**Exhibit10.54**

 

TIM MOXON EMPLOYMENTAGREEMENT

 

This EMPLOYMENT AGREEMENT(the “Agreement”) is entered into on October 19, 2004 (“the Effective Date”),by and between Metroplex Control Systems, Inc., a Texas corporation (the “Corporation”),and Mr. Tim Moxon, an individual residing at 15807 Eagle Cliff, SanAntonio, Texas 78232 (the “Executive”) under the following terms andconditions:

 

RECITALS:

 

WHEREAS, the Executiveand the Corporation are currently operating under an at-will employmentarrangement (the “Former Arrangement’) pursuant to which the Executive was entitledto certain compensation and benefits; and

 

WHEREAS, the executionand delivery of this Agreement, as a new contract to completely supersede theFormer Arrangement, is an inducement and a condition to tie consummation byWilliam Blair Mezzanine Capital Fund III, L.P. (the “Investor”), of that certain Loan Agreement, dated as of theEffective Date, by and among the Investor, 1ST Detention Contracting Group, Inc.,a Delaware Corporation (“ISI Delaware”) tie ultimate parent corporation of theCorporation and all the shareholders of ISI Delaware, which provides for the completionof a loan to ISI Delaware and the delivery to the Investor of Warrants forcapital stock in 1ST Delaware; and

 

WHEREAS, the Corporationdesires to continue to employ the Executive in the capacity hereinafter stated,and the Executive desires to continue in the employ of the Corporation in such capacityfor the period and on the terms and conditions set forth herein.

 

NOW, THEREFORE, inconsideration of the mutual covenants and agreements set forth below, it ishereby covenanted and agreed by the Corporation and the Executive as follows:

 

1.     Employment Period. The Corporation hereby agrees to continue toemploy the Executive as its CFO, and in which capacities, the Executive agreesto provide services to the Corporation for the period beginning on theEffective Date and ending on the fifth anniversary of the Effective Date (the “EmploymentPeriod”).  The Employment Period shall automaticallyrenew until the sixth anniversary of the Effective Date, unless the Corporationor the Executive gives written notice to the contrary to the Executive or theCorporation, respectively, at least sixty (60) days prior to the fifth anniversaryof the Effective Date.

 

2.     Performance of Duties.

 

(a)           TheExecutive agrees that during the Employment Period, while he is employed by theCorporation, he shall devote his full time, energies and talents exclusively toserving in the capacity of CFO of the Corporation in the best interests of theCorporation, and to perform the duties assigned to him by the Board ofDirectors of the Corporation (the ‘Board’) faithfully, efficiently and in aprofessional manner.

 

(b)           Subjectto Section 2(c) below, he Executive shall not, without prior writtenconsent from the Board:

 

(i)    serveas, be a consultant to or employee, officer, manager, agent, or director of,any corporation, partnership or other entity other than the Corporation (otherthan civic, charitable, or other public service organizations) if, asdetermined at the reasonable discretion of the Board, such service, employment,or position would have a material adverse effect upon the ability of theExecutive to perform

 

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hisduties hereunder; or

 

(ii)   havemore than a five percent (5%) ownership interest in any enterprise other thanthe Corporation if such ownership interest would have a material adverse effectupon the ability of the Executive to perform his duties hereunder.

 

3.     Compensation Subject to the terms and conditions of thisEmployment Agreement, during the Employment Period, while he is employed by theCorporation, the Executive shall be compensated by the Corporation for hisservices as follows:

 

(a)                                  TheExecutive shall receive, for each consecutive twelve (12) month periodbeginning on the Effective Date and each anniversary thereof, a rate of salarythat is not less than $105,000.00 per year (“Annual Salary”).

 

(b)                                 TheExecutive shall be eligible to receive incentive compensation payments asfollows:

 

As an Annual Bonus, inaddition to the Annual Salary described above, the Executive shall be paid,Fifteen Percent (15%) of the Nine Percent (9%) bonus Pool, including allentities of 1ST Delaware.

 

(c)           Duringthe Employment Period the Executive’s rate of Annual Salary and amount ofAnnual Bonus shall be reviewed by the Board on or before each anniversary ofthe Commencement Date to determine whether an increase in the Executive’scompensation is appropriate. In addition to the annual review by the Board setforth herein, the Executive’s rate of Annual Salary shall be annually adjustedto be with equivalent executive positions within the Corporation.

 

(d)           TheExecutive shall be a participant in executive benefit plans maintained by theCorporation on substantially the same terms and conditions as other seniorexecutives of the Corporation. Said benefit plan shall, at a minimum, includefull payment by the Corporation of all health/medical care insurance coveragefor the Executive and all of Executive’s dependents, including his wife andchildren. The Corporation, shall, to the extent permitted by law, create amedical savings plan, permitting the Executive to deduct from income up to themaximum amount permitted annually, all of which sum is to be applied b thepayment of medical expenses, and any unused portion shall annually be rolledforward for use the following year.

 

(e)           TheExecutive shall be reimbursed by the Corporation for all reasonable business,promotional, travel and entertainment expenses incurred or paid by theExecutive during the Employment Period in the performance of his services underthis Employment Agreement: (i) provided that such expenses constitutebusiness deductions from taxable income for the Corporation and are excludablefrom taxable income to the Executive under the governing laws and regulationsof the Internal Revenue Code; and (ii) to the extent that such expenses donot exceed the amounts allocable for such expenses in budgets that are approvedfrom time to time by the Corporation   Inorder that the Corporation reimburses the Executive for such allowableexpenses, the Executive shall furnish to the Corporation, in a timely fashion,the appropriate documentation required by the Internal Revenue Code inconnection with such expenses and shall 

 

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furnish such otherdocumentation and accounting as the Corporation may from time to timereasonably request. As used herein the term “Internal Revenue Code” shall meanInternal Revenue Code of 1986, as now or hereafter amended, and the regulationsand revenue rulings and procedures issued pursuant thereto from time to time.

 

(f)                                    TheCorporation shall, at its sole cost and expense for both hardware and usage,provide the Executive with a cell phone.

 

(g)                                 Aspart of the transaction anticipated to be concluded and closed with the Investor,the Executive shall be made eligible to participate in a pool of Stock Options,providing the Executive with options to purchase common stock in 1ST Delaware,such that upon full dilution, and the exercise of all options, the Executivewill own 1.9% of the ownership interest in 1ST Delaware.

 

(h)                                 Notwithstandinganything to the contrary contained herein, any vote or consent of the Boardrequired or permitted hereunder shall exclude any vote by the Executive in hiscapacity as a member of the Board.

 

4.     Restrictive Covenants. The Executive acknowledges and agreesthat:

 

(a)                                  theExecutive has a major responsibility for the operation, development, and growthof the Corporation’s business;

 

(b)                                 theExecutive’s work for the Corporation has brought him and will continue to bringhim into close contact with confidential information of the Corporation and itscustomers; and

 

(c)                                  theagreements and covenants contained in this Paragraph 4 are essential to protectthe business interests of the Corporation and that the Corporation will notenter into this Agreement but for such agreements and covenants. Accordingly,the Executive covenants and agrees to the following:

 

(i)             ConfidentialInformation. Except as may be required by the lawful order of a court or agencyof competent jurisdiction, the Executive agrees to keep secret andconfidential, both during the Employment Period and indefinitely after theExecutive’s employment with the Corporation terminates for any reason or no reason,all non-public information concerning the Corporation and its affiliates thatwas acquired by, or disclosed to, the Executive during the course of hisemployment by the Corporation or any of its subsidiaries or affiliates,including information relating to customers (including, without limitation,credit history, repayment history, financial information and financialstatements), costs, and operations, financial data and plans, whether past,current or planned and not to disclose the same, either directly or indirectly,to any other person, firm or business entity, or to use it in any way; provided,however, that the provisions of this Subparagraph 4(c)(i) shall not applyto information that: (A) was, is now, or becomes generally available tothe public (but not as a result of a breach of any duty of confidentiality bywhich the Executive is bound); (B) was disclosed to the Executive by athird party not subject to any duty of confidentiality to the Corporation priorto its disclosure to the Executive; or (C) is disclosed by the Executivein the ordinary 

 

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course of the Corporation’sbusiness as a proper part of his employment in connection with communicationswith customers, vendors and other proper parties, provided that it is for aproper business purpose solely for the benefit of the Corporation The Executivefurther agrees that he shall not make any statement or disclosure that (1) wouldbe prohibited by applicable Federal or state laws, or (2) is intended tobe detrimental to the Corporation or any of its subsidiaries or affiliates.

 

(ii)          Non-Competition.

 

(A)      The Executive agrees thatfor the period commencing on the Effective Date and ending on the secondanniversary of the date on which the Executive’s employment with the Corporationis terminated for any reason or no reason (the “Non-Competition Period”), theExecutive shall not directly or indirectly, alone or as a partner, officer,director, manager, employee, consultant, agent, independent contractor, memberor stockholder of any person or entity (‘Person’), engage in any businessactivity in North America that is directly or indirectly in competition with theBusiness of the Corporation or which is directly or indirectly detrimental tothe Business or business plans of the Corporation or its subsidiaries oraffiliates; provided, however, that the record or beneficial ownership by the Executiveof Five Percent (5%) or less of the outstanding publicly traded capital stockof any company for investment purposes shall not be deemed to be in violation ofthis Subparagraph4(c)(ii) so long as the Executive is not an officer,director, manager, employee or consultant of such Person. The “Business” of theCorporation shall mean the actual or intended business of the Corporation andits subsidiaries and affiliates during the Employment Period and as of the datethe Executive leaves the employment of the Corporation for any reason or noreason As of the date hereof, the Business of the Corporation is providingdesign, engineering, procurement, installation, maintenance and related goodsand services to: (x) the detention facilities construction and renovationindustry; (y)  the industrial/commercial controls and fire and securityalarm industry; and (z) the access control and security observation industry,and other related businesses. The Executive further agrees that during theNon-Competition Period, he shall not in any capacity, either separately or inassociation with others: (1) employ or solicit for employment or endeavorin any way to entice away from employment with the Corporation or itsaffiliates (a) any current employee of the Corporation or its affiliatesor (b)any Person who was employed by the Corporation or its affiliates in any precedingtwelve (12) month period; (2) solicit, induce or influence any supplier,customer, agent, consultant or other Person that has a business relationshipwith the Corporation to discontinue, reduce or modify such relationship withthe Corporation nor (3) solicit or enter into negotiations with any of theCorporation’s identified potential acquisition candidates.

 

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(B)   TheEmployee understands that the foregoing restrictions may limit his ability toengage in a business similar to the Corporation’s Business for the duration ofthe Non- Competition Period, but acknowledges that he will receive sufficientlyhigh remuneration and other benefits to justify such restriction as an employeeof the Corporation pursuant to this Agreement.

 

(iii)  Remedies.If the Executive breaches, or threatens to commit a breach of any of theprovisions contained in Subparagraphs 4(c)(i) and 4(c)(ii) (the “RestrictiveCovenants”), the Corporation shall have the following rights and remedies, eachof which shall be enforceable, and each of which is in addition to, and not inlieu of, any other rights and remedies available to the Corporation at law orin equity.

 

(A)      The Executive shall accountfor and pay over to the Corporation all compensation, profits, and otherbenefits which inure to the Executive’s benefit which are derived or receivedby the Executive or any person or business entity controlled by the Executive,resulting from any action or transactions constituting a breach of any of theRestrictive Covenants.

 

(B)        Notwithstanding theprovisions of Subparagraph 4(c)(iii) (A) above, the Executiveacknowledges and agrees that in the event of a violation or threatenedviolation of any of the Restrictive Covenants, the Corporation shall have noadequate remedy at law and shall therefore be entitled to enforce each such provisionby temporary or permanent injunction or mandatory relief obtained in any courtof competent jurisdiction without the necessity of proving damages, posting anybond or other security, and without prejudice to any other rights and remediesthat may be available at law or in equity, and the Corporation shall also beentitled to recover its attorneys’ fees and costs incurred to enforce any ofthe Restrictive Covenants from the Executive.

 

(C)        Notwithstanding any otherprovisions hereof, Executive irrevocably acknowledges the standing and right of1ST Delaware to enforce the Restrictive Covenants, and Executive intentionallyand knowingly waives and relinquishes any and all right to object to any actionby ISI Delaware to enforce the Restrictive Covenants set forth herein.

 

(iv)  Severability.If any of the Restrictive Covenants, or any part thereof, are held to beinvalid or unenforceable, the same shall not affect the remainder of thecovenant or covenants, which shall be given full effect, without regard to theinvalid or unenforceable portions. Without limiting the generality of theforegoing, if any of the Restrictive Covenants, or any part thereof, are heldto be unenforceable because of the duration of such provision or the area coveredthereby, the parties hereto agree that the court making 

 

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such determination shallhave the power to reduce the duration and/or area of such provision and, in itsreduced form, such provision shall then be enforceable.

 

(v)         Proprietary Rights.  The Executive acknowledges and agrees that allknow-how, documents, reports, plans, proposals, marketing and sales plans,client lists, client files, and any materials made by the Executive or by theCorporation are the property of the Corporation and shall not be used by theExecutive h any way adverse to the Corporation’s interests. The Executive shallnot deliver, reproduce, or in any way allow such documents or things to bedelivered or used by any third party without specific direction or consent ofthe Board.  The Executive hereby assignsto the Corporation any rights that he may have in any such trade secret or proprietaryinformation.

 

5.     Termination and Compensation Due upon Termination Except asotherwise provided under the executive benefit plans (as in effect on the datehereof) maintained by the Corporation in which the Executive participates inaccordance with Subparagraph 3(c), the Executive’s right to compensation forperiods after the date the Executive’s employment with the Corporationterminates shall be determined in accordance with the following:

 

(a)                                  TerminationWithout Cause. In the event the Corporation terminates the Executive’s employmentunder this Agreement without Cause, the Corporation shall pay the Executive anycompensation and benefits the Corporation owes to the Executive through theeffective date of termination. Additionally, the Executive shall:

 

(i)             receive payment ofhis salary (as of the date of termination) in accordance with the provisions ofSubparagraph 3(a) for twelve (12) months; and

 

(ii)          receive payment of anyincentive compensation payments that otherwise would have been payable to theExecutive under Subparagraph 3(b) through the effective date oftermination.

 

(iii)       without further action ofthe Corporation, be conclusively deemed to have received an automatic, completeand final release, from any duty or obligation to comply with the RestrictiveCovenants in Subparagraph 4(c)(ii) above, immediately after the due dateof the final payment of salary pursuant to Subparagraph 5(a)(i); provided, however,the Corporation may elect to continue such Restrictive Covenants and shall havethe right to enforce same upon payment to the Company of additional severancepayments including salary prorated over the extension period.

 

(b)           VoluntaryResignation.  The Executive may terminatehis employment with the Corporation, and any other entity owned or controlledin whole or in part by ISI Delaware, for any reason (or no reason at all) atany time by giving the Corporation ninety (90) days prior written notice ofvoluntary resignation; provided, however, that the Corporation may decide thatthe Executive’s voluntary resignation be effective immediately upon notice of suchresignation. The Corporation shall have no obligation to make payments to the Executivein accordance with the provisions of Paragraph 3 for periods after the date onwhich the Executive’s employment with the Corporation terminates due to theExecutive’s 

 

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voluntary resignation.The Restrictive Covenants shall continue in effect after such voluntaryresignation.

 

However, for purposes ofthis Paragraph 5, if the Executive resigns following the occurrence of one ofthe following events, the Executive shall be deemed to be terminated withoutCause in accordance with Subparagraph 5(a) above:

 

(i)             the Executive’sduties are materially reduced from those described in Paragraph 2 above;

 

(ii)          the relocation of theExecutive’s office outside Bexar County, Texas without the Executive’s consent;or

 

(iii)       a material breach of any ofthe provisions of Paragraph 3.

 

(c)                                  Terminationfor Cause. The Corporation shall have no obligation to make payments to theExecutive in accordance with the provisions of Paragraph 3 or otherwise forperiods after the Executive’s employment with the Corporation is terminated onaccount of the Executive ‘s discharge for Cause. For purposes of this Paragraph5, the Executive shall be considered terminated for “Cause” if he is dischargedby the Corporation on account of the occurrence of one or more of the followingevents:

 

(i)             the Executive becomeshabitually addicted to drugs or alcohol;

 

(ii)          the Executive disclosesconfidential information in violation of Subparagraph 4(c)(i) or engagesin any action in violation of Subparagraph 4(c )(ii);

 

(iii)       the Corporation is directedby regulatory or governmental authorities to terminate the employment of theExecutive or the Executive engages in activities that cause actions to be takenby regulatory or governmental authorities that have a material adverse effecton the Corporation

 

(iv)      the Executive is indicted ofa felony crime (other than a felony resulting from a minor traffic violation);

 

(v)         the Executive flagrantlydisregards his duties under this Employment Agreement after (A) writtennotice has been given to the Executive by the Board that it views the Executiveto be flagrantly disregarding his duties under this Agreement and (B) the Executivehas been given a period of ten (10) days after such notice to cure suchmisconduct. However, no notice or cure period shall be required if Executive’sdisregard of his duties has materially and adversely affected the Corporation,or is illegal

 

(vi)      any event of egregiousmisconduct involving serious moral turpitude to the extent that, in thereasonable judgment of the Board, the Executive’s credibility and reputation nolonger conform to the standard of the Corporation’s executives; or

 

(vii)   the Executive commits an act offraud against the Corporation, violates a duty of loyalty to the Corporation,or violates Subparagraph 2(a).

 

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(d)                                 Disability.The Corporation shall have no obligation to make payments to the Executive inaccordance with the provisions of Paragraph 3 for periods after the date of theExecutive’s employment with the Corporation terminates on account of disability,except payments due and owing through the effective date of termination. Forpurposes of this Subparagraph 5(d), determination of whether the Executive isdisabled shall be determined in accordance with the Corporation’s long term disabilityplan (if any) and applicable law.

 

(e)                                  Death.The Corporation shall have no obligation to make payments to the Executive inaccordance with the provisions of Paragraph 3 for periods after the date of theExecutive’s death, except payments due and owing as of such date.

 

(f)                                    Termination.A majority of the Board, including the Investor Designee (as defined in thePurchase Agreement), shall vote or consent with respect to any decision toterminate the Executive for any reason or no reason.

 

6.     Successors. This Agreement shall be binding on, and inure to thebenefit of, the Corporation and its successors and assigns and any Personacquiring, whether by merger, consolidation, purchase of all or substantiallyall of the Corporation’s assets and business, or otherwise without furtheraction by the Executive; provided however, that Executive hereby agrees toexecute an acknowledgement of assignment if requested to do so by thesuccessor, assign or acquiring person.

 

7.     Nonalienation The interests of the Executive under thisAgreement are not subject to the claims of his creditors, other than theCorporation, and may not otherwise be voluntarily or involuntarily assigned,alienated or encumbered except for any benefits hereunder that inure to theExecutive’s estate upon his death.

 

8.     Waiver of Breach The waiver by either the Corporation or theExecutive of a breach of any provision of this Agreement shall not operate as,or be deemed a waiver of, any subsequent breach by either the Corporation orthe Executive.

 

9.     Notice. Any notice to be given hereunder by a party hereto shallbe in writing and shall be deemed to have been given when received or, whendeposited in the U.S. mail, certified or registered mail, postage prepaid:

 

(a)                                  Ifto the Executive, at the address set forth in the preamble hereto immediatelyfollowing the Executive’s name.

 

(b)                                 Ifto the Corporation, to it at:

 

Metroplex Control Systems, Inc.

Attention: Sam Youngblood

12903 Delivery Drive 

San Antonio, Texas 78247 

Tel: (210) 495-5245

 

10.   Amendment. This Agreement may be amended orcanceled by mutual agreement of the parties in writing without the consent ofany other Person and no Person, other than the parties hereto (and theExecutive’s estate upon his death), shall have any rights under or interest inthis Agreement or the subject matter hereof. The parties hereby agree that nooral conversations shall be deemed to be a modification of this Agreement andneither party shall assert the same.

 

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11.   Entire Agreement.  This Agreement contains the entire understandingof the parties hereto with respect to the subject matter contained herein andsupersedes all prior agreements and understandings, oral and written, withrespect thereto, including, but not limited to, the Former Arrangement.

 

12.   Applicable Law.  The provisions of this Agreement shall beconstrued in accordance with the laws of the State of Texas.

 

13.   WAIVER OF JURY TRIAL THE EXECUTIVE AND THECORPORATION EXPRESSLY WAIVE ANY RIGHT EITHER MAY HAVE TO A JURY TRIAL CONCERNINGANY CIVIL ACTION THAT MAY ARISE FROM THIS AGREEMENT, OR THE RELATIONSHIPOF THE PARTIES HERETO.

 

14.   Termination All of the provisions of thisAgreement shall terminate after the expiration of the Employment Period, exceptthat Subparagraph 4(c)(i) shall survive indefinitely and Subparagraph 4(c)(ii) shallterminate upon the expiration of the Non-Competition Period.

 

IN WITNESS WHEREOF, theExecutive and the Corporation have executed this Employment Agreement as of theday and year first above written.

 
|   |   “Executive”           |             |
|--------|----------------------------------------|------------------|
|   |                                   |             |
|   |   TIM MOXON                       |             |
|   |                                   |             |
|   |                                   |             |
|   |   /Tim Moxon/                     |             |
|   |   Tim Moxon                       |             |
|   |                                   |             |
|   |                                   |             |
|   |   “Corporation”         |             |
|   |                                   |             |
|   |   Metroplex  Control Systems, Inc |             |
|   |                                   |             |
|   |   By:                             | /Sam Youngblood/ |   |
|   |   Name: Sam  Youngblood           |             |
|   |   Title: CEO                      |             |
|        |                                        |                  |  |

 

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