EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of January 1, 1998, by and
between RSL Communications, Ltd., a Bermuda corporation (the "Company"), and Nir
Tarlovsky ("Executive").
W I T N E S S E T H:
WHEREAS, the Company and Executive are parties to an
Employment Agreement, dated as of April 1, 1995;
WHEREAS, the Company desires to enter into a new agreement,
effective as of January 1, 1998 (the "Commencement Date") to set out the terms
and conditions of Executive's employment by the Company from and after the
Commencement Date; and
WHEREAS, the Executive desires to continue in the employment
of the Company from and after the Commencement Date under those terms and
conditions;
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, the Company and Executive hereby agree as follows:
1. Employment.
(a) Agreement to Employ. Upon the terms and subject to the conditions
of this Agreement, the Company hereby employs Executive, and Executive hereby
accepts continued employment by the Company.
(b) Term of Employment. The Company shall employ Executive for a term
(the "Term") commencing on the Commencement Date and ending December 31, 2000,
unless extended by a written agreement signed by both parties. The period
commencing on the Commencement Date and ending on the earlier of (i) the
expiration of the Term, or (ii) the date of Executive's termination of
employment pursuant to Section 5(a) shall be referred to as the "Employment
Period".
2. Position and Duties.
(a) In general. Executive shall be employed as Vice President of
Business Development and shall perform such duties and services, consistent with
such position for the Company, as may be assigned to him from time to time by
the Company's Chief Executive Officer (the "CEO"). The duties of the Executive
shall include serving as an officer or director or otherwise performing services
for any "Affiliate" of the Company as requested by the Company. An "Affiliate"
of the Company means any entity that controls, is controlled by or is under
common control with the Company. Executive shall report to the President and
CEO.
(b) Full-time employment. During the Employment Period, Executive shall
devote his full business time to the services required of him hereunder, except
for time devoted to services required by him to be performed for any "Affiliate"
of the Company, vacation time and reasonable periods of absence due to sickness,
personal injury or other disability, and shall use his best efforts, judgement,
skill and energy to perform such services in a manner consonant with the duties
of his position and to improve and advance the business and interests of the
Company, provided, however, that Executive shall perform such services under
this Agreement outside the United States. Executive shall not be engaged in any
other business activity which, in the reasonable judgment of the CEO, conflicts
with the duties of the Executive under this Agreement. Executive shall travel to
such location or locations as may be requested by the Company, or which
Executive believes is necessary or advisable, in the performance by Executive of
his duties hereunder or to the extent appropriate to improve and advance the
interests of the Company and its Affiliates. There is no formal disciplinary
procedure, but Executive is expected at all times to behave in a manner
befitting his employment.
(c) Relocation. If Executive decides to relocate his principal
residence to Israel, the Company and Executive will negotiate in good faith to
determine any appropriate changes to Executive's positions and duties set forth
in this Agreement, or to other provisions of this Agreement (including changes
to the dates on which the Option granted to executive pursuant to Section 3(c)
shall become exercisable), to reflect such relocation.
3. Compensation.
(a) Base Salary. During the Employment Period, the Company shall pay
Executive a base salary at the annual rate of US$125,000; provided that,
Executive's annual base salary shall be increased as of January 1 of each year,
commencing January 1, 1999, by an amount equal to the base salary then in
effect, multiplied by the percentage increase in the Cost of Living Index during
the preceding year. The "Cost of Living
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Index" means the consumer price index for all urban consumers in the New York
metropolitan area published by the Department of Labor, or if such index is no
longer available, such other generally available index measuring changes in
consumer purchasing power (in the New York metropolitan area or nationally)
designated by the Board of Directors. Any delay in increase in Executive's
annual base salary by reason of the unavailability of any such index at the time
any such increase shall otherwise be due shall be made up by a lump sum payment
promptly after the index becomes available. Executive's salary, as adjusted for
any increase in the Cost of Living Index, may be further increased at the option
and in the discretion of the Board of Directors (such salary, as the same may be
increased from time to time, is referred to herein as the "Base Salary"). The
Base Salary shall be payable in such installments (but not less frequent than
monthly) as the salaries of other executives of the Company are paid.
(b) Performance Incentive Plan. Executive shall participate in the
Company's 1997 Performance Incentive Plan. The discretionary portion of the
bonus shall be determined by the Compensation Committee. If the Company shall
amend or terminate the 1997 Performance Incentive Plan in a manner that would
reduce the opportunity of Executive to earn an incentive bonus as provided in
the 1997 Performance Incentive Plan, the Company shall provide a substitute
arrangement so that Executive's total bonus opportunity will not be materially
reduced.
(c) Stock Incentive Plan. The Company shall grant Executive an option
(the "Option") under the Company's 1997 Stock Incentive Plan to purchase 216,428
shares of the Company's Class A Common Stock at an exercise price of US$22.00
per share. The Option grant date shall be the date the Option grant is approved
by the Compensation Committee of the Board. The Option shall become exercisable
as set forth below, provided that Executive is employed by the Company on such
date, and once exercisable shall, except as otherwise provided below, remain
exercisable until the expiration of seven years from the date of grant. However,
the Option shall be immediately terminated upon a termination of Executive's
employment by the Company for Cause (as hereinafter defined):
Date First Exercisable Percentage Exercisable
---------------------- ----------------------
February 1, 1999 33 1/3%
Second Anniversary of the Commencement Date 66 2/3%
Third Anniversary of the Commencement Date 100%
The Option shall become immediately exercisable in full in the
event that Executive's employment with the Company is terminated: (i) by the
Company other than for Cause, (ii) by Executive for Good Reason or (iii) by
reason of the death or Disability
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of the Executive. Additionally, the Option shall become immediately exercisable
in full upon a Change in Control. The exercisable portion of the Option shall,
following any termination of Executive's employment (other than for Cause),
remain exercisable for the lesser of two years and the remaining term of the
Option.
4. Benefits, Perquisites and Expenses.
(a) Benefits. During the Employment Period, Executive shall be eligible
to participate in (i) each welfare benefit plan sponsored or maintained by the
Company, including, without limitation, each group life, hospitalization,
medical, dental, health, accident or disability insurance or similar plan or
program of the Company, and (ii) each pension, profit sharing, retirement,
deferred compensation or savings plan sponsored or maintained by the Company, in
each case, whether now existing or established hereafter, on the same basis as
generally made available to other senior officers of the Company, provided that
if Executive is also entitled to any of such benefits under an agreement with an
Affiliate, the benefits shall be provided by the Company and its Affiliates to
Executive in a manner that avoids duplication. The Company may amend or
terminate any such plan in its discretion.
(b) Perquisites. During the Employment Period, Executive shall be
entitled to five weeks' paid vacation annually and shall also be entitled to
receive such perquisites as are generally provided to other senior officers of
the Company in accordance with the then current policies and practices of the
Company, provided that if Executive is also entitled to any such vacation or
perquisites under an agreement with an Affiliate, such vacation and/or
perquisites shall be provided by the Company and its Affiliates to Executive in
a manner that avoids duplication.
(c) Business Expenses. During the Employment Period, the Company shall
pay or reimburse Executive for all reasonable expenses incurred or paid by
Executive in the performance of Executive's duties hereunder, upon presentation
of expense statements or vouchers and such other information as the Company may
require and in accordance with the generally applicable policies and procedures
of the Company.
(d) Indemnification. The Company shall indemnify Executive and hold
Executive harmless from and against any claim, loss or cause of action arising
from or out of Executive's performance as an officer, director or employee of
the Company or any of its subsidiaries or affiliates or in any other capacity,
including any fiduciary capacity, in which Executive serves at the request of
the Company to the maximum extent permitted by applicable law and the Company's
Memorandum of Association and Bye-Laws in effect on the date hereof. If any
claim is asserted against Executive with respect to which
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Executive reasonably believes in good faith he is entitled to indemnification,
the Company shall either defend Executive or, at its option, pay Executive's
legal expenses (or cause such expenses to be paid) on a quarterly basis,
provided that Executive shall reimburse the Company for such amounts, plus
simple interest thereon at the 90-day United States Treasury Xxxx rate as in
effect from time to time, compounded annually, if Executive shall be found by a
court of competent jurisdiction not to have been entitled to indemnification.
5. Termination of Employment.
(a) Termination of the Employment Period. The Employment Period shall
end upon the earliest to occur of (i) a termination of Executive's employment on
account of Executive's death, (ii) a Termination due to Disability or
Retirement, (iii) a Termination for Cause, (iv) a Termination Without Cause, (v)
a Termination by Executive for Good Reason, (vi) a Termination by Executive
other than for Good Reason, or (vii) the expiration of the Term. The Company or
the Executive may initiate a termination in any manner permitted hereunder by
giving the other party written notice thereof (the "Termination Notice"). The
effective date (the "Termination Date") of any termination shall be deemed to be
the later of (i) in the case of a Termination Notice from Executive, 45 days
after the receipt by the Company of the Termination Notice, (ii) the date on
which the Termination Notice is given, or (iii) the date specified in the
Termination Notice; provided, however, that in the case of the Executive's
death, the Termination Date shall be the date of death. Upon termination of his
employment for any reason, Executive will immediately resign from all positions
that he holds with the Company and its Affiliates.
(b) Payments Upon Certain Terminations.
(i) Termination Without Cause or Termination by Executive for
Good Reason. In the event that Executive's employment is terminated by the
Company Without Cause or by Executive for Good Reason, the Company shall pay
Executive his Earned Salary, Vested Benefits and a Severance Benefit (as such
terms are hereinafter defined). In addition, if Executive's employment
terminates pursuant to this subsection (i), the Company shall continue to
provide to Executive the welfare benefits (other than disability insurance)
referred to in Section 4, or substantially comparable benefits, until the
earlier of (x) the date on which Executive is eligible to obtain comparable
benefits from other employment or (y) the expiration of the Term.
(ii) Termination due to Death. In the event of the
termination of Executive's employment due to Executive's death, the Company
shall pay Executive's
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estate Executive's Earned Salary, Vested Benefits and a lump sum payment equal
to 12 months of Executive's Base Salary (at the rate in effect on the date of
his death).
(iii) Termination due to Disability or Retirement. In the
event of termination of Executive's employment by the Company due to Disability
or a Termination due to Retirement, the Company shall pay Executive his Earned
Salary and Vested Benefits, plus, in the event of termination due to Disability,
to the Executive or his estate his Base Salary at the Termination Date on a
monthly basis for 12 months following the month in which Executive's employment
is terminated. In the event that Executive's employment with the Company is
terminated due to Disability, Executive's benefits under this subsection (iii)
shall be reduced by the amount of any Company sponsored (and paid for)
disability benefits paid to Executive.
(iv) Termination by Executive Other Than for Good Reason. In
the event of a Termination by Executive other than for Good Reason, the Company
shall pay Executive his Earned Salary and Vested Benefits.
(v) Termination for Cause. In the event of a termination of
Executive's employment by the Company for Cause, the Company shall pay Executive
his Earned Salary and Vested Benefits.
(c) Timing of Payments. Earned Salary shall be paid in a single lump
sum as soon as practicable, but in no event later than the earlier of 60 days
following the end of the Employment Period or the day such Earned Salary would
have been payable under the Company's normal payroll practices. Vested Benefits
shall be payable in accordance with the terms of the plan, policy, practice,
program, contract or agreement under which such benefits have accrued except as
otherwise expressly modified by this Agreement. Fifty percent (50%) of Severance
Benefits shall be paid within 30 days after the Termination Date and the
remaining 50% of the Severance Benefits shall be paid in equal monthly
installments during the eleven month period following the payment of the first
50% of Severance Benefits.
(d) Retention of monies owed. The Company may at any time during
Executive's employment or upon its termination for any reason deduct and retain
from any monies owed by it to Executive any sum properly paid by it or any
Affiliate to, on behalf or at the request of Executive or due to it from
Executive including, but not limited to, unauthorized expenses or excess
vacation.
(e) Definitions. The following capitalized terms have the following
meanings:
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"Earned Salary" means any Base Salary earned, but unpaid, for
services rendered to the Company on or prior to the date on which the Employment
Period ends.
"Normal Retirement Age" means the first day of the month
following Executive attaining age 65.
"Severance Benefit" means an amount equal to Executive's
annual Base Salary as in effect immediately prior to the Termination Date.
"Termination due to Disability" means a termination of
Executive's employment by the Company because Executive has been incapable of
substantially fulfilling the positions, duties, responsibilities and obligations
set forth in this Agreement because of physical, mental or emotional incapacity
resulting from injury, sickness or disease for a period of (i) at least six
consecutive months or (ii) more than nine months in any twelve month period. Any
question as to the existence, extent or potentiality of Executive's disability
upon which Executive and the Company cannot agree shall be determined by a
qualified, independent physician selected by the Company and reasonably
acceptable to Executive. The determination of any such physician shall be final
and conclusive for all purposes of this Agreement. Executive or his legal
representative or any adult member of his immediate family shall have the right
to present to such physician such information and arguments as to Executive's
disability as he, she or they deem appropriate, including the opinion of
Executive's personal physician.
"Termination due to Retirement" means termination of
employment by Executive other than for Good Reason, or termination of
Executive's employment by the Company other than a Termination for Cause, on or
after Executive's Normal Retirement Age.
"Termination for Cause" means a termination of Executive's
employment by the Company due to (i) Executive's conviction of a felony or the
entering by Executive of a plea of nolo contendere with respect to a charged
felony, (ii) Executive's gross negligence, recklessness, dishonesty, fraud,
willful malfeasance or willful misconduct in the performance of the services
contemplated by this Agreement, (iii) a willful failure without reasonable
justification to comply with a reasonable written order of the Board of
Directors or the CEO; or (iv) a willful and material breach of Executive's
duties or obligations under this Agreement. Notwithstanding the foregoing, a
termination shall not be treated as a Termination for Cause unless the Company
shall have delivered a written notice to Executive stating that it intends to
terminate his employment for Cause and specifying the factual basis for such
termination, and the event or events that form the basis for the notice, if
capable of being cured, shall not have been cured within 30 days of the receipt
of such notice.
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"Termination Without Cause" means any termination by the
Company of Executive's employment hereunder other than (i) a Termination due to
Disability, (ii) a Termination due to Retirement or (iii) a Termination for
Cause.
"Termination for Good Reason" means a termination of
Executive's employment by Executive within 90 days following (i) a reduction in
Executive's annual Base Salary or opportunity under the 1997 Performance
Incentive Plan below the levels contemplated by Sections 3(a) and (b), (ii) a
material reduction in Executive's positions, duties, responsibilities or
reporting lines from those described in Section 2 hereof; (iii) a material
breach of this Agreement by the Company, or (iv) any termination of the
Executive's employment with ITG due to a "Termination Without Cause" by ITG or a
"Termination With Good Reason by Executive", as those terms are defined in the
employment agreement between the Executive and ITG. Notwithstanding the
foregoing, a termination shall not be treated as a Termination for Good Reason
(x) if Executive shall have consented in writing to the occurrence of the event
giving rise to the claim of Termination for Good Reason or (y) unless Executive
shall have delivered a written notice to the Company within 30 days of his
having actual knowledge of the occurrence of one of the events specified in
clause (i), (ii), (iii) or (iv) above stating that he intends to terminate his
employment for Good Reason and specifying the factual basis for such
termination, and such event, if capable of being cured, shall not have been
cured within 30 days of the receipt of such notice. Following a "Change in
Control", Executive shall not be deemed to have Good Reason under clause (ii)
above so long as he continues to have substantially the responsibilities he had
at the time of t he Change in Control.
"Change in Control" means the occurrence of (i) a sale or
other disposition of stock of the Company, or an issuance of stock of the
Company as a result of which any "person" (as such term is used in section 13(d)
and 14(d) of the Securities Exchange Act of 1934), other than Xxxxxx X. Xxxxxx
("Lauder") is or becomes the beneficial owner of more than 25% of the total
voting power of the Company, and Lauder (x) beneficially owns a lesser
percentage of the total voting power of the Company than such other "person" and
(y) no longer has the right or ability by voting power, contract or otherwise to
elect or designate a majority of the Board of Directors, (ii) any merger,
consolidation or reorganization (a "Transaction") and Lauder no longer has the
right or ability by voting power, contract or otherwise to elect or designate a
majority of the Board of Directors, or (iii) more than 50% of the total value of
the assets of the Company and its consolidated subsidiaries are transferred and
the transferee of such assets is not Lauder or a company controlled by Lauder,
or (iv) a complete liquidation of the Company.
"Termination Without Good Reason" means any termination by
Executive of Executive's employment hereunder other than (i) a termination due
to Executive's
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death, (ii) a Termination due to Retirement, (iii) a Termination for Good
Reason, or (iv) a Termination due to Disability.
"Vested Benefits" means amounts which are vested or which
Executive is otherwise entitled to receive under the terms of or in accordance
with any plan, policy, practice or program of, or any contract or agreement
with, the Company, including the Option (to the extent provided in Section
3(c)), at or subsequent to the date of his termination without regard to the
performance by Executive of further services or the resolution of a contingency
and expenses incurred prior to termination of employment that are reimbursable
under Section 4(c).
(f) Full Discharge of Company Obligations. The amounts payable to
Executive pursuant to this Section 5 following termination of his employment
(including amounts payable with respect to Vested Benefits) shall be in full and
complete satisfaction of Executive's rights under this Agreement and any other
claims he may have in respect of his employment by the Company or any of its
subsidiaries. Such amounts shall constitute liquidated damages with respect to
any and all such rights and claims and, upon Executive's receipt of such
amounts, the Company shall be released and discharged from any and all liability
to Executive in connection with this Agreement or otherwise in connection with
Executive's employment with the Company and its subsidiaries and Affiliates,
other than Executive's rights to indemnification under Section 4(d).
6. Agreement Not to Compete With Company
(a) During the Employment Period and for a period of nine
months thereafter (the "Applicable Period"), Executive shall not directly or
indirectly own, manage, operate, finance, join, control, advise, consult, render
services to, have an interest or future interest or participate in the
ownership, management, operation, financing or control of, or be employed by or
connected in any manner with any Competing Business (other than as a holder of
common stock of the Company, and not in excess of 1% of the outstanding voting
shares of any other publicly traded company). "Competing Business" means the
business of international long distance communication services engaged in by the
Company in any country where the Company or an Affiliate conducts such business
at any time during the Term. Any opportunity directly or indirectly related to
any business engaged in by the Company, its subsidiaries and Affiliates of which
Executive becomes aware during the Term shall be deemed a corporate opportunity
of the Company, and Executive shall promptly make such opportunity available to
the Company.
(b) If, during the period of nine months after expiration of
the Employment Period, Executive proposes to engage directly or indirectly in
what may be a Competing
9
Business, Executive shall so notify the Company in a writing which shall fully
set forth and describe in detail the nature of the activity which may be a
competitive Business, the names of the companies or other entities with or for
whom such activity is proposed to be engaged in by Executive or by an Affiliate
of Executive (the "Section 6 Notice"). If, within 30 days after receipt by the
Company of a Section 6 Notice, the Company shall fail to notify Executive that
it deems the proposed activity to be a Competitive Business, then Executive
shall be free to engage in the activities described in the Section 6 Notice
without violation of Section 6(a). If, however, the Company notifies Executive
that the proposed activities constitute a Competitive Business, then (i)
Executive shall not engage in such Competitive Business during the nine month
period following expiration of the Employment Period, and (ii) the Company shall
pay Executive, during such nine month period, in equal monthly installments, an
amount equal to his highest Base Salary; provided that the amount payable under
this Section 6(b) shall be reduced by the amount of Severance Benefit that
Executive is receiving for such period.
7. Confidential Information
(a) Without the prior written consent of the Company, Executive shall
not disclose at any time during the Employment Period or any time thereafter any
Confidential Information (as defined below) to any third person other than in
the course of fulfilling Executive's responsibilities under this Agreement
unless such Confidential Information has been previously disclosed to the public
by the Company or an Affiliate or is in the public domain (other than by reason
of Executive's breach of the provisions of this paragraph).
(b) "Confidential Information" is any non-public information pertaining
to the Company or an Affiliate, any of their businesses or the business or
personal affairs of Lauder or his family and how any of them conducts its or his
business or affairs. "Con fidential Information" includes not only information
disclosed by the Company or an Affiliate to Executive, but non-public
information developed, created or learned by Executive during the course of or
as a result of Executive's employment with the Com pany. "Confidential
Information" specifically includes non-public information and documents
concerning the Company's and its Affiliates' methods of doing business;
research, telecommunications technology, its actual and potential clients,
transactions and suppliers (including the Company's or an Affiliate's terms,
conditions and other business arrangements with them); client or potential
client or transaction lists and billing; ad vertising, marketing and business
plans and strategies (including prospective or pending licensing applications or
investments in license holders or applicants); profit margins, goals, objectives
and projections; compilations, analyses and projections regarding the Company,
its Affiliates or any of its clients or potential clients or their businesses;
trade xx xxxxx; salary, staffing, management organization or employment
information; informa-
10
tion relating to members of the Board of Directors and management of the Company
or an Affiliate; files, drawings or designs; information regarding product
development, marketing plans, sales plans or manufacturing plans; operating
policies or manuals, business plans, financial records or packaging design; or
any other non-public financial, commercial, business or technical information
relating to the Company, an Affiliate, Lauder or his family or non-public
information designated as confidential or proprietary that the Company, an
Affiliate or Lauder may receive belonging to others who do business with any of
them.
(c) Nothing herein shall prevent the disclosure by Executive of any
information required by an order of a court having competent jurisdiction or
under subpoena from a government agency, provided that, if Executive receives a
request for the disclosure of any Confidential Information pursuant to court
process or by a government agency, Executive shall promptly (and at the latest
within five business days but not less than three days prior to the date
Executive is required to respond to the request) notify the Company of that
request and cooperate to the maximum extent authorized by law with the Company
in protecting the Company's and it Affiliates' interest in maintaining the
confidentiality of any Confidential Information. The Company will reimburse
Executive for reasonable out-of-pocket costs or expenses incurred by Executive
in connection with his cooperation with the Company and its Affiliates
hereunder.
8. No Disparaging Comments
Each of the parties hereto agrees not to make disparaging or derogatory comments
about the other party, members of the Board or Affiliates, except to the extent
required by law, and then only after consultation with the other party to the
maximum extent possible in order to maintain goodwill for each of the parties.
9. Return of Company Property
Promptly (and at the latest within ten business days) following Executive's
termination of services, Executive shall:
(i) return to the Company all documents, records, notebooks,
computer diskettes and tapes and anything else containing the
Company's Con fidential Information (as defined above), and
any other property or Con fidential Information of the Company
or its Affiliates, including all copies thereof in Executive's
possession, custody or control, and
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(ii) delete from any computer or other electronic storage medium
owned by Executive any of the proprietary or Confidential
Information of the Company or its Affiliates.
10. No Soliciting or Hiring Company Employees
During the Employment Period and for a twelve month period thereafter, Executive
shall not directly or indirectly induce any employee of the Company or any
Affiliate, other than Executive's secretary or personal assistant, to terminate
employment with such entity. Additionally, during the Employment Period and for
a six month period thereafter, Executive shall not directly or indirectly,
either individually or as owner, agent, employee, consultant or otherwise,
employ or offer employment to any person who is or was employed by the Company
or any Affiliate as an employee; provided, however, that Executive shall not be
deemed to have breached the provisions of this sentence in the event that
Executive had no prior knowledge of such hiring (or offer of employment).
11. Continuing Obligations Following Termination
Executive agrees that his obligations and restrictions with respect to
noncompetition, confidentiality, Company property, nondisparagement and
nonsolicitation, and the Company obligations to indemnify Executive under
Section 4(d), will continue to apply following the termination of Executive's
relationship regardless of the manner in which his relationship with the Company
is terminated, whether voluntarily, for Cause, for Good Reason, without Cause or
otherwise.
12. Arbitration of All Disputes
(a) Any dispute, controversy or claim between the Executive and the
Company or any of its officers, directors, employees or shareholders (who are
expressly made third-party beneficiaries of this agreement) arising out of,
relating to or in connection with this agreement, or the breach, termination or
validity thereof, shall be finally resolved by binding and non-appealable
arbitration, before a single arbitrator selected by the procedure set forth
below, conducted in New York, New York.
(b) Either party may commence an arbitration proceeding by giving
written notice to the other party of its desire to arbitrate.
(c) The single arbitrator (the "Arbitrator") shall be selected from
among the New York City members of the New York Regional Panel of Distinguished
Neutrals (the "Panel") of the Center for Public Resources ("CPR") by mutual
agreement of the parties, or if the parties are unable to agree, by the
following means:
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(A) The Company, on one hand, and Executive
on the other hand, shall simultaneously exchange lists each
containing the names of five members of their choice of the
Panel who have indicated a willingness to serve.
(B) If a single name appears on both lists,
that individual shall be appointed.
(C) If more than one name appears on both
parties' lists, the Arbitrator shall be selected from the
common names by mutual agree ment of the parties or by the
toss of a coin.
(D) If the lists contain no names in common,
each party shall strike four names from the other party's list
and the Arbitrator shall be selected from the remaining two
names by mutual agreement of the parties or by the toss of a
coin.
(E) If the CPR ceases to have a Panel or it
is otherwise impossible to select the Arbitrator from the
Panel as contemplated by this Agreement, the Arbitrator shall
be selected by the President of the CPR in the manner that the
President deems closest to satisfying the purposes of this
Section, or, if such person is unable to do so, by the
President of the Association of the Bar of the City of New
York.
(d) The Arbitrator, after appropriate consultation with the parties,
shall (i) deter mine, in his or her sole discretion, the rules governing the
arbitration proceeding, including whether and to what extent the parties shall
have any right to pre-hearing discovery or other forms of disclosure, the manner
of presentation of arguments and/or evidence before or at any hearing, whether
and to what extent formal rules of evidence shall govern the proceeding and the
parties' rights following the proceeding, and (ii) be governed in exercising
such discretion by the goal of reaching a fair and reasonable decision in an
expeditious and efficient manner while endeavoring to streamline the process and
avoid undue litigation costs.
(e) The Arbitrator shall assess the costs of the proceeding (including
the prevailing party's reasonable attorney's fees) on any unsuccessful party to
the extent the Arbitrator concludes that such party is unsuccessful, unless he
or she concludes that (i) matters of equity or important considerations of
fairness dictate otherwise or (ii) in the case of Executive, the Arbitrator
determined that Executive acted reasonably and in good faith in pursuing all of
the claims asserted by him in such arbitration.
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(f) The Arbitrator shall be required to state his or her decision in
writing and may, but shall not be required to, elaborate on the reasons for such
decision.
(g) The arbitrator(s) shall have the authority upon application by a
party to direct specific performance, including preliminary or interim specific
performance pending the final resolution of the arbitration, of any portion of
this agreement. The parties expressly consent to the jurisdiction and power of
any federal or state court in New York to enforce the terms of such a direction
upon application by a party. If the arbitrator(s) have not yet been appointed,
the parties may obtain injunctive or other appropriate relief from a court to
enforce the terms of this agreement pending the appointment of the arbitrator(s)
who shall thereafter have full power to continue, modify or vacate the terms of
any injunctive relief ordered by the court.
(h) Notwithstanding the terms of this agreement that provide that New
York law shall govern, the arbitration and the provisions in this agreement
dealing with arbitration shall be governed exclusively by the United States
(Federal) Arbitration Act, 9 U.S.C. xx.xx. 1-16, and judgment on or enforcement
of the award or any direction for specific performance rendered by the
arbitrators may be entered by any court having jurisdiction thereof or having
jurisdiction over the relevant party or assets of such party.
(i) If, notwithstanding the parties' agreement to arbitrate, any issue
is presented to a court for decision, the parties hereby waive any right to
trial by jury.
(j) The parties agree that any dispute between the parties and the
arbitration itself shall be kept confidential and that the existence of the
arbitration and any element of it (including but not limited to any pleading,
brief or other document submitted or exchanged, any testimony or other oral
submission, and any award) shall not be disclosed except to the arbitrator(s),
the CPR Institute for Dispute Resolution, the parties, their counsel and any
person necessary to the conduct of the proceeding, except as may be lawfully
required in judicial proceedings relating to the arbitration or otherwise.
13. No Punitive or Emotional Damages
The parties hereto agree that neither the Executive nor the Company will be
entitled to seek or obtain punitive, exemplary or similar damages of any kind
from the other or, in the case of Executive, from the Company's officers,
directors, employees or shareholders, or to seek or obtain damages or
compensation for emotional distress, as a result of any dispute, controversy or
claim arising out of, relating to or in connection with this Agreement, or the
performance, breach, termination or validity thereof. Nothing herein shall
preclude an award of compensatory or punitive damages against any other third
party.
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14. Injunctive Relief to Avoid Irreparable Injury
(a) Executive acknowledges and agrees that the individualized services
and capabilities that he will provide to the Company under this Agreement are of
a personal, special, unique, unusual, extraordinary and intellectual character.
(b) Executive acknowledges and agrees that because the international
telecommunications industry is globally integrated and that its constituent
companies are dependent for their survival on protection of their confidential
information which is highly advanced and technical and on carefully developed
knowledge of customer systems and requirements, the restrictions in this
agreement are reasonable to protect the Company's rights under this Agreement
and to safeguard the Company's and it Affiliates' Confidential Information.
(c) Executive acknowledges and agrees that the covenants and
obligations of Executive with respect to noncompetition, nonsolicitation,
confidentiality and Company property relate to special, unique and extraordinary
matters and that a violation of any of the terms of such covenants and
obligations will cause the Company and its Affiliates irreparable injury for
which adequate remedies are not available at law. Executive therefore agrees
that the Company shall be entitled to an order of specific performance,
injunction, restraining order or such other interim or permanent equitable
relief (without the requirement to post bond) restraining Executive from
committing any violation of the covenants and obligations contained in this
Agreement. Executive acknowledges and agrees that if any one or more of any part
of such restrictions shall be rendered or judged invalid or unenforceable, such
restriction or part shall be deemed to be severed from this Agreement and such
invalidity or unenforceability shall not in any way affect the validity of the
remaining provisions.
(d) These injunctive remedies are cumulative and are in addition to any
other rights and remedies the Company may have at law or in equity.
(e) Executive represents that his economic means and circumstances are
such that the provisions of this Agreement, including the noncompetition,
nonsolicitation, confidentiality and Company property provisions, will not
prevent him from providing for himself and his family on a basis satisfactory to
him and them.
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15. Automatic Amendment by Court Order
and Interim Enforcement
(a) If the Arbitrator(s) or a court determines that, but for the
provisions of this paragraph, any part of this agreement is illegal, void as
against public policy or otherwise unenforceable, the relevant part will
automatically be amended to the extent necessary to make it sufficiently narrow
in scope, time and geographic area to be legally enforceable. All other terms
will remain in full force and effect.
(b) If the Executive raises any question as to the enforceability of
any part or terms of this agreement, including, without limitation, the
provisions relating to noncompetition, nonsolicitation, confidentiality and
Company property, the Executive specifically agrees that he will comply fully
with this Agreement unless and until the entry of an arbitral award to the
contrary.
16. Notices
All notices and other communications required or permitted hereunder shall be
sufficiently given if (a) delivered personally, (b) sent by facsimile
transmission (with confirmation received), (c) sent by a nationally-recognized
air courier assuring overnight delivery, or (d) mailed (by registered or
certified mail, return receipt requested and postage prepaid) as follows:
if to the Executive, to the Executive at:
Nir Tarlovsky
X.X. Xxx 000
Xxxxx Xxxxx B, Sede
Xxxxxxx, Xxxxxx
00000
if to the Company, to the Company at
Clarendon House
Church Street
Xxxxxxxx XX CX
Bermuda
Fax: (000) 000-0000
Attention: Xxxxx Xxxxxxx
with a copy to each of:
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c/o RSL Communications, N. America, Inc.
Suite 4300
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Corporate Counsel
Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxx Xxxxxx, Esq.
or to such other address as shall be furnished by notice from time to time by
one party hereto to the other party. Any such communication shall be deemed to
have been given, (i) in the case of personal delivery, on the date of delivery,
(ii) in the case of delivery by air courier, on the first business day following
the day on which such communication was posted, and (iii) in the case of
mailing, on the third business day following the day on which such notice was
posted.
17. Sole and Entire Understanding; Amendments
The entire understanding and agreement between the Company and Executive have
been incorporated into this Agreement. There are no other agreements, promises,
representations, understandings or inducements by the Company to Executive or
Executive to the Company other than those specifically set forth in this
Agreement. This Agreement may not be altered, amended or added to except in a
single writing signed by the Company and the Executive. Coincident herewith,
Executive and ITG are entering into an Employment Agreement covering Executive's
services to ITG and its subsidiaries.
18. Waiver of Breach
A waiver or breach of any provision of this Agreement shall not constitute or
operate as a waiver of any other breach of such provision or of any other
provision, and any failure to enforce any provision hereof shall not operate as
a waiver of such provision or of any other provision.
19. Headings
The headings of sections in this Agreement are for convenience only, are not a
part of this Agreement and shall not affect the construction of the provisions
of this Agreement.
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20. Arm's Length
(a) This Agreement was entered into at arm's length, without duress or
coercion, and is to be interpreted as an agreement between parties of equal
bargaining strength. Both the Company and the Executive agree that this
Agreement is clear and unambiguous as to its terms, and that no parol or other
evidence will be used or admitted to alter or explain the terms of this
Agreement, but that it will be interpreted based on the language within its four
corners in accordance with the purposes for which it is entered into.
(b) The parties hereto expressly agree that any rule or contractual
interpretation, as applied under California law or anywhere else, that would
allow parol or extrinsic evidence to attempt to show fraud in the inducement or
duress to contradict the plain, unambiguous terms of this Agreement shall not
apply to this Agreement and its performance and enforcement. This provision is a
material part of this Agreement and, should any party try to introduce evidence
contrary to this provision, any other party shall be entitle to consider it a
breach and to rescind this contract in full.
21. Successors and Assigns
(a) This Agreement will inure to the benefit of, and will be binding
upon, the Company, its successors and assigns and upon the Executive and his
heirs, successors and assigns; provided, however, that, because this is an
Agreement for personal services, the Executive cannot assign any of his
obligations under this Agreement to anyone else.
(b) This Agreement may be executed in counterparts, in which case each
of the two counterparts will be deemed to be an original and the final
counterpart shall be deemed to have been executed in New York, New York.
22. New York Law Governs
Any questions or other matters arising under this Agreement, whether of
validity, interpretation, performance or otherwise, will therefore be governed
by and construed in accordance with the laws of the State of New York applicable
to agreements made and to be wholly performed in New York, without reference to
principles of conflicts or choice of law under which the law of any other
jurisdiction would apply.
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IN WITNESS WHEREOF, this Agreement has been executed by
Executive and then by the Company in New York, New York, on the dates shown
below, but effective as of the date and year first above written.
Date: /s/
----------------- ---------------------------
Executive
RSL COMMUNICATIONS, LTD.
Date: BY: /s/
----------------- ----------------------
Title:
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