Exhibit 10.27


 


EMPLOYMENT
AGREEMENT


 


THIS EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into on
February 24th; 2004 (“Effective Date”) by and between Paragon
Systems, Inc., an Alabama corporation (the “Company”) and Carla J. Cilyok
(“Employee”) (together, the “Parties”).


 


RECITALS


 


WHEREAS, Employee is an executive officer of the Company and various of
its Subsidiaries;


 


WHEREAS, pursuant to the terms of a Stock Purchase Agreement dated as
of January 16th, 2004 (the “Stock Purchase Agreement”), by and
among Diversified Security Corporation (“Purchaser”) and each and all of
Charles Keathley, Robert Luther, Harold Bright, and John Wilson (together
referred to as the “Selling Shareholders”), the Purchaser has purchased from
the Selling Shareholders 100.00% of the outstanding stock of the Company;


 


WHEREAS, Employee’s entering into this Agreement is a material
inducement to the Purchaser to enter into the Stock Purchase Agreement of even
date herewith;


 


WHEREAS, the Company desires to enter into a written employment
agreement with Employee as an employee of the Company in the capacity listed on
Exhibit A hereto, and Employee desires to be so employed by the Company
in such position, on the terms and conditions set forth and described herein;
and


 


WHEREAS, the Parties desire to enter into this Agreement setting forth
the terms and conditions of the employment relationship of Employee with the
Company.


 


NOW, THEREFORE, subject to the successful closing of the Stock Purchase
Agreement (which closing is a condition precedent of this Agreement), and in
consideration of the mutual premises, warranties, covenants and agreements set
forth herein and in the Stock Purchase Agreement, the Parties, intending to be
legally bound, hereby agree as follows:


 


 


AGREEMENT


 


1.             EMPLOYMENT.


 


a              Term. The term of Employee’s employment pursuant to this Agreement is for
the three (3) year period commencing on the date hereof and terminating on the
third anniversary of such date (the “Term”), or upon the date of earlier
termination of employment pursuant to Section 3 of this Agreement.


 
















 


b.             Duties. The Company hereby agrees to employ Employee, and Employee hereby
agrees to serve, subject to the provisions of this Agreement, as an employee of
the Company in the position listed on Exhibit A hereof, subject to the
oversight of, and directions from, the Company’s Board of Directors. Employee
shall perform all services and acts necessary to fulfill the duties and
responsibilities of his position and shall render such services on the terms
set forth herein and shall report to the Board of Directors or their designee.
In addition, Employee shall have such other executive and managerial powers and
duties with respect to the Company as may reasonably be assigned to him by the
Board of Directors or their designee.


 


c.             Time Devoted to Employment.  
Employee agrees to devote all his business time, attention and energies
to the performance of the duties assigned hereunder, and to perform such duties
diligently, faithfully and to the best of his abilities, and subject to such
laws, rules, regulations and policies from time to time applicable to the
Company’s employees. Employee agrees to refrain from any activity that does,
will or could reasonably be deemed to conflict with the best interests of the
Company, as the Board of Directors of the Company shall so determine.


 


2.             COMPENSATION AND BENEFITS.


 


a.             Salary.   Employee shall be paid a Base
salary, payable in accordance with the Company’s regular payroll practices, in
the amount set forth in Exhibit A, and, in the discretion of the
Company, Employee may be paid a bonus, as determined as provided in Exhibit A.


 


b.             Vacation, Holidays and Sick Leave. While employed by the Company, Employee
shall be entitled to that number of weeks of paid vacation, to be prorated
monthly for partial calendar years, and paid holidays and sick leave in
accordance with the Company’s standard policies for its executives, as may be
amended from time to time in the discretion of the Company’s Board of
Directors.


 


c.             Benefits. While employed by the Company, Employee shall be eligible to
participate in such benefit plans as are, or from time to time hereafter may
be, provided by the Company to any of its executives. All benefits shall be
provided to Employee in accordance with the terms and conditions of such
benefit plans and programs as are maintained by the Company, as such plans are
amended from time to time.


 


d.             Business Expenses. While employed by the Company, the Company
shall reimburse Employee for all ordinary and necessary business expenses
incurred by him in connection with his employment upon timely submission by
Employee of receipts and other documentation in conformance with the Company’s
normal procedures.


 


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3.             TERMINATION OF EMPLOYMENT.


 


a.             Notwithstanding any provision of this
Agreement to the contrary, the employment of Employee hereunder shall terminate
on the first to occur of the following dates:


 


(i)            the date of Employee’s death;


 


(ii)           the date on which Employee shall have
experienced a Disability (as defined below), and the Company gives Employee
notice of termination on account of Disability;


 


(iii)          the date on which Employee shall have engaged
in conduct which, as reasonably determined by the Board of Directors of the
Company, constitutes Cause in accordance with the provisions set forth in
Section 3.b, below, and the Company gives Employee notice of termination
for Cause;


 


(iv)          the date on which the Company shall give
Employee notice of termination for any reason other than the reasons set forth
in subsections (i) through (iii) above; or the date on which Employee gives the
Company notice of his resignation.


 


b.             Definitions of Cause and Disability.


 


For purposes of this Agreement, “Cause” shall mean
the occurrence of any of the following events: (a) Employee’s willful or
continued failure to perform his duties with the Company; (b) Employee’s
conviction of, guilty plea to, or entry of a nolo contendere plea to (1) a
felony or (2) a misdemeanor involving moral turpitude; or (c) Employee’s
material breach of this Agreement, including but not limited to any breach of a
representation, warranty or covenant herein.


 


For purposes of this Agreement, “Disability” shall
mean an illness, injury or other incapacitating condition as a result of which
Employee is unable to perform the services required to be performed under this
Agreement for (a) thirty (30) consecutive days or (b) a period or periods
aggregating more than sixty (60) days in any six (6) consecutive months.


 


4.                             COMPENSATION IN EVENT OF TERMINATION. Upon termination or resignation of
Employee’s employment with the Company for any reason, the Company shall have
no further obligation to Employee except to pay the amounts set forth in this
Section 4.


 


a.             Termination For Cause or Resignation. In the event Employee’s employment is
terminated by the Company for Cause, or by Employee, Employee or his estate,
conservator or designated beneficiary, as the case may be, shall be entitled to
payment of any earned but unpaid Base Salary through the date of termination,
as well as any accrued vested, benefits to which Employee is entitled.
Following any such termination or resignation, neither Employee nor his estate,
conservator or designated beneficiary shall be entitled to receive any


 


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other
payment provided for hereunder with respect to any period after such
termination or resignation.


 


b.             Termination For Disability or Death. In the event Employee’s employment is
terminated by the Company for Disability, or due to Employee’s death, Employee
or his estate, conservator or designated beneficiary, as the case may be, shall
be entitled to payment of any earned but unpaid Base Salary through the date of
termination, as well as any accrued vested benefits to which Employee is
entitled. Following termination for Disability, neither Employee nor his
estate, conservator or designated beneficiary shall be entitled to receive any
other payment provided for hereunder with respect to any period after such
termination.


 


c.             Termination Without Cause.  In
the event Employee’s employment is terminated by the Company without Cause,
Employee shall be entitled to receive, as his sole and exclusive remedy, (i)
payment of any earned but unpaid Base Salary through the date of termination,
as well as any accrued vested benefits to which employee is entitled (ii) a
lump sum payment equal to three (3) months of the applicable Base Salary in
effect at the time of termination. 
Following any such termination or resignation, neither Employee nor his
estate, conservator or designated beneficiary shall be entitled to receive any
other payment provided for hereunder with respect to any period after such
termination or resignation.


 


5.             REPRESENTATIONS.


 


a.             The Company represents and warrants that this
Agreement has been authorized by all necessary corporate action of the Company
and is a valid and binding agreement of the Company enforceable against them in
accordance with its terms.


 


b.             Employee represents and warrants that he is
not a party to any agreement or instrument which would prevent him from
entering into or performing his duties in any way under this Agreement.


 


6.             ACCOUNTS RECEIVABLE   As
part of Employee’s responsibilities pursuant to this Agreement, Employee shall
verify that all accounts receivable generated by the Company are:


 


(a) solely owned by the Company and, except as permitted by the Board
of Directors of the Company, have not been assigned or encumbered in any
manner;


 


(b) for the full amount stated in each invoice or account receivable,
and are due and payable in accordance with their terms and there are no
set-offs, deductions, discounts, reductions, disputes, contingencies or
counterclaims against the Company.


 


(c) enforceable by the Company in accordance with
the terms of the instruments or documents creating them, and each account
receivable is currently and presently due and


 


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owing
in full to the Company, and payment is not contingent upon fulfillment of any
other obligation at any time;


 


(d)           is
not the result of any sale to an Affiliate;


 


(e)           are
free of all liens, claims, charges and encumbrances; and


 


(f)            have
arisen solely oat of, bona fide sales and deliveries of goods, performance of
services and other business transactions in the ordinary course of business
consistent with past practices.


 


7.                             NON-COMPETE AND NON-SOLICITATION PROVISION


 


Employee
acknowledges that he has read this Agreement and the covenants contained
herein, and that after the term of this Agreement, Employee will be able to
earn a livelihood without violating the restrictions of this section.


 


b.             Employee also hereby agrees that he shall
not, at any time, divulge or disclose to any person or firm, or use for Employee’s
own benefit, gain or otherwise, any proprietary plans, documents, presentations
or products, data, customer lists, or any other trade secrets or confidential
materials of the Company or its Affiliates. Employee acknowledges that any
information gained while employed by the Company or any material taken from the
Company or its Affiliates is deemed proprietary and/or confidential and
Employee shall promptly return to the Company or its Affiliates, after
termination of this Agreement or upon request from the Company, all such
materials together with all copies thereof. Such materials shall include, but
are not limited to, documents, contracts, agreements, plans, photographs,
books, notes, electronically stored data and all copies of the foregoing as well
as any materials or equipment supplied by the Company or any of its Affiliates
to Employee.


 


8.                             RIGHTS AND REMEDIES UPON BREACH. In the event Employee breaches, or
threatens to commit a breach of, any of the provisions of this Agreement, the
Company and its subsidiaries, affiliates, successors or assigns shall have the
following rights and remedies, each of which shall be independent of the others
and severally enforceable, and each of which shall be


 


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in
addition to, and not in lieu of, any other rights or remedies available to the
Company or its subsidiaries, affiliates, successors or assigns at law or in
equity under this Agreement or otherwise:


 


a.             Specific Performance. The Company shall have the right and remedy
to have each and every one of the covenants in this Agreement specifically
enforced and the right and remedy to obtain injunctive relief, it being agreed
that any breach or threatened breach of any of the non-competition or
confidentiality covenants and agreements contained herein would cause
irreparable injury to the Company and its subsidiaries, affiliates, successors
or assigns and that money damages would not provide an adequate remedy at law
to the Company and its subsidiaries, affiliates, successors or assigns. Also,
to the extent any covenant is deemed unenforceable, the Employee and the
Company agree that a court may reduce the scope of such covenant, to the extent
that such covenant, as reduced, shall remain in force.


 


b.             Accounting.   The Company shall have the
right and remedy to require Employee to account for and pay over to the Company
and its subsidiaries, affiliates, successors or assigns, as the case may be,
all compensation, profits, monies, accruals, increments or other benefits derived
or received by Employee that result from any transaction or activity
constituting a breach of this Agreement.


 


c.             Enforceability in all Jurisdictions. Employee intends to and hereby confers
jurisdiction to enforce each and every one of the covenants and agreements
contained herein upon the courts of any jurisdiction within the geographic
scope of such covenants and agreements. If the courts of any one or more of
such jurisdictions hold any such covenant or agreement unenforceable by reason
of the breadth or such scope or otherwise, it is the intention of Employee and
the Company that such determination shall not bar or in any way affect the
Company’s or any of its Affiliates’, successors’ or assigns’ right to the
relief provided above in the courts of any other jurisdiction within the
geographic scope of such covenants and agreements, as to breaches of such
covenants and agreements in such other respective jurisdictions, such covenants
and agreements as they relate to each jurisdiction being, for this purpose,
severable into diverse and independent covenants and agreements.


 


9.                             ASSIGNABILITY OF AGREEMENT. This Agreement is a personal contract and
the rights and interests of Employee hereunder may not be sold, transferred,
assigned, pledged, encumbered, or hypothecated by him. When applicable, this
Agreement shall inure to the benefit of and be enforceable by Employee and his
personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees.


 


10.                           ARBITRATION. Except for an action by the Company seeking injunctive relief in
connection with a breach by Employee of this Agreement, any disagreement, claim
or controversy arising under or in connection with this Agreement shall be
settled exclusively by arbitration before a single arbitrator in accordance
with the Employment Dispute Resolution rules of the American Arbitration
Association, such arbitration to take place in Counties, Georgia. The
arbitrator is not empowered to modify or change this Agreement or award damages
in excess of compensatory damages, and each party hereby irrevocably waives


 


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any
right to recover punitive, exemplary or similar damages with respect to any
dispute. The award of the arbitrator with respect to such disagreement, claim
or controversy shall be enforceable in any court of competent jurisdiction and
shall be binding on the Parties hereto. The arbitrator shall be entitled to
award reasonable attorneys’ fees to the prevailing party in any arbitration or
judicial action under this Agreement.


 


11.                           NOTICES. Any notice to be given hereunder shall be in writing and shall be
deemed given when delivered personally, sent by courier or facsimile or
registered or certified mail, postage prepaid, return receipt requested,
addressed to the party concerned at the address indicated below or to such
other address as such party may subsequently give notice of hereunder in
writing:


 


To Employee:


 


 


 


To the Company


Paragon Systems, Inc.


 


 


 


Any notice delivered personally or by courier under
this Section shall be deemed given on the date delivered and any notice
sent by telecopy or registered or certified mail, postage prepaid, return
receipt requested, shall be deemed given on the date telecopied or mailed.


 


12.           MISCELLANEOUS


 


a.             Severability. In the event that any one or more of the
provisions of this Agreement shall be held to be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remainder of
the Agreement shall not in any way be affected or impaired thereby. Moreover,
if any one or more of the provisions contained in this Agreement shall be held
to be excessively broad as to duration, activity or subject, such provisions
shall be construed by limiting and reducing them so as to be enforceable to the
maximum extent allowed by applicable law.


 


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b.             Survivorship. The respective rights and obligations of
the Parties hereunder shall survive any termination of this Agreement to the
extent necessary to the intended preservation of such rights and obligations.


 


c.             Each Party the Drafter. This Agreement and the provisions contained
in it shall not be construed or interpreted for or against any party to this
Agreement because that party drafted or caused that party’s legal
representative to draft any of its provisions.


 


d.             Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the without regard to its conflict of
law rules.


 


e.             Headings. All descriptive headings of sections and paragraphs in this Agreement
are intended solely for convenience, and no provision of this Agreement is to
be construed by reference to the heading of any section or paragraph.


 


f.              Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.


 


g.             Amendment or Modification, Waiver. No provision of this Agreement may be
amended or waived unless such amendment or waiver is agreed to in writing,
signed by Employee and by a duly authorized officer of the Company. The failure
of either party to this Agreement to enforce any of its terms, provisions or
covenants shall not be construed as a waiver of the same or of the right of
such party to enforce the same. Waiver by either party hereto of any breach or
default by the other party of any term or provision of this Agreement shall not
operate as a waiver of any other breach or default.


 


i.              Entire Agreement. This Agreement contains all the
understandings between the Parties hereto pertaining to the matters referred to
herein, and supersedes all undertakings and agreements, whether oral or in
writing, previously entered into by them with respect thereto. Employee represents
that, in executing this Agreement, he does not rely and has not relied upon any
representation or statement not set forth herein made by the Company with
regard to the subject matter, bases or effect of this Agreement or otherwise.


 


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IN WITNESS WHEREOF, the
Parties hereto have executed this Agreement as of the date first written above.


 


 


	
   

  	
  PARAGON SYSTEMS, INC.

  	
  EMPLOYEE

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Ronald G. Farrell

  	
   

  	
  /s/
  [ILLEGIBLE]

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:
  Ronald G. Farrell

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Chairman/CEO

  	
   

  	
   

  
							



 


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EXHIBIT A


 


	
  BASE
  SALARY:

  	
   

  	
  The
  same as for 2003 

  	
   

  	
  $

  	
  (77,168

  	
  )

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BONUS:

  	
   

  	
  Upon
  signing this agreement

  	
   

  	
  $

  	
  75,000

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Ninety
  (90) days from signing of agreement

  	
   

  	
  $

  	
  75,000

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  One
  year from signing this agreement

  	
   

  	
  $

  	
  50,000

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Two
  years from signing this agreement

  	
   

  	
  $

  	
  50,000

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Three
  years from signing this agreement

  	
   

  	
  $

  	
  50,000

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CAPACITY:

  	
   

  	
  Chief
  Financial Officer

  	
   

  	
   

  
	
   

  	
   

  	
  *Base
  Salary and Bonus may be re-negotiated if Capacity of employee’s position
  changes

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  STOCK
  OPTIONS:

  	
   

  	
   

  
	
   

  	
   

  	
  During
  the term and before the expiration of this agreement, the employee covered by
  this agreement will be offered stock options commensurate with the employee’s
  responsibilities. These stock options will be offered as a reward for
  services rendered. 

  
	
   

  	
   

  	
   

  
	
  LOCATION:

  	
   

  	
   

  
	
   

  	
   

  	
  If
  the employee’s place of work changes to beyond a 50-mile radius of its
  corporate headquarters, currently 3317 Triana Blvd SW, Huntsville, Alabama,
  the employee shall have the option of terminating this agreement with the
  Company.

  
										



 
















 


EXHIBIT A


 


	
  BASE
  SALARY:

  	
   

  	
  The
  same as for 2003 

  	
   

  	
  ($90,000)
  as of April 1, 2004 RF

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BONUS:

  	
   

  	
  Upon
  signing this agreement

  	
   

  	
  $50,000
  as of April 1, 2004 RF

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  One
  year from sign agreement

  	
   

  	
  50,000
  as Jan 15, 2005 RF

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Two
  years from sign agreement

  	
   

  	
  50,000
  on Jan 15, 2006 RF

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CAPACITY:

  	
   

  	
  Chief
  Financial Officer

  	
   

  	
   

  



 


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