unused vacation pay) which were paid to the Executive in the year prior to the year in which his employment was terminated, plus (C) a pro-rated bonus for the year in which Executive was terminated (based on the number of months the Executive was employed by the Corporation in such year), if the bonus target for such year was being achieved on the date of termination (on a pro rata basis, based on the number of months the Executive was employed by the Corporation in such year) (collectively, the “ Severance Payment ”); provided that the Severance Payment shall be conditioned upon the Executive’s voluntary execution of a written general release substantially in the form of Exhibit B hereto (the “ Release ”); provided further , that the Corporation shall have the right to modify the Release to reflect facts and circumstances existing at the time of the Executive’s termination. The Corporation shall pay fifty percent (50%) of the Severance Payment in one payment within thirty (30) days after the end of the Employment Period provided that such release has been in full force and effect for at least ten (10) days, and pay the remaining portion of the Severance Payment on the date that is twelve (12) months after the last day of the Employment Period; provided, however, that if the Executive is a “specified employee” within the meaning of Internal Revenue Code Section 409A(a)(2)(B)(i), no portion of the Severance Payment that is deferred compensation subject to Section 409A will be made before the date that is six (6) months after the payment date provided in the previous clause. For purposes of this Section 5(b), the term “ Constructive Discharge ” means:
               (i) a material adverse reduction in the Executive’s job function, authority, duties or responsibilities, or a similar change in the Executive’s reporting relationships;
               (ii) a required relocation of Executive of more than seventy (70) miles outside of Dallas/Ft. Worth, Texas;
               (iii) any breach of any of the material terms of this Agreement by the Corporation which is not cured within thirty (30) days following written notice thereof by the Executive to the Corporation; or

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               (iv) during the Employment Period, any failure to nominate and/or elect the Executive as a member of the Board and/or any removal of the Executive as a member of the Board (other than for Cause or pursuant to applicable law).
     6. CONFIDENTIAL INFORMATION, REMOVAL OF DOCUMENTS, DEVELOPMENTS AND NON-COMPETITION, RELEASE.
          (a) CONFIDENTIAL INFORMATION. The Executive shall hold in a fiduciary capacity for the benefit of the Corporation and its subsidiaries all trade secrets, confidential information, proprietary information, knowledge and data relating to the Corporation and/or the businesses or investments of the Corporation which was obtained by the Executive in connection with the Executive’s employment by the Corporation and its subsidiaries including such information with respect to any products, improvements, formulas, designs or styles, processes, services, customers, suppliers, marketing techniques, methods, know-how, data, future plans or operating practices (“ Confidential Information ”); provided that “Confidential Information” shall not include information that (i) is or becomes generally available to the public other than as a result of a disclosure by the Executive or (ii) is or becomes available to the Executive on a non-confidential basis from a source that is not known to the Executive to be prohibited from disclosing such information to the Executive by a legal, contractual or fiduciary obligation. Except as may be required or appropriate in connection with his carrying out his duties under this Agreement, the Executive shall not, without the prior written consent of the Corporation or as may otherwise be required by law or legal process, communicate or divulge any such Confidential Information to anyone other than the Corporation and those designated by the Corporation. The Corporation, understands, acknowledges and agrees that, notwithstanding this Section 6, the Executive may disclose to his advisors the terms and conditions of this Agreement to the extent reasonably necessary to enforce this Agreement.
          (b) REMOVAL OF DOCUMENTS. All records, files, drawings, letters, memoranda, reports, computer data, computer disks, electronic storage media, documents, models and the like relating to the business of the Corporation and/or the business of any of its subsidiaries, which the Executive prepares, uses or comes into contact with and which contain Confidential Information shall be the exclusive property of the Corporation to be used by the Executive only in the performance of his duties for the Corporation and shall not be removed by the Executive from the premises of the Corporation (without the written consent of the Corporation) during or after the Employment Period unless such removal shall be required or appropriate in connection with his carrying out his duties under this Agreement, and, if so removed by the Executive, shall be returned to the Corporation immediately upon termination of the Executive’s employment hereunder, or earlier request by the Corporation (with the Executive retaining no copies thereof nor any notes or other records relating thereto).
 

 
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