EXHIBIT 10.14
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), dated as of
September 18, 2003 (the "Effective Date"), by and between IPC Information
Systems, Inc., a Delaware corporation (the "Employer"), and Xxxx Xxxxxx (the
"Employee").
WHEREAS, the Employee possesses skills, experience and
knowledge that are of value to the Employer; and
WHEREAS, the Employer desires to enlist the services and
employment of the Employee on behalf of the Employer as its President and Chief
Operating Officer, and the Employee is willing to render such services on the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, the sufficiency of which is hereby acknowledged, the parties
hereto agree as follows:
1. Employment Term. Subject to the terms and conditions of
this Agreement, the Employer hereby agrees to employ the Employee hereunder, and
the Employee hereby agrees to be employed by the Employer hereunder, for the
period commencing on the Effective Date and ending on the third anniversary of
the Effective Date, unless terminated sooner as hereinafter provided (such
period, the "Employment Term").
2. Duties.
(a) During the Employment Term, the Employee shall
serve as the President and Chief Operating Officer of the Employer, and in such
capacity shall use his best energies and abilities in the performance of such
duties, services and responsibilities customarily associated with such position
as determined from time to time by the Chief Executive Officer of the Employer
(the "CEO") or the Board of Directors of the Employer (the "Board") and such
other duties as reasonably requested by the CEO or Board. In performing such
duties, services and responsibilities, the Employee will report directly to the
CEO.
(b) During the Employment Term, the Employee shall
devote his full business time, attention and best efforts to the performance of
his duties hereunder and shall not, without the consent of the CEO and the Board
provide services as an employee, director or consultant or other independent
contractor to or in respect of any business or entity other than the Employer
and its subsidiaries.
(c) During the Employment term, the Employee shall
serve as a member of the Board at the sole discretion of the Employer. Upon a
termination of the Employee's employment with the Employer for any reason, the
Employee shall be deemed to have resigned from all positions with the Board
without any further action required by the parties hereto.
3. Compensation. In full consideration of the performance by
the Employee of the Employee's obligations during the Employment Term (including
any service as a member of the Board and in any position with any affiliate of
the Employer or otherwise on behalf of the Employer), the Employee shall be
compensated as follows:
(a) Base Salary. During the Employment Term, the
Employee shall receive a base salary (the "Base Salary") at an annual rate of
$275,000, payable in accordance with the normal payroll practices of the
Employer in effect from time to time. During the Employment Term, the Base
Salary shall be subject to annual increase (but not decrease) as determined in
the sole discretion of the Board.
(b) Annual Target Bonus. For each fiscal year of the
Employer in effect during the Employment Term, the Employee shall be eligible to
receive a cash bonus of up to 50% of his Base Salary (the "Target Bonus") upon
the attainment of performance goals set in advance by the CEO and Board. All
such bonuses shall be paid after the completion of the Employer's financial
statements for the applicable fiscal year as and when bonuses are paid to
members of senior management generally.
(c) The Employee shall be solely responsible for
federal, state and local taxes imposed on the Employee by reason of any
compensation and benefits provided under this Agreement, and all such
compensation and benefits shall be subject to all applicable withholding taxes.
4. Benefits.
a) During the Employment Term, the Employee shall be
entitled to participate in the employee benefit plans, policies, programs and
arrangements, as may be amended from time to time, that are provided generally
to senior executives of the Employer to the extent the Employee meets the
eligibility requirements for any such plan, policy, program or arrangement.
b) Upon the presentation of proper documentation, the
Employer shall reimburse the Employee for all reasonable attorneys' fees
incurred in connection with the negotiation of this Agreement, up to a maximum
of $1,500.
5. Vacations. During the Employment Term, the Employee shall
be entitled to four weeks of paid vacation per each full calendar year. Such
vacation time shall be provided in accordance with the Employer's policies with
respect to carry-over of vacation days.
6. Termination of the Employment Term. The Employment Term
shall terminate upon the earliest of:
(a) The second anniversary of the Effective Date;
(b) The death of the Employee;
(c) The Disability of the Employee; and
(d) The termination of the Employee's employment by
the Employer for Cause or without Cause.
For purposes of this Agreement, the terms "Cause" and
"Disability" are each as defined in the Employer's Amended and Restated 2002
Stock Option Plan.
7. Termination Payments.
(a) Subject only to Section 7(b), upon termination of
the Employee's employment during the Employment Term, the sole obligation of the
Employer to make any cash payment to the Employee shall be to pay the Employee
(i) any portion of the Base Salary and bonus which has been earned but unpaid as
of the date of the Employee's termination of employment with the Employer (the
"Termination Date") and (ii) reimbursement of reasonable and necessary business
expenses incurred by the Employee in connection with the Employee's employment
on behalf of the Employer on or prior to the Termination Date but not previously
paid to the Employee (collectively, the "Accrued Compensation").
(b) If the employment of the Employee is terminated
during the Employment Term by the Employer pursuant to Section 6(d) other than
for Cause, the sole obligation of the Employer to make any cash payment to the
Employee other than the payment of the Accrued Compensation shall be to pay the
Employee an amount of severance pay equal to the sum of 75% of the Base Salary
and 75% of the Target Bonus, each as in effect as of the Termination Date. Such
severance pay shall be paid in nine substantially equal monthly installments
commencing within 30 days of the Termination Date; provided, however, that in
the event the Employee breaches any of the covenants set forth in Section 8
hereof following the Termination Date, all severance payments shall cease and
the Employer shall have no further obligations under this Section 7(b). The
obligation of the Employer to pay the severance pay pursuant to this Section
7(b) shall be conditioned on the Employee's execution of a general release in
form satisfactory to the Employer.
8. Employee Covenants.
(a) Unauthorized Disclosure. The Employee agrees and
understands that in the Employee's position with the Employer, the Employee has
been and will be exposed to and has and will receive information relating to the
confidential affairs of the Employer and its affiliates, including, without
limitation, technical information, intellectual property, business and marketing
plans,
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strategies, customer information, software, other information concerning the
products, promotions, development, financing, expansion plans, business policies
and practices of the Employer and its affiliates and other forms of information
considered by the Employer and its affiliates to be confidential and in the
nature of trade secrets (including, without limitation, ideas, research and
development, know-how, formulas, technical data, designs, drawings,
specifications, customer and supplier lists, pricing and cost information and
business and marketing plans and proposals) (collectively, the "Confidential
Information"). The Employee agrees that at all times during the Employee's
employment with the Employer and thereafter, the Employee shall not disclose
such Confidential Information, either directly or indirectly, to any third
person or entity without the prior written consent of the Employer. This
confidentiality covenant has no temporal, geographical or territorial
restriction. Upon termination of the Employee's employment with the Employer,
the Employee shall promptly supply to the Employer all property, keys, notes,
memoranda, writings, lists, files, reports, customer lists, correspondence,
tapes, disks, cards, surveys, maps, logs, machines, technical data and any other
tangible product or document which has been produced by, received by or
otherwise submitted to the Employee during or prior to the Employee's employment
with the Employer, and any copies thereof in his (or capable of being reduced to
his) possession.
(b) Non-competition. By and in consideration of the Employer's
entering into this Agreement and the payments to be made and benefits to be
provided by the Employer hereunder, and further in consideration of the
Employee's exposure to the proprietary information of the Employer and its
affiliates, the Employee agrees that the Employee shall not, during the
Employee's employment with the Employer and thereafter during the one-year
period following the Termination Date (the "Non-competition Term"), directly or
indirectly, own, manage, operate, join, control, be employed by, or participate
in the ownership, management, operation or control of, or be connected in any
manner with, including, without limitation, holding any position as a
shareholder, director, officer, consultant, independent contractor, employee,
partner, or investor in, any Restricted Enterprise; provided, that in no event
shall ownership of 1% or less of the outstanding equity securities of any issuer
whose securities are registered under the Securities Exchange Act of 1934, as
amended, standing alone, be prohibited by this Section 8(b). For purposes of
this paragraph, "Restricted Enterprise" shall mean any person, corporation,
partnership or other entity that is engaged, directly or indirectly, in (a) the
design, manufacture, installation, servicing, consultation and other
professional services and applications of Turret Systems (as defined below); (b)
the design and implementation of the in-building cabling and infrastructure
necessary for customers; (c) the design, provisioning, installation or servicing
of telecommunication services for trading floors; or (d) managed services in
connection with trading organizations as provided by the Employer during the
Employee's employment with the Employer, in each case in the United States or in
any other geographic location where the Employer or any of its affiliates do
business. For purposes of this Agreement, the term "Turret Systems" shall mean
telecommunications equipment and software to enable communications (including
voice, video and data) primarily among traders, counterparties and associated
support personnel. During the one-year period following the Termination Date,
upon request of the Employer, the Employee shall notify the Employer of the
Employee's then-current employment status.
(c) Non-solicitation. During the Non-competition Term, the
Employee shall not (1) contact, induce or solicit (or assist any person to
contact, induce or solicit) any person which has a business relationship with
the Employer or of any of its affiliates to terminate, curtail or otherwise
limit such business relationship, or (2) contact, induce or solicit (or assist
any person to contact, induce or solicit) for employment any person who is, or
within six months prior to the date of such action was, an employee of the
Employer or any of its affiliates.
(d) Remedies. The Employee agrees that any breach of the terms
of this Section 8 would result in irreparable injury and damage to the Employer
for which the Employer would have no adequate remedy at law; the Employee
therefore also agrees that in the event of said breach or any threat of breach,
the Employer shall be entitled to an immediate injunction and restraining order
to prevent such breach and/or threatened breach and/or continued breach by the
Employee and/or any and all persons and/or entities acting for and/or with the
Employee, without having to prove damages, in addition to any other remedies to
which the Employer may be entitled at law or in equity. The terms of this
paragraph shall not prevent the Employer from pursuing any other available
remedies for any breach or threatened breach hereof, including, without
limitation, the recovery of damages from the Employee. The Employee and the
Employer further agree that the provisions of the covenants contained in this
Section 8 are reasonable and necessary to protect the businesses of the Employer
and its affiliates because of the Employee's access to Confidential Information
and his material participation in the operation of such businesses. Should a
court or arbitrator determine, however, that any provision of the covenants
contained in this Section 8 is not reasonable or valid, either in period of
time, geographical area, or otherwise, the parties hereto agree that such
provision should be interpreted and enforced to the maximum extent which such
court or arbitrator deems reasonable or valid.
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The existence of any claim or cause of action by the Employee
against the Employer or any of its affiliates, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the enforcement by the
Employer of the covenants contained in this Section 8.
9. Proprietary Rights. The Employee shall disclose promptly to
the Employer any and all inventions, discoveries, improvements and patentable or
copyrightable works initiated, conceived or made by him, either alone or in
conjunction with others, during the Employee's employment with the Employer and
related to the business or activities of the Employer and its affiliates, and he
assigns all of his interest therein to the Employer or its nominee. Whenever
requested to do so by the Employer, the Employee shall execute any and all
applications, assignments or other instruments which the Employer shall deem
necessary to apply for and obtain trademarks, patents or copyrights of the
United States or any foreign country or otherwise protect the interests of the
Employer and its affiliates therein. These obligations shall continue beyond the
end of the Employee's employment with the Employer with respect to inventions,
discoveries, improvements or copyrightable works initiated, conceived or made by
the Employee while employed by the Employer and shall be binding upon the
Employee's employers, assigns, executors, administrators and other legal
representatives.
10. Employee Representations. The Employee represents and
warrants that (i) he is not subject to any contract, arrangement, policy or
understanding, or to any statute, governmental rule or regulation, that in any
way limits his ability to enter into and fully perform his obligations under
this Agreement and (ii) he is not otherwise unable to enter into and fully
perform his obligations under this Agreement.
11. Indemnification. During the Employee's employment and
thereafter, the Employer agrees to indemnify, including, without limitation,
advancement of all costs and fees, the Employee from and against any liability
and expenses arising by reason of the Employee's acting as an officer or
director of the Employer or any of its subsidiaries, in accordance with and to
the fullest extent permitted by law. During the Employment Term, the Employer
shall maintain commercially reasonable Directors and Officers liability
insurance, under which the Employee will be a covered person. Such liability
insurance shall have such terms and policy limits of coverage as are determined
appropriate by the Board.
12. Non-Waiver of Rights; Disputes.
(a) The failure to enforce at any time the provisions of this
Agreement or to require at any time performance by any other party of any of the
provisions hereof shall in no way be construed to be a waiver of such provisions
or to affect either the validity of this Agreement or any part hereof, or the
right of any party to enforce each and every provision in accordance with its
terms.
(b) No dispute relating to or arising under this Agreement
shall be subject to mediation or arbitration, and, if such dispute is subject to
a trial, such trial shall be a jury trial.
13. Notices. Every notice relating to this Agreement shall be
in writing and shall be given by personal delivery or by registered or certified
mail, postage prepaid, return receipt requested.
14. Binding Effect/Assignment.
(a) This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective heirs, executors,
personal representatives, estates, successors (including, without limitation, by
way of merger) and assigns. Notwithstanding the provisions of the immediately
preceding sentence, the Employee shall not assign all or any portion of this
Agreement without the prior written consent of the Employer.
(b) The Employer will require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Employer, to expressly assume
and agree to perform this Agreement in the same manner and to the same extent
that the Employer would be required to perform it if no such succession had
taken place, unless such assumption occurs automatically by operation of law.
14. Entire Agreement; Modification. This Agreement sets forth
the entire understanding of the parties hereto with respect to the subject
matter hereof and supersedes and replaces all prior agreements, negotiations
and/or representations, written or oral, between the Parties to the extent they
relate in any way to the employment, termination of employment, compensation and
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employee benefits of the Employee, other than the Non-Qualified Stock Option
Agreements entered into between the Parties, dated as of April 5, 2002, April
25, 2003 and July 9, 2003, respectively, and the Key Employee Stock Purchase
Agreement between the Parties, dated as of July 25, 2002 and related Secured
Promissory Note and Security Agreement. This Agreement may not be amended, nor
may any provision hereof be modified or waived, except by an instrument in
writing duly signed by the parties.
15. Severability. If any provision of this Agreement,
or any application thereof to any circumstances, is invalid, in whole or in
part, such provision or application shall to that extent be severable and shall
not affect other provisions or applications of this Agreement.
16. Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York, without
reference to the principles of conflict of laws.
17. Headings. The headings contained herein are
solely for the purposes of reference, are not part of this Agreement and shall
not in any way affect the meaning or interpretation of this Agreement.
18. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed to be an original but
all of which together shall constitute one and the same instrument.
[signature page follows]
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IN WITNESS WHEREOF, the Employer has caused this Agreement to
be executed by authority of the Board, and the Employee has hereunto set his
hand, effective as of the Effective Date.
IPC Information Systems, Inc.
By: /s/ XXXX XXXXXXXX
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Name: Xxxx XxXxxxxx
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Its: Secretary
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/s/ Xxxx Xxxxxx
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Xxxx Xxxxxx
