EXECUTION COPY
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT, dated as of the 18 day
of December 1997 (the "Agreement"), by and between Xxxxxxx X. Xxxxxxxxxxx (the
"Executive") and IPC Information Systems, Inc., a Delaware corporation ("IPC").
WHEREAS, following the closing (the "Closing") of the transactions
contemplated by the Agreement and Plan of Merger, dated as of the date hereof
(the "Merger Agreement"), between Arizona Acquisition Corp. and IPC, the
Executive is expected to make a major contribution to the growth, profitability
and financial strength of IPC;
WHEREAS, IPC and the Executive are parties to an Employment Agreement
dated as of May 9, 1994, as amended by Amendment to Employment Agreement, dated
October 17, 1995 (together, the "Existing Agreement"); and
WHEREAS, effective upon the Closing, IPC desires to retain the services
of the Executive, and the Executive desires to be retained by IPC, on the terms
and conditions set forth below.
NOW, THEREFORE, in consideration of the premises and the mutual
promises herein contained and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. CERTAIN DEFINITIONS. The following terms, when used in this
Agreement, shall have the following meanings (such definitions to be equally
applicable to both singular and plural terms of the terms defined):
"Affiliate" means, with respect to any Person, any other
Person directly or indirectly Controlling, Controlled by, or under common
Control with such Person.
"Control" (including the terms "Controlled by" and "under
common Control with") means the possession, directly or indirectly or as a
trustee or executor, of the power to direct or cause the direction of the
management of a Person, whether through the ownership of stock, as a trustee or
executor, by contract or credit agreement or otherwise.
"Disability" means the inability of the Executive to perform
his duties and obligations for IPC as required by this Agreement, because of a
disability which is not of an apparently temporary nature, which results from
mental or bodily injury, sickness or disease or any combination thereof, and
which has lasted a period of more than 180 consecutive days or more than 180
days within any period of 365 consecutive days.
"Due Cause" shall mean repeated and gross negligence in
fulfilment of, or repeated failure of the Executive to fulfill his material
obligations under this Agreement, in either event after
due written notice thereof, or serious willful misconduct by the Executive in
respect of his obligations hereunder. Due Cause should not include, without
limitation, (a) a refusal by the Executive of an assignment not consistent with
the status, titles and reporting requirements set forth herein or contemplated
hereby, or (b) bad judgment or negligence of the Executive, or (c) any act or
omission (other than one constituting a material breach of trust committed in
willful or reckless disregard of the interests of IPC and undertaken for
personal gain) in respect of which a determination could properly have been made
by the Board that Executive met the applicable standard of conduct prescribed
for indemnification or reimbursement under the by-laws of IPC or the laws of New
York, in each case in effect at the time of such act or omission, or (d) any act
or omission with respect to which notice of termination is given more than
twelve (12) months after the earliest date on which any non-employee director of
IPC who was not a party to such act or omission knew or reasonably should have
known of such act or omission.
"Person" means an individual, corporation, partnership,
limited liability company, limited partnership, association, trust,
unincorporated organization or other entity or group (as defined in Section
13(d)(3) of the Securities and Exchange Act of 1934, as amended).
"Subsidiary" means, with respect to any Person, any entity
which securities or other ownership interests having ordinary voting power to
elect a majority of the Board of Directors or other persons performing similar
functions are at the time directly or indirectly owned by such Person.
2. EMPLOYMENT; TERM. IPC agrees to employ the Executive, and the
Executive hereby agrees to accept such employment by IPC, on the terms and
conditions set forth herein. Unless sooner terminated in the manner hereinafter
provided, the term of this Agreement shall commence on the date of the Closing
and shall expire on the second anniversary thereof (the "Initial Term");
PROVIDED, HOWEVER, that this Agreement shall automatically be extended for
successive one year terms, unless either party shall notify the other at least
90 days prior to the scheduled expiration of this Agreement that the Agreement
shall not be so extended (the Initial Term, plus any extensions thereof,
hereinafter referred to as the "Term"). The parties agree that (i) upon the
Closing, the Existing Agreement shall be terminated and shall have no further
force and effect with no liability to any of the parties thereto, and no further
payments shall be made thereunder, and (ii) should the Closing not occur on or
before the date the Merger Agreement is terminated by its terms, this Agreement
shall be void and have no force and effect.
3. DUTIES.
3.1 OFFICE. During the Term, the Executive shall serve as Vice
Chairman of IPC, reporting to the Board of Directors of IPC (the "Board") and to
the Chairman of IPC. Nothing contained herein shall preclude IPC from
restructuring or reorganizing the functional responsibilities and/or
organizational or reporting position of various officers of IPC, including the
Executive. Subject always to the supervision and direction of the Board, the
Executive shall, from time to time, have the duties and responsibilities
consistent with his positions as Vice Chairman of IPC. The Executive shall have
no right to unilaterally hire any executive officers of IPC without the express
written consent of the Board. The Executive's office shall be located in New
York, New York.
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3.2 FULL WORKING TIME. During the Term, the Executive shall
devote his full working time and his best efforts, and apply all of his skill
and experience, to the proper performance of his duties hereunder and to the
business and affairs of IPC. Except as set forth in Exhibit B hereto, the
Executive, without the prior written approval of the Board, shall not, either
directly or indirectly, engage in any business other than that specified herein
or accept any employment or business office whatsoever (including but not
limited to serving as a director ) from any other Person (but the foregoing
shall not preclude the Executive, subject to Section 7 hereof, from (i) serving
as a director of any nonprofit or charitable organization, or (ii) making an
investment in any other business, so long as in any such case the Executive does
not actively participate in such other business or organization and such
activity does not interfere with the Executive's ability to perform his duties
hereunder and does not constitute a conflict of interest with IPC or any of its
Affiliates in the reasonable opinion of the Board).
4. SALARY AND BENEFITS.
4.1 BASE SALARY. IPC shall pay the Executive during the Term a
base salary at an annual rate of Four Hundred Twenty Thousand Dollars
($420,000.00) per annum, payable in accordance with the standard payroll
practices of IPC ("Base Salary"). It is understood that the Base Salary shall be
the Executive's minimum annual compensation during the Term. The Base Salary
shall be reviewed annually by the Board of Directors, or the Compensation
Committee of the Board of Directors, of IPC, and may be increased (but not
decreased) at its discretion.
4.2 BONUS. For each fiscal year of IPC ending during the Term,
IPC may, in its discretion, pay to the Executive a bonus based on the
performance of the Executive and IPC for such year.
4.3 OPTION TO PURCHASE COMPANY COMMON STOCK. The Executive
shall be granted an option to purchase shares of the common stock of IPC (the
"Option") on the Closings pursuant to the IPC Information Systems, Inc. Stock
Option Plan. The terms of the Option shall be set forth on the Option Grant
Certificate (the "Certificate") attached on Exhibit A hereto, which Certificate
is hereby incorporated by reference into this Agreement.
4.4 BENEFITS. The Executive shall participate, to the extent
that he is eligible therefore and subject to the terms and conditions thereof,
in any plans or programs which may be maintained by IPC for its employees and/or
senior executives generally, providing insurance, medical
benefits, retirement benefits, or other like fringe benefits.
4.5 VACATION. The Executive shall be entitled to eight (8)
weeks annual paid vacation each year of the Term to be earned and taken in
accordance with IPC's vacation policy.
4.6 EXPENSES. IPC shall pay or reimburse the Executive for
reasonable business expenses actually incurred or paid by the Executive during
the Term, in the performance of his services hereunder; provided that such
expenses are consistent with IPC policy. Such payment or reimbursement shall be
made upon presentation of expense statements or vouchers or other supporting
information acceptable to IPC and otherwise in accordance with IPC policy then
in effect.
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4.7 DEDUCTIONS. IPC shall deduct from all compensation payable
hereunder such payroll, withholding and other taxes as may be required by law.
4.8 EXECUTIVE ASSISTANT. The Executive shall have the right,
in his sole discretion, to hire and maintain one executive assistant during the
Term, on compensation terms consistent with past practice.
5. TERMINATION.
5.1 GENERAL. IPC shall have the right to terminate the
employment of Executive at any time with or without Due Cause.
5.2 TERMINATION UNDER CERTAIN CIRCUMSTANCES. (a) In the event
Executive's employment with IPC is terminated prior to the expiration of the
Term by reason of (i) the Executive's resignation, (ii) death, (iii) Disability
or (iv) the Executive's discharge by IPC for Due Cause, this Agreement shall
terminate including, without limitation, IPC's obligations under Section 4
hereof.
(b) In the event that the Executive's employment with
IPC is terminated by IPC prior to the expiration of the Term other than by
reason of (i) the Executive's resignation, (ii) death, (iii) Disability or (iv)
the Executive's discharge by IPC for Due Cause, IPC shall continue to pay to the
Executive the Executive's Base Salary for the remainder of the Term (assuming
that the Term would expire as of the last day of the then-effective Term without
extension thereof), at such time or times as such payments would have been
provided for hereunder in the event that the Executive's employment had not
terminated hereunder. IPC and Executive hereby stipulate that the damages which
may be incurred by Executive as a consequence of any such termination of
employment are not capable of accurate measurement as of the date first above
written and that the benefits and payments provided for in this Agreement
constitute a reasonable estimate under the circumstances of all damages
sustained as a consequence of any such termination of employment, without any
requirement of proof of actual damage and without regard to the Executive's
efforts, if any, to mitigate damages. IPC and the Executive further agree that
IPC may condition the payments and benefits (if any) due under this Section on
(A) the receipt of the Executive's resignation from any and all positions which
he holds as an officer, director or committee member (unless, with respect to
resignation as a director or committee member, such resignation would be
contrary to any other document entered into in connection with the Merger
Agreement) with respect to IPC, or any Subsidiary or Affiliate thereof, and (B)
the Executive's execution and delivery within 21 days after any such termination
of employment, and the non-retraction during any statutory waiting period, of a
release in favor of IPC, in form and substance reasonably satisfactory to IPC.
(c) The parties hereto acknowledge that the provisions
of this Section 5 shall not affect the Option, and that the terms and conditions
affecting the Option shall be set forth separately in the Certificate.
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6. PROPRIETARY INFORMATION.
6.1 DISCLOSURE TO IPC. The Executive shall promptly disclose
to IPC in such form and manner as IPC may reasonably require (a) all operations,
systems, services, methods, developments, inventions, improvements and other
information or data pertaining to the business or activities of IPC and its
Subsidiaries and Affiliates as are conceived, originated, discovered or
developed by Executive (whether or not copyrighted or patented or capable of
being copyrighted or patented) during the Term of his employment with IPC
(whether before or after the date hereof), and (b) such information and data
pertaining to the business, operations, personnel, activities, financial
affairs, and other information relating to IPC and its Subsidiaries and
Affiliates and their respective customers, suppliers, employees and other
persons having business dealings with IPC and its Subsidiaries and Affiliates as
may be reasonably required for IPC to operate its business. It is understood
that such information is proprietary in nature and shall (as between IPC and
Executive) be for the exclusive use and benefit of IPC and shall be and remain
the property of IPC both during the Term and thereafter. If so requested by IPC,
the Executive shall execute and deliver to IPC any instrument as IPC may
reasonably request to effectuate the assignment of any such proprietary
information to IPC. Without limiting the generality of the foregoing, the
Executive hereby releases and waives and assigns to IPC any and all claims and
rights which he has against any of IPC or any Subsidiary or Affiliate thereof or
any of the technology, "knowhow," licenses or other proprietary rights or
processes of IPC or any Subsidiary or Affiliate thereof.
6.2 POST-EMPLOYMENT. In the event that the Executive leaves
the employ of IPC for any reason, including, without limitation, the expiration
of the Term, the Executive shall deliver to IPC (and shall not keep in his
possession, recreate or deliver to anyone other than IPC) any and all devices,
records, data, notes, reports, proposals, lists, correspondence, specifications,
drawings, blueprints, sketches, materials, equipment, other documents or
property, together with all copies thereof (in whatever medium recorded)
belonging to IPC or any Subsidiary or Affiliate thereof or any of their
respective successors or assigns.
7. NON-COMPETITION AND NON-SOLICITATION.
7.1 NON-COMPETITION. During the Term and for a period of one
year thereafter, except as contemplated by this Agreement, the Merger Agreement,
the Investors Agreement dated as of the date hereof, among IPC and the other
parties named therein, the Amended and Restated Labor Pooling Agreements, the
Corporate Opportunity Agreement or the Stockholders Agreement (all of which
entered into in connection with the Merger), the Executive agrees, and shall
cause each of its respective Affiliates to agree, that any such Person shall
not, directly or indirectly, through any Person Controlled by such Executive, in
any form or manner within any jurisdiction in which IPC or its Affiliates are
doing business: (a) engage in the Business (as defined herein) for his or their
own account or for the account of any other Person, or (b) become interested in
any Person engaged in the Business as a partner, shareholder, member, principal,
agent, employee, trustee, consultant or in any other relationship or capacity;
PROVIDED, HOWEVER, that the Executive may own, directly or indirectly, solely as
a passive investment, securities of any Person if either the Executive or Xxxxx
Xxxxxxxxxxx or any of their respective Affiliates, as the case may be (1) is not
a Person in Control of, or a member of a group that Controls, such Person and
(2) does not, directly or indirectly, own 5% or more of any voting class of
securities of such Person. For purposes of this Agreement, "Business" means (i)
the
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design, manufacture, sale, distribution and/or maintenance of voice and/or data
communications products, including, but not limited to, turret or dealerboard
systems used within the financial services, energy, transportation or emergency
services industries, Private Branch Exchange (PBX) and/or key telephone systems,
voice recording systems and video teleconferencing products; (ii) the furnishing
of communications cabling or voice or data communications products, including
the design and/or installation of local and wide area networks or the provision
of maintenance services for said communications cabling or products; (iii) the
design, furnishing, installation and/or maintenance of low voltage cabling
systems (such as would not require an electrical license for the installation
thereof); and (iv) the provision of long distance telecommunications network
services.
7.2 NON-SOLICITATION. During the Term and for a period of one
year thereafter, the Executive will not, directly or indirectly, use IPC
proprietary knowledge or information obtained during the course of Executive's
employment with IPC with the intention to, or which a reasonable person would
construe to (a) interfere with or disrupt any present or prospective
relationship, contractual or otherwise, between IPC and any customer, supplier,
employee, consultant or other person having business dealings with IPC, or (b)
employ or solicit the employment or engagement by others of any employee or
consultant of IPC (other than the Executive's executive assistant) who was such
an employee or consultant at the time of termination of the Executive's
employment hereunder or within one year prior thereto.
7.3 SCOPE. The Executive agrees that the provisions of this
Section 7 are necessary to protect the interests of IPC and are reasonable and
valid in geographical and temporal scope and in all other respects. If any court
determines that the provisions of this Section 7 or any part thereof are
unenforceable because of the duration or geographical scope of such provision,
such court will have the power to reduce the duration or scope of such
provision, as the case may be, and, in its reduced form, such provision will be
enforceable.
8. NONDISCLOSURE. Except with the prior written consent of IPC in each
instance or as may be reasonably necessary to perform the Executive's services
hereunder, the Executive shall not disclose, use, publish, or in any other
manner reveal, directly or indirectly, at any time during or after the Term, any
confidential information relating to IPC or any Subsidiary or Affiliate thereof
acquired by him prior to, during the course of, or incident to, his employment
hereunder, except information which becomes generally available to the public
through no breach of this Agreement by the Executive. Such confidential
information shall include, but shall not be limited to, information relating to
(a) the business, operations, systems, services, know-how, trade secrets,
customer lists, pricing policies, operational methods, market plans, product
development plans, acquisition plans, design and design projects, inventions and
research projects and all other plans and processes of IPC, and (b) the
business, operations, personnel, activities, financial affairs, and other
information relating to IPC or any Subsidiary or Affiliate thereof and their
respective customers, suppliers, employees, consultants, officers, directors,
stockholders and other Persons having business dealings with IPC or any
Subsidiary or Affiliate thereof. In the event Executive is required (by oral
questions, interrogatories, requests for information or documents in legal
proceedings, subpoenas, civil investigative demand or similar process) to
disclose any such confidential information, the Executive shall provide IPC with
prompt written notice of such requirement so that IPC may seek a protective
order or other appropriate remedy and/or waive compliance with the provisions of
this Section. If, in the absence of such a protective order or other remedy or
receipt of a waiver by IPC, the Executive is nonetheless advised by his legal
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counsel that he is legally compelled to disclose such confidential information,
the Executive may, without liability hereunder, disclose only that portion of
such confidential information which such counsel advises is legally required to
be disclosed; provided that the Executive exercises his best efforts to preserve
the confidentiality of the information, including, without limitation, by
cooperating with IPC to obtain an appropriate protective order or other reliable
assurance that confidential treatment will be accorded the confidential
information.
9. REMEDIES FOR CERTAIN BREACHES. If the Executive commits a breach, or
threatens to commit a breach, of any of the provisions of Sections 6, 7 and/or 8
hereof, IPC shall have the following rights and remedies, each of which rights
and remedies shall be independent of the others, and shall be severally
enforceable, and all of which rights and remedies shall be in addition to, and
not in lieu of, any other rights and remedies available under law or in equity
to IPC:
(a) the right and remedy to have the provisions of
Sections 6, 7 and/or 8 enforced by any court of competent
jurisdiction by injunction, restraining order, specific
performance or other equitable relief in favor of IPC, it
being acknowledged and agreed that any breach or threatened
breach of Sections 6, 7 and/or 8 hereof by the Executive will
cause irreparable injury to IPC and that money damages will
not provide an adequate remedy to IPC; and
(b) to cease as of the date of such breach or
threatened breach any and all further payments to Executive
pursuant to this Agreement.
10. ARBITRATION. Any dispute, controversy or claim, at any time arising
out of this or relating to this Agreement, or the breach, termination or
invalidity thereof (other than any dispute, controversy or claim pursuant to
Sections 6, 7, 8 and/or 9 hereof, which may, at the option of IPC, be submitted
to any court having jurisdiction), shall be referred to final and binding
arbitration by a single arbitrator appointed by mutual agreement of the parties,
but in the absence of mutual agreement, selected by the Chief Judge of the
Federal District Court for the Southern District of New York. The place of
arbitration shall be New York, NY. Any arbitral award may be entered as a
judgment in any court of competent jurisdiction.
11. MISCELLANEOUS.
11.1 NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, telegram, telex
or telecopy, or by mail (registered or certified mail, postage prepaid, return
receipt requested) or by any courier service, providing proof of delivery. All
communications hereunder shall be delivered to the respective parties at the
following addresses:
If to the Executive: Xxxxxxx X. Xxxxxxxxxxx
00 Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
copy to: White & Case
0000 Xxxxxx xx xxx Xxxxxxxx
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Xxx Xxxx, XX 00000
Telecopier: (000) 000-0000
Attn: Xxxxxx X. Rover, Esq.
If to IPC: IPC Information Systems, Inc.
Wall Street Plaza
00 Xxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
Telecopier No.: (000) 000-0000
Attn: General Counsel
copy to: Xxxxxx, Xxxxx & Bockius LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopier No.: (000) 000-0000
Attn: Xxxxxx X. Xxxxxx, Esq.
or to such other address as the party to whom notice is given may have
previously furnished to the other parties hereto in writing in the manner set
forth above.
11.2 ENTIRE AGREEMENT. Upon the Closing, this Agreement shall
constitute the entire agreement between the Executive and IPC with respect to
IPC's employment of the Executive and supersedes all prior agreements and
understandings, written or oral, with respect thereto, including,
without limitation, the Existing Agreement.
11.3 AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only by (a) an instrument in writing and signed by the party
against whom such amendment or waiver is sought to be enforced, and (b) in the
case of IPC, such amendment or waiver also must be duly authorized by an
appropriate resolution of the Board.
11.4 SUCCESSORS AND ASSIGNS. IPC shall have the right to
assign this Agreement. The personal services of the Executive are the subject of
this Agreement and no part of his rights or obligations hereunder may be
assigned, transferred, pledged or encumbered by the Executive. This Agreement
shall inure to the benefit of, and be binding upon (a) the parties hereto, (b)
the heirs, administrators, executors and personal representatives of the
Executive and (c) the successors and assigns of IPC as provided herein.
11.5 GOVERNING LAW. This Agreement, including the validity
hereof and the rights and obligations of the parties hereunder, and all
amendments and supplements hereof and all waivers and consents hereunder, shall
be construed in accordance with and governed by the laws of the State of New
York without giving effect to any conflicts of law provisions or rule, that
would cause the application of the laws of any other jurisdiction.
11.6 SEVERABILITY. If any provisions of this Agreement as
applied to any part or to any circumstance shall be adjudged by a court to be
invalid or unenforceable, the same shall in
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no way affect any other provision of this Agreement, the application of such
provision in any other circumstances or the validity or enforceability of this
Agreement.
11.7 SURVIVAL. The rights and obligations of IPC and Executive
pursuant to Sections 6, 7, 8, 9, 10 and this Section 11 shall survive the
termination of the Executive's employment with IPC and the expiration of the
Term.
11.9 CAPTIONS. The headings and captions used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
11.10 COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
EXECUTIVE:
/s/ Xxxxxxx X. Xxxxxxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx
IPC INFORMATION SYSTEMS, INC.
By:/s/ S.T. Xxxxxx
--------------------------------
Name: S.T. Xxxxxx
Title: President and C.E.O.
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EXHIBIT A
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IPC INFORMATION SYSTEMS, INC.
STOCK OPTION PLAN
GRANT CERTIFICATE
This Grant Certificate evidences the grant of an option pursuant to the
provisions of the Stock Option Plan (the "Plan") of IPC Information Systems,
Inc. (the "Company") to the individual whose name appears below (the "Grantee"),
covering the specific number of shares of Common Stock of the Company ("Stock")
set forth below, pursuant to the provisions of the Plan and on the following
express terms and conditions:
1. Name of Grantee:
Xxxxxxx Xxxxxxxxxxx
0. Number of shares of Stock of the Company which are subject to this option:
[57,720] shares [based on 1.25% of total IPC shares on a fully diluted
basis]
3. Exercise price of shares subject to this option:
$21 per share
4. Date of grant of this option:
[Closing Date]
5. Vesting:
See Section 5(b) of the Plan.
6. Termination date of this option:
See Section 5(c) of the Plan.
The Grantee hereby acknowledges receipt of a copy of the Plan as presently in
effect. The text and all of the terms and provisions of the Plan are
incorporated herein by reference, and this option is subject to these terms and
provisions in all respects. At any time when the Grantee wishes to exercise this
option, in whole or in part, the Grantee shall submit to the Company a written
notice of exercise, specifying the exercise date and the number of shares to be
exercised. Upon exercise, the Grantee shall remit to the Company the exercise
price, plus an amount sufficient to satisfy any withholding tax obligation of
the Company that arises in connection with such exercise.
IPC INFORMATION SYSTEMS, INC. AGREED TO AND ACCEPTED BY:
By:_________________________ ________________________________
Xxxxxxx Xxxxxxxxxxx
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XXXXXXX X
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PERMITTED EMPLOYMENT AND BUSINESS OFFICES
The Executive shall be permitted throughout the Term to continue his present
positions with (i) Knight Maintenance Corporation, (ii) KEC-NJ and (iii) KEC-NY,
and to perform such duties and services in relation to such positions as is
consistent with past practices.
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