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EMPLOYMENT AGREEMENT
AGREEMENT effective as of the 17th day of October 1995, by and between IPC
INFORMATION SYSTEMS, INC., a New York corporation (the "Company"), and XXXXXX
XXXXXXX XXXXXX ("Xx. Xxxxxx").
W I T N E S S E T H
WHEREAS, the Company wishes to secure the services of Xx. Xxxxxx pursuant
to the terms and conditions hereof and in order to induce Xx. Xxxxxx to enter
into this agreement (the "Agreement") and to secure the benefits to accrue from
his performance hereunder is willing to undertake the obligations assigned to it
herein; and
WHEREAS, Xx. Xxxxxx is willing to accept such employment with the Company
and to enter into the Agreement;
NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto agree as follows:
1. POSITION; DUTIES; RESPONSIBILITIES.
1.1 Xx. Xxxxxx shall serve as President and Chief Executive Officer of the
Company having general direction, charge and management of the business, the
resources and affairs of the Company, which shall include but not be limited to
development and implementation of the Company's vision, mission, strategic plans
and operational plans and Xx. Xxxxxx shall direct communications with investors,
securities analysts, the press and other of the Company's constituencies. Xx.
Xxxxxx shall be appointed to fill a vacant position on the Board of Directors of
the Company (the "Board"), which the Board shall forthwith establish, to serve
until the next annual meeting of shareholders at which the Board shall nominate
him to serve for an additional term of three years, or until his successor is
elected and qualified or until his earlier resignation or removal. Xx. Xxxxxx
shall report to and be subject to the supervision, control and direction of the
Board and the Executive Committee of the Board (the "Executive Committee"),
should the Board, in its sole discretion, decide to establish an Executive
Committee. Xx. Xxxxxx shall have such other responsibilities and authorities
consistent with the status, titles and reporting requirements set forth herein
as are appropriate to said positions, subject to change (other than diminution
in position, authority, duties or responsibilities) from time to time by the
Board or the Executive Committee. Employment shall be principally at the
Company's headquarters, currently in New York City, in which area Xx. Xxxxxx
will establish his principal residence.
1.2 During the course of his employment, Xx. Xxxxxx agrees to devote his
full time and attention and give his best efforts and skill to furthering the
business and interests of the Company. Notwithstanding the foregoing, Xx. Xxxxxx
may volunteer his time and efforts on behalf of charitable, civic and
professional organizations provided such activities do not unduly interfere with
the carrying out of his duties hereunder.
1.3 Xx. Xxxxxx may continue to serve on any board of directors on which he
currently serves and may seek renewal on the same. Xx. Xxxxxx must seek the
approval of the Board prior to serving as a member of a board of directors of a
company or charitable organization on which he does not serve as of the
effective date of this Agreement.
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2. TERM.
The term of employment as Chief Executive Officer and President under this
Agreement shall be for two (2) years, to commence as of December 3, 1995, and
shall continue through December 2, 1997, unless sooner terminated in accordance
with this Agreement, and thereafter as herein provided. Xx. Xxxxxx'x term of
employment shall automatically renew for subsequent one (1) year terms, the
first of which would begin on December 3, 1997, subject to the terms of this
Agreement unless either party gives written notice thirty (30) days or more
prior to the next anniversary of employment of its decision not to renew.
3. SALARY.
3.1 The Company shall pay Xx. Xxxxxx a base salary during the term of
employment at the annual rate of Three Hundred Thousand Dollars ($300,000)
("Base Salary"), payable in accordance with the standard payroll practices of
the Company.
3.2 It is understood that the Base Salary is to be Xx. Xxxxxx'x minimum
annual compensation during his employment with the Company. The Base Salary
shall be reviewed annually by the Board and may increase at the discretion of
the Board. Base Salary shall include all such increased amounts.
4. STOCK OPTIONS.
4.1 Upon the commencement of employment with the Company in any capacity,
the Company shall grant Xx. Xxxxxx a Non-Qualified Stock Option under the IPC
Information Systems, Inc. 1994 Stock Option and Incentive Plan (the "1994 Option
Plan") to purchase one- hundred and fifty thousand shares of common stock at
"Fair Market Value" as of such date. The term of such options shall be ten years
subject to earlier termination as provided in the 1994 Option Plan and herein.
For purposes of this Section, "Fair Market Value" and the terms and conditions
of the stock option grant shall be controlled by the 1994 Option Plan.
4.2 Xx. Xxxxxx shall vest in the options specified in Section 4.1
contingent on continued employment on such dates, unless his employment is
terminated by the Company or there is a change in control which occurs as set
forth in Section 9.4, as follows:
(i) 50,000 shares, vesting in equal installments on December 2,
1996, December 2, 1997 and December 2, 1998; and
(ii) 50,000 shares vesting in equal installments on December 2,
1997, December 2, 1998 and December 2, 1999; and
(iii) 50,000 shares, vesting in equal installments on December 2,
1998, December 2, 1999 and December 2, 2000."
4.3 Upon a change in control, as that term is defined in Section 6.02 of
the 1994 Option Plan, the direct result of which Xx. Xxxxxx is no longer
President and Chief Executive Officer of the Company, Xx. Xxxxxx shall become
immediately vested in all stock options granted to him under Sections 4.1 and
4.4 hereof. Notwithstanding the foregoing, the exercisability of the stock
options granted under Section 4.4 shall be in accordance with the terms of the
1994 Option Plan.
4.4 The Company shall grant and vest upon commencement of employment,
subject to the approval for an increase in the number of shares available under
the 1994 Option Plan by the Shareholders, the following additional ten year Non-
Qualified Stock Options to Xx. Xxxxxx in addition to the options granted under
Section 4.1 above which shall be exercisable as follows:
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a. 25,000 shares at a price of twenty-five dollars ($25.00) per share which
shall become exercisable contingent upon: (i) continued employment of Xx. Xxxxxx
under this Agreement or some successor agreement, unless his employment is
terminated by the Company or there is a change in control which occurs as set
forth in Section 9.4, and (ii) the occurrence of ninety (90) consecutive trading
days during which the closing price of the Company's common stock averages at
least forty dollars ($40.00).
b. 25,000 shares at a price of forty dollars ($40.00) per share which shall
become exercisable contingent upon: (i) continued employment of Xx. Xxxxxx under
this Agreement or some successor agreement, unless his employment is terminated
by the Company or there is a change in control which occurs as set forth in
Section 9.4, and (ii) the occurrence of ninety (90) consecutive trading days
during which the closing price of the Company's common stock averages at least
sixty dollars ($60.00).
Notwithstanding the foregoing, the contingencies specified in Sections
4.4(a)(ii) and 4.4(b)(ii) shall not apply upon the occurrence of an
extraordinary corporate event. It is the intent of the parties to this
Agreement, that an extraordinary corporate event shall mean, but is not limited
to, an event which shall cause an unexpected fluctuation in the closing price of
the Company's stock and is not a direct result of Xx. Xxxxxx'x employment as
defined herein, such as the purchase of a large block of the Company's stock by
an unrelated third party at a substantial premium.
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5. BONUS.
5.1 During the course of his employment, Xx. Xxxxxx may receive an annual
bonus which shall be determined at the discretion of the Compensation Committee
of the Board.
5.2 If a bonus is paid in any year, for purposes of this Section 5 it shall
be paid to Xx. Xxxxxx in conformance with Company's normal bonus pay policies.
6. HIRING BONUS.
6.1 Company agrees to pay Xx. Xxxxxx a hiring bonus equal to One Hundred
Thousand Dollars ($100,000) on December 3, 1995.
7. MISCELLANEOUS BENEFITS.
7.1 Xx. Xxxxxx shall be provided with an automobile suitable to his
position.
7.2 Xx. Xxxxxx shall be entitled to five (5) weeks annual paid vacation
each year of the term of employment.
7.3 Xx. Xxxxxx shall be provided with life insurance equal to two (2) times
his base salary.
7.4 The Company shall reimburse Xx. Xxxxxx for reasonable attorneys' fees
in connection with representing Xx. Xxxxxx during negotiations of this
Agreement.
7.5 Xx. Xxxxxx shall also be provided with other benefits otherwise
available to senior officers of the Company.
8. RESIDENTIAL MATTERS.
8.1 A residential loan (the "Loan") shall be provided to Xx. Xxxxxx in the
amount of One Hundred Fifty Thousand Dollars ($150,000) upon Xx. Xxxxxx'
contracting for the purchase of a primary residence within the New York City
area, substantially in the Form of Annex 1 hereto and incorporated herein, with
interest to be set at the rate of interest otherwise imputed under the Internal
Revenue Code of 1986, as amended (the "Code"). Such loan to be secured by a
mortgage or other security interest on such residential property sufficient to
satisfy the Code and Regulation requirements for "Employee-relocation loans." To
the extent the Code and Regulations do not require interest, the Loan shall be
interest free. The Parties agree that at present no interest is required.
8.2 The term of the Loan shall be the earlier of three years from the date
of the Loan or upon termination of employment.
8.3 After the Loan is made, prior to the end of each year that Xx. Xxxxxx
is awarded a bonus, Fifty Thousand Dollars ($50,000) of said bonus will reduce
the Loan; provided however, that if in any year the bonus to be paid is less
than Eighty Thousand Dollars ($80,000) than only five-eighths (5/8ths) of such
bonus shall be so applied.
8.4 The Company shall pay to Xx. Xxxxxx any loss sustained by him within
one year after commencement of employment on the sale of his current principal
residence based upon the excess of (i) a mutually acceptable appraisal of such
residence to be obtained at Company expense, over (ii) the proceeds of sale
realized by Xx. Xxxxxx minus reasonable real estate commission; provided that,
if such sale proceeds are for less than eighty-five percent (85%) of the
appraised value, Xx. Xxxxxx will offer to sell the residence to the Company for
such proposed sale price. Also, Xx. Xxxxxx shall have use of a corporate
apartment in New York until he shall have obtained and occupied housing in the
New York area for a delayed move. The terms of this Section 8.4 shall apply for
twelve (12) months from commencement of employment.
9. CONSEQUENCES OF TERMINATION OF EMPLOYMENT.
9.1 DEATH. In the event of the death of Xx. Xxxxxx during the term of
employment under this Agreement or during the period when payments are being
made pursuant to Section 9.2, this Agreement shall terminate and all obligations
to Xx. Xxxxxx shall cease as of the date of death except that Company will pay
the Base Salary until the end of the month in which Xx. Xxxxxx dies, and except
for any rights or benefits of Xx. Xxxxxx under the benefit plans and programs of
the Company in which Xx. Xxxxxx is a participant, as determined in accordance
with the terms and provisions of such plans and programs. Any bonus (or amounts
in lieu thereof) pursuant to Section 5, payable in the year in which Xx.
Xxxxxx'x death occurs, shall be promptly paid to Xx. Xxxxxx'x estate.
9.2 DISABILITY. If Xx. Xxxxxx shall become incapacitated by reason of
sickness, accident or other physical or mental disability, as such
incapacitation is certified by a physician chosen by Company and reasonably
acceptable to Xx. Xxxxxx (if he is not then unable to exercise sound judgment),
and shall therefore be unable to perform his normal duties hereunder for more
than a six month period, then the employment of Xx. Xxxxxx hereunder and this
Agreement may be terminated by Xx. Xxxxxx or the Company upon thirty (30) days'
written notice to the other party following such certification. Should Xx.
Xxxxxx not acquiesce (or should he be unable to acquiesce) in the selection of
the certifying doctor, a doctor chosen by Xx. Xxxxxx (or if he is not then able
to exercise sound judgment by his spouse or legal representative) and reasonably
acceptable to the Company shall be required to concur in the medical
determination of incapacitation, failing which the two doctors shall designate a
third doctor whose decision shall be determinative as of the end of the calendar
month in which such concurrence or third-doctor decision, as the case may be, is
made. The Company shall thereafter pay to Xx. Xxxxxx, at such times as Base
Salary provided for in Section 3 of this Agreement would normally be paid, 100%
of Base Salary for the first month following such termination and 50% of Base
Salary for the remaining period of what would have constituted the term of
employment but for termination by reason of disability. Following the
termination pursuant to this Section 9.2, the Company shall pay or provide to
Xx. Xxxxxx such other rights and benefits of participation under the employee
benefit plans and programs available to other senior officers of the Company.
9.3 DUE CAUSE. The Company may terminate Xx. Xxxxxx and this Agreement at
any time for Due Cause. In the event of such termination for Due Cause, Xx.
Xxxxxx shall continue to receive Base Salary payments provided for in this
Agreement only through the date of such termination for Due Cause, and Xx.
Xxxxxx shall be entitled to no further benefits under this Agreement.
Notwithstanding the foregoing, any rights and benefits Xx. Xxxxxx may have under
the 1994 Option Plan in which he is a participant, shall be determined in
accordance with the terms and provisions of such plan. Xx. Xxxxxx understands
and agrees that in the event of the termination of employment pursuant to this
Section 9.3: (a) the principal and interest on the Loan shall become due and
payable in full immediately, (b) Xx. Xxxxxx shall return his automobile and (c)
no payment shall be made under Section 8.4 of this Agreement for any expenses or
loss incurred thereafter. The term "Due Cause" shall mean repeated and gross
negligence in fulfillment of, or repeated failure of Xx. Xxxxxx to fulfill his
material obligations under this Agreement, in either event after due written
notice thereof, or serious willful misconduct by Xx. Xxxxxx in respect of his
obligations hereunder, after due written notice thereof and a reasonable
opportunity to cure, if curable. Due Cause should not include, without
limitation, (a) refusal by Xx. Xxxxxx 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 Xx. Xxxxxx, 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 the Company and undertaken for
personal gain) in respect of which a determination could properly have been made
by the Board that Xx. Xxxxxx met the applicable standard of conduct prescribed
for indemnification or reimbursement under the by-laws of the Company or the
laws of the State 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 the Company who was not a party to such act or omission
knew or should have known of such act or omission.
9.4 AT WILL. The other provisions of this Agreement notwithstanding, the
Company may terminate Xx. Xxxxxx'x employment and this Agreement at any time for
whatever reason it deems appropriate, with or without cause and with or without
prior notice. In the event of such a termination of Xx. Xxxxxx'x employment and
this Agreement, except for Xx. Xxxxxx'x obligations under Section 10, Xx. Xxxxxx
shall have no further obligations of any kind under or arising out of the
Agreement and Company shall be obligated only to pay Xx. Xxxxxx the following:
(a) Base Salary provided in Section 3 of this Agreement through the end of the
then current term of employment as provided in Section 2 of this Agreement, but
no less than a total of twelve (12) months of Base Salary and (b) any other
amounts due and owing not then paid. Options shall vest (1) immediately, if Xx.
Xxxxxx'x employment terminates as a result of a change in control in accordance
with Section 4.3, and otherwise, (2) to the extent they would have vested had
Xx. Xxxxxx remained an employee through the end of the then current term of
employment. Xx. Xxxxxx agrees that the payments described in this Section 9.4
shall be full and adequate compensation to Xx. Xxxxxx for all damages Xx. Xxxxxx
may suffer as a result of the termination of his employment pursuant to this
Section 9.4, and hereby waives and releases Company from any and all obligations
or liabilities to Xx. Xxxxxx arising from or in connection with Xx. Xxxxxx'x
employment with Company or the termination of his employment including, without
limitation, all rights and claims Xx. Xxxxxx may have under federal, state or
local statutes, regulations or ordinances or under any common law principles of
breach of contract or the covenant of good faith and fair dealing, defamation,
wrongful discharge, intentional infliction of emotional distress or promissory
estoppel; provided, however, that any rights and benefits Xx. Xxxxxx may have
under the 1994 Option Plan shall be determined in accordance with the terms and
provisions of such plan unless the provisions of (2) above of this Section 9.4
apply; further, provided, however, that after a termination under this Section
9.4 and a change in control, thereafter, that occurs during the term of this
Agreement had it not been terminated under this Section 9.4, any options not
previously exercisable and vested shall become fully vested and exercisable for
the later of (i) the remaining term of this Agreement or (ii) the exercise
period as defined by the 1994 Option Plan. In the event of a material breach of
this Agreement on the part of the Company, Xx. Xxxxxx shall have the right to
terminate the Agreement upon providing the Company with a sixty (60) day notice
of intent to terminate. Such notice shall be in writing, shall be delivered to
the Board and shall state the material breach committed by the Company, which
may include, a reduction in title, responsibilities or Base Salary. Thereafter,
the Company shall have thirty (30) days to cure such breach. If the Company
fails to cure, such termination shall be deemed to be termination by the Company
at will, in which case, the terms of this Section 9.4 shall apply.
9.5 EMPLOYEE VOLUNTARY. In the event Xx. Xxxxxx terminates his employment
of his own volition prior to the end of the term specified in Section 2 of this
Agreement, such termination shall constitute a voluntary termination and in such
event Company's only obligation to Xx. Xxxxxx shall be to make Base Salary
payments provided for in this Agreement through the period ending with the date
of such voluntary termination. Except as may be otherwise expressly provided in
Section 9.2, but subject to the following provisions of this Section 9.5, any
rights and benefits Xx. Xxxxxx may have under the 1994 Option Plan, in which he
is a participant, shall be determined in accordance with the terms and
provisions of such plan. Xx. Xxxxxx understands and agrees that in the event of
the termination of employment pursuant to this Section 9.5: (a) the principal
and interest on the Loan shall become due and payable in full immediately, (b)
Xx. Xxxxxx must return the automobile supplied to him by the Company and (c) the
payment provided under Section 8.4 of this Agreement shall cease.
9.6 EFFECT OF NON-RENEWAL. If on the first anniversary of commencement of
employment the Company gives notice pursuant to Section 2 of its decision not to
renew then a relocation payment shall be paid at the end of the employment
period equal to the reasonable moving expenses of Xx. Xxxxxx in connection with
the relocation of Xx. Xxxxxx outside of the New York City area.
10. COVENANTS OF EMPLOYEE.
10.1 Xx. Xxxxxx acknowledges that as a result of the services to be
rendered to the Company hereunder, Xx. Xxxxxx will be brought into close contact
with many confidential affairs of the Company, its subsidiaries and affiliates,
not readily available to the public. Xx. Xxxxxx further acknowledges that the
services to be performed under this Agreement are of a special, unique, unusual,
extraordinary and intellectual character; that its goods and services are
marketed throughout the United States and the world; and that the Company
competes with other organizations that are or could be located in nearly any
part of the United States.
10.2 In recognition of the foregoing, Xx. Xxxxxx covenants and agrees that,
except as is necessary in providing services under this Agreement, Xx. Xxxxxx
will not knowingly use for his own benefit nor knowingly divulge any
Confidential Information and Trade Secrets of the Company, its subsidiaries and
affiliated entities, which are not otherwise in the public domain and, so long
as they remain Confidential Information and Trade Secrets not in the public
domain, will not intentionally disclose them to anyone outside of the Company
either during or after his employment. For the purposes of this Agreement,
"Confidential Information and Trade Secrets" of the Company means information
which is secret to the Company, its subsidiaries and affiliated entities. It may
include, but is not limited to, information relating to the products, services,
new and future concepts and business of Company, its subsidiaries and
affiliates, in the form of memoranda, reports, computer software and data banks,
customer lists, employee lists, books, records, financial statements, manuals,
papers, contracts and strategic plans. As a guide, Xx. Xxxxxx is to consider
information originated, owned, controlled or possessed by the Company, its
subsidiaries or affiliated entities which is not disclosed in printed
publications stated to be available for distribution outside the Company, its
subsidiaries and affiliated entities as being secret and confidential. In
instances where doubt does or should reasonably be understood to exist in Xx.
Xxxxxx'x mind as to whether information is secret and confidential to the
Company, its subsidiaries and affiliated entities, Xx. Xxxxxx agrees to request
an opinion, in writing, from the Company.
10.3 Xx. Xxxxxx will deliver promptly to the Company on the termination of
his employment with the Company, or at any other time the Company may so
request, all memoranda, notes, records, reports and other documents relating to
the Company, its subsidiaries and affiliated entities, and all property owned by
the Company, its subsidiaries and affiliated entities, which Xx. Xxxxxx obtained
while employed by the Company, and which Xx. Xxxxxx may then possess or have
under his control.
10.4 During and for a period of two (2) years commencing on the termination
of employment with the Company (except that the time period of such restrictions
shall be extended by any period during which Xx. Xxxxxx is in violation of this
Section 10.4), Xx. Xxxxxx will not: (a) knowingly interfere with, disrupt or
attempt to disrupt, any then existing relationship, contractual or otherwise
between the Company, its subsidiaries or affiliated entities, and any customer,
client, supplier, or agent, it being understood that the right to seek or enter
into contractual arrangements with independent contractors, including, without
limitation, consultants and professionals, and the like, shall not be abridged
by reason of this Section 10; or (b) solicit, or assist any other entity in
soliciting for employment, any person known to Xx. Xxxxxx to be an agent or
executive employee of the Company, its subsidiaries or affiliated entities or
(c) without the written consent of the Company, become an officer, employee,
consultant, director or trustee of any entity, or any direct or indirect
subsidiary or affiliate of any such entity, that directly or indirectly competes
with the Company (including subsidiaries) in any market area in which the
Company generates thirty-five percent (35%) of its revenues ("core area"); or
(d) without the written consent of the Company, become an officer, employee,
consultant, director or trustee of any entity, or any direct or indirect
subsidiary or affiliate of any such entity, that directly or indirectly competes
with the Company (including subsidiaries) in any market area in which the
revenues of such entity are 10% or more of the Company's core areas; provided,
however, that if employment terminates within three years from the commencement
of employment this non-compete shall only apply to the delivery of integrated
voice, data and video services, including the procurement, installation, design
and development of hardware and applications, as well as global wide area
connectivity over a dedicated virtual private network for the financial
industry.
Notwithstanding the foregoing, upon a termination at will or a change in
control in accordance with Section 9.4, this non-compete shall only be in effect
for what the remaining term of Xx. Xxxxxx'x employment would have been.
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10.5 Xx. Xxxxxx will promptly disclose to the Company all inventions,
processes, original works of authorship, trademarks, patents, improvements and
discoveries related to the business of the Company, its subsidiaries and
affiliated entities (collectively "Developments"), conceived or developed during
Xx. Xxxxxx'x employment with the Company and based upon information to which he
had access during the term of employment, whether or not conceived during
regular working hours, through the use of Company time, material or facilities
or otherwise. All such Developments shall be the sole and exclusive property of
the Company, and upon request Xx. Xxxxxx shall deliver to the Company all
outlines, descriptions and other data and records relating to such Developments,
and shall execute any documents deemed necessary by the Company to protect the
Company's rights hereunder. Xx. Xxxxxx agrees upon request to assist the Company
to obtain United States or foreign letters patent and copyright registrations
covering inventions and original works of authorship belonging to the Company
hereunder. If the Company is unable because of Xx. Xxxxxx'x mental or physical
incapacity to secure Xx. Xxxxxx'x signature to apply for or to pursue any
application for any United States or foreign letters patent or copyright
registrations covering inventions and original works of authorship belonging to
the Company hereunder, then Xx. Xxxxxx hereby irrevocably designates and
appoints the Company and its duly authorized officers and agents as his agent
and attorney in fact, to act for and in his behalf and stead to execute and file
any such applications and to do all other lawfully permitted acts to further the
prosecution and issuance of letters patent or copyright registrations thereon
with the same legal force and effect as if executed by him. Xx. Xxxxxx hereby
waives and quitclaims to the Company any and all claims, of any nature
whatsoever, that he may hereafter have for infringement of any patents or
copyright resulting from any such application for letters patent or copyright
registrations belonging to the Company hereunder.
10.6 Xx. Xxxxxx agrees that the remedy at law for any breach or threatened
breach of any covenant contained in this Section 10 will be inadequate and that
the Company, in addition to such other remedies as may be available to it, in
law or in equity, shall be entitled to injunctive relief without bond or other
security.
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10.7 Although the restrictions contained in Sections 10.1, 10.2, 10.3 and
10.4 above are considered by the parties hereto to be fair and reasonable in the
circumstances, it is recognized that restrictions of such nature may fail for
technical reasons, and accordingly it is hereby agreed that if any of such
restrictions shall be adjudged to be void or unenforceable for whatever reason,
but would be valid if part of the wording thereof were deleted, or the period
thereof reduced or the area dealt with thereby reduced in scope, the
restrictions contained in Sections 10.1, 10.2, 10.3 and 10.4 shall be enforced
to the maximum extent permitted by law, and the parties consent and agree that
such scope or wording may be accordingly judicially modified in any proceeding
brought to enforce such restrictions.
10.8 Notwithstanding that Xx. Xxxxxx'x employment hereunder may expire or
be terminated as provided in Section 2 or Section 9 above, this Agreement shall
continue in full force and effect insofar as is necessary to enforce the
covenants and agreements of Xx. Xxxxxx contained in this Section 10.
11. ARBITRATION.
The parties shall use their best efforts and good will to settle all
disputes by amicable negotiations. The Company and Xx. Xxxxxx agree that, with
the express exception of any dispute or controversy arising under Section 9.2 or
Section 10 of this Agreement, any controversy or claim arising out of or in any
way relating to Xx. Xxxxxx'x employment with the Company, including, without
limitation,, any and all disputes concerning this Agreement and the termination
of this Agreement that are not amicably resolved by negotiation, shall be
settled by arbitration in New York, New York, or such other place agreed to by
the parties, as follows:
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(a) Any such arbitration shall be heard before a panel consisting of one
(1) to three (3) arbitrators, each of whom shall be impartial. Except as the
parties may otherwise agree, all arbitrators shall be appointed in the first
instance by the President of the New York State Bar Association or, in the event
of his unavailability by reason of disqualification or otherwise, by the
Chairman of the Executive Committee of said Bar Association. In determining the
number and appropriate background of the arbitrators, the appointing authority
shall give due consideration to the issues to be resolved, but his decision as
to the number of arbitrators and their identity shall be final.
(b) An arbitration may be commenced by any party to this Agreement by the
service of a written Request for Arbitration upon the other affected party. Such
Request for Arbitration shall summarize the controversy or claim to be
arbitrated, and shall be referred by the complaining party to the appointing
authority for appointment of arbitrators ten (10) days following such service or
thereafter. If the panel of arbitrators is not appointed by the appointing
authority within thirty (30) days following such reference, any party may apply
to any court within the State of New York for an order appointing arbitrators
qualified as set forth below. No Request for Arbitration shall be valid if it
relates to a claim, dispute, disagreement or controversy that would have been
time barred under the applicable statute of limitations had such claim, dispute,
disagreement or controversy been submitted to the courts of the State of New
York.
(c) The schedule for the discovery and arbitration hearings shall be such
as to facilitate expeditious resolution. The Arbitration Panel shall, in its
reasonable discretion, establish arbitration procedures that will avoid
unnecessary delay or overly broad discovery, including the establishment of
discovery rules that may be substantially limited as compared to those set forth
in the Federal Rules of Civil Procedure.
(d) All attorneys' fees and costs of the arbitration shall in the first
instance be borne by the respective party incurring such costs and fees, but the
arbitrators shall have the discretion to award costs and/or attorneys' fees as
they deem appropriate under the circumstances. The parties hereby expressly
waive punitive damages, and under no circumstances shall an award contain any
amount that in any way reflects punitive damages.
(e) Judgment on the award rendered by the arbitrators may be entered in any
court having jurisdiction thereof.
(f) It is intended that controversies or claims submitted to arbitration
under this Section 11 shall remain confidential, and to that end it is agreed by
the parties that neither the facts disclosed in the arbitration, the issues
arbitrated, nor the views or opinions of any persons concerning them, shall be
disclosed to third persons at any time, except to the extent necessary to
enforce an award or judgment or as required by law or in response to legal
process or in connection with such arbitration.
12. SUCCESSORS AND ASSIGNS.
12.1 ASSIGNMENT BY THE COMPANY. This Agreement shall inure to the benefit
of and shall be binding upon the successors and assigns of the Company. It is
assignable by Company to the purchaser or assignee of all or substantially all
of the Company, as then currently defined, but only with the prior written
consent of Xx. Xxxxxx, which shall not be unreasonably withheld.
12.2 ASSIGNMENT BY XX. XXXXXX. Xx. Xxxxxx may not assign this Agreement or
any part thereof; provided, however, that nothing herein shall preclude one or
more beneficiaries of Xx. Xxxxxx from receiving any amount that may be payable
following occurrence of his legal incompetency or his death and shall not
preclude the legal representative of his estate from receiving such amount or
from assigning any right hereunder to the person or persons entitled thereto
under his will or, in the case of intestacy, to the person or persons entitled
thereto under the laws of the intestacy applicable to his estate.
13. GOVERNING LAW.
This Agreement shall be deemed a contract made under, and for all purposes
shall be construed in accordance with, the laws of the State of New York without
reference to the principles of conflict of laws.
14. ENTIRE AGREEMENT.
This Agreement contains the understanding and representation between the
parties hereto pertaining to the subject matter hereof and supersedes all
undertakings and agreements, whether oral or in writing, if any there be,
previously entered into by them with respect thereto.
15. AMENDMENT OR MODIFICATION; WAIVER.
No provision of this Agreement may be amended or modified unless such
amendment or modification is agreed to in writing, signed by Xx. Xxxxxx and by a
duly authorized officer of the Company. Except as otherwise specifically
provided in this Agreement, no waiver by either party hereto of any breach by
the other party of any condition or provision of the Agreement to be performed
by such other party shall be deemed a waiver of a similar or dissimilar
provision or condition at the same or any prior or subsequent time.
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16. NOTICES.
Any notice to be given hereunder shall be in writing and delivered
personally or sent by overnight mail, such as Federal Express, addressed to the
party concerned at the address indicated below or to such other address as such
party may subsequently give notice of hereunder in writing:
If to Company:
Xxxxxx Xxxxxxx, Esq.
General Counsel
IPC Information Systems, Inc.
Wall Street Plaza
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
with a copy to:
Xxxxxx X. Rover, Esq.
White & Case
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
If to Xx. Xxxxxx:
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
with a copy to:
Xxxxx X. Xxxxxxxxx, Esq.
Wien Malkin & Bettex
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
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17. SEVERABILITY.
In the event that any provision or portion of this Agreement shall be
determined to be invalid or unenforceable for any reason, the remaining
provisions or portions of this Agreement shall be unaffected thereby and shall
remain in full force and effect to the fullest extent permitted by law.
18. WITHHOLDING.
Anything to the contrary notwithstanding, all payments required to be made
by the Company hereunder to Xx. Xxxxxx or his beneficiaries, including his
estate, shall be subject to withholding and deductions as the Company may
reasonably determine it should withhold or deduct pursuant to any applicable law
or regulation. In lieu of withholding or deducting, such amounts, in whole or in
part, the Company may, in its sole discretion, accept other provision for
payment as permitted by law, provided it is satisfied in its sole discretion
that all requirements of law affecting its responsibilities to withhold such
taxes have been satisfied.
19. SURVIVORSHIP.
The respective rights and obligations of the parties hereunder shall
survive any termination of this Agreement to the extent necessary to the
intended preservation of such rights and obligations.
20. HEADINGS.
Headings of the sections of this Agreement are intended solely for
convenience and no provision of this Agreement is to be construed by reference
to the title of any section.
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21. KNOWLEDGE AND REPRESENTATION.
Xx. Xxxxxx acknowledges that the terms of this Agreement have been fully
explained to him, that Xx. Xxxxxx understands the nature and extent of the
rights and obligations provided under this Agreement, and that Xx. Xxxxxx has
been represented by legal counsel in the negotiation and preparation of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first set forth above.
IPC INFORMATION SYSTEMS, INC.
_____________________ By_________________________________
Xxxxxx Xxxxxxx Xxxxxx Xxxxxxx X. Xxxxxxxxxxx
Chairman and
Chief Executive Officer
Dated:______________ Dated:_____________________________
