Document:

exv10w27

Exhibit 10.27

Midwest Banc Holdings, Inc. Severance Policy

(As Amended and Restated June 24, 2008)

Purpose:

Midwest Banc Holdings, Inc. (“MBHI”) establishes in this Policy its guidelines for the payment of
severance in the event of employment separation or discharge due to reasons other than cause or
resignation. This Policy applies to the full-time employees of MBHI and its subsidiaries.

Appointment and Authority of Administrator:

The Administrator and named fiduciary of this Policy is MBHI, which shall carry out its duties
through the President of MBHI, except that if the Policy ever applies to the President then the
Board of Directors or its delegate is responsible for carrying out the duties as Administrator of
the Policy. The Administrator is authorized to decide in its discretion all questions arising under
this Policy, including those as to eligibility for and amounts of benefits payable under this
Policy. For example, the Administrator will decide in its discretion whether an employee has
voluntarily resigned or has been terminated for cause.

Benefits will be paid under this Policy only if the Administrator decides in its discretion that
the applicant is entitled to them.

Limitations on Benefits:

No benefits are payable under this Policy in the event the employee voluntarily resigns or is
terminated for cause. Further, a period of unemployment is required for benefits to be paid under
this Policy. Accordingly, no benefits are payable under this Policy to an employee if, by way of
example and not of limitation, (1) MBHI sells a business unit or part of a business unit and the
buyer hires the employee upon the sale, or (2) MBHI sells a subsidiary and the employee does not
lose his or her job upon the sale. In addition, an employee covered by a Transitional Employment
Agreement which becomes effective following a change-in-control will not be eligible to receive
severance payments.

Severance Benefits:

Eligible employees who have been discharged for reasons other than cause or resignation and who
experience a period of unemployment shall be entitled to benefits under this Policy as follows,
subject to the terms, conditions, and limitations set forth in this Policy:

     (1) Senior Vice Presidents and higher will be entitled to receive six (6) months of base
salary or one week for every full year of service, whichever is greater.

     (2) All other employees will be entitled to receive twelve (12) weeks of base salary or one
week for every full year of service, whichever is greater.

 

How and When Severance Benefits Will be Paid:

The schedule for the payment of the severance benefits will be the same schedule as the schedule
under which the employee’s employer (MBHI or one of its subsidiaries) normally pays employees for
services performed during a payroll period. The length of the schedule shall correspond to the
length of time used to calculate the severance benefit. Each separate payment shall be equal to
the total severance benefits divided by the number of pay dates occurring during the length of time
used to calculate the severance benefits. The Schedule for the time and the form of payment are
fixed as provided herein and may not be modified by the employee of MBHI without compliance with
Section 409A of the Internal Revenue Code.

Release of Employment-Related Claims:

To the fullest extent allowed by law, it is a condition of entitlement to receipt of severance
benefits under this Policy that a discharged employee release in writing any and all
employment-related claims that the employee may have against MBHI or any of its subsidiaries or
employees, including claims for discrimination. The President or his or her delegate is
authorized to specify the form of any such release and to negotiate the terms of such release with
each discharged employee.

Non-Solicitation of Customers and Employees:

It is a condition of entitlement to receipt of severance benefits under this Policy that each
discharged officer agree in writing not to solicit the customers or employees of MBHI or any of its
subsidiaries for the duration of the severance payments. The President or his or her delegate is
authorized to specify the form of any such written nonsolicitation agreement and to negotiate the
terms of such agreement with each discharged officer.

Claims Procedures:

It is the duty of the Administrator to adopt reasonable claims and review procedures to decide
claims and requests for reviews of benefit denials under this Policy.

Amendment and Termination:

MBHI reserves the right to amend or terminate this Policy at any time, with or without retroactive
effect to the fullest extent allowed by law. Amendments will be recommended by the compensation
committee and by the Board of Directors or the officer or officers delegated by the Board with the
authority to make amendments to this Policy; provided, however, that such officers shall not be
permitted to make amendments which affect Senior Vice Presidents and above.

Effective Date:

This amended and restated Policy is effective the date it is adopted by the Board of Directors,
which is June 28, 2005.

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Adoption of Amended and Restated Policy:

To evidence the adoption of this amended and restated Policy by MBHI, the President of MBHI has
been authorized to sign this Policy on June 24, 2008.

	 	 	 	 	 
	 
	 	 	 	 
	 

	 	 

	 	 

3EX-10.1 Employment Agreement

Exhibit 10.1

EMPLOYMENT AGREEMENT

     This Employment Agreement (the “Agreement”), is entered into as of August 1, 2008,
(the “Effective Date”) by and between Edward M. Carriero, Jr., residing at 1002 NW
195th Avenue, Pembroke Pines, FL 33029 (“Employee”), and SUNAIR SERVICES
CORPORATION, a Florida corporation, with offices at 595 South Federal Highway, Suite 500, Boca
Raton, FL 33432 (the “Company”).

W I T N E S S E T H:

     WHEREAS, the Company and Employee wish to continue an existing employment relationship, on the
terms, conditions and covenants set forth in this Agreement.

     NOW, THEREFORE, in consideration of Employee’s continuation of employment with the Company,
the payment of salary, benefits and the award of certain option grants, the mutual covenants
contained herein and other good and valuable consideration, the receipt of which the Company and
Employee hereby acknowledge, Employee and the Company agree, as follows:

     1. Position. Employee agrees to employment with the Company, and the Company hereby
employs Employee, in the position of Chief Financial Officer of the Company. Employee further
agrees to faithfully and diligently perform the job duties and to carry out the responsibilities of
that position and such other duties and responsibilities traditionally associated with such
position as determined by the Chief Executive Officer of the Company from time to time. Employee
acknowledges that the operations of the primary operating subsidiary of the Company is
headquartered in Orlando, Florida and that he will spend a significant portion of his time in
Orlando, Florida, however, he will not be required to reside in Orlando, Florida.

     2. Employee’s Effort. Employee shall faithfully and diligently perform his duties in
the capacity as an employee and in such capacity shall spend his full working time and best
efforts, skill and attention to his position and to the business and interests of the Company, and
Employee shall be prohibited from causing any private investments in businesses that are unrelated
to the business of the Company to interfere with his duties to the Company pursuant to this
Agreement.

     3. Salary.

          (a) The Company shall pay Employee (i) base compensation (the “Salary”) for services
rendered in the amount of One Hundred Sixty-Five Thousand Dollars ($165,000.00) per annum, payable
in installments consistent with the Company’s normal payroll schedule, subject to applicable
withholding and other taxes, and (ii) annual bonus, if any. The Chief Executive Officer shall
review Employee’s Salary for adjustment on the anniversary of the date hereof and eligibility for
annual bonus and make his recommendation to the Company’s Compensation Committee for review and
decision.

          (b) The Employee will be entitled to participate in any bonus plan, incentive compensation
program or incentive stock option plan or other employee benefits of the Company and which are
available to the other similarly situated executives of the Company, on the terms and at the level
of participation determined by the Company’s Compensation Committee.

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Options granted pursuant to such plans shall vest in accordance with the applicable plan from
the time of grant until the expiration date.

     4. Benefits.

          (a) The Company will notify Employee on or about the beginning of each calendar year with
respect to the holiday schedule (including the Company’s policy for allowing personal holidays) for
the coming year and the Employee shall be entitled to paid holidays per year, in accordance with
the Company’s policies.

          (b) Employee shall be entitled to fifteen (15) paid vacation days each calendar year, to be
taken at such times as the Employee and the Company shall mutually determine and provided that no
vacation time shall significantly interfere with the duties required to be rendered by the Employee
hereunder. Any vacation time not taken by the Employee during any calendar year may not be carried
forward into any succeeding calendar year.

          (c) Employee shall be entitled to sick leave and emergency leave according to the regular
policies and procedures of the Company. Additional sick leave or emergency leave over and above
paid leave provided by the Company, if any, shall be unpaid and shall be granted at the discretion
of the Board of Directors of the Company.

          (d) During the term of employment hereunder, the Employee shall be provided medical, dental,
and hospitalization insurance at no cost to the Employee and will be entitled to participate in the
Company’s accidental death and dismemberment, disability, travel and life insurance plans, and any
and all other plans as are presently and hereinafter offered by the Company to its executive
personnel, including savings, pension, profit-sharing and deferred compensation plans, subject to
the general eligibility and participation provisions set forth in such plans. Employee shall be
responsible for payment of any federal or state income tax imposed upon these benefits.

          (e) Employee shall be entitled to participate in any pension or profit sharing plan, incentive
stock option plan or any other type of plan adopted by Company for the benefit of its officers
and/or regular employees pursuant to the terms of such plans.

          (f) During the term of this Agreement, the Company shall provide the Employee with an
automobile and the Company shall be responsible for all insurance, lease, gasoline, oil, repairs,
maintenance, and other similar expenses incurred by the Employee by reason of the use of such
automobile. In the event Company alters its policy of providing an automobile to Employee and
other similarly situated executives, Company shall provide to Employee a reasonable and appropriate
automobile allowance. Employee shall be responsible for payment of any federal or state income tax
imposed upon these benefits.

          (g) Employee shall be entitled to reimbursement for all reasonable expenses, including travel
and entertainment, incurred by Employee in the performance of Employee’s duties. Employee will
maintain records and written receipt as required by the Company policy and reasonably requested by
the Board of Directors of the Company to substantiate such expenses.

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     5. Term; Termination. This Agreement and the status and obligations of Employee
hereunder as an employee of the Company (except as provided for below) shall cease and terminate
effective upon the close of business on the second anniversary of the Effective Date (the
“Expiration Date”) unless earlier terminated pursuant to this Section 5 or further extended
by the parties hereto in writing in a separate instrument provided to the other party no later than
sixty (60) days prior to the applicable Expiration Date; provided, however, that upon such date
said termination shall not affect any rights that may have been specifically granted to Employee by
the Company pursuant to any of the Company’s retirement plans, supplementary retirement plans,
profit sharing and savings plans, healthcare, 401(k) or any other employee benefit plans sponsored
by the Company, it being understood that no such rights are granted hereunder and that the
Employee’s participation in such plans shall cease as of the date of said termination. In
addition, notwithstanding the expiry or termination of this Agreement pursuant to this Section 5 or
otherwise, the Company’s and the Employee’s rights and obligations under Sections 7 through 12
inclusive of this Agreement shall survive such termination or expiration of this Agreement in
accordance with the terms of such Sections.

          (a) Termination with Notice by Either Party. The Company or Employee may terminate
this Agreement for any reason or no reason upon sixty (60) days prior written notice to the other.
If the Company terminates the employment of Employee without Good Cause (as herein defined), or the
Employee terminates his employment with Good Cause (as herein defined), the Company shall pay
Employee severance compensation calculated at the rate of Salary in effect as of the date
immediately preceding the date of termination for twelve (12) months, payable in the manner and at
such times as the Salary otherwise would have been payable to the Employee hereunder were Employee
to continue to be employed by the Company. If the Company terminates the employment of Employee
with Good Cause, or if this Agreement is not renewed, or Employee terminates his employment with
the Company hereunder as provided in this Section 5(a), the Company shall not be under any
obligation to pay Employee, and Employee shall not be entitled to, any such severance compensation.

          (b) Termination for Good Cause by Company. In the case of the Company terminating
this Agreement, “Good Cause” means any one or more of the following:

               (1) a material breach or material default by Employee of the material terms of this Agreement
(except any such breach or default which is caused by the physical disability or death of Employee)
which remains uncured after twenty (20) days following Employee’s receipt from the Company of
written notice specifying such breach or default, if subject to cure;

               (2) gross negligence or willful misfeasance by Employee or the breach of fiduciary duty by
Employee (if affirmatively determined by the Board of Directors of the Company) in the performance
of his duties as an employee hereunder;

               (3) the commission by Employee of an act of fraud, misappropriation of funds, breach of trust,
embezzlement or any other crime in connection with Employee’s duties;

               (4) conviction of Employee of a felony or any crime which involves dishonesty or a breach of
trust;

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               (5) the Employee shall be unable, or fail, to perform the essential functions of his/her
position for which he was hired, with or without reasonable accommodation, for any period of six
months or more to the extent termination for such disability is in accordance with applicable law;

               (6) the death of the Employee; or

               (7) the Employee is unable to perform any of the functions of his position for which he was
hired, because such performance is prohibited or enjoined by a judicial or administrative order or
other agreement enforcing any non-competition, non-solicitation or other restrictive covenant or
agreement to which the Employee is a party.

     In the event of a termination for Good Cause, the Company will pay Employee the Salary earned
and reasonable expenses reimbursable under this Agreement incurred through the date of Employee’s
termination. Any good faith determination by the Board of Directors of the Company of Good Cause
shall be binding and conclusive on all interested parties. Upon the termination of Employee’s
employment with the Company due to death or disability as set forth in Sections 5(b)(5) and 5(b)(6)
above, the Employee shall be entitled to retain all options that have been granted to Employee and
have vested as of the date of such termination for the duration allowed under applicable law and
the Company’s stock option plan.

          (c) Termination for Good Cause by Employee. In the case of the Employee terminating
this Agreement, “Good Cause” means any one or more of the following:

               (1) there shall be a continuing material breach or continuing material default by the Company
of the material terms of this Agreement which remains uncured after twenty (20) days following the
Company’s receipt from the Employee of written notice specifying such breach or default;

               (2) if Employee shall no longer hold the position of Chief Financial Officer of the Company
with duties and responsibilities consistent with such position unless there is Good Cause for the
removal of Employee from such position; or

               (3) a reduction in Employee’s Salary.

     6. Change in Control and Other Grounds Entitling Employee to Terminate. ”Change in
Control” shall mean (a) any sale, lease, exchange or other transfer (in one transaction or a
series of transactions) of all or substantially all of the assets of the Company; (b) any
consolidation or merger or other business combination of the Company with any other entity where
the shareholders of the Company, immediately prior to the consolidation or merger or other business
combination would not, immediately after the consolidation or merger or other business combination,
beneficially own, directly or indirectly, shares representing fifty percent (50%) of the combined
voting power of all of the outstanding securities of the entity issuing cash or securities in the
consolidation or merger or other business combination (or its ultimate parent corporation, if any);
or (c) the Board of Directors of the Company adopts a resolution to the effect that a “Change In
Control” has occurred for purposes of this Agreement.

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     Upon a Change in Control, 100% of all unvested stock options and/or restricted shares held by
Employee shall immediately vest.

     Further, if Employee elects to terminate his employment hereunder with Good Cause (as defined
in Section 5(c)) because any of the scenarios constituting such Good Cause occurs within one (1)
year of a Change in Control then Employee shall be entitled to the severance payments provided for
in Section 5(a).

     Nothing stated in this Section 6 shall operate to reduce or eliminate the severance
obligations of the Company to the Employee pursuant to Section 5(a) to the extent the Company
terminates the employment of Employee without Good Cause whether in connection with a Change in
Control or otherwise.

     7. Confidentiality. Employee shall keep confidential, except as the Company may
otherwise consent in writing, and not divulge, communicate, disclose use to the detriment of the
Company or for the benefit of any other person or persons, misuse in any way, or make any use of
except for the benefit of the Company, at any time either during the term of this Agreement or at
any time thereafter, any Confidential Information (as defined herein). For purposes of this
Agreement, “Confidential Information” means information disclosed to the Employee or known
by the Employee as a consequence of or through the unique position of his employment with the
Company (including information conceived, originated, discovered or developed by the Employee)
prior to or after the date hereof, and not generally or publicly known, about the Company or its
business, including, without limitation, trade secrets, knowledge, data or other information of the
Company relating to the products, processes, know how, technical data, designs, formulas, test
data, customer lists, business plans, marketing plans and strategies, and product pricing
strategies or other subject matter pertaining to any business of the Company or any of its clients,
customers, consultants, licensees or affiliates which Employee may produce, obtain or otherwise
learn of during the course of Employee’s performance of services, including information expressly
deemed to be confidential by the Company. Employee shall not deliver, reproduce, or in any way
allow any such Confidential Information to be delivered to or used by any third parties without the
specific direction or consent of a duly authorized representative of the Company, except in
connection with the discharge of his duties hereunder. The terms of this paragraph shall survive
termination of this Agreement. Any Confidential Information or data now or hereafter acquired by
the Employee with respect to the business of the Company (which shall include, but not be limited
to, information concerning the Company’s financial condition, prospects, technology, customers,
suppliers, sources of leads and methods of doing business) shall be deemed a valuable, special and
unique asset of the Company that is received by the Employee in confidence and as a fiduciary, and
Employee shall remain a fiduciary to the Company with respect to all of such information.
Notwithstanding anything to the contrary herein, Employee shall not have any obligation to keep
confidential any information (and the term Confidential Information shall not be deemed to include
any information) that (a) is generally available to the public through no fault or wrongful act of
Employee in breach of the terms hereof, (b) is disseminated by the Company or any of its affiliates
publicly without requiring confidentiality, (c) is required by law or regulation to be disclosed by
Employee, (d) is required to be disclosed by Employee to any government agency or person to whom
disclosure is required by judicial or administrative process, or (e) is within Employee’s
knowledge, experience and expertise in the pest control services industry that he possessed at the
time of this

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Agreement; provided that such knowledge, experience and expertise shall not be used in
violation of the restrictive covenants set forth in Sections 9 through 12 hereof.

     8. Return of Confidential Material. Upon the completion or other termination of
Employee’s services for the Company, Employee shall promptly surrender and deliver to the Company
all records, materials, equipment, drawings, documents, notes and books and data of any nature
pertaining to any invention, trade secret or Confidential Information of the Company or to
Employee’s services, and Employee will not take with him any description containing or pertaining
to any Confidential Information, knowledge or data of the Company which Employee may produce or
obtain during the course of his services. The terms of this paragraph shall survive termination of
this Agreement.

     9. Competition. Employee will not do any of the following, either directly or
indirectly, during Employee’s employment with the Company and, during the Applicable
Non-Competition Period (as herein defined), anywhere in the geographic area that Company operates
during the term of this Agreement. In the event that Employee improperly competes with the Company
in violation of this Section, the period during which he engages in such competition shall not be
counted in determining the Applicable Non-Competition Period:

          (a) For purposes of this Agreement, “Competitive Activity” shall mean any activity
relating to, in respect of or in connection with, directly or indirectly, the lawn care and pest
control services industry.

          (b) For purposes of this Agreement, “Applicable Non-Competition Period” shall equal
(i) one (1) year after Employee’s cessation of employment with the Company in the event the Company
terminates the employment of Employee without Good Cause, the Company fails to renew this Agreement
as provided in Section 5 without Good Cause, the Employee terminates his employment with the
Company with Good Cause or Employee fails to renew this Agreement as provided in Section 5, but
only to the extent the Company complies with its obligation to pay the severance payments required
by Section 5(a) hereunder to Employee and (ii) one (1) year after Employee’s cessation of
employment with the Company in the event the Company terminates the employment of Employee with
Good Cause, the Company fails to renew this Agreement as provided in Section 5 with Good Cause, or
Employee terminates his employment with the Company hereunder without Good Cause as provided in
this Section 5(a).

          (c) Employee shall not, directly or indirectly, own any interest in, manage, operate, control,
consult for, be an officer or director of, work for, or be employed in any capacity by, any sole
proprietorship, corporation, company, partnership, association, venture or business any company or
any other business, entity, agency or organization (whether as an employee, officer, director,
partner, agent, security holder, creditor, consultant or otherwise) that directly or indirectly (or
through any affiliated entity) engages in Competitive Activity; provided that such provision shall
not apply to the Employee’s ownership of securities of the Company or the acquisition by the
Employee, solely as an investment, of securities of any issuer that is registered under Section
12(b) or 12(g) of the Securities Exchange Act of 1934, as amended, and that are listed or admitted
for trading on any United States national securities exchange or that are quoted on the National
Association of Securities Dealers Automated Quotations System, or any similar system or automated
dissemination of quotations of securities prices in common use,

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so long as the Employee does not control, acquire a controlling interest in or become a member
of a group which exercises direct or indirect control of, more than five percent of any class of
capital stock of such corporation.

          (d) Employee shall not, directly or indirectly, for himself or for any other person, firm,
corporation, partnership, association or other entity, solicit or perform services in connection
with any Competitive Activity for any prior or current customers of the Company;

          (e) Employee shall not, directly or indirectly, for himself or for any other person, firm,
corporation, partnership, association or other entity, solicit or attempt to solicit for employment
or employ or attempt to employ any then current employees or former employees employed by the
Company without the Company’s consent, as applicable, unless such employee or former employee has
not been employed by the Company for a period in excess of six months; or

          (f) Employee shall not make known the names and addresses of such clients or any information
relating in any manner to the Company’s trade or business relationships with such customers, other
than in connection with the performance of the Employee’s duties under this Agreement.

          Employee and the Company agree that the phrase “Employee’s cessation of employment with the
Company” as used in this Agreement, refers to any separation from his employment at the Company
either voluntarily by Employee pursuant to Sections 5(a) and 5(c) or involuntarily by the Company
pursuant to Sections 5(a) and 5(b).

     10. Other Obligations.

          (a) Employee acknowledges that the Company from time to time may have agreements with other
persons, which impose obligations or restrictions on the Company made during the course of work
thereunder or regarding the confidential nature of such work. Employee will be bound by all such
obligations and restrictions and will take all action necessary to discharge the obligations of the
Company thereunder.

          (b) All of Employee’s obligations under this Agreement shall be subject to any applicable
agreements with, and policies issued by the Company to which Employee is subject that are generally
applicable to the similarly situated executives of the Company.

     11. Trade Secrets of Others. Employee represents that his performance of all the
terms of this Agreement as employee to the Company does not and will not breach any agreement to
keep in confidence proprietary information, knowledge or data acquired by Employee in confidence or
in trust. Employee will not enter into any agreement, either written or oral, which is in conflict
with this Agreement.

     12. Other Provisions Relating to Restrictive Covenants.

          (a) Ownership of Developments. All copyrights, patents, trade secrets, or other
intellectual property rights associated with any ideas, concepts, techniques, inventions,
processes, or works of authorship developed or created by the Employee during the course of

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performing work for the Company or its clients (collectively, the “Work Product”)
shall belong exclusively to the Company and shall, to the extent possible, be considered a work
made by the Employee for hire for the Company within the meaning of Title 17 of the United States
Code. To the extent the Work Product may not be considered work made by the Employee for hire for
the Company, the Employee agrees to assign, and automatically assign at the time of creation of the
Work Product, without any requirement of further consideration, any right, title, or interest the
Employee may have in such Work Product. Upon the request of the Company, the Employee shall take
such further actions, including execution and delivery of instruments of conveyance, as may be
appropriate to give full and proper effect to such assignment.

          (b) Books and Records. All books, records, and accounts relating in any manner to the
customers or clients of the Company, whether prepared by the Employee or otherwise coming into the
Employee’s possession, shall be the exclusive property of the Company and shall be returned
immediately to the Company on termination of the Employee’s employment hereunder or on the
Company’s request at any time.

          (c) Definition of Company. Solely for purposes of these Sections 7 through 10, the
term “Company” also shall include any existing or future subsidiaries of the Company that are
operating during the time periods described herein and any other entities that directly or
indirectly, through one or more intermediaries, control, are controlled by or are under common
control with the Company during the periods described herein.

          (d) Acknowledgment by the Employee. The Employee acknowledges and confirms that (a)
the restrictive covenants contained in these Sections 7 through 12 are reasonably necessary to
protect the legitimate business interests of the Company, and (b) the restrictions contained in
these Sections 7 through 12 (including without limitation the length of the term of such
provisions) are not overbroad, overlong, or unfair and are not the result of overreaching, duress
or coercion of any kind. The Employee further acknowledges and confirms that his full, uninhibited
and faithful observance of each of the covenants contained in these Sections 7 through 12 will not
cause him any undue hardship, financial or otherwise, and that enforcement of each of the covenants
contained herein will not impair his ability to obtain employment commensurate with his abilities
and on terms fully acceptable to him or otherwise to obtain income required for the comfortable
support of him and his family and the satisfaction of the needs of his creditors. The Employee
acknowledges and confirms that his special knowledge of the business of the Company is such as
would cause the Company serious injury or loss if he were to use such ability and knowledge to the
benefit of a competitor or were to compete with the Company in violation of the terms of these
Sections 7 through 12. The Employee further acknowledges that the restrictions contained in these
Sections 7 through 12 are intended to be, and shall be, for the benefit of and shall be enforceable
by, the Company’s successors and assigns.

          (e) Reformation by Court. In the event that a court of competent jurisdiction shall
determine that any provision of these Sections 7 through 12 is invalid or more restrictive than
permitted under the governing law of such jurisdiction, then only as to enforcement of these
Sections 7 through 12 within the jurisdiction of such court, such provision shall be interpreted
and enforced as if it provided for the maximum restriction permitted under such governing law.

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          (f) Extension of Time. If the Employee shall be in violation of any provision of
these Sections 7 through 12, then each time limitation set forth in these Sections 7 through 12
shall be extended for a period of time equal to the period of time during which such violation or
violations occur. If the Company seeks injunctive relief from such violation in any court, then
the covenants set forth in these Sections 7 through 12 shall be extended for a period of time equal
to the pendency of such proceeding including all appeals by the Employee.

          (g) Injunction. It is recognized and hereby acknowledged by the parties hereto that a
breach by the Employee of any of the covenants contained in these Sections 7 through 12 of this
Agreement will cause irreparable harm and damage to the Company, the monetary amount of which may
be virtually impossible to ascertain. As a result, the Employee recognizes and hereby acknowledges
that the Company shall be entitled to an injunction from any court of competent jurisdiction
enjoining and restraining any violation of any or all of the covenants contained in these Sections
7 through 12 of this Agreement by the Employee or any of his affiliates, associates, partners or
agents, either directly or indirectly, and that such right to injunction shall be cumulative and in
addition to whatever other remedies the Company may possess.

          (h) Survival. The provisions of these Sections 7 through 12 shall survive the
termination of the term of employment hereunder or expiration of the term of this Agreement.

     13. Modification. This Agreement may not be changed, modified, released, discharged,
abandoned, or otherwise amended, in whole or in part, except by an instrument in writing, signed by
Employee and by the Company. Any subsequent change or changes in Employee’s relationship with the
Company or Employee’s compensation shall not affect the validity or scope of this Agreement.

     14. Entire Agreement. Employee acknowledges receipt of this Agreement, and agrees
that with respect to the subject matter thereof, it is Employee’s entire agreement with the
Company, superseding any previous oral or written communications, representations, understandings
with the Company or any office or representative thereof. Each party to the Agreement acknowledges
that, in executing this Agreement, such party has had the opportunity to seek the advice of
independent legal counsel, and has read and understood all of the terms and provisions of the
Agreement.

     15. Severability. In the event that any paragraph or provision of this Agreement
shall be held to be illegal or unenforceable, the entire Agreement shall not fall on account
thereof, but shall otherwise remain in full force and effect, and such paragraph or provision shall
be enforced to the maximum extent permissible.

     16. Successors and Assigns. This Agreement shall be binding upon Employee’s heirs,
executors, administrators or other legal representatives and is for the benefit of and shall be
enforceable by the Company, its successors and assigns. Employee expressly consents to the
enforcement of these provisions by the Company and its successors and assigns.

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     17. Governing Law. This Agreement shall be governed by the laws of the State of
Florida except for any conflicts of law rules thereof that might direct the application of the
substantive law of another state.

     18. Counterparts. This Agreement may be signed in counterparts and by facsimile
transmission, each of which shall be deemed an original and both of which shall together constitute
one agreement.

     19. No Waiver. No waiver by either party hereto of any breach of this Agreement by
the other party hereto shall constitute a waiver of any subsequent breach.

     20. Notice. Any notice hereby required or permitted to be given shall be sufficiently
given if in writing and upon mailing by registered or certified mail, postage prepaid, to either
party at the address of such party or such other address as shall have been designated by written
notice by such party to the other party.

     21. Arbitration.

          (a) Exclusive Remedy. The parties recognize that litigation in federal or state
courts or before federal or state administrative agencies of disputes arising out of the Employee’s
employment with the Company or out of this Agreement, or the Employee’s termination of employment
or termination of this Agreement, may not be in the best interests of either the Employee or the
Company, and may result in unnecessary costs, delays, complexities, and uncertainty. The parties
agree that any dispute between the parties arising out of or relating to the Employee’s employment,
or to the negotiation, execution, performance or termination of this Agreement or the Employee’s
employment, including, but not limited to, any claim arising out of this Agreement, claims under
Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, the Age
Discrimination in Employment Act of 1967, the Americans with Disabilities Act of 1990, Section 1981
of the Civil Rights Act of 1966, as amended, the Family Medical Leave Act, the Employee Retirement
Income Security Act, and any similar federal, state or local law, statute, regulation, or any
common law doctrine, whether that dispute arises during or after employment shall be resolved by
arbitration in the Broward County, Florida area, in accordance with the National Employment
Arbitration Rules of the American Arbitration Association, as modified by the provisions of this
Section 21. Except as set forth below with respect to Section 12 of this Agreement, the parties
each further agree that the arbitration provisions of this Agreement shall provide each party with
its exclusive remedy, and each party expressly waives any right it might have to seek redress in
any other forum, except as otherwise expressly provided in this Agreement. Notwithstanding
anything in this Agreement to the contrary, the provisions of this Section 21 shall not apply to
any injunctions that may be sought with respect to disputes arising out of or relating to Sections
7 through 12 of this Agreement. The parties acknowledge and agree that their obligations under
this arbitration agreement survive the expiration or termination of this Agreement and continue
after the termination of the employment relationship between the Employee and the Company. By
election of arbitration as the means for final settlement of all claims, the parties hereby waive
their respective rights to, and agree not to, sue each other in any action in a Federal, State or
local court with respect to such claims, but may seek to enforce in court an arbitration award
rendered pursuant to this Agreement. The parties specifically agree to waive their

10

 

respective rights to a trial by jury, and further agree that no demand, request or motion will
be made for trial by jury.

          (b) Arbitration Procedure and Arbitrator’s Authority. In any arbitration proceeding,
each party shall be entitled to engage in any type of discovery permitted by the Federal Rules of
Civil Procedure, to retain its own counsel, to present evidence and cross-examine witnesses, to
purchase a stenographic record of the proceedings, and to submit post-hearing briefs. In reaching
his/her decision, the arbitrator shall have no authority to add to, detract from, or otherwise
modify any provision of this Agreement. The arbitrator shall submit with the award a written
opinion which shall include findings of fact and conclusions of law. Judgment upon the award
rendered by the arbitrator may be entered in any court having competent jurisdiction.

          (c) Effect of Arbitrator’s Decision: Arbitrator’s Fees. The decision of the
arbitrator shall be final and binding between the parties as to all claims which were or could have
been raised in connection with the dispute, to the full extent permitted by law. In all cases in
which applicable federal law precludes a waiver of judicial remedies, the parties agree that the
decision of the arbitrator shall be a condition precedent to the institution or maintenance of any
legal, equitable, administrative, or other formal proceeding by the Employee in connection with the
dispute, and that the decision and opinion of the arbitrator may be presented in any other forum on
the merits of the dispute. If the arbitrator finds that the Employee was terminated in violation
of law or this Agreement, the parties agree that the arbitrator acting hereunder shall be empowered
to provide the Employee with any remedy available should the matter have been tried in a court,
including equitable and/or legal remedies, compensatory damages and back pay. The arbitrator’s
fees and expenses and all administrative fees and expenses associated with the filing of the
arbitration shall be borne by the non-prevailing party.

     22. Section 162(m) Limits. Notwithstanding any other provision of this Agreement to
the contrary, if and to the extent that any remuneration payable by the Company to the Employee for
any year would exceed the maximum amount of remuneration that the Company may deduct for that year
under Section 162(m) (“Section 162(m)”) of the Internal Revenue Code of 1986, as amended
(the “Code”), payment of the portion of the remuneration for that year that would not be so
deductible under Section 162(m) shall, in the sole discretion of the Board of Directors, be
deferred and become payable at such time or times as the Board of Directors determines that it
first would be deductible by the Company under Section 162(m), with interest at the “short-term
applicable rate” as such term is defined in Section 1274(d) of the Code.

     23. Assignment. The Company shall have the right to assign this Agreement and its
rights and obligations hereunder in whole, but not in part, to any corporation or other entity
which is a wholly-owned subsidiary of the Company or with or into which the Company may hereafter
merge or consolidate or to which the Company may transfer all or substantially all of its assets,
if in any such case said corporation or other entity shall by operation of law or expressly in
writing assume all obligations of the Company hereunder as fully as if it had been originally made
a party hereto. The Employee may not assign or transfer this Agreement or any rights or
obligations hereunder.

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     24. Waiver of Jury Trial. The Employee hereby knowingly, voluntarily and
intentionally waives any right that the Employee may have to a trial by jury in respect of any
litigation based hereon, or arising out of, under or in connection with this Agreement and any
agreement, document or instrument contemplated to be executed in connection herewith, or any course
of conduct, course of dealing statements (whether verbal or written) or actions of any party
hereto.

[Signatures on following page]

12

 

     The undersigned have executed this Employment Agreement as of the date first set forth above.

	 	 	 	 	 
	 	SUNAIR SERVICES CORPORATION

 	 
	 	By:  	/s/ Jack I. Ruff
 	 
	 	 	Jack I. Ruff, 	 
	 	 	President and Chief Executive Officer 	 
	 
	 	 	 
	 	                                              /s/ Edward M. Carriero, Jr.
 	 
	 	Edward M. Carriero, Jr. 	 
	 	 	 
	 

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