SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 17, 1995
IPC INFORMATION SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 24296 58-1636502
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
Wall Street Plaza
88 Pine Street
NEW YORK, NY 10005
(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code, is (212) 825-9060
Page 1 of 5 pages
Exhibit Index Located at Page 5
<PAGE>
Item 5. Other Events.
The Company has entered into an employment agreement with Steven T. Clontz,
dated as of October 17, 1995, attached hereto as Exhibit 10.14 and made a part
hereof, setting forth the terms of his service to the Company as its President
and Chief Executive Officer. In connection therewith, each of Richard P.
Kleinknecht, Peter J. Kleinknecht and Jeffrey M. Gill have entered into
amendments to their respective employment agreements with the Company. Pursuant
to such amendments, Richard P. and Peter J. Kneinknecht, formerly the Chief
Executive Officer and President, respectively, have resigned such portions and
consented to the appointment of Mr. Clontz as President and Chief Executive
Officer. Richard P. Kleinknecht shall continue to serve as Chairman of the
Company, Peter J. Kleinknecht shall continue to serve as Vice Chairman of the
Company and Mr. Gill shall report to Mr. Clontz. The amendments to the
employment agreement of Richard P. Kleinknecht, Peter J. Kleinknecht and Mr.
Gill are attached hereto as Exhibits 10.2, 10.3 and 10.4, respectively, and made
a part hereof.
In connection with the by-laws of the Company have been amended to provide
for, among other things, a single Chief Executive Officer and President to have
general and active management of the Company and to carry out the resolutions of
the Board of Directors.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Not applicable
(b) Not applicable
(c) The following exhibits are filed with this report:
EXHIBIT NO. DESCRIPTION
3.2 Amended By-Laws of the Company
10.2.1 Letter Agreement, dated as of
October 17, 1995, by and between the
Company and Richard P. Kleinknecht
amending the Employment Agreement,
dated May 9, 1994 by and between the
Company and Richard P. Kleinknecht.
Page 2 of 5 pages
<PAGE>
10.3.1 Letter Agreement, dated as of
October 17, 1995, by and between the
Company and Peter J. Kleinknecht
amending the Employment Agreement,
dated May 9, 1994, by and between
the Company and Peter J.
Kleinknecht.
10.4.1 Letter Agreement, dated as of
October 17, 1995, by and between the
Company and Jeffrey M. Gill amending
the Employment Agreement, dated
August 29, 1994, by and between the
Company and Jeffrey M. Gill.
10.14 Employment Agreement, dated as of
October 17, 1995, by and between the
Company and Stephen T. Clontz.
99 Press Release
Page 3 of 5 pages
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
IPC Information Systems, Inc.
By: /S/ DANIEL UTEVSKY
Daniel Utevsky
Secretary
Dated: November 29, 1995
Page 4 of 5 pages
<PAGE>
EXHIBITS
EXHIBIT NO. DESCRIPTION PAGE
3.2 Amended By-Laws of the Company
10.2.1 Letter Agreement, dated as of October 17, 1995,
by and between the Company and Richard P.
Kleinknecht amending the Employment Agreement,
dated May 9, 1994 by and between the Company
and Richard P. Kleinknecht.
10.3.1 Letter Agreement, dated as of October 17, 1995,
by and between the Company and Peter J.
Kleinknecht amending the Employment Agreement,
dated May 9, 1994, by and between the Company
and Peter J. Kleinknecht.
10.4.1 Letter Agreement, dated as of October 17, 1995,
by and between the Company and Jeffrey M.
Gill amending the Employment Agreement, dated
August 29, 1994, by and between the Company
and Jeffrey M. Gill.
10.14 Employment Agreement, dated as of October 17,
1995, by and between the Company and Stephen T.
Clontz.
99 Press Release
Page 5 of 5 pages
<PAGE>
================================================================================
BY-LAWS
OF
IPC INFORMATION SYSTEMS, INC.
================================================================================
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I................................. 1
OFFICES .................................................................... 1
Section 1. Registered Office..................................... 1
Section 2. Other Offices......................................... 1
ARTICLE II................................ 1
STOCKHOLDERS................................................................. 1
Section 1. Time and Place of Meetings............................ 1
Section 2. Annual Meetings....................................... 1
Section 3. Special Meetings...................................... 1
Section 4. Notice of Meeting..................................... 2
Section 5. Quorum................................................ 2
Section 6. Voting................................................ 2
Section 7. Voting Rights......................................... 2
Section 8. Proxies............................................... 2
Section 9. Conduct of Meetings................................... 3
Section 10. Record Date........................................... 3
Section 11. Stockholders of Record................................ 4
ARTICLE III................................ 4
DIRECTORS.................................................................... 4
Section 1. Management............................................ 4
Section 2. Number................................................ 4
Section 3. Election and Tenure................................... 5
Section 4. Vacancies and Newly Created Directorships............. 5
Section 5. Removal and Resignation............................... 5
Section 6. Place of Meetings..................................... 5
Section 7. Annual Meeting........................................ 5
Section 8. Regular Meetings...................................... 6
Section 9. Special Meetings...................................... 6
Section 10. Conduct of Meetings................................... 6
Section 11. Quorum and Voting..................................... 6
Section 12. Written Consent....................................... 6
Section 13. Telephonic Participation.............................. 6
Section 14. Compensation.......................................... 7
Section 15. Amendments Concerning the Board....................... 7
ARTICLE IV................................ 7
NOTICES .................................................................... 7
Section 1. Notice................................................ 7
(i)
<PAGE>
Section 2. Waiver of Notice...................................... 7
ARTICLE V................................. 8
COMMITTEES................................................................... 8
Section 1. Standing Committees................................... 8
Section 2. Audit Committee....................................... 8
Section 3. Compensation Committee................................ 8
Section 4. Other Committees...................................... 9
ARTICLE VI................................ 9
OFFICERS .................................................................... 9
Section 1. Officers.............................................. 9
Section 2. Tenure; Resignation; Removal; Vacancies............... 9
Section 3. Compensation.......................................... 10
Section 4. Authority and Duties.................................. 10
Section 5. The Chairman.......................................... 10
Section 6. The Vice Chairman..................................... 10
Section 7. The Chief Executive Officer and President............. 10
Section 8. The Chief Operating Officer........................... 10
Section 9. The Vice Presidents................................... 11
Section 10. The Assistant Vice Presidents......................... 11
Section 11. The Chief Financial Officer........................... 11
Section 12. The Secretary......................................... 11
Section 13. The Assistant Secretaries............................. 11
Section 14. Action with Respect to Securities of Other
Corporations.......................................... 12
ARTICLE VII................................ 12
STOCK CERTIFICATES........................................................... 12
Section 1. Certificates.......................................... 12
Section 2. Transfer Agent and Registrar.......................... 12
Section 3. Lost Certificates..................................... 12
Section 4. Transfers of Stock.................................... 13
ARTICLE VIII............................... 13
GENERAL PROVISIONS........................................................... 13
Section 1. Dividends............................................. 13
Section 2. Fiscal Year........................................... 13
Section 3. Seal.................................................. 13
ARTICLE IX................................ 13
INDEMNIFICATION.............................................................. 13
Section 1. Actions, Suits or Proceedings other than by
or in the Right of the Corporation................... 13
Section 2. Actions or Suits by or in the Right of the
Corporation........................................... 14
(ii)
<PAGE>
Section 3. Indemnification for Costs, Charges and Expenses of a
Successful Party........................................... 15
Section 4. Indemnification for Expenses of a Witness.................. 15
Section 5. Determination of Right to Indemnification.................. 16
Section 6. Advancement of Costs, Charges and Expenses................. 16
Section 7. Procedure for Indemnification.............................. 16
Section 8. Settlement................................................. 17
Section 9. Other Rights; Continuation of Right to Indemnification;
Individual Contracts....................................... 17
Section 10. Savings Clause............................................. 18
Section 11. Insurance.................................................. 18
Section 12. Definitions................................................ 18
Section 13. Subsequent Amendment and Subsequent Legislation............ 19
ARTICLE X................................. 20
WAIVER OF SECTION 203........................................................ 20
ARTICLE XI................................ 20
AMENDMENTS................................................................... 20
RECORD OF AMENDMENTS TO BY-LAWS
(iii)
<PAGE>
IPC INFORMATION SYSTEMS, INC.
BY-LAWS
------------------------------
ARTICLE I
OFFICES
Section 1. REGISTERED OFFICE. The registered office of the corporation in
the State of Delaware shall be in the City of Wilmington, County of New Castle.
Section 2. OTHER OFFICES. The corporation may also have offices at such
other places both within and without the State of Delaware as the board of
directors may from time to time determine or the business of the corporation may
require.
ARTICLE II
STOCKHOLDERS
Section 1. TIME AND PLACE OF MEETINGS. All meetings of stockholders for the
election of directors and for any other purpose shall be held at such time
(except as otherwise provided by Section 2 of this Article) and at such place,
either within or without the State of Delaware, as shall be designated from time
to time by the board of directors and stated in the notice of the meeting or in
a duly executed waiver of notice thereof.
Section 2. ANNUAL MEETINGS. Annual meetings of stockholders, commencing
with the year 1995, shall be held on the third Thursday of January of each year
or, if such day be a legal holiday in the state where the meeting is to be held
on the next business day following, at 10:00 A.M., or at such other date and
time as shall be designated from time to time by the board of directors and
stated in the notice of the meeting. At each annual meeting, stockholders shall
elect a board of directors and transact such other business as may properly be
brought before the meeting.
Section 3. SPECIAL MEETINGS. Special meetings of stockholders, for any
purpose or purposes, unless otherwise prescribed by statute or by the
certificate of incorporation, may be called by the chairman and vice chairman or
the board of directors and shall be called by the secretary at the request in
writing of stockholders owning at least a majority of the entire capital stock
of the corporation issued and outstanding and entitled to vote. Such request
shall state the purpose or purposes of the proposed meeting. Business transacted
at any special meeting of stockholders shall be limited to the purposes stated
in the notice.
<PAGE>
Section 4. NOTICE OF MEETING. Except as otherwise required by statute,
written notice of each meeting of stockholders stating the place, date and hour
thereof and, in the case of a special meeting, specifying the purpose or
purposes for which the meeting is called, shall be given to each stockholder
entitled to vote at such meeting not less than ten nor more than sixty days
before the date of the meeting.
Section 5. QUORUM. Except as otherwise provided by statute or by the
certificate of incorporation, the holders of record of a majority of the stock
issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum for the transaction of business
at each meeting of stockholders. If such quorum shall not be present at any
meeting of stockholders, a majority of stockholders entitled to vote thereat who
are present in person or represented by proxy shall have the power to adjourn
the meeting from time to time, without notice other than an announcement at the
meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present any business may be transacted which
might have been transacted at the meeting as originally notified. If the
adjournment is for more than thirty days, or if after the adjournment a new
record date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each stockholder of record entitled to vote at the
meeting. A quorum, once present to organize a meeting, is not broken by the
subsequent withdrawal of any stockholders.
Section 6. VOTING. At any meeting of stockholders at which a quorum is
present, all elections of directors shall be determined by a plurality vote and
all other matters shall be determined by the affirmative vote of the holders of
a majority of the stock having voting power present in person or represented by
proxy, except as otherwise provided by statute or by the certificate of
incorporation.
Section 7. VOTING RIGHTS. Unless otherwise provided by the certificate of
incorporation and except as otherwise provided by statute, each stockholder of
record shall at every meeting of stockholders be entitled to one vote in person
or by proxy for each share of the capital stock having voting power held by such
stockholder.
Section 8. PROXIES. Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for such
stockholder by proxy, but no proxy shall be voted or acted upon after three
years from its date, unless the proxy provides for a longer period. The
attendance at any meeting by a stockholder who shall have previously given a
proxy applicable thereto shall not, as such, have the effect of revoking the
proxy. The corporation may treat any duly executed proxy as not revoked and in
full force and effect until it receives a duly executed instrument revoking it,
or a duly executed proxy bearing a later date. If ownership of a share of voting
stock of the corporation stands in the name of two or more persons, in the
absence of written directions to the corporation to the contrary, any one or
more of such stockholders may cast all votes to which such ownership is
entitled. If an attempt is made to cast conflicting votes by the several persons
in whose names shares of stock stand, the vote or votes to which those persons
are entitled shall be cast as directed by a majority of those holding such stock
and present at such meeting. If such conflicting votes are evenly split on any
particular matter, each faction may vote the securities in question
proportionally, or any person voting the shares, or a beneficiary, if any, may
apply to the Court of Chancery or such other court as may have jurisdiction to
appoint an additional person to act with the persons so voting the shares, which
shall then be voted as determined by a majority of such persons and the person
appointed by the Court.
Section 9. CONDUCT OF MEETINGS. The chairman shall serve as chairman at all
meetings of the stockholders or, if the chairman is absent or otherwise unable
to so serve, the vice chairman or, if both the chairman and the vice chairman
are absent or otherwise unable to serve, the chief executive officer and
president, shall serve as chairman of such meetings. If the chairman, the vice
chairman and the chief executive officer and president are absent or otherwise
unable to so serve, such other person as shall be appointed by a majority of the
whole board of directors shall serve as chairman at any meeting of stockholders
held in such absence. The secretary or, in his or her absence, such other person
as the chairman of the meeting shall appoint, shall serve as secretary of the
meeting. The chairman of the meeting shall conduct all meetings of the
stockholders in accordance with the best interests of the Corporation and shall
have the authority and discretion to establish reasonable procedural rules for
the conduct of such meetings, including such regulation of the manner of voting
and the conduct of discussion as he or she shall deem appropriate. The chairman
of the meeting shall also have the authority to adjourn the meeting from time to
time and from place to place as he or she may deem necessary and in the best
interests of the Corporation.
Section 10. RECORD DATE. (a) In order that the corporation may determine
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, the board of directors may fix a record date, which
record date shall not precede the date upon which the resolution fixing the
record date is adopted by the board of directors, and which record date shall
not be more than sixty nor less than ten days before the date of such meeting.
If no record date is fixed by the board of directors, the record date for
determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next preceding the day
on which notice is given, or, if notice is waived, at the close of business on
the day next preceding the day on which the meeting is held. A determination of
stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting; provided, however,
that the board of directors may fix a new record date for the adjourned meeting.
(b) In order that the corporation may determine stockholders entitled to consent
to corporate action in writing without a meeting, the board of directors may fix
a record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the board of directors, and
which date shall not be more than ten days after the date upon which the
resolution fixing the record date is adopted by the board of directors. If no
record date has been fixed by the board of directors, the record date for
determining stockholders entitled to consent to corporate action in writing
without a meeting, when no prior action by the board of directors is required by
this chapter, shall be the first date on which a signed written consent setting
forth the action taken or proposed to be taken is delivered to the corporation
by delivery to its registered office in this State, its principal place of
business, or an officer or agent of the corporation having custody of the book
in which proceedings of meetings of stockholders are recorded. Delivery made to
a corporation's registered office shall be by hand or by certified or registered
mail, return receipt requested. If no record date has been fixed by the board of
directors and prior action by the board of directors is required by this
chapter, the record date for determining stockholders entitled to consent to
corporate action in writing without a meeting shall be at the close of business
on the day on which the board of directors adopts the resolution taking such
prior action. (c) In order that the corporation may determine stockholders
entitled to receive payment of any dividend or other distribution or allotment
of any rights or stockholders entitled to exercise any rights in respect of any
change, conversion or exchange of stock, or for the purpose of any other lawful
action, the board of directors may fix a record date, which record date shall
not precede the date upon which the resolution fixing the record date is
adopted, and which record date shall be not more than sixty days prior to such
action. If no record date is fixed, the record date for determining stockholders
for any such purpose shall be at the close of business on the day on which the
board of directors adopts the resolution relating thereto.
Section 11. STOCKHOLDERS OF RECORD. The corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner; and the corporation
shall not be bound to recognize any equitable or other claim to or interest in
such share or shares on the part of any other person, regardless of whether it
shall have knowledge or notice of any such claim or interest, except as
otherwise provided by law.
ARTICLE III
DIRECTORS
Section 1. MANAGEMENT. The business and affairs of the corporation shall be
managed by or under the direction of its board of directors, which may exercise
all such powers of the corporation and do all such lawful acts and things as are
not by statute or by the certificate of incorporation or by these by-laws
directed or required to be exercised or done by stockholders.
Section 2. NUMBER. The total number of directors which shall constitute the
whole board of directors shall not be less than two nor more than nine. The
board of directors at the time of adoption of these by-laws shall consist of two
directors. Thereafter, within the limits above specified, the number of
directors shall be determined by resolution of two-thirds of the whole board of
directors.
Section 3. ELECTION AND TENURE. The directors shall be elected at the
annual meeting of stockholders, except as provided by the certificate of
incorporation and Section 4 of this Article, and each director elected shall
hold office until such director's successor is elected and qualified or until
such director's earlier resignation or removal. Directors need not be
stockholders.
Section 4. VACANCIES AND NEWLY CREATED DIRECTORSHIPS. Vacancies and newly
created directorships resulting from an increase in the authorized number of
directors may be filled only by a vote of a majority of the directors then in
office, although less than a quorum, or by a sole remaining director. Whenever
the holders of any class or classes of stock or series thereof are entitled to
elect one or more directors by the certificate of incorporation, vacancies and
newly created directorships of such class or classes or series may be filled by
a majority of the directors elected by such class or classes or series thereof
then in office, or by a sole remaining director so elected. Except as otherwise
provided by the certificate of incorporation, each director so chosen shall hold
office until the next annual election and until such director's successor is
duly elected and shall qualify or until such director's earlier resignation or
removal.
Section 5. REMOVAL AND RESIGNATION. Except as otherwise provided by the
certificate of incorporation or by statute, any director or the whole board of
directors may be removed, but only for cause, by the holders of a majority of
shares then entitled to vote at any election of directors. A director may resign
at any time by giving written notice to the board of directors, the chairman,
the vice chairman or the secretary of the corporation. Unless otherwise
specified in the notice, the resignation shall take effect upon receipt thereof
by the board of directors or such officer, and acceptance of the resignation
shall not be necessary to make it effective. For purposes of this Section 5,
conduct worthy of removal for "cause" shall mean (a) conduct as a director of
the corporation or any subsidiary of the corporation, which conduct involves
willful material misconduct, breach of fiduciary duty involving personal
pecuniary gain or gross negligence in the performance of duties, or (b) conduct,
whether or not as a director of the corporation or a subsidiary of the
corporation, which conduct involves dishonesty or breach of fiduciary duty and
is punishable by imprisonment for a term exceeding one year under state or
federal law.
Section 6. PLACE OF MEETINGS. The board of directors may hold meetings,
both regular and special, either within or without the State of Delaware.
Section 7. ANNUAL MEETING. An annual meeting of each newly elected board of
directors shall be held, without notice other than these by-laws, immediately
after and at the same place as the annual meeting of stockholders.
Section 8. REGULAR MEETINGS. Regular meetings of the board of directors may
be held without notice at such time and at such place as shall from time to time
be determined by the board of directors.
Section 9. SPECIAL MEETINGS. Special meetings of the board of directors may
be called by the chairman, vice chairman or the chief executive officer and
president on at least five days notice to each director, in accordance with
Article IV of these by-laws. Special meetings shall be called by the secretary
in like manner and on like notice on the written request, stating the purpose or
purposes of the meeting, of two (2) directors, or one-third of the directors
constituting the whole board of directors, whichever is less.
Section 10. CONDUCT OF MEETINGS. Meetings of the board of directors shall
be presided over by the chairman or, in the absence or disability of the
chairman, by the vice chairman or, in the absence or disability of both the
chairman and vice chairman, by the chief executive officer and president. If the
chairman, the vice chairman and the chief executive officer and president are
absent from any meeting of the board of directors, the presiding officer shall
be the then senior member of the board of directors in terms of length of
service on the board of directors. The secretary or, in the secretary's absence,
a person appointed by the chairman (or other presiding person), shall act as
secretary of the meeting. The chairman (or other person presiding) shall conduct
all meetings of the board of directors in accordance with the best interests of
the corporation and shall have the authority and discretion to establish
reasonable procedural rules for the conduct of meetings of the board of
directors.
Section 11. QUORUM AND VOTING. At all meetings of the board of directors, a
majority of the total number of the whole board of directors shall constitute a
quorum for the transaction of business and the act of a majority of the
directors present at any meeting at which there is a quorum shall be the act of
the board of directors, except as may be otherwise provided by statute, by these
by-laws or by the certificate of incorporation. If a quorum shall not be present
at any meeting of the board of directors, a majority of the directors present
thereat may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
-2-
Section 12. WRITTEN CONSENT. Unless otherwise restricted by the certificate
of incorporation or these by-laws, any action required or permitted to be taken
at any meeting of the board of directors or of any committee thereof may be
taken without a meeting, if all members of the board of directors or committee,
as the case may be, consent thereto in writing, and the writing or writings are
filed with the minutes of proceedings of the board of directors or committee.
Section 13. TELEPHONIC PARTICIPATION. Unless otherwise restricted by the
certificate of incorporation or these by-laws, members of the board of
directors, or any committee designated thereby, may participate in a meeting of
the board of directors, or any committee, by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and such participation in a meeting shall
constitute presence in person at the meeting.
Section 14. COMPENSATION. Unless otherwise restricted by the certificate of
incorporation or these by-laws, the board of directors shall have the authority
to fix the compensation of directors in such one or more forms and amount as the
board of directors may determine.
<PAGE>
-3-
Section 15. AMENDMENTS CONCERNING THE BOARD. The matter which is the
subject of Sections 2, 3, 4 and 5 of this Article III may be altered only by a
vote, in addition to any vote required by law, of two-thirds of the whole board
of directors or by the affirmative vote of the holders of record of not less
than 80% of the outstanding shares of capital stock of the corporation entitled
to vote generally in the election of directors at a meeting of stockholders
called for that purpose.
ARTICLE IV
NOTICES
Section 1. NOTICE. Whenever notice is required by statute, the certificate
of incorporation or these by-laws to be given to any director or stockholder,
such notice shall be in writing and may be given personally or by mail or
courier. Notice by mail shall be deemed to be given, in the case of a director,
four days after depositing, and, in the case of a stockholder, at the time when
deposited, in the post office or a postal service letter box, enclosed in a
post-paid sealed wrapper, and addressed to such director or stockholder at such
director's or stockholder's address appearing on the books of the corporation.
Notice by courier shall be deemed to be given two days after delivering same to
the courier service, if marked for delivery within two days thereafter. Notice
to directors may also be given by telex, facsimile or other electronic
transmission, and shall be deemed given when transmitted. A day, for purposes of
these by-laws, shall be deemed to include Saturday, Sunday and all legal
holidays.
Section 2. WAIVER OF NOTICE. Whenever any notice is required to be given by
statute, the certificate of incorporation or these by-laws, a waiver thereof in
writing, signed by the person or persons entitled to said notice, whether before
or after the time stated therein, shall be deemed equivalent thereto. Attendance
of a person at a meeting of stockholders, board of directors or any committee of
the board of directors shall constitute a waiver of notice of such meeting,
except where the person is attending for the express purpose of objecting, at
the beginning of the meeting, to the transaction of any business because the
meeting was not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of
stockholders, board of directors, or members of a committee of the board of
directors need be specified in any written waiver of notice.
ARTICLE V
COMMITTEES
Section 1. STANDING COMMITTEES. At each annual meeting of the board of
directors, the directors shall designate from their own number, by resolution
adopted by a majority of the whole board of directors, the audit committee and
the compensation committee, each of which shall be standing committees of the
board of directors. The board of directors shall appoint a director to fill any
vacancy on any committee of the board of directors. The members of the
committees shall serve at the pleasure of the board of directors.
<PAGE>
-4-
Section 2. AUDIT COMMITTEE. The audit committee shall consist of at least
two (2) members whose background and experience are financial and/or business
management related, none of whom shall be an officer or salaried employee of the
corporation or its subsidiaries, an attorney who receives a fee or other
compensation for legal services rendered to the corporation or any other
individual having a relationship which, in the opinion of the board of
directors, would interfere with the exercise of independent judgment in carrying
out the responsibilities of a director. At any regular meeting of the board of
directors, any director who is otherwise eligible to serve on the audit
committee may be elected to fill a vacancy that has occurred on the audit
committee. The board of directors shall designate one member of the committee to
serve as chairman of the committee. The audit committee shall meet annually, at
the call of the chairman of the committee and may hold such additional meetings
as the chairman of the committee may deem necessary, to examine, or cause to be
examined, the records and affairs of the corporation to determine its true
financial condition, and shall present a report of examination to the board of
directors at the board of directors' next regular meeting following the meeting
of the audit committee. The committee shall appoint, from its membership or
otherwise, a secretary who shall cause to be kept written minutes of all
meetings of the committee. The audit committee shall make, or cause to be made,
such other examinations as it may deem advisable or whenever so directed by the
board of directors and shall report thereon in writing at a regular meeting of
the board of directors. The audit committee shall make recommendations to the
board of directors in relation to the employment of accountants and independent
auditors and arrange for such other assistance as it may deem necessary or
desirable. The audit committee shall review and evaluate the procedures and
performance of the corporation's internal auditing staff. A quorum shall consist
of two (2) members of the committee.
Section 3. COMPENSATION COMMITTEE. The compensation committee shall consist
of at least two (2) members, none of whom shall be an officer or salaried
employee of the corporation or its subsidiaries, and such ex-officio or other
members as shall be appointed by the board of directors or these by-laws. The
board of directors shall designate one member of the committee to serve as
chairman of the compensation committee, who shall have the authority to adopt
and establish procedural rules for the conduct of all meetings of the committee.
The committee shall meet annually at the call of the chairman of the
committee, and may hold such additional meetings as the chairman may deem
necessary. A quorum shall consist of two (2) members of the committee, other
than ex-officio members. The vote of a majority of the members present at any
meeting, including the chairman of the committee who shall be eligible to vote,
shall constitute the action of the compensation committee. The committee shall
appoint, from its membership or otherwise, a secretary who shall cause to be
kept written minutes of all meetings of the committee. The compensation
committee shall be responsible for overseeing the development, implementation
and conduct of the corporation's employment and personnel policies, notices and
procedures, including the administration of the corporation's compensation and
benefit programs.
<PAGE>
-5-
Section 4. OTHER COMMITTEES. The board of directors may by resolution
adopted by a majority of the whole board of directors at any meeting authorize
such other committees as from time to time it may deem necessary or appropriate
for the conduct of the business of the corporation. The members of each
committee so authorized shall be appointed by the board of directors from
members of the board of directors and/or employees of the corporation. Each such
committee shall exercise such powers as may be assigned by the board of
directors to the extent not inconsistent with law, these by-laws or the
certificate of incorporation.
ARTICLE VI
OFFICERS
Section 1. OFFICERS. The officers of the corporation shall be chosen by the
board of directors and shall be a chairman, a vice-chairman, a chief executive
officer and president, a chief operating officer and a secretary. The board of
directors may also choose a chief financial officer, a treasurer, one or more
vice presidents, one or more assistant secretaries, and any other officers and
agents as it shall deem necessary. Any number of offices may be held by the same
person, unless the certificate of incorporation or these by-laws otherwise
provide.
Section 2. TENURE; RESIGNATION; REMOVAL; VACANCIES. Each officer of the
corporation shall hold office until such officer's successor is chosen and
qualified, or until such officer's earlier resignation or removal, or, if the
term of any such officer shall have been fixed by the board of directors or by
the executive officer acting under authority delegated to the executive officer
by the board of directors, until the date of the expiration of such term. Any
officer elected or appointed by the board of directors may be removed at any
time by the board of directors or the executive officer authorized to appoint
such officer; provided that any such removal shall be without prejudice to the
rights, if any, of the officer so removed under any employment contract or other
agreement with the corporation. Any vacancy occurring in the office of president
or secretary of the corporation shall be filled by the board of directors. Any
other vacancy may be filled by the board of directors.
Section 3. COMPENSATION. The compensation of all officers, employees and
agents of the corporation shall be fixed by the board of directors or by any
committee or officer to whom such authority has been delegated by the board of
directors.
Section 4. AUTHORITY AND DUTIES. All officers as between themselves and the
corporation shall have such authority and perform such duties in the management
and operation of the corporation as may be provided in these by-laws, or, to the
extent not so provided, as may be prescribed by the board of directors. The
board of directors may from time to time delegate the powers or duties of any
officer to any other officers or agents, notwithstanding any provision hereof.
<PAGE>
-6-
Section 5. THE CHAIRMAN. The chairman, if there be a chairman, shall
preside at all meetings of stockholders and the board of directors, and the
chairman of the board shall have such other powers and duties as the board of
directors may from time to time prescribe.
Section 6. THE VICE CHAIRMAN. In the absence of the chairman, the vice
chairman, if there be a vice chairman, shall perform the duties of the chairman,
and the vice chairman shall have such other powers and duties as the board of
directors may from time to time prescribe.
Section 7. THE CHIEF EXECUTIVE OFFICER AND PRESIDENT. The chief executive
officer and president shall have the general and active management of the
business of the corporation, shall see to it that all resolutions of the board
of directors are carried into effect and, in connection therewith, shall be
authorized to delegate to the other officers of the corporation such powers and
duties of the chief executive officer and president as the chief executive
officer and president at such times and in such manner may deem advisable. In
the absence of either the vice chairman or the chairman and the vice chairman,
as the case may be, the chief executive officer and president shall assume all
such responsibilities of such absent officer or officers. The chief executive
officer and president shall have such other powers and duties as the board of
directors may from time to time prescribe.
Section 8. THE CHIEF OPERATING OFFICER. The chief operating officer shall
be the chief operating officer of the corporation, and its executive officer
next in authority to the chief executive officer and president. The chief
operating officer shall have such other powers and duties as the board of
directors may from time to time prescribe.
Section 9. THE VICE PRESIDENTS. The vice president, if any, or if there be
more than one, the vice presidents, shall assist the executive officers in the
management of the business of the corporation and the implementation of
resolutions and orders of the board of directors at such times and in such
manner as the executive officers may deem advisable. If there be more than one
vice president, the board of directors may designate one of them as executive
vice president, in which case such vice president shall be first in order of
seniority, and may also grant to others such titles as shall be descriptive of
their respective functions or indicative of their relative seniority. Each vice
president shall have such other powers and duties as the board of directors or
the executive officers may from time to time prescribe.
Section 10. THE ASSISTANT VICE PRESIDENTS. The assistant vice president, if
any, or, if there be more than one, the assistant vice presidents, shall perform
such duties as the board of directors or the executive officers may from time to
time prescribe.
Section 11. THE CHIEF FINANCIAL OFFICER. The chief financial officer shall
have the care and custody of the corporate funds, and other valuable effects,
including securities, and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the corporation in
such depositories as may be designated by the board of directors. The chief
financial officer shall disburse the funds of the corporation as may be ordered
by the board of directors, taking proper vouchers for such disbursements, and
shall render to the chief executive officer and president and the board of
directors, at meetings or whenever they may require it, an account of all the
chief financial officer's transactions as chief financial officer and of the
financial condition of the corporation.
Section 12. THE SECRETARY. The secretary shall attend all meetings of
stockholders and the board of directors and shall record, or cause to be
recorded, the minutes of all proceedings taken at such meetings, and maintain
all documents evidencing corporate actions taken by written consent of
stockholders or of the board of directors, in a book to be kept for that
purpose; and the secretary shall perform like duties for any committees of the
board of directors when required. The secretary shall see to it that all notices
of meetings of stockholders and of special meetings of the board of directors
are duly given in accordance with these by-laws or as required by statute; the
secretary shall be the custodian of the seal of the corporation, and, when
authorized by the board of directors, the secretary shall cause the corporate
seal to be affixed to any document requiring it, and, when so affixed, attested
by the secretary's signature as secretary or by the signature of an assistant
secretary; and the secretary shall perform such other duties as are generally
incident to the office of secretary and as the board of directors or the chief
operating officer may from time to time prescribe.
Section 13. THE ASSISTANT SECRETARIES. The assistant secretary, if any, or,
if there be more than one, the assistant secretaries, in the order determined by
the board of directors or by the chief executive officer and president, shall,
in the absence or disability of the secretary, exercise the powers and perform
the duties of the secretary; and the assistant secretary or assistant
secretaries shall perform such other duties as the board of directors or the
chief executive officer may from time to time prescribe.
Section 14. ACTION WITH RESPECT TO SECURITIES OF OTHER CORPORATIONS. Unless
otherwise directed by the board of directors, the chief executive officer and
president or any officer of the corporation authorized by the chief executive
officer and president shall have power to vote and otherwise act on behalf of
the corporation, in person or by proxy, at any meeting of stockholders, or with
respect to any action of stockholders, of any other corporation in which this
corporation may hold securities and otherwise to exercise any and all rights and
powers which this corporation may possess by reason of its ownership of
securities in such other corporation.
ARTICLE VII
STOCK CERTIFICATES
Section 1. CERTIFICATES. The shares of the corporation's capital stock
shall be represented by certificates, which shall be in such form as the board
of directors shall determine, provided that the board of directors may provide
by resolution or resolutions that some or all of any or all classes or series of
its stock shall be uncertificated shares. Any such resolution shall not apply to
shares represented by a certificate until such certificate is surrendered to the
corporation. Notwithstanding the adoption of such a resolution by the board of
directors, every holder of stock represented by certificates and, upon request,
every holder of uncertificated shares shall be entitled to have a certificate
signed by, or in the name of the corporation by the chairman and/or
vice-chairman and/or the chief executive officer and president, and by the
treasurer or an assistant treasurer, or the secretary or an assistant secretary
of the corporation representing the number of shares registered in certificate
form. Any or all of the signatures on the certificate may be a facsimile. In
case any officer, transfer agent or registrar who has signed or whose facsimile
signature has been placed upon a certificate shall have ceased to be such
officer, transfer agent or registrar before such certificate is issued, it may
be issued by the corporation with the same effect as if such officer, transfer
agent or registrar were such officer, transfer agent or registrar at the date of
issue.
Section 2. TRANSFER AGENT AND REGISTRAR. The board of directors shall have
the power to appoint one or more transfer agents and registrars for the transfer
and registration of certificates of stock of any class, and may require that
stock certificates be countersigned and registered by one or more of such
transfer agents and registrars.
Section 3. LOST CERTIFICATES. The board of directors may issue a new
certificate of stock or uncertificated shares in place of any certificate
therefore issued by it, alleged to have been lost, stolen or destroyed, and the
board of directors may require the owner of the lost, stolen, or destroyed
certificate, or such owner's legal representative to give the corporation a bond
sufficient to indemnify it against any claim that may be made against it on
account of the alleged loss, theft or destruction of any such certificate or the
issuance of such new certificate or uncertificated shares.
Section 4. TRANSFERS OF STOCK. Upon surrender to the corporation or the
transfer agent of the corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignation or authority to
transfer, it shall be the duty of the corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.
ARTICLE VIII
GENERAL PROVISIONS
Section 1. DIVIDENDS. Dividends upon the capital stock of the corporation,
subject to the provisions of the certificate of incorporation, if any, may be
declared by the board of directors at any regular or special meeting, pursuant
to law. Dividends may be paid in cash, in property, or in shares of the capital
stock, subject to the provisions of the certificate of incorporation.
Section 2. FISCAL YEAR. The fiscal year of the corporation shall be fixed,
and may from time to time be changed, by resolution of the board of directors.
<PAGE>
-7-
Section 3. SEAL. The corporate seal shall have inscribed thereon the name
of the corporation, the year of its organization and the words "Corporate Seal,
Delaware". The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.
ARTICLE IX
INDEMNIFICATION
Section 1. ACTIONS, SUITS OR PROCEEDINGS OTHER THAN BY OR IN THE RIGHT OF
THE CORPORATION. To the fullest extent permitted by the General Corporation Law
of the State of Delaware, the corporation shall indemnify any person who is or
was or has agreed to become a director or officer of the corporation who was or
is made a party to or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
corporation) by reason of the fact that he or she is or was or has agreed to
become a director or officer of the corporation, or is or was serving or has
agreed to serve at the written request of the corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, or by reason of any action alleged to have been taken
or omitted in such capacity, and the corporation may indemnify any other person
who is or was or has agreed to become an employee or agent of the corporation
who was or is made a party to or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the corporation) by reason of the fact that he or she is or was or has
agreed to become an employee or agent of the corporation, or is or was serving
or has agreed to serve at the written request of the corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, or by reason of any action alleged to have been taken
or omitted in such capacity, against costs, charges, expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him or her or on his or her behalf in connection with
such action, suit or proceeding and any appeal therefrom, if he or she acted in
good faith and in a manner he or she reasonably believed to be in, or not
opposed to, the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his or her
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of NOLO CONTENDERE or
its equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which he or she reasonably believed to be
in, or not opposed to, the best interests of the corporation and, with respect
to any criminal action or proceeding, had reasonable cause to believe that his
or her conduct was unlawful. Notwithstanding anything contained in this Article
IX, the corporation shall not be obligated to indemnify any director, officer,
employee or agent in connection with an action, suit or proceeding, or part
thereof, initiated by such person against the corporation unless such action,
suit or proceeding, or part thereof, was authorized or consented to by the board
of directors.
<PAGE>
Section 2. ACTIONS OR SUITS BY OR IN THE RIGHT OF THE CORPORATION. To the
fullest extent permitted by the General Corporation Law of the State of
Delaware, the corporation shall indemnify any person who is or was or has agreed
to become a director or officer of the corporation who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he or she is or was or has agreed to become a director
or officer of the corporation, or is or was serving or has agreed to serve at
the written request of the corporation as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other enterprise,
or by reason of any action alleged to have been taken or omitted in such
capacity, and the corporation may indemnify any other person who is or was or
has agreed to become an employee or agent of the corporation who was or is made
a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that he or she is or was or has
agreed to become an employee or agent of the corporation, or is or was serving
or has agreed to serve at the written request of the corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, or by reason of any action alleged to have been taken
or omitted in such capacity, against costs, charges and expenses (including
attorneys' fees) actually and reasonably incurred by him or her or on his or her
behalf in connection with the defense or settlement of such action or suit and
any appeal therefrom, if he or she acted in good faith and in a manner he or she
reasonably believed to be in, or not opposed to, the best interests of the
corporation, except no indemnification shall be made in respect of any claim,
issue or matter as to which such person shall have been adjudged to be liable to
the corporation unless and only to the extent that the Court of Chancery of
Delaware or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of such liability but in view of
all the circumstances of the case, such person is fairly and reasonably entitled
to indemnity for such costs, charges and expenses which the Court of Chancery or
such other court shall deem proper. Notwithstanding anything contained in this
Article IX, the corporation shall not be obligated to indemnify any director,
officer, employee or agent in connection with an action or suit, or part
thereof, initiated by such person against the corporation unless such action or
suit, or part thereof, was authorized or consented to by the board of directors.
Section 3. INDEMNIFICATION FOR COSTS, CHARGES AND EXPENSES OF A SUCCESSFUL
PARTY. To the extent that a director, officer, employee or agent of the
corporation has been successful, on the merits or otherwise (including, without
limitation, the dismissal of an action without prejudice), in defense of any
action, suit or proceeding referred to in Section 1 or 2 of this Article IX, or
in defense of any claim, issue or matter therein, such person shall be
indemnified against all costs, charges and expenses (including attorneys' fees)
actually and reasonably incurred by such person or on such person's behalf in
connection therewith.
Section 4. INDEMNIFICATION FOR EXPENSES OF A WITNESS. To the extent that
any person who is or was or has agreed to become a director or officer of the
corporation is made a witness to any action, suit or proceeding to which he or
she is not a party by reason of the fact that he or she was, is or has agreed to
become a director or officer of the corporation, or is or was serving or has
agreed to serve as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, at the
written request of the corporation, such person shall be indemnified against all
costs, charges and expenses actually and reasonably incurred by such person or
on such person's behalf in connection therewith.
To the extent that any person who is or was or has agreed to become an
employee or agent of the corporation is made a witness to any action, suit or
proceeding to which he or she is not a party by reason of the fact that he or
she was, is or has agreed to become an employee or agent of the corporation, or
is or was serving or has agreed to serve as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, at the written request of the corporation, such person may be
indemnified against all costs, charges and expenses actually and reasonably
incurred by such person or on such person's behalf in connection therewith.
Section 5. DETERMINATION OF RIGHT TO INDEMNIFICATION. Any indemnification
under Section 1 or 2 of this Article IX (unless ordered by a court) shall be
made by the corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer, employee or agent
is proper under the circumstances because he or she has met the applicable
standard of conduct set forth in Section 1 or 2 of this Article IX. Any
indemnification under Section 4 of this Article IX (unless ordered by a court)
shall be made by the corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer, employee or agent
is proper under the circumstances. At the election of the board of directors,
such determinations shall be made (a) by the board of directors acting by a
majority vote of directors who were not parties to such action, suit or
proceeding even though less than a quorum, or (b) if there are no such
directors, or if such directors so direct, by independent legal counsel in a
written opinion, or (c) by the stockholders. To obtain indemnification under
this Article IX, any person referred to in Section 1, 2, 3 or 4 of this Article
IX shall submit to the corporation a written request, including therewith such
documents as are reasonably available to such person and are reasonably
necessary to determine whether and to what extent such person is entitled to
indemnification.
Section 6. ADVANCEMENT OF COSTS, CHARGES AND EXPENSES. Costs, charges and
expenses (including attorneys' fees) incurred by or on behalf of a director or
officer in defending a civil or criminal action, suit or proceeding referred to
in Section 1 or 2 of this Article IX shall be paid by the corporation in advance
of the final disposition of such action, suit or proceeding; provided, however,
that the payment of such costs, charges and expenses incurred by or on behalf of
a director or officer in advance of the final disposition of such action, suit
or proceeding shall be made only upon receipt of a written undertaking by or on
behalf of the director or officer to repay all amounts so advanced in the event
that it shall ultimately be determined that such director or officer is not
entitled to be indemnified by the corporation as authorized in this Article IX
or by law. No security shall be required for such undertaking and such
undertaking shall be accepted without reference to the recipient's financial
ability to make repayment. The majority of the directors who were not parties to
such action, suit or proceeding may, upon approval of such director or officer
of the corporation, authorize the corporation's counsel to represent such
person, in any action, suit or proceeding, whether or not the corporation is a
party to such action, suit or proceeding.
Section 7. PROCEDURE FOR INDEMNIFICATION. Any indemnification under Section
1, 2, 3 or 4 of this Article IX or advancement of costs, charges and expenses
under Section 6 of this Article IX shall be made promptly, and in any event
within sixty (60) days (except indemnification to be determined by stockholders
which will be determined at the next annual meeting of stockholders), upon the
written request of the director, officer, employee or agent. The right to
indemnification or advancement of expenses as granted by this Article IX shall
be enforceable by the director, officer, employee or agent in any court of
competent jurisdiction, if the corporation denies such request, in whole or in
part, or if no disposition of such request is made within sixty (60) days of the
request. Such person's costs, charges and expenses incurred in connection with
successfully establishing his or her right to indemnification or advancement, to
the extent successful, in any such action shall also be indemnified by the
corporation. It shall be a defense to any such action (other than an action
brought to enforce a claim for the advancement of costs, charges and expenses
under Section 6 of this Article IX where the required undertaking, if any, has
been received by the corporation) that the claimant has not met the standard of
conduct set forth in Section 1 or 2 of this Article IX, but the burden of
proving such defense shall be on the corporation. Neither the failure of the
corporation (including its board of directors, its independent legal counsel and
its stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he or she has met the applicable standard of conduct set forth in
Section 1 or 2 of this Article IX, nor the fact that there has been an actual
determination by the corporation (including its board of directors, its
independent legal counsel and its stockholders) that the claimant has not met
such applicable standard of conduct, shall be a defense to the action or create
a presumption that the claimant has not met the applicable standard of conduct.
Section 8. SETTLEMENT. The corporation shall not be obligated to reimburse
the costs, charges and expenses of any settlement to which it has not agreed. If
in any action, suit or proceeding (including any appeal) within the scope of
Section 1 or 2 of this Article IX, the person to be indemnified shall have
unreasonably failed to enter into a settlement thereof offered or assented to by
the opposing party or parties in such action, suit or proceeding, then,
notwithstanding any other provision of this Article IX, the indemnification
obligation of the corporation to such person in connection with such action,
suit or proceeding shall not exceed the total of the amount at which settlement
could have been made and the expenses incurred by or on behalf of such person
prior to the time such settlement could reasonably have been effected.
Section 9. OTHER RIGHTS; CONTINUATION OF RIGHT TO INDEMNIFICATION;
INDIVIDUAL CONTRACTS. The indemnification and advancement of costs, charges and
expenses provided by or granted pursuant to this Article IX shall not be deemed
exclusive of any other rights to which those persons seeking indemnification or
advancement of costs, charges and expenses may be entitled under law (common or
statutory) or any by-law, agreement, policy of indemnification insurance or vote
of stockholders or disinterested directors or otherwise, both as to action in
his or her official capacity and as to action in any other capacity while
holding office, and shall continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
legatees, heirs, distributees, executors and administrators of such person.
Nothing contained in this Article IX shall be deemed to prohibit the corporation
from entering into, and the corporation is specifically authorized to enter
into, agreements with directors, officers, employees and agents providing
indemnification rights and procedures different from those set forth herein. All
rights to indemnification under this Article IX shall be deemed to be a contract
between the corporation and each director, officer, employee or agent of the
corporation who serves or served in such capacity (or at the written request of
the corporation, in the capacity of director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise) at
any time while this Article IX is in effect. Section 10. SAVINGS CLAUSE. If this
Article IX or any portion shall be invalidated on any ground by any court of
competent jurisdiction, the corporation shall nevertheless indemnify each
director or officer, and may indemnify each employee or agent, of the
corporation as to any costs, charges, expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement with respect to any action, suit
or proceeding, whether civil, criminal, administrative or investigative
(including an action by or in the right of the corporation), to the full extent
permitted by any applicable portion of this Article IX that shall not have been
invalidated and to the full extent permitted by applicable law.
Section 11. INSURANCE. The corporation may purchase and maintain insurance,
at its expense, to protect itself and any person who is or was a director,
officer, employee or agent of the corporation or who is or was serving at the
written request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against any costs, charges or expenses, liability or loss incurred by such
person in any such capacity, or arising out of his status as such, whether or
not the corporation would have the power to indemnify such person against such
costs, charges or expenses, liability or loss under this Article IX or
applicable law; provided, however, that such insurance is available on
acceptable terms as determined by a vote of a majority of the board of
directors. To the extent that any director, officer, employee or agent is
reimbursed by an insurance company under an indemnification insurance policy for
any costs, charges, expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement to the fullest extent permitted by any applicable
portion of this Article IX, any agreement, the policy of indemnification
insurance or otherwise, the corporation shall not be obligated to reimburse the
person to be indemnified in connection with such proceeding.
Section 12. DEFINITIONS. For purposes of this Article IX, the following
terms shall have the following meanings:
(a) "The corporation" shall include any constituent corporation (including
any constituent of a constituent) absorbed by way of an acquisition,
consolidation, merger or otherwise, which, if its separate existence had
continued, would have had power and authority to indemnify its directors,
officers, employee or agent so that any person who is or was a director,
officer, employee or agent of such constituent corporation, or is or was serving
at the written request of such constituent corporation as a director or officer
of another corporation, partnership, joint venture, trust or other enterprise,
shall stand in the same position under the provisions of this Article IX with
respect to the resulting or surviving corporation as he would have with respect
to such constituent corporation if its separate existence had continued;
(b) "Other enterprises" shall include employee benefit plans, including,
but not limited to, any employee benefit plan of the corporation;
(c) "Director or officer" of the corporation shall include any partner or
trustee who is or was or has agreed to serve at the written request of the
corporation as a partner or trustee of another corporation, partnership, joint
venture, trust or other enterprise;
(d) "Serving at the written request of the corporation" shall include any
service that imposes duties on, or involves services by a director, officer,
employee or agent of the corporation with respect to an employee benefit plan,
its participants or beneficiaries, including acting as a fiduciary thereof;
(e) "Fines" shall include any penalties and any excise or similar taxes
assessed on a person with respect to an employee benefit plan;
-8-
(f) A person shall be deemed to have acted in "good faith and in a manner
such person reasonably believed to be in, or not opposed to, the best interests
of the corporation and, with respect to any criminal action or proceeding, had
no reasonable cause to believe such person's conduct was unlawful," if such
person's action is based on the records or books of account of the corporation
or another enterprise, or on information supplied to him or her by the officers
of the corporation or another enterprise in the course of their duties, or on
the advice of legal counsel for the corporation or another enterprise or on
information or records given or reports made to the corporation or another
enterprise by an independent certified public accountant or by an appraiser or
other expert selected with reasonable care by the corporation or another
enterprise; and
(g) A person shall be deemed to have acted in a manner "not opposed to the
best interests of the corporation," as referred to in Sections 1 and 2 of this
Article IX if such person acted in good faith and in a manner he or she
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan.
Section 13. SUBSEQUENT AMENDMENT AND SUBSEQUENT LEGISLATION. Neither the
amendment, termination or repeal of this Article IX or of relevant provisions of
the General Corporation Law of the State of Delaware or any other applicable
laws, nor the adoption of any provision of the certificate of incorporation or
the by-laws of the corporation or of any statute inconsistent with this Article
IX shall eliminate, affect or diminish in any way the rights of any director,
officer, employee or agent of the corporation to indemnification under the
provisions of this Article IX with respect to any action, suit or proceeding
arising out of, or relating to, any actions, transactions or facts occurring
prior to the final adoption of such amendment, termination or repeal.
If the General Corporation Law of the State of Delaware is amended to
expand further the indemnification permitted to directors, officers, employees
or agents of the corporation, then the corporation shall indemnify such persons
to the fullest extent permitted by the General Corporation Law of the State of
Delaware, as so amended.
ARTICLE X
WAIVER OF SECTION 203
The corporation expressly elects not to be governed by Section 203 of the
General Corporation Law of the State of Delaware, which election shall, in
accordance with such Section, not be effective until 12 months after the
adoption of these by-laws and not apply to any business combination between the
corporation and any person who became an interested stockholder of the
corporation on or prior to such adoption.
ARTICLE XI
AMENDMENTS
These by-laws, except as provided by applicable law or the certificate of
incorporation, or as otherwise set forth in these by-laws, may be amended or
repealed at any regular meeting of the board of directors by the vote of
two-thirds of the whole board of directors; provided, however, that (a) a notice
specifying the change or amendment shall have been given at a previous regular
meeting and entered in the minutes of the board of directors; (b) a written
statement describing the change or amendment shall be made in the notice mailed
to the directors of the meeting at which the change or amendment shall be acted
upon; and (c) any by-law made by the board of directors may be altered, amended,
rescinded, or repealed by the holders of shares of capital stock entitled to
vote thereon at any annual meeting or at any special meeting called for that
purpose in accordance with the percentage requirements set forth in the
certificate of incorporation and/or these by-laws. Notwithstanding the
foregoing, any provision of these by-laws that contains a supermajority voting
requirement shall only be altered, amended, rescinded, or repealed by a vote of
the board of directions or holders of capital stock entitled to vote thereon
that is not less than the supermajority specified in such provision.
<PAGE>
-9-
RECORD OF AMENDMENTS
TO BY-LAWS
ARTICLE- MEETING AT
SECTION CONTENT OF AMENDMENT WHICH ADOPTED
<PAGE>
-10-
October 17, 1995
Peter J. Kleinknecht
23 Roscoe Road
Wilton, CT 06897
Re: Amendment to Employment Agreement
Dear Mr. Kleinknecht:
Reference is made to the Employment Agreement made and entered into as
of May 9, 1994 by and between IPC Information Systems, Inc. ("Company") and you
("Agreement"). Section 3 of the Agreement addresses your title and duties
thereunder and states that you shall serve as Vice Chairman of the Company with
certain enumerated duties, receiving the compensation specified in Section 4,
and that you shall also serve as President without additional compensation.
By execution of this letter agreement, which shall only be effective
upon and concurrently with the execution by Richard P. Kleinknecht of a similar
amendment to his employment agreement, you agree (i) to resign as President,
concurrently with the appointment by the Board of Directors of a new President;
(ii) to give your written consent, pursuant to Section 3 of the Agreement, to
the appointment of Steven T. Clontz as the Company's Chief Executive Officer and
President.
You further agree to replace Section 3 of the Agreement as follows:
Section 3. DUTIES. Mr. Kleinknecht shall serve as Vice Chairman
of the Company. Mr. Kleinknecht's responsibilities, duties and
authority as Vice Chairman shall, subject to the direction of the
Board and the By-laws of the Company and any applicable provisions of
the General Corporation Laws of the State of Delaware, be those
customarily associated with such position and shall include, but not
be limited to, contributing to the planning for the Company's long
term needs and objectives and strategic business development, all in
consultation with the Chairman and Chief Executive Officer and
President. Mr. Kleinknecht shall execute documents in the name of the
Company and do such other official acts on behalf of the Company as
are appropriate and permitted by the By-laws of the Company. Mr.
Kleinknecht shall also preside, in the absence of the Chairman, over
all meetings of the Company's Board and shareholders at which he is
present. The Company shall not appoint a Chief Executive Officer or
President of the Company without Mr. Kleinknecht's prior written
approval of such appointment.
If the proposed amendment meets with your approval, kindly signify your
acceptance by signing the enclosed copy of this letter where indicated and
returning it, whereupon, subject to the condition in the second paragraph
hereof, the Agreement shall, in accordance with Section 25 thereof, be deemed
amended.
Yours very truly,
IPC INFORMATION SYSTEMS, INC.
By:__________________________
________________________________ Name: Daniel Utevsky
Title: Corporate Secretary
ACCEPTED AND AGREED TO
AS OF OCTOBER 17, 1995
_________________________________
Peter J. Kleinknecht
<PAGE>
-11-
October 17, 1995
Richard P. Kleinknecht
15 Banbury Lane
Huntington, NY 11743
Re: Amendment to Employment Agreement
Dear Mr. Kleinknecht:
Reference is made to the Employment Agreement made and entered into as
of May 9, 1994 by and between IPC Information Systems, Inc. ("Company") and you
("Agreement"). Section 3 of the Agreement addresses your title and duties
thereunder and states that you shall serve as Chairman of the Company with
certain enumerated duties, receiving the compensation specified in Section 4,
and that you shall also serve as Chief Executive Officer without additional
compensation.
By execution of this letter agreement, which shall only be effective
upon and concurrently with the execution by Peter J. Kleinknecht of a similar
amendment to his employment agreement, you agree (i) to resign as Chief
Executive Officer, concurrently with the appointment by the Board of Directors
of a new Chief Executive Officer; and (ii) to give your written consent,
pursuant to Section 3 of the Agreement, to the appointment of Steven T. Clontz
as the Company's Chief Executive Officer and President.
<PAGE>
-12-
You further agree to replace Section 3 of the Agreement as follows:
Section 3. DUTIES. Mr. Kleinknecht shall serve as Chairman of the
Company. Mr. Kleinknecht's responsibilities, duties and authority as
Chairman shall, subject to the direction of the Board and the By-laws
of the Company and any applicable provisions of the General
Corporation Laws of the State of Delaware, be those customarily
associated with such position and shall include, but not be limited
to, contributing to the planning for the Company's long term needs and
objectives and strategic business development, all in consultation
with the Vice Chairman and Chief Executive Officer and President. Mr.
Kleinknecht shall execute documents in the name of the Company and do
such other official acts on behalf of the Company as are appropriate
and permitted by the By-laws of the Company. Mr. Kleinknecht shall
also preside over all meetings of the Company's Board and shareholders
at which he is present. The Company shall not appoint a Chief
Executive Officer or President of the Company without Mr.
Kleinknecht's prior written approval of such appointment.
If the proposed amendment meets with your approval, kindly signify your
acceptance by signing the enclosed copy of this letter where indicated and
returning it, whereupon, subject to the condition in the second paragraph
hereof, the Agreement shall, in accordance with Section 25 thereof, be deemed
amended.
Yours very truly,
IPC INFORMATION SYSTEMS, INC.
By:_________________________
___________________________________ Name: Daniel Utevsky
Title: Corporate Secretary
ACCEPTED AND AGREED TO
AS OF OCTOBER 17, 1995
____________________________________
Richard P. Kleinknecht
<PAGE>
-13-
October 17, 1995
Jeffrey M. Gill
10 Kerry Lane
Darien, CT 06820
Re: Amendment to Employment Agreement
Dear Mr. Gill:
Reference is made to the Employment Agreement made and entered into as
of August 29, 1994 by and between IPC Information Systems, Inc. ("Company") and
you ("Agreement"). Section 3 of the Agreement addresses your title and duties
thereunder and states that you shall serve as Chief Operating Officer of the
Company with certain enumerated duties, receiving the compensation specified in
Section 4, and that you shall be subject to the direction of the Chairman and
Vice Chairman of the Company.
By execution of this letter agreement you agree that, upon the
appointment by the Board of Directors of a Chief Executive Officer and
President, you shall thereafter be subject to the direction of such officer.
<PAGE>
-14-
If the proposed amendment meets with your approval, kindly signify your
acceptance by signing the enclosed copy of this letter where indicated and
returning it, whereupon the Agreement shall, in accordance with Section 24
thereof, be deemed amended.
Yours very truly,
IPC INFORMATION SYSTEMS, INC.
By:__________________________
______________________________ Name: Daniel Utevsky
Title: Corporate Secretary
ACCEPTED AND AGREED TO
AS OF OCTOBER 17, 1995
______________________________
Jeffrey M. Gill
<PAGE>
-1-
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 STEVEN
TERRELL CLONTZ ("Mr. Clontz").
W I T N E S S E T H
WHEREAS, the Company wishes to secure the services of Mr. Clontz pursuant
to the terms and conditions hereof and in order to induce Mr. Clontz 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, Mr. Clontz 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 Mr. Clontz 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 Mr. Clontz shall direct communications with investors,
securities analysts, the press and other of the Company's constituencies. Mr.
Clontz 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. Mr. Clontz
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. Mr. Clontz 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 Mr. Clontz
will establish his principal residence.
1.2 During the course of his employment, Mr. Clontz 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, Mr. Clontz
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 Mr. Clontz may continue to serve on any board of directors on which he
currently serves and may seek renewal on the same. Mr. Clontz 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.
<PAGE>
-2-
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. Mr. Clontz's 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 Mr. Clontz 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 Mr. Clontz's 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 Mr. Clontz 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 Mr. Clontz 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 Mr. Clontz is no longer
President and Chief Executive Officer of the Company, Mr. Clontz 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 Mr. Clontz in addition to the options granted under
Section 4.1 above which shall be exercisable as follows:
<PAGE>
-3-
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 Mr. Clontz
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 Mr. Clontz 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 Mr. Clontz's 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.
<PAGE>
-4-
5. BONUS.
5.1 During the course of his employment, Mr. Clontz 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 Mr. Clontz in conformance with Company's normal bonus pay policies.
6. HIRING BONUS.
6.1 Company agrees to pay Mr. Clontz a hiring bonus equal to One Hundred
Thousand Dollars ($100,000) on December 3, 1995.
7. MISCELLANEOUS BENEFITS.
7.1 Mr. Clontz shall be provided with an automobile suitable to his
position.
7.2 Mr. Clontz shall be entitled to five (5) weeks annual paid vacation
each year of the term of employment.
7.3 Mr. Clontz shall be provided with life insurance equal to two (2) times
his base salary.
7.4 The Company shall reimburse Mr. Clontz for reasonable attorneys' fees
in connection with representing Mr. Clontz during negotiations of this
Agreement.
7.5 Mr. Clontz shall also be provided with other benefits otherwise
available to senior officers of the Company.
<PAGE>
8. RESIDENTIAL MATTERS.
8.1 A residential loan (the "Loan") shall be provided to Mr. Clontz in the
amount of One Hundred Fifty Thousand Dollars ($150,000) upon Mr. Clontz'
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 Mr. Clontz
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 Mr. Clontz 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 Mr. Clontz minus reasonable real estate commission; provided that,
if such sale proceeds are for less than eighty-five percent (85%) of the
appraised value, Mr. Clontz will offer to sell the residence to the Company for
such proposed sale price. Also, Mr. Clontz 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 Mr. Clontz 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 Mr. Clontz shall cease as of the date of death except that Company will pay
the Base Salary until the end of the month in which Mr. Clontz dies, and except
for any rights or benefits of Mr. Clontz under the benefit plans and programs of
the Company in which Mr. Clontz 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 Mr.
Clontz's death occurs, shall be promptly paid to Mr. Clontz's estate.
9.2 DISABILITY. If Mr. Clontz 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 Mr. Clontz (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 Mr. Clontz hereunder and this
Agreement may be terminated by Mr. Clontz or the Company upon thirty (30) days'
written notice to the other party following such certification. Should Mr.
Clontz not acquiesce (or should he be unable to acquiesce) in the selection of
the certifying doctor, a doctor chosen by Mr. Clontz (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 Mr. Clontz, 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
Mr. Clontz 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 Mr. Clontz and this Agreement at
any time for Due Cause. In the event of such termination for Due Cause, Mr.
Clontz shall continue to receive Base Salary payments provided for in this
Agreement only through the date of such termination for Due Cause, and Mr.
Clontz shall be entitled to no further benefits under this Agreement.
Notwithstanding the foregoing, any rights and benefits Mr. Clontz 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. Mr. Clontz 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) Mr. Clontz 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 Mr. Clontz to fulfill his
material obligations under this Agreement, in either event after due written
notice thereof, or serious willful misconduct by Mr. Clontz 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 Mr. Clontz 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 Mr. Clontz, 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 Mr. Clontz 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 Mr. Clontz's 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 Mr. Clontz's employment and
this Agreement, except for Mr. Clontz's obligations under Section 10, Mr. Clontz
shall have no further obligations of any kind under or arising out of the
Agreement and Company shall be obligated only to pay Mr. Clontz 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 Mr.
Clontz's 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
Mr. Clontz remained an employee through the end of the then current term of
employment. Mr. Clontz agrees that the payments described in this Section 9.4
shall be full and adequate compensation to Mr. Clontz for all damages Mr. Clontz
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 Mr. Clontz arising from or in connection with Mr. Clontz's
employment with Company or the termination of his employment including, without
limitation, all rights and claims Mr. Clontz 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 Mr. Clontz 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, Mr. Clontz 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 Mr. Clontz 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 Mr. Clontz 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 Mr. Clontz 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. Mr. Clontz 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)
Mr. Clontz 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 Mr. Clontz in connection with
the relocation of Mr. Clontz outside of the New York City area.
10. COVENANTS OF EMPLOYEE.
10.1 Mr. Clontz acknowledges that as a result of the services to be
rendered to the Company hereunder, Mr. Clontz will be brought into close contact
with many confidential affairs of the Company, its subsidiaries and affiliates,
not readily available to the public. Mr. Clontz 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, Mr. Clontz covenants and agrees that,
except as is necessary in providing services under this Agreement, Mr. Clontz
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, Mr. Clontz 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 Mr.
Clontz's mind as to whether information is secret and confidential to the
Company, its subsidiaries and affiliated entities, Mr. Clontz agrees to request
an opinion, in writing, from the Company.
10.3 Mr. Clontz 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 Mr. Clontz obtained
while employed by the Company, and which Mr. Clontz 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 Mr. Clontz is in violation of this
Section 10.4), Mr. Clontz 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 Mr. Clontz 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 Mr. Clontz's employment would have been.
-5-
10.5 Mr. Clontz 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
Mr. Clontz's 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 Mr. Clontz 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. Mr. Clontz 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 Mr. Clontz's mental or physical
incapacity to secure Mr. Clontz's 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 Mr. Clontz 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. Mr. Clontz 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 Mr. Clontz 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.
<PAGE>
-6-
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 Mr. Clontz's 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 Mr. Clontz 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 Mr. Clontz 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 Mr. Clontz's 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:
<PAGE>
-7-
(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 Mr. Clontz, which shall not be unreasonably withheld.
12.2 ASSIGNMENT BY MR. CLONTZ. Mr. Clontz may not assign this Agreement or
any part thereof; provided, however, that nothing herein shall preclude one or
more beneficiaries of Mr. Clontz 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 Mr. Clontz 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.
<PAGE>
-8-
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:
Daniel Utevsky, Esq.
General Counsel
IPC Information Systems, Inc.
Wall Street Plaza
88 Pine Street, 15th Floor
New York, NY 10005
with a copy to:
Edward F. Rover, Esq.
White & Case
1155 Avenue of the Americas
New York, NY 10036
If to Mr. Clontz:
4065 Deverrall Street
Altharetta, GA 30202
with a copy to:
Lanny A. Oppenheim, Esq.
Wien Malkin & Bettex
60 East 42nd Street
New York, NY 10165
<PAGE>
-9-
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 Mr. Clontz 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.
<PAGE>
-10-
21. KNOWLEDGE AND REPRESENTATION.
Mr. Clontz acknowledges that the terms of this Agreement have been fully
explained to him, that Mr. Clontz understands the nature and extent of the
rights and obligations provided under this Agreement, and that Mr. Clontz 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_________________________________
Steven Terrell Clontz Richard P. Kleinknecht
Chairman and
Chief Executive Officer
Dated:______________ Dated:_____________________________
<PAGE>
-11-
FOR IMMEDIATE RELEASE
Contact: Richard S. Eaton
Director, Corporate Communications
212-858-7836
IPC INFORMATION SYSTEMS, INC. ANNOUNCES
NEW CHIEF EXECUTIVE OFFICER AND PRESIDENT
New York, NY -- IPC Information Systems, Inc. (NASDAQ:IPCI), the world
leader in technology-based solutions to the financial services industry, today
announced the appointment of S. T. (Terry) Clontz to the position of chief
executive officer and president.
Mr. Clontz joins IPC from BellSouth International where he has served
since 1992 as president of its Asia/Pacific Region, chairman of BellSouth New
Zealand and a director of BellSouth's ventures in Australia, Singapore and the
People's Republic of China. Prior to 1992, Mr. Clontz was vice president for
BellSouth International's European division. His 23 years of telecommunications
experience helped to lead BellSouth International's successful expansion from
its home base in the U.S. into ventures worldwide.
IPC's recently acquired subsidiary, International Exchange Networks,
Ltd. (IPC IXnet), is now deploying a global telecommunications network serving
the financial community. Terry stated, "The combined strengths of IPC and IXnet
provide the unique capabilities to meet the mission- critical communications
needs of the financial community worldwide, from state-of-the-art network
services to turnkey technology solutions."
Mr. Clontz will join and report to the Board of Directors. Richard P.
Kleinknecht, formerly chief executive officer, and Peter J. Kleinknecht,
formerly president, will each retain their respective chairman and vice chairman
titles. They will concentrate on strategic business development and management
of IPC's dramatic growth in financial technology solutions, integrated with
IXnet. Reporting to Mr. Clontz will be Jeff Gill, chief operating officer, who
has managed the day-to-day operations of the company since April 1992.
Richard Kleinknecht stated: "Terry's experience in developing and
implementing strategic plans for international expansion, strategic partnering
and managing joint venture investments will broaden our senior management team's
skill base." Peter Kleinknecht added: "IPC is well positioned now for continued
profitable growth, capitalizing on its market leadership serving the global
financial community."
<PAGE>
