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Exhibit 10.3
EMPLOYMENT AGREEMENT
AGREEMENT executed as of the 15th day of May, 1999, by and PROGRESSIVE
TELECOMMUNICATIONS CORPORATION, a Florida corporation with executive offices at
000 Xxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxx 00000 (the "Company"), and
XXX XXXXX CHUBOKOS, (hereafter referred to as the "Employee") located at 000 XX
00xx Xxxxxxx. Xxxx Xxxxx, Xxxxxxx 00000.
W I T N E S S E T H
Whereas, the Employee is currently the CEO/President and a Chairman of
the Board of Directors of CCC Communications Corporation (which is merging with
the CCC Merger Corp. a wholly owned subsidiary of the Company) under an
Employment Agreement and has served in this executive capacity since its
foundation, and;
Whereas, the Company acknowledges and recognizes the value of the
Employee's services which are of special, unique and of extraordinary character
with expertise desired by the Company; and
Whereas, the Company desires to employ, retain and make secure for the
Company the abilities and expertise of the Employee for a minimum period of (3)
years from the effective date of this Agreement; and
Whereas, both the Company and the Employee desire to embody the terms
and conditions of employment of the Employee into a written agreement;
NOW THEREFORE, in consideration of the premises and for other good and
valuable consideration, the adequacy and receipt of which is hereby
acknowledged, the Company and the Employee do hereby agree as follows:
1. EMPLOYMENT.
The Company hereby employs the Employee as the President, Chief
Operations Officer, Member of the Board of Directors and the Employee hereby
accepts such employment upon the terms and conditions hereinafter set forth.
2. TERM.
Subject to the provisions of this Section, hereof the term of
Employment shall commence on May 15, 19998 and continue for an initial period
of three (3) years or until May 15, 2002. Following the completion of the
Initial Term, the Employee's term of employment shall be renewed, if not
renegotiated, for two years automatically, unless either party notifies the
other, in writing, of its intent not to renew at lease ninety (90) days prior
to this Agreement's expiration.
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3. COMPENSATION AND BENEFITS.
For services rendered by the Employee hereunder, the Company shall pay
to the Employee the following compensation:
3.1 Fixed Compensation.
Employee shall receive (from the Company) a signing bonus of
%50,000.00 and 50,000 shares of stock at a par value of .01 cent
per share. Employee shall receive a minimum of $140,000.00 in
annual salary paid in two-week installments of $5,384.62 or
weekly installments of $2,692.31 . This shall be considered the
minimum salary for the Employee. The Company's Board of Directors
may, at its discretion, increase the salary, but at no time or in
any event shall the above referenced salary be reduced.
3.2 Incentive Compensation.
Such incentive compensation ("Incentive Compensation") may be
paid to Employee in the form of a cash bonus, profit sharing or
otherwise as the Board of Directors of the Company or the Board's
Compensation Committee may grant to executive employees of the
Company from time to time. In addition, the Employee is a
permanent participant in the Company's executive bonus pool (the
"Bonus Pool"). Pursuant to the Bonus Pool, the Company's Board of
Directors, will distribute $100,000 and/or 100,000 shares of the
Company's Common Stock divided amongst the participants, at such
time the Company achieves each of the following milestones:
(a) One Million ($1,000,000) Dollars in sales in any given
calendar month;
(b) Two Million ($2,000,000) Dollars in sales in any given
calendar month;
(c) Three Million ($3,000,000) Dollars in sales in any given
calendar month;
(d) Four Million ($4,000,000) Dollars in sales in any given
calendar month; and
(e) Five Million ($5,000,000) Dollars in sales in any given
calendar month.
3.3 Other Benefits.
In addition to the Fixed and Incentive compensation which
Employee shall receive pursuant to subparagraphs 3.1 and 3.2 of
this paragraph 3, the Employee shall receive the following items
of reimbursement, compensation or benefits:
(a) Expenses. Employee is authorized hereunder to incur
reasonable expenses for promoting the business and affairs
of the Company, including, without limitation
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by specification, expenses for entertainment, travel and
similar items. The Company shall promptly reimburse Employee
for all such expenses upon presentation, as expenses are
incurred, by the Employee to the Company of an itemized
account of such expenditures.
(b) The Company shall maintain either a whole-life life
insurance policy or policies or a minimum deposit life
insurance policy or policies (or the equivalent thereof) on
the life of the Employee having an aggregate face value of
not less than $250,000 Dollars (collectively, the "Policy").
In the event that the Company purchases minimum deposit life
insurance and this Agreement is terminated without Cause as
defined herein prior to the time that the insurance policy
has been fully paid, the Company agrees to continue to make
the premium payments on the policy until it is fully paid.
The proceeds of the policy shall be payable to any
beneficiary or beneficiaries designated at any time and from
time to time by the Employee, provided however, that upon
the death of the employee, the aggregate amount of premiums
paid on the Policy shall be repaid to the Company by the
beneficiary or beneficiaries designated in the Policy.
Employee, if requested by the Company, shall take all
necessary steps, including if requested, the naming of the
Company as a Co-Beneficiary of the Policy to the extent of
the total amount of premiums paid thereon, in order to
insure Employee's compliance with this covenant. In no event
shall the premiums on any policy or policies aggregate more
than $10,000 per year. The Policy shall be in addition to
any key man policy or group term policy or policies insuring
the life of the Employee maintained by the Company.
(c) Automobile. The Company shall provide Employee with an
automobile compatible with his position and responsibility
hereunder or, in lieu thereof, at the option of the
Employee, a monthly stipend equal to the cost of leasing and
insuring such an automobile. The Company's monthly
obligation under this paragraph shall not exceed $600 per
month including gas and maintenance.
(d) Medical Benefits. The Company shall provide Employee with
such family health and medical benefits as the Company
normally accords its executive officers.
(e) Vacations. Employee shall be entitled during each calendar
year, during the period of employment, to six weeks vacation
beginning during the first year of employment and every year
thereafter. The vacation entitlement is cumulative or may be
compensated in a monetary manner. The Employee is entitled
to full compensation during such vacation periods.
(f) Sick Time. Employee is entitled , if needed, 20 fully
compensated sick days per calendar year. Calendar year is
defined as January to December.
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(g) Working Facilities. The Company shall furnish Employee with
a private office, secretarial help and such other
facilities, services and staff as are suitable to his
position to ensure adequate performance of the duties the
Employee holds within the Company.
(h) Company shall provide and supply Employee with Officers &
Directors Liability Insurance and Indemnify Employee from
shareholder lawsuits and Corporate/Company liabilities, such
as clause shall be added to the by-laws of the Company.
3.3 The Company agrees that nothing contained in this Agreement is
intended to or shall be deemed to be granted to the Employee in
lieu of, or as a limitation upon, any rights and privileges which
the Employee may otherwise be entitled to as an executive
employee of the Company under any retirement, pension, insurance,
hospitalization or other employee benefit plan of any type
(including, without limitation by specification, any incentive,
profit sharing, bonus or stock option plan), which may now be in
effect or which may hereafter be adopted by the Company, it being
understood that the Employee shall have the same rights and
privileges to participate in such Company benefit plans as any
other executive employee of the Company.
4. DUTIES; TIME AND EFFORT.
4.1 During the term of employment hereunder, Employee, subject to the
supervision and control of the Board of Directors of the Company,
shall supervise all aspects of the Company. Employee shall serve
as the Chief Operations Officer, President and Board Member of
Progressive Telecommunications Corporation. In addition, the
Employee shall serve as Chief Executive Officer, President and
Chairman of the Board for the subsidiaries CCC Communications and
Stormtel as is so requested by the Board of Directors. The
Company and Employee agree that Employee shall serve in these
capacities throughout the period of employment agreement as
outlined herein.
4.2 Employee agrees to devote his full-time and effort to the
business of the Company during the term of his employment
hereunder and to serve as a member of the Company's Board of
Directors. The Employee shall perform his duties faithfully,
diligently and to the best of his ability. Employee, at all
times, shall use his best efforts to preserve, protect, enhance
and maintain the trade, business and goodwill of the Company.
5. COVENANTS AND RESTRICTIONS.
Subject to the provisions of Paragraph 8.6 hereof, Employee covenants
that, except in carrying out his duties hereunder, during the term of his
employment and for a period of one (1) year following the date of termination
of employment hereunder:
5.1 Without the express written consent of the Board of Directors,
Employee shall not directly or indirectly, participate or engage
in, assist, render employment services to, become
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associated with, work for, or otherwise become in any way or
manner connected with the ownership, management, operation, or
control of, any business, which is competing with Companies
primary services and products that would take from the assets or
products or confidential and proprietary information of the
Company. This clause in no way is to be construed as industry ban
but rather as ban from utilizing contacts, products developed,
and other proprietary information.
5.2 Employee shall not knowingly provide or solicit to provide to any
Person or individual (i) competitive primary goods or services
which are competitive with those provided by the Company or which
would be competitive with the goods or services that the Company
has planned to provide; or (ii) any goods or services to any
customer of the Company. The term "customer" shall mean any
person or individual to whom the Company has provided goods or
services within the twelve (12) month period prior to the
termination of Employee's employment hereunder. Notwithstanding
anything herein to the contrary, no limitation shall be imposed
on Employee hereunder with respect to any goods and services that
the Company has planned to provide and which are not actually
being provided at the time of the termination of Employee's
employment .
5.3 Employee agrees that he shall not divulge to others, nor shall he
use to the detriment of the Company or in any business or process
of manufacture competitive with or similar to any business or
process of manufacture engaged in by the Company or any of its
subsidiaries or affiliated companies, at any time during his
employment with the Company or thereafter, any confidential or
trade secret information obtained during the course of employment
with the Company relating to sales, salesmen, sales volume or
strategy, customers, formulas, processes, methods, machines,
manufactures, compositions, ideas, improvements or inventions
belonging to or relating to the business of the Company, or its
subsidiary or affiliated companies.
5.4 Employee shall neither solicit, seek to solicit any of the
Company's personnel in any capacity whatsoever nor shall Employee
induce or attempt to induce any of the Company's personnel to
leave the employ of the Company to work for Employee or
otherwise.
5.5 Employee acknowledges that his breach of any of the restrictive
covenants contained in this Paragraph 5 may cause irreparable
damage to the Company for which remedies at law would be
inadequate. Accordingly, if Employee breaches or threatens to
breach any of the provisions of this Paragraph 5, the Company
shall be entitled to appropriate injunctive relief, including,
without limitation, preliminary and permanent injunctions in any
court of competent jurisdiction, restraining Employee from taking
any action prohibited . If any portion of this Paragraph 5 is
adjudicated to be invalid or unenforceable, this Paragraph 5
shall be deemed amended to delete there from the portion so
adjudicated, such deletion to apply only with respect to the
operation of this Paragraph 5 in the jurisdiction in which such
adjudication is made.
5.6 Employee is granted one-hundred twenty from execution to divest
any other Company interests, assets which has been owned for many
years prior to this Agreement but
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could be construed as competitive in the marketplace. This is a
goodwill gesture towards commitment on the part of the Employee.
6. PROPRIETARY PROPERTY.
Subject to the provisions of Paragraph 8.6 hereof:
6.1 The Employee agrees that any and all inventions or improvements
as will as any and all ideas, creations, know-how and methods of
applying and putting into practice any inventions or improvements
(all of the foregoing being hereinafter called "Proprietary
Property" and being more fully defined in subparagraph 6.2 below)
that are created, developed, conceived of or discovered either
(i) by the Employee (solely or jointly with others) either in the
course of his employment, on the Company's time, with the
Company's materials or facilities, or (ii) by and for the
Company; or (iii) by any independent individual of business
acquired by the Company. The Employee shall not, without
limitation as to time or place, use any proprietary Property
except on Company business, during or after his period of
employment (in accordance with Section 5), nor disclose the same
to any person or individual except for disclosure on Company
business or as may be required by law. It is agreed by the
parties, the Company will compensate the Employee for ideas,
creations and methods with royalties under agreement.
6.2 As used in this Agreement, "Proprietary Property" means
proprietary technical information not generally known by the
Employee prior to employment or information not generally known
in the Company's industry and which is disclosed to Employee or
known or developed by Employee as a consequence of or through
employment with the Company.
6.3 During or subsequent (in accordance with Section 5) to the
Employee's employment by Company, Employee shall not, directly or
indirectly, lecture upon, publish articles concerning, use,
disseminate, disclose, sell or offer for sale any Proprietary
Property without the Company's prior written consent.
7. DISABILITY.
7.1 Subject to the terms of this subparagraph 7.1, in the event
Employee becomes temporarily disabled during the term of this
Agreement, he shall continue to receive one hundred (100%)
percent of the Fixed Compensation to which Employee was entitled
at the time of disability for a maximum period of six (6) months.
Beginning on the seventh month of disability by Employee the
fixed compensation shall be reduced to fifty (50%) percent and be
available for six (6) more calendar months. The terms "disabled"
and "disability" shall mean disability which, in the opinion of a
doctor reasonably satisfactory to the Company, renders the
Employee unable to perform his duties hereunder. The date such
disability commences shall be the date Employee first absents
himself from work during a continuous period of disability as so
determined by the
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doctor herein above set forth. The term "temporary disability"
shall mean a disability which is not a permanent disability as
such term is defined in subparagraph 7.2 below.
7.2 Notwithstanding anything to the contrary set forth in this
Agreement, the Company may terminate this Agreement upon no less
than ninety (90) days prior written notice to Employee after six
(6) full continuous calendar months following the "permanent
disability" (as defined below) of Employee and the payment to
Employee of all unpaid compensation which the Company owes to the
Employee for the period of employment prior to termination. In
such event, the Employee shall be entitled to receive from the
Company or from the Company's disability insurance carrier
disability compensation in an amount which shall, when added to
all social security benefits received or to be received by
Employee as a result of the permanent disability, equal One
Hundred Thousand ($100,000) Dollars per annum; provided, however,
in no event shall the premiums paid by the Company for
maintaining the disability policy (as such term is defined below)
exceed Fifteen Thousand ($15,000) Dollars per annum. The
Employee's entitlement to disability benefits shall be pursuant
to the terms of this Agreement and the disability insurance
policy (the "Disability Policy") to be obtained and maintained by
the Company, naming the Employee as the insured thereunder.
Notwithstanding the foregoing, in the event Employee's disability
is either not covered under the Disability Policy or Employee is
covered for less than One Hundred Thousand ($100,000) Dollars per
annum or if coverage under the Disability Policy terminates
during the Period of disability for any reason whatsoever, then
for the balance of Employee's then current term of employment the
Company will pay Employee One Hundred Thousand ($100,000) Dollars
per annum or, if Employee is receiving benefits under the
Disability Policy, the Company will supplement the insurance
payments which Employee is entitled to receive so that Employee
receives a total of One Hundred Thousand ($100,000) Dollars per
annum and, thereafter, the Company will pay to Employee, or
supplement the benefits Employee receives under said Disability
Policy, so that Employee receives the lesser of (i) One Hundred
Thousand ($100,000) Dollars per annum; or (ii) fifty (50%)
percent of Employee's Fixed Compensation until Employee attains
the age of sixty-five (65). Once Employee attains age sixty-five
(65), the Company shall have no further obligations to make
disability payments to Employee or to otherwise supplement the
amounts Employee receives under the Disability Policy except to
the extent that it is the Company's then current policy to
continue to cover or provide benefits to permanently disabled
executive officers beyond age sixty-five (65). Notwithstanding
anything to the contrary set forth in this Paragraph 7.2, in the
event the Employee reassumes the full Performance of his duties
hereunder prior to such termination notice, the Employee shall be
entitled to one hundred (100%) percent of his total compensation
from the date of his return. In no event shall Employee be
entitled to renew the term of his employment for the Extension
Term or any Annual Term if Employee becomes permanently disabled
during either the Initial Term or the Extension Term. Employee
shall be deemed "Permanently Disabled" for purposes hereof if
either: (i) Employee has been temporarily disabled for a period
in excess of 730 consecutive days; or (ii) the insurance company
issuing the Disability Policy determines that the Employee is
Permanently Disabled and will make payments pursuant to the
Disability Policy; or (iii) a physician, mutually acceptable to
both the Company and the Employee, determines on the basis of
medical evidence that Employee is totally disabled, mentally or
physically, so as to be, prevented from engaging in
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further employment by the Company in the capacity in which
Employee was engaged prior to such disability and that such
disability will be permanent and continuous during the remainder
of the life of Employee. In the event a physician cannot be
selected who is acceptable to both the Company and the Employee,
each party shall select a physician who shall together select a
third physician whose decision shall be final. In the event of a
dispute or the inability of the physicians selected by the
Company and the Employee to select a third physician, a physician
shall be selected by the American Arbitration Association and the
decision of such physician shall be final.
7.3 Payments of disability compensation under subparagraphs 7.1 and
7.2 above shall be reduced by the amounts actually received by
the Employee under any policy or policies of disability, health,
accident, or wage continuation insurance paid for by the Company.
8. TERMINATION; SEVERANCE; DEATH.
8.1 The Employee's employment shall terminate upon his death, and may
be terminated, at the option of (i) the Employee, (A) upon the
conclusion of the Initial Term, or any Annual Term upon proper
written notice to the Company, or (B) for breach of this
Agreement, or (ii) the Company upon proper written notice to the
Employee, (A) at the conclusion of the Initial Term or any Annual
Term, (B) as a result of his permanent disability as defined in
Paragraph 7.2 hereof, or (C) for cause. Termination "for cause"
shall mean termination only in the event the Employee is guilty
of (i) intentional or reckless failure to perform his duties
hereunder, or (ii) any act of intentional dishonesty by the
Employee which adversely effects the Company's business.
8.2 If Employee's employment is terminated by the Company for
documented cause, as referenced in Section 8.1C.
8.3 If Employee's employment is terminated by Employee's decision to
act as a consultant to the Company or as a result of the
Employee's permanent disability, the Company shall remain
obligated to pay Employee the entitlements set forth in Paragraph
7 of this Agreement.
8.4 If Employee's employment is terminated by the Company's
determination not to renew the employment term at the conclusion
of either the Initial Term or any Annual Term, the company shall
be obligated to pay Employee, within sixty (60) days of such
termination, a lump sum severance payment in an amount equal to
the product derived by multiplying each year of the Employee's
employment with the Company (commencing with the calendar year
1999) times One Hundred Thousand ($100,000) Dollars.
8.5 If Employee's employment is terminated by the Company during the
Initial Term or any Annual Term, the Company shall be obligated
to pay Employee, within sixty (60) days of such termination, a
lump sum severance payment in an amount equal to the aggregate
amount of the Employee's Base Salary for the remainder of the
Initial Term or any Annual Term as the case
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may be, plus the product derived by multiplying each year of the
Employee's employment with the Company (commencing with the
calendar year 1999) times Seventy Five Thousand ($75,000)
Dollars.
8.6 If Employee dies during the term of his employment hereunder, the
Company shall promptly pay to the Employee's estate or promptly
distribute to the beneficiary or beneficiaries named by Employee
all life insurance proceeds under the Policy referred to in
paragraph 3.3(b) hereof (if received by the Company for any
reason) as well as any term life insurance policy or policies
with the exception of any key-man policy which the Company
maintained on the life of and for the benefit of the Employee;
provided, however, all other Company fringe benefits shall cease
upon Employee's death.
8.7 Notwithstanding anything to the contrary set forth in this
Agreement, the Employee's covenants set forth in Paragraphs 5 and
6 hereof shall not apply with respect to and shall not be
enforceable against Employee, in the event the Employee's
employment is terminated by the Company for any reason other than
those reasons expressly set forth in Paragraph 8.1 hereof.
9. ARBITRATION.
Any dispute, controversy or claim arising out of or pursuant to this
Agreement or the breach hereof shall be settled by arbitration in the City of
Clearwater, County of Pinellas and State of . Such arbitration shall be
effected by arbitrators selected as hereinafter provided and shall be conducted
in accordance with the Rules, existing at the date thereof, of the American
Arbitration Association. The dispute, controversy or claim shall be submitted
to three arbitrators, one arbitrator to be selected by the Company, one
arbitrator to be selected by the Employee and the third arbitrator to be
selected by the two so selected by the Company and Employee, or if they cannot
agree on a third, by the American Arbitration Association. In the event that
either the Company or Employee within one (1) month after notification of any
demand for arbitration hereunder, shall not have selected its arbitrator and
given notice thereof to the other party, the arbitrator for such party shall be
selected by the American Arbitration Association. Meetings of the arbitrators
shall be held in Clearwater, Florida at such place or places as may be agreed
upon by the arbitrators. The results of final determination of any such
arbitration proceedings shall be binding on the parties hereto and a judgment
may be entered in any court having jurisdiction.
10. SEVERABILITY OF PROVISIONS.
In the event any court of competent jurisdiction determines that any
term or provision of this Agreement shall be unenforceable, the invalidity of
such term or provision shall not affect the validity of the remainder hereof.
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11. NOTICES.
Any notice required or permitted to be given pursuant to the
provisions hereof shall be deemed given when sent by registered or certified
mail, return receipt requested, to the Company or Employee at their respective
addresses set forth above or to such other address as may be given by similar
notice by the Company or Employee.
12. WAIVER OF BREACH.
The waiver by the Company or Employee of a breach of any provision
hereof by the other shall not operate or be construed to operate as a waiver by
such party of any subsequent breach by the other of the same or any other
provision hereof.
13. ENTIRE AGREEMENT, MODIFICATION AND CONSTRUCTION.
This Agreement contains the entire understanding between the Company
and Employee with respect to the subject matter hereof. The terms and
conditions hereof may be changed only by an agreement in writing signed by the
Company and Employee. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida, applicable to contracts made
and to be performed therein, without giving effect to the principles thereof
relating to conflicts of law.
IN WITNESS WHEREOF, the Company has caused this Agreement to be signed
and its seal affixed by a duly authorized officer and the Employee has signed
this Agreement as of the day and year first above written.
Progressive Telecommunications Corporation: Employee:
/s/ Xxxxx X. Xxxxxxx /s/ Xxx Xxxxxxxx
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Authorized Corporate Signature Employee Signature
Xxxxx X. Xxxxxxx Xxx Xxxxxxxx
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Print Name & Title Print Name
5/21/99 XXX-XX-XXXX 5/15/99
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Date SS# Date
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