Employment Agreement, effective as of September 1, 1998 (the
"Effective Date"), between VCS Technologies, Inc., a Delaware corporation with
principal offices at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("VCS") and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, III, residing at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
("Wheaton").
WHEREAS, VCS is a company engaged in the sales and service of
videoconferencing and video streaming technologies;
WHEREAS, Wheaton is the founder and currently serves as the
President and Chief Executive Officer of VCS; and
WHEREAS, VCS and Wheaton believe that it is appropriate for them to
memorialize their understandings with respect to Wheaton's employment,
including confidentiality and non-competition provisions, and agree as to each
other's obligations pursuant to their employer-employee relationship.
NOW, THEREFORE, in consideration of the mutual covenants herein set
forth, VCS and Wheaton do hereby agree as follows:
1. Employment. VCS hereby employs Wheaton and Wheaton accepts this
employment and agrees to render services to VCS on the terms and conditions
set forth in this Agreement. Wheaton shall serve in the capacity of President
and Chief Executive Officer, perform services for VCS normally associated with
such positions, and use his best efforts to meet the business requirements and
goals set by the board of directors of VCS (the "Board"). In furtherance
thereof, Wheaton will devote his best efforts, including his full-time
attention, during reasonable business hours, to the affairs and business of
VCS. Wheaton further agrees to observe and comply with the rules and
regulations of VCS as adopted by the Board with respect to performance of his
duties, and to carry out and perform orders, directions, and policies enacted
by the Board.
2. Term. The term of this Employment Agreement shall be the period
from the Effective Date and terminating on December 31, 2001 (the "Initial
Employment Term"). The Agreement shall thereafter automatically renew for
successive one year terms, until terminated by either party in accordance with
this Agreement (the "Succeeding Employment Term") unless either party provides
written notice of termination to the other party at least 90 days prior to the
expiration of the Initial Employment Term or any Succeeding Employment Term.
In the event VCS terminates this Agreement by providing the aforementioned
notice, VCS will pay Wheaton the "Deferred Compensation" (as defined below).
3. Compensation.
3.1. Base Salary. VCS will compensate and pay Wheaton for
his services during the term of this Agreement at a base salary of $150,000
per year, and VCS agrees that the Base Salary will increase annually in an
amount no less than five per cent (5%) of the previous year's Base Salary (the
"Base Salary"). The Base Salary shall be paid to Wheaton in a manner
consistent with salary paid to the other employees of VCS.
3.2. Bonus. Wheaton may receive, from time to time, bonus
compensation from VCS, as established by the Board following the negotiation
of the terms by the parties (the "Bonus Compensation"). If at any time
hereafter VCS shall adopt a bonus program, an option program or any other form
of equity participation for senior executives of VCS, Wheaton shall be
eligible to participate in such program in a manner and capacity commensurate
with his position and duties.
3.3. Deferred Compensation.
3.3.1. Amount. Deferred Compensation shall be the
amount which is calculated as the greater of (A) 150% of the Base Salary
payments Wheaton would have received had his employment continued for the
remaining term of this Agreement (including yearly increases); or (B) an
amount equal to 200% of the highest annual compensation earned by Wheaton in
the past two years (including both Base Salary and Bonus Compensation). In
addition to the Deferred Compensation, Wheaton shall be entitled to all of the
benefits and personal perquisites otherwise provided in this
Agreement (including car allowance) during that period of time which is the
greater of (X) the remaining term of this Agreement, or (Y) a one year
following the date of termination. The Deferred Compensation herein shall be
deemed liquidated damages resulting from VCS's termination of this Agreement
and shall be Wheaton's sole and exclusive remedy for any such termination.
Deferred Compensation shall not be diminished or offset by reason of any
earnings by Wheaton subsequent to the date of termination.
3.3.2. Payment of Deferred Compensation. Except as
otherwise provided below, the Deferred Compensation shall be paid in monthly
installments over the 12 months following the event giving rise to a Deferred
Compensation. If such termination is a result of the death of Wheaton, the
initial Deferred Compensation shall be made within 15 days after the personal
representative of Wheaton's estate notifies VCS that Letters Testamentary have
been issued to the estate appointing an authorized representative of the
estate.
3.4. Withholding. All compensation paid to Wheaton shall be
subject to the customary withholding tax and other employment taxes as
required with respect to compensation paid by an employer to an employee.
4. Benefits.
4.1. Health Insurance; Vacation. VCS shall provide Wheaton
with health insurance coverage, personal time and other benefits during the
term of this Agreement as agreed upon by the Board, but in no event will such
benefits be less than those offered to other employees of VCS. Wheaton shall
be entitled to four weeks paid vacation during each year of this Agreement.
4.2. Car Allowance. VCS will pay to Wheaton a car allowance
of $700 per month.
4.3. Life Insurance. Provided VCS has a net worth (as
reflected on any quarterly or annual financial statements) in excess of $1
million, VCS shall provide, at its own expense, life insurance coverage on
Wheaton's life for $1 million. Wheaton shall have full discretion to name the
beneficiary of this insurance. VCS shall have the right at its own expense and
for its own benefit to purchase additional insurance on Wheaton's life for the
benefit of VCS and Wheaton shall cooperate by providing necessary information,
submitting to required medical examinations, and otherwise complying with the
insurance carrier's requirements.
5. Expenses. VCS shall reimburse Wheaton or otherwise provide for or
pay for all reasonable expenses incurred by Wheaton in furtherance of or in
connection with the business of VCS, including, but not by way of limitation,
(i) all reasonable expenses incurred by Wheaton in accordance with VCS's
travel policy, as established by the Board; and (ii) all reasonable expenses
in connection with Wheaton's attendance at trade and professional conferences,
which are in furtherance of the business of VCS. Wheaton agrees that he will
furnish VCS with adequate records and other documents for the substantiation
of each such business expense.
6. Employment Termination
6.1. Resignation of Wheaton. The parties agree that Wheaton
has the right to voluntarily terminate his employment with VCS by providing
VCS with a minimum of 60 days' notice. Upon the termination date specified in
the notice, Wheaton will cease to have any of the powers associated with the
offices he held with VCS. In such event, all of VCS's obligations under this
Agreement will terminate immediately upon the date of such termination of
employment, and VCS will not be required to pay the Deferred Compensation.
6.2. Termination by VCS for Convenience. The parties agree
that the Board has the right to terminate Wheaton's employment for convenience
during the term of this Agreement upon notice to Wheaton. In such event, VCS
will pay Wheaton the Deferred Compensation. The date of termination will be
the date specified in a notice from the Board, and Wheaton will cease to have
any power of his office as of such date.
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6.3. Termination by VCS for Cause. The parties agree that
the Board has the right to terminate Wheaton's employment during the term of
this Agreement for "Cause." For the purposes of this Agreement, the term
"Cause" will mean:
o Conduct on Wheaton's part intended to or likely to injure VCS's
business or reputation;
o Actions by Wheaton in intentionally furnishing materially
false, misleading, or omissive information to the Board;
o Wheaton is convicted of any felony or other serious offense;
o Abusive use of drugs or alcohol by Wheaton;
o Any fraud, embezzlement or misappropriation by Wheaton of the
"assets" of VCS. For the purposes of this provision, the
parties acknowledge that "asset" includes, but is not limited
to the "Confidential Information" (as defined in Section 7 of
this Agreement); or
o Significant failure by Wheaton to perform duties and
obligations as set forth in their Agreement, resulting in
substantial damage to VCS, but not encompassing illness,
physical or mental incapacity.
In the event that Wheaton's employment is terminated by VCS for Cause, the
date of employment termination will be as specified in a notice to Wheaton
from VCS, and Wheaton will cease to have any power of his office as of such
date., VCS will pay Wheaton the Base Salary and any Bonus Compensation due him
as of such date, and all benefits provided by VCS to Wheaton will cease as of
such date except as otherwise required by law.
6.4. Termination by VCS for Death or Disability. The parties
agree that Wheaton's employment will terminate upon Wheaton's death or
Disability. The term "Disability" shall be defined as Wheaton's inability,
through physical or mental illness or other cause, to perform the majority of
his usual duties for a period of at least three continuous months. If
Wheaton's employment is terminated due to Wheaton's death or Disability, VCS
will pay the Deferred Compensation.
6.5. Good Reason. Wheaton may terminate his employment for
Good Reason ("Good Reason") upon 60 days' notice to VCS if (i) Wheaton's
duties are materially diminished or altered so as to be inconsistent Wheaton's
position, authority or responsibilities as the President and Chief Executive
Officer of VCS; (ii) Wheaton's title any other substantial adverse change in
Wheaton's position including titles, authority or responsibilities; (iii) the
material failure by VCS to comply with the terms of this Agreement; (iv) VCS
requires Wheaton to be based or perform services at any location more than 50
miles from Stamford, CT (except normal travel requirements associated with
Wheaton's position and titles); or (v) Wheaton's Base Salary is materially
diminished. In the event Wheaton's employment relationship with VCS is
terminated for "Good Reason," VCS will pay Wheaton the Deferred Compensation.
In the event that Wheaton shall in good faith give a "Notice of Termination,"
as hereinafter defined in Section 6.7 hereof, for Good Reason and it shall
thereafter be determined that Good Reason did not exist, the employment of
Wheaton shall, unless VCS and Wheaton shall otherwise mutually agree, be
deemed to have terminated, at the date of the giving of such purported Notice
of Termination. In such event Wheaton shall be deemed to have elected to
voluntarily resign and shall be entitled to receive only those payments and
benefits which he would have been entitled to receive at such date under
Section 6.1 of this Agreement.
6.6. Change of Control. Wheaton may terminate this Agreement
upon 30 days' notice to VCS at any time within the 180 day period following
the date of the occurrence of a "Change of Control." For the purposes of this
Agreement, a "Change of Control" shall be deemed to have occurred if: VCS has
a net worth of at least $1 million (as reflected on any quarterly or annual
financial statement), and either (i) a third person, including an entity or a
"group" as defined in Article 13(d) or 14(d) of the Securities Exchange Act of
1934, as amended (other than an entity or "group" which includes Wheaton),
becomes the beneficial owner of shares of VCS having 30% or more of the total
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number of votes that may be cast for the election of directors of VCS in the
year 2000 and thereafter; or (ii) as the result of, or in connection with, any
cash tender or exchange offer, merger of other business combination, sale of
assets or contested election, or any combination of the foregoing transactions
(a "Transaction"), the persons who were directors of VCS before the
Transaction shall cease to constitute a majority of the Board of VCS or any
successor to VCS. In the event Wheaton's employment relationship with VCS is
terminated for a change of control, VCS will pay Wheaton the Deferred
Compensation.
6.7. Notice of Termination. Any termination by VCS for
Cause, or by Wheaton for Good Reason shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section
18hereof. For purposes of this Agreement, a "Notice of Termination" means a
written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Wheaton's
employment under the provision so indicated and (iii) if the termination date
is other than the date of receipt of such notice, specifies the termination
date of this Agreement which date shall be in accordance with the specific
termination provision of this Agreement relied upon.
6.8. Survival of Agreement Upon Termination. In the event
that Wheaton's employment is terminated pursuant to any provision set forth in
this Section 6, the rights and obligations of the parties which are set forth
in Sections 7 through 17 of this Agreement shall survive the employment
termination for a period from the date of such employment termination through
the third anniversary of such date.
7. Confidential Information. Wheaton hereby agrees and acknowledges
that the following information and materials, whether in written, oral,
magnetic, photographic, optical or other form and whether now existing or
developed or created during the period of Wheaton's employment or engagement
with VCS, excepting information obtained by Wheaton from general or public
sources, are proprietary to VCS and are highly confidential in nature (the
"Confidential Information"):
7.1. Business Records, Marketing Plans and Customer
Information. All books, records, documents, memoranda and materials, and the
information contained therein directly relating to the business and finances
of VCS including, but not limited to: (i) marketing and development plans,
forecasts, forecast assumptions, forecast volumes, future plans and potential
strategies of VCS; (ii) cost objectives, pricing policies and procedures,
quoting policies and procedures, and unpublished price lists; (iii) licensing
policies, strategies and techniques; (iv) customer lists, names of past,
present and prospective customers and their representatives; (v) data and
other business information about or provided by past, present and prospective
customers; (vi) names of past, present and prospective vendors and their
representatives, data and other Information about or provided by past, present
and prospective vendors; (vii) purchasing information, orders, invoices,
▇▇▇▇▇▇▇▇, and payment of ▇▇▇▇▇▇▇▇; (viii) past, present and prospective
licenses and licensees, the terms and conditions of any licenses or
prospective licenses, contracts or prospective contracts; (ix) types of
products, supplies, materials and services purchased, leased, licensed and/or
sold by VCS; (x) past, present and future research and development
arrangements; (xi) customer service information; (xii) joint ventures, mergers
and/or acquisitions; (xiii) VCS personnel policies and procedures, VCS
personnel files, and the compensation of officers, directors and employees of
VCS; and (xiv) all other confidential business records and trade secrets of
VCS.
7.2. Technology and Manufacturing Procedures. All books,
records, documents, memoranda and materials, and the information contained
therein, relating to the technology of VCS (whether or not patentable, whether
or not protected by copyright, whether developed by or for VCS) including, but
not limited to: (i) ideas and concepts for existing and new products,
processes and services; (ii) specifications for products, equipment and
processes, whether technical or financial; (iii) manufacturing and performance
specifications and procedures; (iv) engineering drawings, flow charts, and
graphs; (v) technical, research and engineering data; (vi) formulations,
materials, and material specifications; (vii) laboratory studies and benchmark
tests; (viii) laboratory notebooks; (ix) plant layout
4
and equipment; (x) manuals, including service manuals and operation manuals;
(xi) quality assurance policies, procedures and specifications; (xii)
validation studies; and (xiii) all other know-how, methodology, procedures,
techniques and trade secrets related to the research, engineering and
development affairs of VCS.
7.3. Third Party Information. Any and all other information
and materials in VCS's possession or under its control from any other person
or entity which VCS is obligated to treat as confidential or proprietary
("Third Party Information").
7.4. Not Generally Known. Any and all Confidential
Information not generally known to the public or within the industries or
trades in which VCS competes.
8. General Skills and Knowledge. The general skills and experience
gained by Wheaton during Wheaton's employment with VCS, and information
publicly available or generally known within the industries or trades in which
VCS competes, is not considered Confidential Information.
9. Wheaton's Obligations as to Confidential Information and
Materials. During Wheaton's employment by VCS, Wheaton will have access to the
Confidential Information and will occupy a position of trust and confidence
with respect to VCS's affairs and business. Wheaton agrees to take the
following steps to preserve the confidential and proprietary nature of the
Confidential Information:
9.1. Non-Disclosure. During and for a period of three years
after Wheaton's employment with VCS, Wheaton will not use, disclose or
otherwise permit any person or entity access to any of the Confidential
Information other than as required in the performance of Wheaton's duties with
VCS.
9.2. Prevent Disclosure. Wheaton will take all reasonable
precautions to prevent disclosure of the Confidential Information in
accordance with VCS's reasonable instructions to Wheaton.
9.3. Return all Materials. Upon termination of Wheaton's
employment with VCS, for any reason whatsoever, Wheaton will deliver to VCS
all tangible materials embodying the Confidential Information, including,
without limitation, any documentation, records, listings, notes, data,
sketches, drawings, memoranda, models, accounts, reference materials, samples,
machine-readable media and equipment which in any way relate to the
Confidential Information.
10. Ideas and Inventions. Wheaton agrees that all right, title and
interest in or to any and all Inventions are the property of VCS. For the
purposes of this Agreement, "Inventions" shall mean all ideas, concepts,
know-how, techniques, processes, methods, inventions, discoveries,
developments, innovations and improvements (i) conceived or made by Wheaton,
whether alone or with others, in the course of Wheaton's employment by VCS, or
(ii) conceived or made by Wheaton, whether alone or with others, in the course
of Wheaton's employment, but which reach fruition within the period from the
date of termination of Wheaton's employment through the second anniversary of
such date, and which either (a) involve or are reasonably related to the
business of VCS or to VCS's actual or demonstrably anticipated research or
development; or (b) incorporate or are derived from, in whole or in part, any
of the Confidential Information. Wheaton agrees to promptly disclose all
Inventions to VCS, and to provide all assistance reasonably requested by VCS
in the preservation of its interests in the Inventions, such as by executing
documents, testifying, etc. Wheaton agrees to execute, acknowledge and deliver
any instruments confirming the complete ownership by VCS of such Inventions.
Such assistance shall be provided at VCS's expense without any additional
compensation to Wheaton.
11. Post-Employment Procedures. Wheaton agrees that, upon the
termination of his employment with VCS, he will (i) participate in good faith
in VCS's exit interview process; and (ii) enter into an appropriate Employment
Termination Agreement, in which, among other things, Wheaton will represent to
VCS that he has fully complied with the terms of this Agreement and that he
will fulfill the then-executory obligations contained in this Agreement.
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12. Copyrights. Wheaton agrees that any work prepared for VCS which
is protected under United States Copyright laws or under the universal
Copyright Convention, the Berne Copyright convention and/or the Buenos Aires
Copyright Convention shall be a work made for hire and ownership of all
copyrights (including all renewals and extensions) therein shall vest in VCS.
In the event any such work is deemed not to be a work made for hire for any
reason, Wheaton hereby grants, transfers and assigns all right, title and
interest in such work and all copyrights in such work and all renewals and
extensions thereof to VCS, and agrees to provide all assistance reasonably
requested by VCS in the establishment, preservation and enforcement of its
copyright in such work, such assistance to be provided at VCS's expense but
without any additional compensation to Wheaton. Wheaton hereby agrees to and
does hereby waive all moral rights with respect to the work developed or
produced hereunder, including, without limitation any and all rights of
identification of authorship and any and all rights of approval, restriction,
or limitation on use or subsequent modifications.
13. Conflicting Obligations and Rights. Before (i) performing any
obligations Wheaton may have to preserve the confidentiality of another's
proprietary information or materials, or (ii) exercising any rights Wheaton
may claim to any patent or copyrights trade secrets, or other discoveries,
inventions, ideas, know-how, techniques methods, processes or other
proprietary information or materials before performing that work, Wheaton
shall inform VCS in writing of any apparent conflict between Wheaton's work
for VCS and such other obligations and/or rights. In the absence of such
written notice, VCS may conclude that no such conflict exists and Wheaton
agrees thereafter to make no such claim against VCS. VCS shall hold such
disclosures by Wheaton in strict confidence.
14. Restrictive Covenants.
14.1. Acknowledgments. Wheaton acknowledges that (i) VCS's
business is all aspects of videoconferencing and video streaming including,
but not limited to, equipment and software sales and systems integration,
integrating voice/video/data systems through intranet and Internet technology;
and providing consulting services relating thereto, and that (ii) fulfillment
of the obligations hereunder will result in Wheaton becoming familiar with the
business affairs of VCS and any present or future parent, subsidiary and/or
affiliate.
14.2. Covenant Not to Compete. In consideration for the
Compensation, and as a condition to the performance by VCS of all obligations
under this Agreement, Wheaton agrees that during the Initial Employment Term
or any Succeeding Employment Terms of this Agreement and for the period from
the date of termination of Wheaton's employment pursuant to either Section 6.1
or 6.3 hereof through the second anniversary of such date, Wheaton shall not
directly or indirectly through any other person, firm or corporation compete
with or be engaged in the same business or "participate in" any other business
or organization which during such period competes with or is engaged in the
same business as VCS. The term "participate in" shall mean: "directly or
indirectly, for his own benefit or for, with, or through any other person,
firm, or corporation, own, manage, operate, control, loan money to, or
participate in the ownership, management, operation, or control of, or be
connected as a director, officer, employee, partner, consultant, agent,
independent contractor, or otherwise with, or acquiesce in the use of his
name." Notwithstanding the foregoing, it shall not be a breach of the
provisions of this Section 14 if, after the Term of this Agreement, Wheaton is
a passive investor in any publicly held entity and Wheaton owns three per cent
(3%) or less of the equity interests therein.
14.3. Restrictive Covenants Necessary and Reasonable.
Wheaton agrees that the provisions of this Section 14 are necessary and
reasonable to protect VCS in the conduct of its business. If any restriction
contained in this Section 14 shall be deemed to be invalid, illegal, or
unenforceable by reason of the extent, duration or geographical scope thereof,
or otherwise, then the court making such determination shall have the right to
reduce such extent, duration, geographical scope, or other provisions hereof
and in its reduced form such restriction shall then be enforceable in the
manner contemplated hereby.
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15. Injunctive Relief. Wheaton, recognizing that irreparable injury
shall result to VCS in the event of Wheaton's breach of the terms and
conditions of this Agreement, agrees that in the event of his breach or
threatened breach, VCS shall be entitled to injunctive relief restraining
Wheaton, and any and all persons or entities acting for or with him, from such
breach or threatened breach. Nothing herein contained, however, shall be
construed as prohibiting VCS from pursuing any other remedies available to it
by reason of such breach or threatened breach.
16. Indemnification.
16.1. To the full extent allowed by law, VCS shall hold
harmless and indemnify Wheaton, his executors, administrators or assigns,
against any and all judgments, penalties (including excise and similar taxes),
fines, settlements and reasonable expenses (including attorneys' fees)
actually incurred by Wheaton (net of any related insurance proceeds or other
amounts received by Wheaton or paid by or on behalf of VCS on Wheaton's behalf
in compensation of such judgments, penalties, fines, settlements or expenses)
in connection with any threatened, actual or completed action, suit or
proceeding, whether civil, criminal, arbitral, administrative or
investigative, or any appeal in such action, suit or proceeding, to which
Wheaton was, is or is threatened to be made a named defendant or respondent (a
"Proceeding"), because Wheaton is or was a director or officer of VCS, or was
serving at the request of VCS as a director, officer, partner, venturer,
proprietor, trustee, employee, agent or similar functionary (an "Affiliate
Executive") of another corporation, partnership, joint venture, sole
proprietorship, trust, employee benefit plan or other enterprise (each, a
"Company Affiliate"). Upon authorization of indemnification of Wheaton by the
Board in accordance with the applicable provisions of the Delaware General
Corporation Law (the "DGCL"), Wheaton shall be presumed to be entitled to such
indemnification under this Agreement upon submission of a Claim (as
hereinafter defined). Thereafter, VCS shall have the burden of proof to
overcome the presumption that Wheaton is so entitled. Such presumption shall
only be overcome by a judgment or other final adjudication, after all appeals
and all time for appeals have expired ("Final Determination"), adverse to
Wheaton establishing that such indemnification is not permitted hereunder or
by law. An actual determination by VCS (including its Board, legal counsel, or
its stockholders) that Wheaton has not met the applicable standard of conduct
for indemnification shall not be a defense to the action or create a
presumption that Wheaton has not met the applicable standard of conduct. The
purchase, establishment or maintenance of any Indemnification Arrangement
shall not in any way diminish, restrict, limit or affect the rights and
obligations of VCS or of Wheaton under this Agreement except as expressly
provided herein, and the execution and delivery of this Agreement by VCS and
Wheaton shall not in any way diminish, restrict, limit or affect Wheaton's
right to indemnification from VCS or any other party or parties under any
other indemnification arrangement, the Certificate of Incorporation or Bylaws
of VCS, or the DGCL.
16.2. Subject only to the provisions of this Section 16.2,
as long as Wheaton shall continue to serve as a director and/or officer of VCS
(or shall continue at the request of VCS to serve as an Affiliate Executive)
and, thereafter, as long as Wheaton shall be subject to any possible
Proceeding by reason of the fact that Wheaton was or is a director and/or
officer of VCS (or served in any of said other capacities), VCS shall, unless
no such policies are available in any market, purchase and maintain in effect
for the benefit of Wheaton one or more valid, binding and enforceable policies
(the "Insurance Policies") of directors' and officers' liability insurance
("D&O Insurance") providing adequate liability coverage for Wheaton's acts as
a director and/or officer of VCS or as an Affiliate Executive. VCS may
promptly notify Wheaton of any lapse, amendment or failure to renew said
policy or policies or any provision thereof relating to the extent or nature
of coverage provided thereunder. In the event VCS does not purchase and
maintain in effect said policy or policies of D&O Insurance pursuant to the
provisions of this Section 16.2, VCS shall, to the full extent permitted by
law, in addition to and not in limitation of the other rights granted Wheaton
under this Agreement, hold harmless and indemnify Wheaton to the full extent
of coverage which would otherwise have been provided for the benefit of
Wheaton pursuant to the Insurance Policies.
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16.3. Wheaton shall have the right to receive from VCS on
demand, or at his option to have VCS pay promptly on his behalf, in advance of
a Final Determination of a Proceeding all expenses payable by VCS pursuant to
the terms of this Agreement as corresponding amounts are expended or incurred
by Wheaton in connection with such Proceeding or otherwise expended or
incurred by Wheaton (such amounts so expended or incurred being referred to as
"Advanced Amounts"). In making any claim for payment by VCS of any expenses,
including any Advanced Amount, pursuant to this Agreement, Wheaton shall
submit to VCS a written request for payment (a "Claim"), which includes a
schedule setting forth in reasonable detail the dollar amount expended (or
incurred or expected to be expended or incurred). Each item on such schedule
shall be supported by the ▇▇▇▇, agreement or other documentation relating
thereto, a copy of which shall be appended to the schedule as an exhibit.
Where Wheaton is requesting Advanced Amounts, Wheaton must also provide (i)
written affirmation of such Wheaton's good faith belief that he has met the
standard of conduct required by law for indemnification, and (ii) a written
undertaking to repay such Advanced Amounts if a Final Determination is made
that Wheaton is not entitled to indemnification hereunder.
16.4. VCS shall not be liable under this Agreement to make
any payment in connection with any claim made against Wheaton for an
accounting of profits made from the purchase or sale by Wheaton of securities
of VCS within the meaning of Section 16(b) of the Exchange Act or similar
provisions of any state statutory law or common law.
16.5. All agreements and obligations of VCS contained herein
shall continue during the period Wheaton is a director and/or officer of VCS
(or is serving at the request of VCS as an Affiliate Executive) and shall
continue thereafter so long as Wheaton shall be subject to any possible
Proceeding by reason of the fact that Wheaton was a director or officer of VCS
or was serving as such an Affiliate Executive.
16.6. Promptly after receipt by Wheaton of notice of the
commencement of any Proceeding, Wheaton shall, if a claim in respect thereof
is to be made against VCS under this Agreement, notify VCS of the commencement
thereof, but failure to so notify VCS will not relieve VCS from any liability
which it may have to Wheaton. With respect to any such Proceeding: (i) VCS
shall be entitled to participate therein at its own expense; (ii) except with
prior written consent of Wheaton, VCS shall not be entitled to assume the
defense of any Proceeding; and (iii) VCS shall not settle any Proceeding in
any manner which would impose any penalty or limitation on Wheaton without
Wheaton's prior written consent.
17. Dispute Resolution. VCS and Wheaton agree that any dispute or
controversy arising between any of the parties to this Agreement, or any
person or entity in privity therewith, out of the transactions effected and
relationships created in connection herewith, including any dispute or
controversy involving the formation, terms or construction of this Agreement,
regardless of kind or character, will be resolved through binding arbitration
held in Stamford, CT. The only disputes not subject to mandatory, binding
arbitration are requests for injunctive relief. With respect to the
arbitration of any dispute or controversy, each party understands that: (i)
arbitration is final and binding on the parties; (ii) each party is waiving
its right to seek certain remedies in court, including to right to a jury
trial; (iii) discovery in arbitration is different and more limited than
discovery in litigation; and (iv) an arbitrators' award need not include
factual findings or legal reasoning, and any party's right to appeal or to
seek modification of a ruling by the arbitrator is strictly limited.
17.1. Each party to this Agreement will submit any dispute
or controversy to arbitration before the American Arbitration Association
("AAA") within five days after receiving a written request to do so from the
other party. If any party fails to submit a dispute or controversy to
arbitration as requested, then the requesting party may commence the
arbitration proceeding. The Federal Arbitration Act will govern the proceeding
and all issues raised by this Agreement to be arbitrated.
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Each party to this Agreement will be bound by the determination of an
arbitration panel of three members empaneled by the AAA to adjudicate the
dispute. Judgment on any arbitration award may be entered in any court of
competent jurisdiction.
17.2. Any party to this Agreement may bring an action
including a summary or expedited proceeding of any such dispute or controversy
in a court of competent jurisdiction and, further, may seek provision or
ancillary remedies, including temporary or injunctive relief in connection
with such dispute or controversy in a court of competent jurisdiction,
provided that the dispute or controversy is ultimately resolved through
binding arbitration conducted in accordance with the terms and conditions of
Section 17. If any party institutes legal proceedings in an effort to resist
arbitration and is unsuccessful in doing so, the prevailing party is entitled
to recover, from the losing party, its legal fees and out-of-pocket expenses
incurred in connection with the defense of such legal proceedings.
18. Miscellaneous.
18.1. Notices. Any and all notices, demands, requests or
other communication required or permitted by this Agreement or by law to be
served on, given to, or delivered to any party hereto by any other party to
this Agreement shall be in writing and shall be deemed duly served, given, or
delivered when personally delivered to the party to be notified, or in lieu of
such personal delivery, when deposited in the United States mail, registered
or certified mail, return receipt requested, or when confirmed as received if
delivered by overnight courier, addressed to the to the party to be notified,
at the address of VCS at its principal office, as first set forth above, or to
Wheaton at the address as first set forth above. VCS or Wheaton may change the
address in the manner required by law for purposes of this paragraph by giving
notice of the change, in the manner required by this paragraph, to the
respective parties.
18.2. Amendment. This Agreement may not be modified,
changed, amended, or altered except in writing signed by Wheaton or his duly
authorized representative, and by a member of the Board.
18.3. Governing Law. This Agreement shall be interpreted in
accordance with the laws of the State of Connecticut. It shall inure to the
benefit of and be binding upon VCS, and its successors and assigns.
18.4. Attorney's Fees. Should any litigation or arbitration
be commenced between the parties to this Agreement concerning any provision of
this Agreement, the expense of all attorneys' fees and other costs incurred in
connection therewith shall be paid by the losing party.
18.5. Severability. Should any provision or portion of this
Agreement be held unenforceable or invalid for any reason, the remaining
provisions and portions of this Agreement shall be unaffected by such holding.
18.6. Entire Agreement. This Agreement constitutes the sole
and only agreement of the parties hereto respecting the subject matter hereof.
Any prior agreements, promises, negotiations, or representations concerning
its subject matter not expressly set forth in this Agreement, are of no force
and effect.
18.7. Counterparts. This Agreement and any certificates made
pursuant hereto, may be executed in any number of counterparts and when so
executed all of such counterparts shall constitute a single instrument binding
upon all parties hereto notwithstanding the fact that all parties are not
signatory to the original or to the same counterpart.
18.8. Section Headings. The Article and Section headings
used in this Agreement are for reference purposes only, and should not be used
in construing this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement the day
and year as set forth below.
VCS TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇, Jr. /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, III
----------------------------- --------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇, Jr. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, III
Chief Financial Officer
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