Exhibit 10.15

EXECUTION COPY
 
EMPLOYMENT AGREEMENT
 
THIS AGREEMENT is by and between TELKONET, INC. (“TKO”), a Utah corporation with
corporate offices located in Germantown, Maryland and WILLIAM R. DUKES
(“Executive”).

WHEREAS, TKO is acquiring substantially all of the assets (the “Acquisition”) of
SMART SYSTEMS INTERNATIONAL (“SSI”).

WHEREAS, TKO will continue to operate the SSI business following the Effective
Date (as hereinafter defined);

WHEREAS, subject to the Acquisition being completed (the “Effective Date”), TKO
desires to employ Executive, and Executive desires to be employed by TKO.

NOW THEREFORE, TKO hereby employs Executive, and Executive hereby accepts
employment with TKO on the following terms and conditions:

1.     Duties.  TKO hereby employs Executive in the capacity of __TBD______. In
such capacity, Executive shall perform his duties in a professional, supervisory
and managerial nature solely for the benefit of TKO and pertaining to the
business and affairs of TKO as determined by the Board of Directors and/or the
Executive Committee of TKO. Executive shall report directly to TKO’s Chief
Executive Officer (the “Telkonet CEO”). Executive’s duties and responsibilities
shall also include, but not be limited to, the following:

(a) provide leadership the activities and operations of the SSI business;

(b) Hire, compensate, discipline and terminate SSI staff within the approved
budget, establish job descriptions, duties and responsibilities of all SSI staff
in accordance with TKO Bylaws, and the policies and procedures of TKO, perform
regular evaluations of all SSI staff, determine the level of compensation of
such staff on the basis of such evaluations, within the approved budget and in
accordance with the policies of TKO and have primary responsibility for the
day-to-day operations of SSI;

(c) Alert and advise the Board of Directors and/or the Executive Committee about
reasonably significant matters needing their attention and action;

(d) Serve as the representative of SSI in activities related to its objectives
and policies;

(e) Direct the coordination of the activities of SSI’s committees and projects;

(f) Oversee, under the direction of the Board of Directors and with the
assistance of TKOs outside certified public accountant (the “TKO Accountant”),
the custody and use of all funds, securities, property and, generally, all
assets of SSI and the deposit of the funds of SSI;

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(g) Oversee the preparation of a proposed annual budget of SSI;

(h) Oversee the receipt and disbursement of SSI funds in accordance with the
adopted budget of TKO;

(i) Supervise the sales, installation and support of all SSI subscriber
acquisition activities;

(j) Oversee, develop and expand all aspects of SSI’s business, sales and
production operations;

(k) Present an annual financial report to the Board of Directors;

(l) Present to the Board of Directors an annual report of all activities of SSI;

(m) Negotiate, evaluate and execute all contracts, agreements and commitments
arising in the ordinary course of SSI’s business for and on behalf of TKO,
consistent with the duties and responsibilities set forth above; and

(n) Implement all Board directives and perform all such other duties that may be
assigned from time-to-time by the Board of Directors in its discretion.
 
2.     Term. The term of this Agreement (the “Term”) shall commence on the
Effective Date and shall continue for a minimum of six (6) months. At the end of
that time period, an assessment will be made regarding the Executive’s continued
employment. In the event that he is involuntarily terminated (other than for
“cause” or engaging in any unethical, immoral or unprofessional conduct or
violation of a Company policy), Telkonet agrees to pay the Executive severance
equal to three (3) months of current base salary, and continue to provide and
pay for health insurance coverage for a period of three months following
termination or until such time that the Executive is covered by another group
benefits plan, whichever occurs first.

3.     Extent of Services. During the Term and any extension thereof, Executive
shall devote his full time and efforts to the performance, to the best of his
abilities, of such duties and responsibilities inherent in his position
hereunder, as described in Section 1 above, and as the Board of Directors and/or
the Officers of TKO shall determine, consistent therewith.

4.     Compensation.

(a) Salary. Executive shall be paid Two Hundred Forty Nine Thousand and Four
Hundred Ninety Six Dollars ($249,496.00) per year, which shall be paid in
accordance with TKO’s normal payroll practices, and subject to all lawfully
required withholding. The base salary may be increased annually as determined by
the Board of Directors of Telkonet in its sole discretion.

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(b) Executive Participation in TKO Staff Benefits Plans. Following the Effective
Date, Executive shall be entitled to participate in any group health programs
and other benefit and incentive plans, which may be instituted from time-to-time
for TKO employees, and for which Executive qualifies under the terms of such
plans. All such benefits shall be provided on the same terms and conditions as
generally apply to all other TKO employees under these plans and may be modified
by TKO from time-to-time.

(c) Expenses. Subject to TKO Company policy, the Executive shall be reimbursed
by TKO for all ordinary, reasonable, customary and necessary expenses incurred
by him in the performance of his duties and responsibilities under this
Agreement Executive agrees to prepare documentation for such expenses as may be
necessary for TKO to comply with the applicable rules and regulations of the
Internal Revenue Service.

5.     Vacation. At full pay and without any adverse effect to his compensation,
provided all other terms and conditions of this Agreement are satisfied,
Executive shall be entitled to three (3) weeks of vacation for each full
calendar year during the term of this Agreement. Executive agrees to schedule
his vacation leave in advance upon written notice to the TKO CEO and at a time
with minimum disruption to TKO. Carryover of vacation days in excess of two
weeks is subject to the prior approval of the CEO of TKO.
 
6.     Termination. This Agreement shall terminate in accordance with Section 2
of this Agreement, or upon the first to occur of any of the following events:

(a) The bankruptcy or dissolution of TKO;

(b) The death of Executive;

(c) The mutual consent of Executive and TKO;

(d) “Cause” exists for termination. For purposes of this Agreement, “cause”
shall include, but not be limited to, the following: (1) theft, fraud,
embezzlement, dishonesty or other similar behavior by Executive; (2) any
material breach by Executive of any provision of this Agreement; (3) any
habitual neglect of duty or misconduct of Executive in discharging any of his
duties and responsibilities under this Agreement; (4) any conduct of Executive
which is detrimental to or embarrassing to TKO, including, but not limited to,
Executive being indicated or convicted of a felony or any offense involving
moral turpitude; or (5) any default of Executive’s obligations hereunder, or any
failure or refusal of Executive to comply with the policies, rules and
regulations of TKO, which default, failure or refusal is not cured within a
reasonable time (but not to exceed thirty (30) days) after written notification
thereof to Executive by TKO. If cause exists for termination, Executive shall be
entitled to no further compensation, except for accrued leave and vacation and
except as may be required by applicable law.

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7.     Surrender of Books and Papers. Upon termination of this Agreement
(irrespective of the time, manner, or cause of termination, be it for cause or
otherwise), Executive shall immediately surrender to TKO all books, records, or
other written papers or documents entrusted to him or which he has otherwise
acquired pertaining to TKO and all other TKO property in Executive’s possession,
custody or control.

8.     Inventions and Patents. Executive agrees that Executive will promptly
from time-to-time fully inform and disclose to TKO any and all ideas, concepts,
copyrights, copyrightable material, developments, inventions, designs,
improvements and discoveries of whatever nature that Executive may have or
produce during the term of Executive’s employment under this Agreement that
pertain or relate to the then current business of TKO (the “Creations”), whether
conceived by Executive alone or with others and whether or not conceived during
regular working hours. All Creations shall be the exclusive property of TKO and
shall be “works made for hire” as defined in 17 U.S.C. §101, and TKO shall own
all rights in and to the Creations throughout the world, without payment of
royalty or other consideration to Executive or anyone claiming through
Executive. Executive hereby transfers and assigns to TKO (or its designee) all
right, title and interest in and to every Creation. Executive shall assist TKO
in obtaining patents or copyrights on all such inventions, designs, improvements
and discoveries being patentable or copyrightable by Executive or TKO and shall
execute all documents and do all things necessary to obtain letters of patent or
copyright, vest the TKO with full and exclusive title thereto, and protect the
same against infringement by others, and such assistance shall be given by
Executive, if needed, after termination of this Agreement for whatever cause or
reason. Executive hereby represents and warrants that Executive has no current
or future obligation with respect to the assignment or disclosure of any or all
developments, inventions, designs, improvements and discoveries of whatever
nature to any previous Employer, entity or other person and that Executive does
not claim any rights or interest in or to any previous unpatented or
uncopyrighted developments, inventions, designs, improvements or discoveries.

9.     Trade Secrets, Non-Competition and Non-Solicitation.

(a) Trade Secrets. Contemporaneous with the execution of this Agreement and
during the term of employment under this Agreement, TKO shall deliver to
Executive or permit Executive to have access to and become familiar with various
confidential information and trade secrets of SSI and TKO, including without
limitation, data, production methods, customer lists, product format or
developments, other information concerning the business of SSI and TKO, and
other unique processes, procedures, services and products of SSI and TKO, which
are regularly used in the operation of the business of the SSI and TKO
(collectively, the “Confidential Information”). Executive shall not disclose any
of the Confidential Information that he receives from TKO or their clients and
customers in the course of his employment with TKO, directly or indirectly, nor
use it in any way, either during the term of this Agreement or at any time
thereafter, except as required in the course of employment with TKO Executive
further acknowledges and agrees that Executive owes SSI and TKO a fiduciary duty
to preserve and protect all Confidential Information from unauthorized
disclosure or unauthorized use. All files, records, documents, drawings,
graphics, processes, specifications, equipment and similar items relating to the
business of SSI and/or TKO, whether prepared by Executive or otherwise coming
into Executive’s possession in the course of his employment with TKO, shall
remain the exclusive property of TKO and shall not be removed from the premises
of SSI and/or TKO without the prior written consent of TKO unless removed in
relation to the performance of Executive’s duties under this Agreement. Any such
files, records, documents, drawings, graphics, specifications, equipment and
similar items, and any and all copies of such materials which have been removed
from the premises of SSI and/or TKO, shall be returned by Executive to TKO.
Executive further acknowledges that the covenants of Executive herein are
intended to include the protection of the confidential information of SSI's and
TKO’s customers and clients, that come into the possession of Executive as a
result of his employment with TKO, and that such customers and clients of TKO
shall be entitled to rely on and enforce these covenants against Executive for
their own benefit.

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(b) Non-Competition. Executive acknowledges that he will be provided with and
have access to the Confidential Information, the authorized use or disclosure of
which would cause irreparable injury to TKO, that TKO’s willingness to enter
into this Agreement is based in material part on Executive’s agreement to the
provisions of this Section 9(b) and that Executive’s breach of the provisions of
this Section would materially and irreparably damage TKO. In consideration for
TKO’s disclosure of Confidential Information to Executive, Executive’s access to
the Confidential Information, and the salary paid to Executive by TKO hereunder,
Executive agrees that during the term and for a period of three (3) months
following termination of the Employment (the "Noncompetition Period"), he will
not (a) Participate In (as hereinafter defined) any other business or
organization which at any time during the Noncompetition Period be engaged in
the same business as or in competition with TKO within Continental USA; (b)
directly or indirectly solicit for business any person or enterprise that at any
time during the one (1) year period preceding the date of termination of the
Employment who was a customer of TKO; or (c) directly or indirectly employ any
person who, at any time during the one (1) year period preceding the date of
termination pursuant to the terms of the Employment Contract was, or during the
Noncompetition Period is, an employee of TKO.

(c) Reasonableness of Restrictions. Executive acknowledges that the restrictions
set forth in Section 9(b) of this Agreement are reasonable in scope and
necessary for the protection of the business and goodwill of TKO. Executive
agrees that should any portion of the covenants in Section 9 be unenforceable
because of the scope thereof or the period covered thereby or otherwise, the
covenant shall be deemed to be reduced and limited to enable it to be enforced
to the maximum extent permissible under the laws and public policies applied in
the jurisdiction in which enforcement is sought.

(d) Soliciting Executives. Executive shall not during the term of this Agreement
or for a period of one (1) year after termination of Executive’s employment
hereunder for any reason, whether by resignation, discharge or otherwise, either
directly or indirectly, employ, enter into agreement with, or solicit the
employment of, Executives of TKO and/or SSI for the purpose of causing them to
leave the employment of SSI or TKO or take employment with any business that is
in competition in any manner whatsoever with the business of SSI or TKO.

(e) Injunctive Relief; Extension of Restrictive Period. In the event of a breach
of any of the covenants by Executive or TKO contained in this Agreement, it is
understood that damages will be difficult to ascertain, and either party may
petition a court of law or equity for injunctive relief in addition to any other
relief which Executive or TKO may have under the law, including but not limited
to reasonable attorneys’ fees.

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10.     Miscellaneous.

(a) This Agreement shall be binding upon the parties and their respective heirs,
executors, administrators, successors and assigns. Executive shall not assign
any part of his rights under this Agreement without the prior written consent of
TKO.

(b) This Agreement contains the entire agreement and understanding between the
parties and supersedes any and all prior understandings and agreements between
the parties regarding Executive’s employment.

(c) No modification hereof shall be binding unless made in writing and signed by
the party against whom enforcement is sought. No waiver of any provisions of
this Agreement shall be valid unless the same is in writing and signed by the
party against whom it is sought to be enforced, unless it can be shown through
custom, usage or course of action.

(d) This Agreement is executed in, and it is the intention of the parties hereto
that it shall be governed by, the laws of the State of Maryland, without regard
to applicable conflicts of laws provisions.

(e) The provisions of this Agreement shall be deemed to be severable, and the
invalidity or unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof.

(f) Any notice or communication permitted or required by this Agreement shall be
in writing and shall become effective upon personal service, or service by wire
transmission, which has been acknowledged by the other party as being received,
or two (2) days after its mailing by certified mail, return receipt requested,
postage prepaid addressed as follows:

(1) If to TKO, to:

Lorna M. Kleinrock, PHR
Vice President, Human Resources
Telkonet, Inc.
20374 Seneca Meadows Parkway
Germantown, Maryland 20876
 
(2) If to Executive, to:

Mr. William R Dukes
SSI
3271 S. Highland Drive, #715
Las Vegas, NV 89109

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IN WITNESS WHEREOF, TKO and Executive have executed this Agreement as of the
Effective Date.

 
 
TELKONET, INC.
 

By: ___________________________
Name:
Title:
 
 

By: /s/ William R. Dukes        
William R. Dukes

 
 
 
 
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