INTERLOGIX INC
EMPLOYMENT AGREEMENT DATED 7/28/1999
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>ex10-1.txt
<DESCRIPTION>EMPLOYMENT AGREEMENT DATED 7/28/1999
<TEXT>

<PAGE>   1
                                                                   Exhibit 10.1


                              EMPLOYMENT AGREEMENT


                  This Employment Agreement (the "Agreement") is entered into as
of September 28, 1999, by and between Thomas L. Auth ("Employee") and ITI
Technologies, Inc. a Delaware corporation (the "Company").

                                   Background

                  The Company has entered an Agreement and Plan of Merger and
Reorganization dated as of September 28, 1999 by and between the Company and SLC
Technologies, Inc. (the "Merger Agreement"). Capitalized terms used but not
defined herein shall have the meanings ascribed to them in the Merger Agreement.
Employee is currently the Chairman of the Board of Directors of the Company and
the Merger Agreement provides that at the Effective Time Employee will continue
as the Chairman of the Board of Directors of the Company. In addition to his
services as non-executive Chairman of the Board of Directors of the Company
after the Effective Time, the Company desires to engage Employee to provide
services as an employee of the Company and Employee desires to provide such
services as an employee of the Company, all upon the terms and conditions
hereinafter set forth.

                                      Terms

                  NOW, THEREFORE, in consideration of the mutual representations
and warranties, covenants, undertakings and agreements herein contained, the
Company and Employee, intending to be legally bound hereby, agree as follows:

                  1. Establishment of Employment. Subject to Section 10, the
Company hereby engages the services of Employee, and Employee hereby accepts
employment with the Company upon the terms and subject to the conditions set
forth in this Agreement.

                  2. Employment Period. For purposes of this Agreement the
"Employment Period" means the period beginning at the Effective Time and ending
upon the date his employment is terminated pursuant to Section 6(a) hereof.

                  3. Services. During the Employment Period, Employee shall
carry out such duties as are reasonably assigned or delegated to Employee by the
Chief Executive Officer of the Company. It is expected that for the first six
months after the Effective Time Employee shall assist in the integration and
transition to the extent mutually agreed by the Employee and the Chief Executive
Officer of the Company. Thereafter, Employee shall carry out such duties as may
be mutually agreed by Employee and the Chief Executive Officer of the Company
(it being understood, for the purpose of clarity, that the Employee shall not be
under any obligation whatsoever to accept any such duties and the Chief
Executive Officer shall not be under any obligation to offer any such duties or
permit Employee to perform any duties).

                  4. Office and Secretarial Support. From the Effective Time
until the earlier to occur of (a) the two-year anniversary of the Effective Time
and (b) the termination of the
<PAGE>   2
Employment Period, the Company shall provide Employee with an off-site office
and secretarial support at such off-site location.

                  5. Compensation and Benefits.

                           (a) During the Employment Period, but subject to the
terms of this Section 5 and Section 7 hereof, Employee shall receive the
following compensation and benefits:

                                (i) Salary. The Company shall pay Employee a
monthly salary of $33,333 ("Salary"), payable monthly in arrears;

                                (ii) Standard Group Benefits. Employee shall
receive all group benefits, other than pursuant to bonus or equity-based
compensation plans, that are made available to senior executives of the Company
as a matter of standard policy;

                                (iii) Withholding. All compensation to Employee
made pursuant to this Agreement shall be subject to such withholding as may be
required by any applicable laws; and

                                (iv) Automobile. The Company has furnished
Employee with an automobile, and from the Effective Time until the earlier to
occur of (a) the two-year anniversary of the Effective Time and (b) the
termination of the Employment Period, the Company shall continue to pay or
reimburse Employee for all operating costs associated therewith.

                           (b) Options. At the Effective Time the Company will
grant Employee options to acquire 20,000 shares of the Company's Common Stock.
The options to be granted pursuant to this Section 5(e) are referred to herein
as the "Options." The terms of the Options shall be the standard terms for
options granted pursuant to the stock option plan referenced in Section 5.14 of
the Merger Agreement, except that (i) the exercise price for the Options will be
the fair market value on the date of grant, (ii) the Options shall be fully
vested on the date of grant, (iii) the Options will not expire prior to ninety
(90) days after the end of the Employment Period, and (iv) Employee will not be
permitted to exercise Options covering 10,000 shares of the Company's Common
Stock until the first anniversary of the Effective Time, and will not be
permitted to exercise the remaining Options until the second anniversary of the
Effective Time.

                           (c) Health Coverage. By written notice to the Company
delivered at least two (2) months prior to the end of the Employment Period,
Employee may elect to waive the last $40,000 in Salary payable hereunder to
Employee and in lieu of such payment require the Company to provide health
insurance coverage for Employee and his spouse at the cost of the Company until
the Employee reaches the age of sixty-five (65), pursuant to the health coverage
generally made available to senior executives of the Company as a matter of
standard policy or substantially similar coverage.



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                  6. Termination.

                           (a) Employee's employment shall terminate immediately
upon the earliest to occur of: (i) the third anniversary of the Effective Time,
(ii) Employee's death, (iii) the date the Company provides written notice of
termination of Employee by the Company for Cause (as defined herein) and (iv)
termination by Employee of his services hereunder by resignation. Employee's
resignation as a director of the Company, should Employee elect to resign, shall
not be considered a resignation by Employee hereunder.

                           (b) For purposes of this Agreement "Cause" means the
occurrence of any of the following circumstances:

                                (i) the willful engaging by Employee in conduct
that is significantly injurious to the Company and/or its affiliates, monetarily
or otherwise, after a written demand for cessation of such conduct is delivered
to Employee by the Board of Directors of the Company, which demand specifically
identifies the manner in which the Board of Directors of the Company believes
that Employee has engaged in such conduct and the injury to the Company and/or
its affiliates;

                                (ii) the conviction of Employee of a crime
involving moral turpitude;

                                (iii) Employee's abuse of illegal drugs or other
controlled substances or habitual intoxication; or

                                (iv) Employee's willful breach of Section 9
hereof.

                           (c) Notwithstanding anything to the contrary herein,
the Company may, without terminating Employee's employment, at any time relieve
Employee of all his duties and responsibilities hereunder and may relieve
Employee of authority to act on behalf of, or legally bind, the Company,
provided that any such action by the Company shall be without prejudice to
Employee's right to the compensation and benefits provided under this Agreement.
Employee covenants and agrees that in the event the Company relieves Employee of
his duties and responsibilities pursuant to this Section 6(c), from and after
the date the Company notifies Employee in writing that he is relieved of his
duties and responsibilities, Employee shall not hold himself out as a
representative or agent of the Company or hold himself out as having the
authority to act on behalf of, or legally bind, the Company, except that
Employee may hold himself out as the Chairman of the Board of Directors of the
Company.

                  7. Obligations of the Company upon Termination.

                           (a) Termination For Cause. If the Company terminates
Employee prior to the third anniversary of the Effective Time for Cause, so long
as Employee has not breached Section 9 hereof, the Company shall pay Employee
such portion of the Salary as is accrued prior to the date of such termination.
Upon termination of Employee by the Company


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for Cause, except as set forth in this Section 7(a), the Company shall have no
further liability or obligation under this Agreement to Employee or any person
claiming under or through him.

                           (b) Termination Upon Death. If Employee's employment
is terminated prior to the third anniversary of the Effective Time by reason of
Employee's death, so long as Employee has not breached Section 9 hereof, the
Company shall (i) pay the Salary to Employee's estate until the third
anniversary of the Effective Time and (ii) continue to provide the benefits set
forth in Section 5(a)(ii) hereof until the third anniversary of the Effective
Time. Upon termination of Employee by reason of death or disability, except as
set forth in this Section 7(b), the Company shall have no further liability or
obligation under this Agreement to Employee or any person claiming under or
through him.

                           (c) Termination By Employee. If Employee terminates
his employment by resignation prior to the third anniversary of the Effective
Time, the Company shall have no further liability or obligation under this
Agreement to Employee or any person claiming under or through him, except that
the Company shall pay Employee for such portion of the Salary as is accrued
prior to the date of such termination.

                           (d) Termination Upon Expiration of Employment Term.
Except as provided in Section 5(c), after the third anniversary of the Effective
Time, the Company shall have no further liability or obligation under this
Agreement to Employee or any person claiming under or through him, except that
the Company shall pay Employee for such portion of the Salary as is accrued
prior to the third anniversary of the Effective Time.

                  8. Employee's Representation and Warranty. Employee represents
and warrants that he is not a party to or otherwise subject to or bound by the
terms of any contract, agreement or understanding that in any manner would limit
or otherwise affect his ability to perform his obligations hereunder.

                  9. Employee's Covenants and Agreements; Non-Disparagement.

                           (a) Employee has entered into the Employee Stock
Option Agreements listed on Exhibit A hereto (collectively, the "Specified
Agreements"). The Company is entering into this Agreement in reliance on the
existence and validity of Section 4 of the Specified Agreements, which is
incorporated herein by reference. Any breach of Section 4 of the Specified
Agreements will be deemed to be a breach of this Agreement.

                           (b) Employee agrees during the Employment Term and
thereafter not to make any statements that are materially injurious or
disparaging to the Company or any of its directors, officers, employees,
representatives or stockholders.

                  10. Effect of Non-consummation. This Agreement is contingent
upon the consummation of the Merger under the Merger Agreement and shall not
take effect until the Effective Time. Accordingly, notwithstanding anything
contained herein to the contrary, in the


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event that the Merger Agreement is terminated prior to the Effective Time, this
Agreement shall become null and void without any further action

                  11. Governing Law. This Agreement shall be governed by, and
interpreted in accordance with, the laws of the State of Delaware applicable to
contracts executed in and to be performed in that State, without giving effect
to the conflicts of law provisions thereof.

                  12. Binding Agreement. This Agreement shall be binding upon
and inure to the benefit of the parties, and their legal representatives, heirs,
successors and assigns, except that the duties and responsibilities of Employee
hereunder are of a personal nature and shall not be assignable in whole or in
part by Employee.

                  13. Duration. Notwithstanding the termination of the
Employment Period and of Employee's employment with the Company, this Agreement
shall continue to bind the parties for so long as any obligations remain under
the terms of this Agreement.

                  14. Notices. All notices required or permitted hereunder shall
be made in writing by hand-delivery, facsimile, certified or registered
first-class mail, or air courier guaranteeing overnight delivery to the other
party at the following addresses:




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                             If to the Company, to:

                                   ITI Technologies, Inc.
                                   2266 North Second Street
                                   North Saint Paul, Minnesota 55109
                                   Attention:  General Counsel
                                   Telephone:  651-777-2690
                                   Facsimile:  651-779-4802


                            With a required copy to:


                                   SLC Technologies, Inc.
                                   c/o Berwind Corporation
                                   West Tower, Centre Square
                                   1500 Market Street
                                   Philadelphia, PA  19102
                                   Attention:  Pamela I. Lehrer
                                               General Counsel
                                   Telephone:  215-563-2800
                                   Facsimile:  215-563-4489


                            If to Employee, to:


                                   Thomas L. Auth
                                   8 Evergreen Road
                                   North Oaks, Minnesota 55127
                                   Telephone:
                                   Facsimile:


or to such other address as any of such party may designate in a written notice
served upon the other party in the manner provided herein. All notices required
or permitted hereunder shall be deemed duly given and received when delivered by
hand, if personally delivered; when delivered if delivered via facsimile
transmission; when delivered if sent by certified or registered first-class
mail; and on the day next succeeding the date of mailing if timely delivered to
an express air courier guaranteeing overnight delivery.

                  15. Entire Agreement. This instrument, together with the
Specified Agreements, constitutes the entire agreement with respect to the
subject matter hereof among the parties hereto and replaces and supersedes as of
the date hereof, any and all prior oral and written


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<PAGE>   7
agreements and understandings between or among Employee, the Company and any
subsidiary of the Company, including the Letter Agreement dated March 15, 1993
among Employee, the Company and Interactive Technologies, Inc. This Agreement
may only be modified by an agreement in writing executed by parties hereto.

                  16. Severability. If any term or provision of this Agreement
or the Specified Agreements or the application thereof to any person or
circumstance shall, to any extent, be held invalid or unenforceable by a court
of competent jurisdiction, the remainder of this Agreement and the Specified
Agreements or the application of any such term or provision to persons or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby, and each term and provision of this Agreement and
the Specified Agreements shall be valid and enforceable to the fullest extent
permitted by law. If any of the provisions contained in this Agreement or the
Specified Agreements shall for any reason be held to be excessively broad as to
duration, scope, activity or subject, it shall be construed by limiting and
reducing it, so as to be valid and enforceable to the extent compatible with the
applicable law or the determination by a court of competent jurisdiction.

                  17. Waiver of Breach. The waiver by the Company of a breach of
any provision of this Agreement by Employee shall not operate or be construed as
a waiver of any other or subsequent breach by Employee of such or any other
provision. No delay or omission by the Company or Employee in exercising any
right, remedy or power hereunder or existing at law or in equity shall be
construed as a waiver thereof, and any such right, remedy or power may be
exercised by the Company or Employee from time to time and as often as may be
deemed expedient or necessary by the Company or Employee in its or his sole
discretion.

                  18. Counterparts. This Agreement may be executed in two or
more Counterparts, each of which shall be deemed an original, but which together
shall constitute one and the same instrument.

                  19. Headings. The headings preceding the text of the sections
and subsections hereof are inserted solely for convenience of reference, and
shall not constitute a part of this Agreement, nor shall they affect its
meaning, construction or effect.

                  20. Release; Covenant not to Sue.

                           (a) In consideration of the guarantee of employment
through the end of the Employment Period and the other consideration set forth
herein, to which Employee would otherwise not be entitled, Employee (for
himself, his heirs and his personal representatives) hereby releases and
discharges the Company, SLC Technologies, Inc., their respective principals,
owners, affiliates, parents, subsidiaries, successors and predecessors, and all
of their respective principals, owners, shareholders, affiliates, parents,
subsidiaries, successors, predecessors, partners, employees, agents, officers
and directors (collectively "Released Parties") for any and all claims and/or
causes of action, known or unknown, from the beginning of time through the date
hereof, which Employee may have or could claim to have against the Released
Parties, except for such claims arising solely from Employee's status as a


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shareholder, elected officer or director of the Company. This general release
includes, but is not limited to, all claims arising from Employee's status as an
employee of the Company and all claims arising from or during Employee's
employment through the Effective Time, and all claims arising under federal,
state or local laws prohibiting employment discrimination based upon age, race,
sex, handicap, disability, national origin or any other protected
characteristic, including, but not limited to, any and all claims arising under
the common law, the Age Discrimination in Employment Act, Title VII of the Civil
Rights Act of 1964, the Americans with Disabilities Act, the Family and Medical
Leave Act, the Employee Retirement Income Security Act and/or claims growing out
of any other federal, state or local statute, rule or ordinance or any other
legal restrictions, expressed or implied, on the Company's right to control or
terminate the employment of its employees.

                           (b) Employee acknowledges that under this Agreement
the Company may restrict or eliminate completely his duties pursuant to Sections
3 and 6(c) hereof and that the Company is under no obligation to extend his
employment after the third anniversary of the Effective Time. In consideration
of the guarantee of employment through the end of the Employment Period and the
other consideration set forth herein, to which Employee would otherwise not be
entitled, Employee (for himself, his heirs and his personal representatives)
further agrees not to make any claim, suit or demand against the Company, SLC
Technologies, Inc., their respective principals, owners, affiliates, parents,
subsidiaries, successors and predecessors, and all of their respective
principals, owners, shareholders, affiliates, parents, subsidiaries, successors,
predecessors, partners, employees, agents, officers and directors (collectively
"Released Parties") for any and all claims and/or causes of action, known or
unknown, which Employee may have or could claim to have against the Released
Parties arising from the specific rights set forth in the first sentence of this
Section 20(b) under this Agreement. This covenant includes all claims arising
under federal, state or local laws prohibiting employment discrimination based
upon age, race, sex, handicap, disability, national origin or any other
protected characteristic, including, but not limited to, any and all claims
arising under the common law, the Age Discrimination in Employment Act, Title
VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the
Family and Medical Leave Act, the Employee Retirement Income Security Act and/or
claims growing out of any other federal, state or local statute, rule or
ordinance or any other legal restrictions, expressed or implied, on the
Company's right to control or terminate the employment of its employees.

                           (c) Employee hereby on advice of counsel has freely
and knowingly waived the twenty-one (21) day consideration period provided for
releases under the Americans with Disabilities Act. Employee shall have until
the close of business on October 6, 1999 to revoke this Agreement in writing
and, if Employee revokes this Agreement in writing prior to the close of
business on October 6, 1999, this Agreement shall be null and void and have no
further force and effect.


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                  IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year first written above and signed below.



                                        /s/ Thomas L. Auth
                                        --------------------------------------
                                        Thomas L. Auth



                                        ITI TECHNOLOGIES, INC.


                                        By: /s/ Kenneth L. Boyda
                                           -----------------------------------
                                           Name: Kenneth L. Boyda
                                           Title: President & CEO




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