AT-WILL EMPLOYMENT AGREEMENT
This AT-WILL EMPLOYMENT AGREEMENT ("Agreement") is made,
entered into, and effective as of December 1, 1998 ("Effective
Date"), by and between GTC Telecom, Inc., a Nevada corporation ("the
"Company") and Xxxxx Xxxxxxxx ("Xxxxxxxx").
RECITALS
WHEREAS, COMPANY desires to benefit from Xxxxxxxx'x expertise
and employ Xxxxxxxx on an "at will" basis as Chief Financial Officer
and Xxxxxxxx is willing to accept such employment.
NOW, THEREFORE, in consideration of the mutual covenants and
conditions contained herein, the parties hereto hereby agree as
follows:
AGREEMENT
1. Term and Duties.
The parties agree that this Agreement constitutes an At-Will
Employment Agreement which may be terminated by either party at any
time ("Termination Date"), with or without cause. The Company
hereby employs Xxxxxxxx as Chief Financial Officer ("CFO") as of the
Effective Date and Xxxxxxxx agrees to enter into and remain in the
employ of the Company until this Agreement is terminated. Xxxxxxxx
shall faithfully and diligently perform all professional duties and
acts as CFO as may be reasonably requested of Xxxxxxxx by the
Company or its officers consistent with the function of a CFO of a
similar telecommunications company.
2. Duties.
2.1 Xxxxxxxx agrees to perform Xxxxxxxx'x services to the best
of Xxxxxxxx'x ability. Xxxxxxxx agrees throughout the term of this
Agreement to devote sufficient time, energy and skill to the
business of the Company and to the promotion of the best interests
of the Company.
3. Compensation.
3.1 Subject to the termination of this Agreement as provided
herein, the Company shall compensate Xxxxxxxx for his services
hereunder at an annual salary ("Salary") of One Hundred and Five
Thousand Dollars ($105,000.00), payable in semi-monthly installments
in accordance with the Company's practices, less normal payroll
deductions. Provided however, that Xxxxxxxx'x annual Salary shall
increase to One Hundred and Twenty-Five Thousand Dollars ($144,000)
upon the happening of either of the following events:
a. The Company's gross revenues, actually received for
two consecutive calendar months, exceed all gross
expenditures actually paid for the same period; or
b. The Company successfully completes a Form SB-2
registered offering of its securities.
3.2 In addition to the Salary as defined above, the Company
agrees to grant to Xxxxxxxx One Hundred and Fifty Thousand Stock
Purchase Options as follows:
a. 25,000 Options to vest six (6) months from the date
of this Agreement, provided that Xxxxxxxx is then
employed by the Company, exercisable at a price of
$.01 per share for a period of thirty-six (36) months
from the date of vesting. If the Company at any time
proposes to register any of its securities under the
Securities Act of 1933 (the "Act"), including under
an SB-2 Registration Statement or otherwise, it will
use its best efforts to cause all the Shares into
which said Options are exercisable to be registered
under the Act, as amended, with the other securities
which the Company at the time propose to register.
b. The remaining 125,000 Options to vest in 1/3
increments each following year, provided that
Xxxxxxxx is then employed by the Company, over the
subsequent three years at an exercise price of $4.00,
for a period of thirty-six (36) months from the date
of vesting. The Company is not required to cause the
Shares into which said Options are exercisable to be
registered under the Act.
c. Notwithstanding the above, in the event that this
Agreement is terminated, for any reason, Xxxxxxxx
shall have ninety (90)
days from the
Termination Date in
which to exercise those
Options already vested.
All Options not
exercised within ninety
(90) days of the
Termination Date and
those not yet vested on
the Termination Date,
shall be forfeited by
Xxxxxxxx and deemed
null and void.
3.3 In addition to the compensation set forth above, the
Company shall periodically review Xxxxxxxx'x performance and
services rendered with a view to paying discretionary bonuses based
upon above-average or outstanding performance for a prior period.
Any such bonuses approved by the Company shall be paid to Xxxxxxxx
within 30 days of the grant thereof.
3.4 In addition to the Salary and bonuses stated above,
commencing with the Effective Date, Xxxxxxxx shall be eligible to
participate in a health insurance plan, including dependent
coverage, supplied by the Company. Xxxxxxxx shall also be entitled
to participate, fully and on a reasonable basis comparable to other
officers, in any and all stock option, stock purchase, stock
appreciation (or the like) plans, programs or arrangements
heretofore or hereafter adopted or amended by the Company, and in
all individual or group insurance, retirement, disability, salary
continuation and other employee benefit plans, programs or
arrangements or any equivalent successor plans, programs or
arrangements that may now exist or hereafter be adopted by the
Company. Xxxxxxxx shall be entitled to participate in any and all
group life, workers' compensation, health plan, or accidental
insurance plans which are adopted by the Company for the benefit of
officers or employees. Xxxxxxxx shall be entitled to such sick
leave and paid holidays and to such other perquisites of employment,
as customarily are extended by the Company to officers or employees.
In addition, Xxxxxxxx shall be entitled to such other benefits as
the Company may elect to provide generally, from time to time, to
officers or employees.
4. Expenses.
The Company shall reimburse Xxxxxxxx for all reasonable
business related expenses incurred by Xxxxxxxx in the course of his
normal duties on behalf of the Company. In reimbursing Xxxxxxxx
for expenses, the ordinary and usual business guidelines and
documentation requirements shall be adhered to by the Company and
Xxxxxxxx.
5. Severance.
5.1 If, and only if, this Agreement is terminated as set forth
in Section 5.2 herein, the Company shall pay to Xxxxxxxx xxxxxxxxx
in the amount equal to one-fourth (1/4) of the Salary then payable
pursuant to Section 3.1 herein, at the date of Xxxxxxxx'x
termination (the "Termination Salary"). The Company shall pay the
Termination Salary to Xxxxxxxx upon the same payment schedule and
subject to all state, federal, and local tax withholdings, as though
Xxxxxxxx were still employed by the Company.
5.2 Upon the occurrence of any of the following events
Xxxxxxxx shall be entitled to terminate his employment hereunder and
the Company shall be obligated to pay Xxxxxxxx the Termination Salary:
Xxxxxxxx resigns or is terminated for a reason other than
voluntarily or for Cause. The following shall constitute
"Cause" for purposes of this Agreement:
1. A willful act of dishonesty by Xxxxxxxx
involving theft of funds or assets;
2. The conviction of Xxxxxxxx of a felony; or
3. Willful failure or refusal of Xxxxxxxx to
properly perform Xxxxxxxx'x duties under this
Agreement, other than any such failure resulting
from Xxxxxxxx'x exercise of business judgment or
incapacity due to physical or mental illness;
For purposes of this paragraph 5.2 no act, or failure to act,
on Xxxxxxxx'x part shall be considered "willful" or "intentional"
unless done, or omitted to be done, by him not in good faith and
without reasonable belief that his action or omissions was in the
best interest of the Company.
6. Vacation.
Xxxxxxxx shall be entitled to four (4) weeks of paid vacation
for each year of service, which vacation shall be used by Xxxxxxxx
during the ensuing year as approved by the Company. Vacation dates
shall be approved by the Company and shall be those most convenient
to the Company's business. Xxxxxxxx shall also be entitled to sick
days to the extent otherwise granted generally to employees and/or
officers of the Company.
7. Arbitration.
If a dispute or claim shall arise between the parties with
respect to any of the terms or provisions of this Agreement, or with
respect to the performance by any of the parties under this
Agreement, then the parties agree that the dispute shall be
arbitrated in Orange County, California, before a single arbitrator,
in accordance with the rules of either the American Arbitration
Association ("AAA") or Judicial Arbitration and Mediation Services,
Inc./Endispute ("JAMS/Endispute"). The selection between AAA and
JAMS/Endispute rules shall be made by the claimant first demanding
arbitration. The arbitrator shall have no power to alter or modify
any express provisions of this Agreement or to render any award
which by its terms affects any such alteration or modification. The
parties to the arbitration may agree in writing to use different
rules and/or arbitrator(s). In all other respects, the arbitration
shall be conducted in accordance with the California Code of Civil
Procedure, or equivalent. The parties agree that the judgment award
rendered by the arbitrator shall be considered binding and may be
entered in any court having jurisdiction as stated in Paragraph 11
of this Agreement. The provisions of this Paragraph shall survive
the termination of this Agreement.
8. Notices.
Any notice, request, demand, or other communication given
pursuant to the terms of this Agreement shall be deemed given upon
delivery, if hand delivered or delivered via facsimile, or
Forty-Eight (48) hours after deposit in the United States mail,
postage prepaid, and sent certified or registered mail, return
receipt requested, correctly addressed to the addresses of the
parties indicated below or at such other address as such party shall
in writing have advised the other party.
If to the Company:
GTC Telecom, Inc.
0000 Xxxxxx Xxx., Xxxxx X-0
Xxxxx Xxxx, XX 00000
With a copy to:
M. Xxxxxxx Xxxxxx, Esq.
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Facsimile No.: 000-000-0000
If to Xxxxxxxx:
Xxxxx Xxxxxxxx
00000 Xxxxxxx Xx.
Xxxxxx Xxxxx, XX 00000.
9. Assignment.
Subject to all other provisions of this Agreement, any attempt
to assign or transfer this Agreement or any of the rights conferred
hereby, by judicial process or otherwise, to any person, firm,
company, or corporation without the prior written consent of the
other party, shall be invalid, and may, at the option of such other
party, result in an incurable event of default resulting in
termination of this Agreement and all rights hereby conferred.
10. Choice of Law.
This Agreement and the rights of the parties hereunder shall be
governed by and construed in accordance with the laws of the State
of California including all matters of construction, validity,
performance, and enforcement and without giving effect to the
principles of conflict of laws.
11. Jurisdiction.
The parties submit to the jurisdiction of the Court of the
State of California in and for the County of Orange, for the
resolution of all legal disputes arising under the terms of this
Agreement, including, but not limited to, enforcement of any
arbitration award.
12. Entire Agreement.
Except as provided herein, this Agreement, including exhibits,
contains the entire agreement of the parties, and supersedes all
existing negotiations, representations, or agreements and all other
oral, written, or other communications between them concerning the
subject matter of this Agreement. There are no representations,
agreements, arrangements, or understandings, oral or written,
between and among the parties hereto relating to the subject matter
of this Agreement that are not fully expressed herein.
13. Severability.
If any provision of this Agreement is unenforceable, invalid,
or violates applicable law, such provision, or unenforceable portion
of such provision, shall be deemed stricken and shall not affect the
enforceability of any other provisions of this Agreement.
14. Captions.
The captions in this Agreement are inserted only as a matter of
convenience and for reference and shall not be deemed to define,
limit, enlarge, or describe the scope of this Agreement or the
relationship of the parties, and shall not affect this Agreement or
the construction of any provisions herein.
15. Counterparts.
This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which shall
together constitute one and the same instrument.
16. Modification.
No change, modification, addition, or amendment to this
Agreement shall be valid unless in writing and signed by all parties
hereto.
17. Waiver.
No waiver of any breach, covenant, representation, warranty or
default of this Agreement by any party shall be considered to be a
waiver of any other breach, covenant, representation, warranty or
default of this Agreement.
18. Interpretation
The terms and conditions of this Agreement shall be deemed to
have been prepared jointly by all of the Parties hereto. Any
ambiguity or uncertainty existing hereunder shall not be construed
against any one of the drafting parties, but shall be resolved by
reference to the other rules of interpretation of contracts as they
apply in the State of California.
19. Taxes.
Any income taxes required to be paid in connection with the
payments due hereunder, shall be borne by the party required to make
such payment. Any withholding taxes in the nature of a tax on
income shall be deducted from payments due, and the party required
to withhold such tax shall furnish to the party receiving such
payment all documentation necessary to prove the proper amount to
withhold of such taxes and to prove payment to the tax authority of
such required withholding.
20. Not for the Benefit of Creditors or Third Parties.
The provisions of this Agreement are intended only for the
regulation of relations among the parties. This Agreement is not
intended for the benefit of creditors of the parties or other third
parties and no rights are granted to creditors of the parties or
other third parties under this Agreement. Under no circumstances
shall any third party, who is a minor, be deemed to have accepted,
adopted, or acted in reliance upon this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the Effective Date.
"Company" "Xxxxxxxx"
GTC Telecom, Inc. Xxxxx Xxxxxxxx
/s/Xxxx Xxxxxx /s/Xxxxx Xxxxxxxx
By: Xxxx Xxxxxx, President
