EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of
the 9th of Novemner, 1999 between Progressive Telecommunications Corporation,
Inc. ("Corporation"), a Nevada corporation, and Xxxxx Xxxxxxx
("Employee").
WHEREAS, Corporation desires to employ Employee, and Employee desires
to be employed by Corporation; and WHEREAS, Corporation and Employee desire to
enter this Agreement which sets forth the terms and conditions of said
employment.
NOW, THEREFORE, in consideration of the mutual covenants set forth
herein, Corporation and Employee agree as follows:
1. Employment. Corporation agrees to employ Employee, and Employee
accepts such employment and agrees to serve Corporation, on the terms and
conditions set forth herein.
2. Term of Agreement. The Term of Employee's employment hereunder
shall commence on the date first set forth above and shall continue in effect
until the 31st day of December, 2001 ("Term").
3. Position and Duties. Employee shall be responsible for the
establishment, maintenance and supervision of Corporation's direct
telemarketing operation of the yellow page directory services (hereinafter
referred to as"YPD") in the Clearwater, Florida region. The parties agree
and understand that, during the time of Employee's employment with the
Corporation, the Employee shall be responsible for managing the telemarketing
operations of the Corporation, which marketing operations include the
selling of Internet directory listings, Internet advertising, web sites and
other products and services to the Corporation's customers throughout the
United States. References in this Agreement to Employee's employment with
Corporation shall be deemed to refer to employment with Corporation or an
affiliate.
4. Compensation and Related Matters.
4.1 Base Salary. During the Term of his employment
hereunder, Corporation shall pay to Employee an annual
base salary of $104,000. Base Salary shall be paid in
installments of $4,000 every two weeks.
4.2 Benefit Plans and Arrangements. Employee shall be
entitled to participate in and to receive under
Corporation's employee benefit plans and arrangements in
effect during the Term of his employment hereunder.
4.3 Perquisites. During the Term of his employment
hereunder, Employee shall be entitled to receive fringe
benefits ordinarily and customarily provided by
Corporation to persons of a position and/or status in
Corporation equal to that of Employee.
4.4 Expenses. Corporation shall promptly reimburse Employee
for all normal out-of-pocket expenses related to
Corporation's business that are actually paid or
incurred by him in the performance of his services under
this Agreement.
5. Representations Concerning Corporation's Stock. The Corporation
represents and warrants to the Employee that the Corporation's common stock is
currently traded, on NASDAQ Over the Counter Bulletin Board. The Corporation
hereby represents to the Employee that the trading symbol for the
Corporation's common stock on NASDAQ OTC-BB is "PTCI". The Corporation
further represents and warrants to the Employee that any and all of the
Corporation's common stock which is hereafter issued by the Corporation to
the Employee, owned by the Employee or for which any warrants or options are
issued by the Corporation to the Employee: (i) when earned or paid for as
contemplated by this Agreement, shall not be subject to any further call or
assessment, (ii) shall be of the same class of stock as the shares of stock
of the Corporation currently being traded on NASDAQ Over the Counter, and
(iii) all federal and state securities law and NASDAQ filings with respect
thereto shall be timely and properly filed, including but not limited to any
S-8 filings.
6. Termination. The Term of Employee's employment hereunder may be
terminated under the following circumstances:
6.1 Death. The Term of the Employee's employment hereunder
may be terminated upon his death.
6.2 Without Cause. Corporation may terminate the Term of
Employee's employment without cause at any time upon
written notice to Employee.
6.3 With Cause. Corporation may terminate the Term of
Employee's employment with cause at any time upon
written notice to Employee. Cause shall be defined as
failure to meet 50% of the per telemarketer per day
threshold as defined in Section 10.2 for two consecutive
quarters.
Upon termination of Employee's employment by Corporation without cause, under
section 6.2 above, the Employee shall be entitled to receive all of the shares
of common stock and warrants issued or not issued under the maximum shares
under section 10.1, which shares of common stock and warrants shall be
delivered to Employee in equal monthly installments from the date of
termination through December 31, 2001.
7. Corporation's Responsibilities And Support Services. The
Corporation agrees and represents that the Corporation shall provide the
funding necessary to fully and timely effectuate the budget attached hereto as
"Exhibit A" hereinafter referred to as the Budget. The Corporation shall have
no obligations to fund expenditures that would exceed the assumptions outlined
in the Budget.
8. Employee's Signing Bonus. In addition to the Base Salary, the
Corporation agrees to provide a signing bonus to the Employee Two Hundred
Thousand (200,000) shares of common stock of the Corporation; and
The Corporation agrees and represents that the shares of common stock of
the Corporation comprising the Signing Bonus shall be issued to the Employee
as of the date of execution of this Agreement, and such shares of common
stock of the Corporation shall be immediately registered under S-8 as to make
the securities available to be traded on NASDAQ Over the Counter, without
limitation or restriction.
9. Employee's Bonus Stock Incentives. In addition to the Base
Salary and Signing Bonus provided hereinabove, the Corporation hereby grants
to the Employee certain bonus stock incentives, as provided hereinbelow:
9.1 Stock Incentive. The Employee shall be entitled to a bonus
stock incentive which shall be based on the sales of the
Corporation's products and services which are made by the
telemarketing operations of the Corporation. All sales made by
the telemarketing operations of the Corporation shall be
included for purposes of calculating and determining the amount
of any bonus stock incentive earned by the Employee at such time
as a customer verbally agrees to purchase any such products or
services, and once payment is actually received by the
Corporation for any such sales. The dollar amount of a "sale"
will be the total dollar commitment of a customer for the
services or products purchased, for a twelve (12) month period.
(For example, if a customer agrees to purchase a service and the
charge for said service is Fifty Dollars per month, then the
amount of the sale for purposes of this Agreement shall be
considered to be Six Hundred Dollars.) Such bonus stock
incentives shall be computed and disbursed to the Employee on a
quarterly basis during the eight (8) quarters commencing January
1, 2000 and ending December 31, 2001.
9.2 Calculation of Quarterly Stock Incentive. At the end of each of
the eight (8) quarters, the Employee's bonus stock incentive
shall be based upon the average monthly sales during the quarter
then ending. Such Average Monthly Sales shall be computed as
follows:
[Dollar amount of total sales of the Corporation's
products and services made by the telemarketing
operations of the Corporation during the quarter]
\ 3 = Average Monthly Sales
The total dollar value of the number of shares of common stock
of the Corporation to be issued to the Employee as a bonus stock
incentive for such quarter shall then be computed as follows:
[Average Monthly Sales] x .80 (i.e., 80%) = total dollar
value of quarterly bonus stock incentive
The number of shares of common stock of the Corporation to be
issued to the Employee as such quarterly bonus stock incentive
shall be the number of shares, at a value of Five Dollars
($5.00) per share, which is equal to such total dollar value of
the quarterly bonus stock incentive, as computed above.
Additionally, the Corporation shall also grant to the Employee,
at the end of each of the eight (8) quarters, a warrant for
additional shares of common stock of the Corporation, at a value
of Five Dollars ($5.00) per share, equal to one-half (1/2) of
the total dollar amount of the quarterly bonus stock incentive.
9.3 Example. The following is an illustrative example of the
calculation of the quarterly bonus stock incentives and
quarterly warrants:
Assume that the Corporation's monthly sales during the
first (1st) quarter are:
January, 2000 $1,500,000.00
February, 2000 $2,000,000.00
March, 2000 $2,125,000.00
Total Quarterly Sales $5,625,000.00
The Employee's quarterly bonus stock incentives would then be
calculated as follows:
$5,625,000.00 (total quarterly sales) / 3 =
$1,875,000.00 (Average Monthly Sales)
$1,875,000.00 (average monthly sales) x .80 =
$1,500,000.00 (total dollar value of quarterly stock
incentive)
$1,500,000.00 (total dollar value of quarterly bonus
stock incentive) / $5.00 (per share) = 300,000 shares
The warrant issued to the Employee for additional shares of
common stock of the Corporation would then be equal to 150,000
shares.
10. Restrictions And Limitations on Stock Incentive. The Employee's
bonus stock incentives shall be subject to the following limitations and
restrictions:
10.1 Maximum Shares. The number of shares of common stock of the
Corporation which may be issued to the Employee as bonus stock
incentives during the eight (8) quarters shall not exceed a
total of two million four hundred thousand (2,4000,000) shares.
Additionally, the number of shares of common stock of the
Corporation for which warrants are granted to the Employee
during the eight (8) quarters shall not exceed a total of one
million two hundred thousand (1,200,000) shares.
10.2 Sales Threshold. Though the parties acknowledge and agree
that the Employee is not subject to any specific sales
requirements or quotas, it is the hope of the parties that the
sales by the Corporation's telemarketing operations will average
approximately Two Hundred Twenty-five Dollars ($225.00) per
telemarketer per day. During any calendar quarter during the
term of this Agreement, if the daily sales average for such
quarter are less than One Hundred Twelve and 50/100 Dollars
($112.50) per telemarketer per day, the Employee shall not be
entitled to a bonus stock incentive for such quarter, nor shall
the Employee be entitled to any warrants for such quarter. Also
in the event average daily sales are less than One Hundred
Twelve and 50/100 Dollars ($112.50) per telemarketer per day for
any quarter, the Corporation may then issue written notice to
the Employee that in the event average daily sales for the
quarter immediately following are also less than One Hundred
Twelve and 50/100 Dollars ($112.50) per telemarketer per day,
this Agreement may be terminated by the Corporation with cause.
10.3 Trading Restrictions for Bonus Stock Incentives. As to any
shares of common stock of the Corporation issued to the Employee
as bonus stock incentives, twenty-five percent (25%) of such
shares shall be immediately registered under S-8 as to make the
securities available to be traded or sold by the Employee on
NASDAQ, Over the Counter, without limitation or restriction,
upon issuance. The remaining seventy-five percent (75%) will be
issued under Rule 144 and such shares must be retained by the
Employee for not less than one (1) year from the date of the end
of the quarter for which such shares are issued.
Any securities unregistered on December 30th 2001 will be
registered under S-8 as to make the securities available to be
traded or sold by the Employee on NASDAQ OTC-BB, without
limitation or restriction.
10.4 Limitations on Warrants. The Employee shall be entitled to
exercise any warrants granted to the Employee at any time and
upon Employee's sole discretion at a price of Five Dollars
($5.00) per share, provided, however, if not exercised, such
warrants shall expire one (1) year after their date of issuance.
Upon Employee's exercise of any warrant, the resulting shares of
common stock of the Corporation issued to the Employee shall be
subject to the same trading and sale restrictions as the shares
of common stock issued to Employee for the quarter when such
warrant was granted, as provided in Subparagraph 10.3
hereinabove.
11. Equitable Adjustments. The Corporation agrees and represents
that the number of shares to be issued and warranted to the Employee pursuant
to the bonus stock incentive provisions hereinabove, or pursuant to paragraph
6 or 7 hereinabove, shall be equitably increased or decreased for any stock
split, stock dividend, reclassification or recapitalization of the common
stock of the Corporation which occurs subsequent to the date of this
Agreement.
12. Minimum Stock Value. In the event the value of the stock of the
Corporation, as quoted on NASDAQ, falls below Two and 50/100 Dollars ($2.50)
per share at the close of business for 30 consecutive trading days prior to
January 1, 2002, or in the event the Corporation's stock is removed or
suspended from trading on NASDAQ, then in such event the Corporation shall
immediately issue to the Employee (i) a number of shares of common stock of
the Corporation equal to the total number of shares issued to the Employee
as of such date, and (ii) warrants equal to the number of warrants held by
the Employee as of such date. Such distribution of additional shares of
common stock and warrants of the Corporation to the Employee shall be made
regardless of whether the value of the stock of the Corporation, as quoted
on NASDAQ or otherwise, later increases.
13. Unauthorized Disclosure; Customer Solicitation. (a) Employee
shall not, without the prior written consent of Corporation, disclose or use
in any way, either during the Employee's employment with Corporation or
thereafter, except as required in the course of such employment by
Corporation, any confidential business or technical information or trade
secret acquired in the course of such employment, whether or not conceived of
or prepared by him, which is related to any service or business of
Corporation or any Corporation affiliate, other than information which is
generally known in the industry in which such business is transacted or
acquired from public sources, all of which are the exclusive and valuable
property of Corporation and its affiliates.
(b) During the Term and for a period of One (1) year immediately
following the termination of Employee's employment, regardless of the cause of
such termination, Employee agrees that he will not at any time, in any
fashion, form or manner, either directly or indirectly, divulge, disclose or
communicate to any person, firm or corporation, in any manner whatsoever, any
information of any kind, nature or description concerning any matters
affecting or relating to the business of the corporation, or its affiliates,
including, but not limited to, the names of their clients or prospective
clients or any other information concerning the business of Corporation, its
manner of operation, plans, vendors, suppliers, advertising, marketing,
methods, practices, computer programs, research and information of any kind,
nature or description, without regard to whether any or all of the foregoing
matters would otherwise be deemed confidential, material or important, or use
same for any reason or purpose whatsoever, except in connection with the
performance of his duties under this Agreement or with the express prior
written consent of Corporation.
14. Tangible Items. All files, records, documents, manuals, books,
forms, reports, memoranda, studies, data, calculations, recordings,
correspondence, in whatever form they may exist, and all copies, abstracts and
summaries of the foregoing and all physical items related to the business of
Corporation and its affiliates, other than merely personal items, whether of a
public nature or not, and whether prepared by Employee or not, are and shall
remain the exclusive property of the Corporation and its affiliates and shall
not be removed from their premises, except as required in the course of
employment by Corporation, without the prior written consent of Corporation,
and the same shall be promptly returned by Employee on the termination of the
Employee's employment with Corporation or at time prior thereto upon the
request of Corporation.
15. Inventions and Patents. Employee agrees that all inventions,
innovations, improvements, developments, methods, designs, analyses, drawings,
reports, and all similar or related information which relates to Corporation's
actual or anticipated business research and development or existing or future
products or services and which are conceived, developed or made by or at the
direction of Employee while employed by Corporation will be owned by
Corporation. Employee also agrees to promptly perform all reasonable actions
(whether before, during or after the Term) necessary to establish and confirm
such ownership.
16. Covenants and Restrictions. Subject to the provisions 8.6
hereof, Employee covenants that, except in carrying out his duties hereunder,
during the term of employment and for a period of one (1) year following the
date of termination of employment hereunder :
16.1 Without express written consent of the Board of Directors,
Employee shall not directly or indirectly, participate or
engage in, assist render employment services to, become
associated with, work for, or otherwise become in any way or
manner connected with the ownership, management, operation,
or control of, any business, which 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 a ban from utilizing contacts, products
developed, procedures and other confidential information.
16.2 Employee shall not knowingly provide or solicit to provide to
any person or individual (I) any goods or services which are
competitive with those provided by the Company or which would
be competitive with the goods and 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 company to whom the Company has provided goods or
services to within the previous twelve (12) month period prior
to 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
or 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.
16.3 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 employment with the Company or thereafter, any
confidential or trade secret information obtained during the
course of employment with the Company relating to sales,
salesman, 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.
16.4 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 the employ of the Company to work for Employee
or otherwise.
16.5 Employee acknowledges that a breach of any of the restrictive
covenants contained in Section 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 Section 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 hereby. This remedy shall be in addition to all
other remedies available to the Company at law or equity. If
any portion of this Section 5 is adjudicated to be invalid or
unenforceable, this Section 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 Section 5 in the
jurisdiction in which such adjudication is made.
17. Remedies. Employee acknowledges that the restrictions and
agreements contained in this Agreement are reasonable and necessary to protect
the legitimated interests of Corporation, and that any violation of this
Agreement will cause substantial and irreparable injury to Corporation that
would not be qualifiable, and for which no adequate remedy would exist at law
and agrees that injunctive relief, would be necessary however Corporation must
give a five (5) day notice to Employee of any injunctive relief hearing and in
any event must post a bond for all damages Employee might incur as a result of
such injunction.
18. Reasonableness of Restrictions. (a) Employee recognizes that in
the course of his employment by Corporation, (i) he will be working in an area
of great importance to Corporation's business, and (ii) he will have access to
highly confidential information concerning the business of Corporation and its
affiliates, including without limitation, information with respect to
Corporation's records, clients, presentation materials, computer programs,
research and information. Accordingly, Employee has agreed as provided in
Section 14 through 18 of his Agreement in order to induce Corporation to
employ Employee.
(b) Employee acknowledges and agrees that the covenants set forth in
Section (s) 14 through 18 are reasonable and valid in geographical and
temporal scope and in all other respects.
(c) Sections 13 through 17 shall survive the termination of this
Agreement and termination of Employee's employment hereunder.
(d) Notwithstanding any other provision of this Agreement,
Corporation acknowledges and agrees that the provisions of Sections 13 through
17 hereinabove shall not be binding upon Employee in the event of a breach by
Corporation of any of its obligations, covenants, agreements, representations
or warranties pursuant to this Agreement.
19. Applicable Law; Arbitration. This Agreement shall be governed
and construed under the laws of the State of Florida, not including the choice
of law rules thereof. Any and all disputes, complaints, controversies, claims
and grievances arising under, out of, in connection with, or in any manner
related to this Agreement or the relationship of parties hereunder shall be
settled by binding arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association. Any decision and award of the
arbitrator shall be final, binding and conclusive upon all of the parties
hereto and said decision and award may be entered as a final judgment in any
court of competent jurisdiction. Notwithstanding said Rules, any arbitration
hearing to take place hereunder shall be conducted in Clearwater, Florida,
before one (1) arbitrator who shall be an attorney who has substantial
experience in commercial law issues. In the event of any arbitration between
the parties hereto involving this Agreement or the respective rights of the
parties hereunder, each party shall pay his own attorneys' fees, costs and
expenses of such arbitration. Each party hereby consents to a single,
consolidated arbitration proceeding of multiple claims, or claims involving
more than two (2) parties. Either party may apply to any court of competent
jurisdiction for injunctive relief or other interim measures as provided for
elsewhere in this Agreement, in aid of the arbitration proceedings, or to
enforce the arbitration award, but not otherwise. Any such application to a
court shall not be deemed incompatible or a waiver of this section. The
arbitrator shall be required to make written findings of fact and conclusions
of law to support its award. The arbitrator shall award costs
and attorney fees to the prevailing party in any such arbitration. If any
party to the arbitration does not appear at the arbitration at the time and
place set for arbitration, the arbitrator shall make his decision based upon the
testimony and evidence of the party present, and the non-present party shall
waive its right to present evidence or testimony to the arbitrator.
20. Severability. If any term, restriction, covenant, or promise
contained herein is found to be unreasonable and for that reason unenforceable,
then such term, restriction, covenant, or promise shall not thereby be
terminated but shall be deemed modified to the extent necessary to make it
enforceable and, if it cannot be so modified, that is shall be deemed amended
to delete therefrom such provision or portion adjudicated to be invalid or
unenforceable, such modification or amendment in any event to apply only with
respect to the operation of this Agreement in the particular jurisdiction on
which such adjudication is made.
21. Notice. For the purpose of this Agreement, notices, demands,
and all other communications provided for in the Agreement shall be in writing
and shall be deemed to have been duly given when received if delivered in
person or by overnight courier or if mailed by United States registered mail,
return receipt requested, postage prepaid to the following address:
If to Employee: Mr. Xxxxx Xxxxxxx
000 Xxxxx Xx
Xxxxxxxxxx, XX 00000
If to Corporation: __________________________
Either party may change its address for notices by written notice to the other
party in accordance with this Section 21.
22 Additional Actions and Instruments. Corporation hereby agrees
to take or cause to be taken such further actions, to obtain such consents and
approvals, and to execute, deliver and file or cause to be executed, delivered
and/or filed such further instruments as Employee may from time to time
reasonably request in order to fully effectuate the purposes, terms and
conditions of this Agreement.
23. Miscellaneous. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification, or discharge is agreed
to in writing signed by Employee and Corporation. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior subsequent time. No agreements or
representations, oral or otherwise, expressed or implied, with respect to the
subject matter hereof have been made between either party which are not set
forth expressly in this Agreement.
24. Headings. the headings in this Agreement are inserted for
convenience only and shall have no significance in the interpretation of this
Agreement.
25. Successors. This Agreement shall be binding upon and inure to
the benefit of both parties hereto and their heirs, personal representatives
and successors, including without limitation any affiliate to which
Corporation may assign this Agreement. Any such assignment shall not relieve
the parties hereto of liability for the performance of their respective
obligations hereunder. Any assignment by Corporation to an affiliate shall
not be deemed to permit the delivery of stock or warrants of the affiliate in
satisfaction of the obligations to Employee hereunder, it being understood
and agreed that the obligations can only be satisfied by delivery of common
stock and warrants of Progressive Telecommunications Corporation, Inc., as
contemplated by this Agreement.
26. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement as of the date and year first written above.
PROGRESSIVE TELECOMMUNICATIONS
CORPORATION, INC.
By: /s/ Xxxxxx Xxxxxxx
Xx. Xxxxxx Xxxxxxx, Vice President
Printed Name and Title
"CORPORATION"
/s/ Xxxxx Xxxxxxx
Xxxxx Xxxxxxx
"EMPLOYEE"
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