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Exhibit 10.4
EMPLOYMENT AGREEMENT
This Agreement executed as of the 15 of May 1999, by and between
Progressive Telecommunications Corporation (hereafter referred to as the
"Company"), a Florida Corporation with its offices located at 000 Xxxxxxxxx
Xxxxxx, Xxxxx 000 Xxxxxxxxxx, Xxxxxxx 00000 and Xxxxx "Xxxxx" Xxxxxx (hereafter
referred to as the "Employee") located at 0000 X.X. 00xx Xxxxx, Xxxxx 00, Xxxx
Xxxxx, Xxxxxxx 00000, the Corporate Employee Address.
WITNESSETH
Whereas, the Employee is currently the Executive Vice President, Chief
Technical Officer and a Member of the Board of Directors of CCC Communications
Corporation (which is merging with the Company) under an Employment Agreement
and has served in this executive capacity since its formation, and;
Whereas, the Company acknowledges and recognizes the value of the
Employee's services which are 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 services, abilities and expertise of the Employee for a minimum
period of three 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 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 agrees to employ the Employee as Executive Vice
President Chief Technical Officer, Member 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, 1999 (Commence Date) and continue for an
initial period of three (3) years or until May 15, 2002. Following completion
of the Initial Term, the Employee's term of employment shall be renewed, if not
renegotiated, for two year terms automatically, unless either party notifies
the other, in writing, of its intent not to renew at least ninety (90) days
prior to this Agreement's expiration.
3. COMPENSATION AND BENEFITS
For the services rendered by the Employee hereunder, the Company shall
be obligated to the Employee under the following compensation schedule:
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 $120,000.00 in
annual salary paid in bi-weekly installments of $4561.53 or
weekly installments of $2,500.00. This shall be considered the
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minimum salary to 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") will be
paid to the Employee in the form of a cash bonus or otherwise as
the Board of Directors of the Company or the Board's Compensation
Committee may grant executive employees of the Company from time
to time. In addition, the Employee is 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
$100,000.00 and 100,000 shares of the Company's Common Stock
divided amongst the executive participants, at such time the
Company achieves each of the following milestones:
(a) One-Million ($1,000,000.00) Dollars in gross revenues billed
in any given calendar month;
(b) Two-Million ($2,000,000.00) Dollars in gross revenues billed
in any given calendar month;
(c) Three-Million ($3,000,000.00) Dollars in gross revenues
billed in any given calendar month;
(d) Four-Million ($4,000,000.00) Dollars in gross revenues
billed in any given calendar month;
(e) Five-Million ($5,000,000.00) Dollars in gross revenues
billed in any given calendar month;
It is agreed by the parties, the Company will compensate the
Employee for interactive voice integrated with local dial tone
service methods with royalties. The Company such pay a royalty of
2% of net billing, exclusive to the integrated local voice
telephone system; such royalties will be perpetual even after
termination of this agreement for a period of seven years. Such
royalty's payment shall continue even if the system is sold or
sub-licensed to other companies.
3.3 Other Benefits
In addition to the above reference fixed and incentive
compensation which the Employee shall receive, pursuant to
subsections 3.1 and 3.2 of Section 3, the Employee shall receive
the reimbursements, compensation and benefits:
(a) Expenses. Employee is authorized hereunder to incur
reasonable expenses for promoting the business and affairs
of the Company, including, without limitation by
specification, expenses for travel, entertainment, lodging
and other similar items. The Company shall promptly
reimburse the 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 Employee having an aggregate face value of not
less than $250,000.00 (collectively, the "Policy"). In the
event that the Company purchases minimum deposit life
insurance and this Agreement is terminated with or 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 fully payable to
any beneficiary or beneficiaries designated at any time and
from time to time by the Employee, provided however, that
upon death of the Employee, the aggregate amount of premiums
paid on the Policy by the Company is repaid to the Company
by the beneficiary(s) of the Employee 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 the premiums paid thereon, in order
to insure Employee's compliance with this covenant. In no
event shall premiums on any policy or policies aggregate
more than $10,000.00 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 for the benefit of the Company.
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(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 $500.00 per
month excluding gas and maintenance.
(d) Medical Benefits. The Company shall provide and pay for in
its entirety the Employee with such family health and
medical benefits as the Company accords its Executive
officers.
(e) Vacations. Employee shall be entitled during each calendar
year, during the period of employment, to four 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 compensation during such vacation
periods.
(f) Sick Time. Employee is entitled, if needed, 20 fully
compensated sick per calendar year, defined as calendar year
January to December.
(g) Working Facilities. The Company shall furnish Employee with
a private office, secretarial help and other facilities,
services and staff as are suitable to his position to ensure
adequate performance of the duties of the position the
Employee holds in 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
the Company as the Chief Technical Officer, Executive Vice
President and Board Member of Progressive Telecommunications
Corporation. In addition, the Employee shall serve as Chief
Technical Officer, Executive Vice President and Member 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 full-time attention and effort to the
business of the Company during the term of 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 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:
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5.1 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 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
a ban from utilizing contacts, products developed, procedures and
other proprietary information.
5.2 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.
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
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 if accepted by the Company for
use.
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 the
employ of the Company to work for Employee or otherwise.
5.5 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.
6. Proprietary Property.
Subject to the provisions of Section 8.6 hereof:
6.1 The Employee agrees that any and all inventions or improvements
as well 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 subsection 6.2 below)
that are created, developed, conceived of or
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discovered either (I) by the Employee (solely or jointly with
others) in the course of employment, on Company time, with
Company 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 other 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 this agreement.
6.2 As used in this Agreement "Proprietary Property" means
proprietary technical information not 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 the 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 Section 7.1, in the event Employee
becomes temporarily disabled during the term of this Agreement,
Employee shall continue to receive one-hundred percent (100%) 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 percent (50%) 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
from work during a continuous period of disability as so
determined by the doctor herein above set forth. The term
"temporary disability" shall mean a disability which is not a
permanent disability as defined in Section 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 "permanent
disability" (as defined below) of Employee and the payment to
Employee of all unpaid accrued 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,
when added to all social security benefits received or to be
received by Employee as a result of the permanent disability,
equal to One-Hundred Thousand ($100,000.00) 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 ($15,000.00) 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 ($100,000.00) Thousand 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 ($100,000.00) Thousand
dollars per annum or, if Employee is receiving benefits under the
Disability Policy,
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the Company will supplement the insurance payments which Employee
is entitled to receive so that Employee receives a total of
One-Hundred Thousand ($100,000.00) 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
($100,000.00) dollars per annum; or (ii) fifty (50%) percent of
Employee's Fixed Compensation until Employee attains the age of
sixty-five (65). Once the Employee attains the age of 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 the age sixty-five (65).
Notwithstanding anything to the contrary set forth in this
Section 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 the total compensation from the date of the Employee's
return. In no event shall Employee be entitled to renew the term
of the Employment for the Extension Terms or any Annual Term if
the Employee becomes permanently disabled during either the
Initial Term or 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 the Employee is totally disabled, mentally or
physically, so as to be , prevented from engaging in 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 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 Sub-Sections 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 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
notice to the Company, or (b) for documented 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 permanent disability as defined in
Section 7.2 hereof, or (C) for cause. Termination "for cause"
shall mean termination only in the event the Employee is guilty
in a court of competent jurisdiction with respect to Section 5,
(I) intentional failure to perform duties hereunder, (ii) any act
of intentional dishonesty which has material adverse effect to
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 the Employment 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 Section 7
of this Agreement.
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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 calendar year 1999)
times One-Hundred Thousand ($100,000.00) 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 may be, plus the
product derived by multiplying each year of the Employee's with
the Company (commencing with the calendar year 1999) times
Seventy Five Thousand ($75,000.00) Dollars.
8.6 If the Employee dies during the term of the employment hereunder,
the Company shall promptly pay to the Employee's estate or
promptly distribute to the beneficiary or beneficiaries named by
the Employee all life insurance proceeds under the Policy
referred to in Section 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 Sections 5 and 6
hereof shall not apply with respect to and shall not be
enforceable against the Employee, in the event the Employee's
employment is terminated by the Company for any reason other than
those reasons expressly set forth in Section 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 Florida. 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.
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
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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 agreement in writing signed by the
Company and the Employee. This Agreement shall be governed by and construed
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 the day and year first written above.
Progressive Telecommunications Corporation: Employee:
/s/ Xxxxx X. Xxxxxxx /s/ Xxxxx X. Xxxxxx
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Authorized Corporate Signature Employee Signature
Xxxxx X. Xxxxxxx Xxxxx X. Xxxxxx
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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