U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-KSB/A
AMENDMENT NO. 1
TO
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995
Commission file number: 0-15818
Global Telemedia International, Inc.
f/k/a Phoenix Advanced Technologies
(Name of small business issuer specified in its charter)
Florida 64-0708107
(State or other jurisdiction (I.R.S. Employer
of incorporation or origination) Identification No.)
1121 Alderman Drive, Suite 200, Alpharetta, Georgia 30202
(Address of principal executive offices, including zip code)
(770) 667-6088
(Issuer's telephone number, including area code)
Securities registered under Section 12(b) of the Exchange Act:
Name of each exchange
Title of each class on which registered
None None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $0.004 par value per share
(Title of Class)
The undersigned registrant hereby amends the following items, financial
statements, exhibits of other portions of the ANNUAL REPORT ON FORM 10-KSB
THE FISCAL YEAR ENDED DECEMBER 31, 1995, as set forth in the pages attached
hereto:
1. Item 9 - Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act
2. Item 11 - Security Ownership of Certain Beneficial Owners and Management
3. Item 13 - Exhibit and Reports on Form 8-K.
4. Exhibits - Exhibit 10
(l) Employment Agreement of Geoffrey McClain
effective May 26, 1995
(m) Employment Agreement of Melissa Hart
effective May 26, 1995
(n) Amendment Number One (1) to Employment Contract of
Melissa D. Hart Dated November 1, 1995
(o) Employment Agreement of Herb Perman
effective October 1, 1995
Exhibit 27 (Financial Data Schedule).
<PAGE>
Item 9 - Directors, Executive Officers Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.
Compliance with Section 16 of the Securities Exchange Act of 1934. Section
16(a) of the Exchange Act requires the Company's directors and executive
officers and beneficial holders of more than 10% of the Company's Common Stock
to file with the Securities and Exchange Commission (the "Commission") initial
reports of ownership and reports of changes in ownership of such equity
securities of the Company. Based solely upon a review of such forms, or on
written representations form certain reporting persons that no other reports
were required for such persons, the Company believes that all reports required
pursuant to Section 16(a) with respect to its executive officers, directors
and 10% beneficial stockholders for the fiscal year ended December 31, 1995
were timely filed except as follows:
To the Company's knowledge, during the Fiscal Year Ended December 31 1995, (i)
Mr. Roderick McClain, the president and director failed through administrative
error, to timely file three transactions, which has since been corrected by
the filing of two reports; (ii) Mr. Geoffrey McClain, a director and
executive officer, failed through administrative error, to timely file one
transaction which has since been corrected by the filing of two reports; (iii)
Mr. Herb Perman, chief financial officer and director, failed through
administrative error to timely file one transaction which has since been
corrected by the filing of two reports; (iv) Ms. Melissa Hart, an executive
officer, failed through administrative error, to timely file one transaction,
which has since been corrected by the filing of two reports. To the Company's
knowledge, all other filing requirements were timely complied with."
<PAGE>
Item 11 - Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth information, as of April 15, 1996, with
respect to all stockholders known by the Company to be the beneficial owners
of more than 5% of its outstanding Common Stock, all directors, and all
directors and officers as a group. Except as noted below, each person has sole
voting and investment powers with respect to the shares shown.
Title of Class Amount/Nature/Percent
(Common of Beneficial
Shares) Name and Ownership(1) Class
Common Neil Berman, 6031 Town Colony Dr., #116, Boca Raton, FL 33433
491,134(2) 4.55%
Common J. Robert Cade, MD., 529 N.W. 58th St., Gainesville, FL 32607
941,012(3) 8.73%
Common Anthony R. Catinella, 4615 River Oaks Dr., Knoxville, TN 37920
300,000(4) 2.78%
Common Gregory Catinella, 720 Kings Ct., Bethlehem, GA
162,500(7) 1.09%
Common R. Wayne Johns, 11111 Houze Rd., #304, Roswell, GA 30076
26,250 0.24%
Common Stephen R. Kaas, 285 Dunwoody Creek Cir., Atlanta, GA 30350
100,000 0.93%
Common Geoffrey F. McClain, 7330 Mindello St., Miami, FL 33143
320,820 2.97%
Common Roderick A. McClain, 9265 Prestwick Club Dr., Duluth, GA 30350
1,290,729(6) 11.97%
Common Allyson Rodriguez, 9265 Prestwick Club Dr., Duluth, GA 30350
1,290,729 11.97%
Common Arnold L. Zimmerman, 1107 NW 57th St., Gainesville, FL 32605
319,221 2.96%
Common Herbert S. Perman, 1714 Johnson Ferry Rd., Atlanta, GA 30319
200,000(7) 1.85%
Common John L. Walsh, 500 Northridge Rd., #780, Atlanta, GA 30350
0 0.00%
Common Cy Caine, Address Unknown
0 0.00%
Common Keith Montgomery, Address Unknown
0 0.00%
Common Melissa Hart, 6048 Coventry Cir., Alpharetta, GA 30201
77,000(8) 0.01%
Common All Officers and DIrectors as a Group
3,737,532(3)(4)(5)(6)(7)(8) 34.65%
(1) Indicates record ownership unless otherwise indicated.
(2) Based on oral representation of shareholder; includes 284,550 shares
purchasable within 60 days (% of record 4.96%).
(3) Includes 3,500 shares purchasable within 60 days pursuant to exercise
of outstanding warrants.
(4) Includes spouse's shares (225,000).
(5) Includes shares purchasable pursuant to exercise of warrants (11,250).
(6) Includes spouse's shares (1,290,729).
(7) Includes 50,000 shares purchasable pursuant to exercise of outstanding
warrants.
(8) Includes 25,000 shares purchasable pursuant exercise of outstanding
warrants.
<PAGE>
Item 13 - Exhibit and Reports on Form 8-K
REPORT OF INDEPENDENT ACCOUNTANTS
Board of Directors and Shareholders
Global Telemedia International, Inc.
We have audited the accompanying consolidated statements of operations,
shareholders' equity and cash flows of Global TeleMedia International, Inc.
(f/k/a Phoenix Advanced Technology, Inc.) and subsidiaries for the year ended
December 31, 1994. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the
consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the results of operations and cash flows of
Global TeleMedia International, Inc. for the year ended December 31, 1994, in
conformity with generally accepted accounting principles.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note B,
the Company's current liabilities exceed its current assets and the Company
continues to incur losses from operations. Such uncertainties raise
substantial doubt about the Company's ability to continue as a going concern.
The financial statements do not include any adjustments relating to the
recoverability and classification of recorded assets, or the amounts and
classification of liabilities that might be necessary in the event the Company
cannot continue in existence.
/S/ Kuafman, Rossin & Co., P.A.
-------------------------------
KAUFMAN, ROSSIN & CO., P.A.
<PAGE>
In accordance with the requirements of the Exchange Act, the registrant has
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
GLOBAL TELEMEDIA INTERNATIONAL, INC.
f/k/a PHOENIX ADVANCED TECHNOLOGY, INC.
(Registrant)
/S/ Roderick A. McClain
- -------------------------------------------------
Roderick A. McClain, President & CEO and Director
Date: October 10, 1996
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on
the dates indicated.
/S/ Herbert S. Perman
- -------------------------------------------------------
Herbert S. Perman, Chief Financial Officer and Director
Date: October 10, 1996
<PAGE>
Exhibit 10
(l) Employment Agreement of Geoffrey F. McClain Effective May 26, 1995
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made as of the 1st day of September, 1995,
by and between GLOBAL TELEMEDIA INTERNATIONAL, INC., a Florida corporation
having a usual place of business at 500 Northridge Road, Suite 780, Atlanta,
Georgia 30350 (hereinafter "Employer") and GEOFFREY F. MCCLAIN of 5010 SW
73rd Terrace, Miami, Florida 33143, (hereinafter "Employee").
W I T N E S S E T H:
WHEREAS, Employer is a corporation engaged in the business of marketing
long distance telephone services and products and otherwise engages in
activities in the telecommunications industry; and
WHEREAS, Employee is an individual with extensive experience in the
business of sales and business negotiations and desires to be employed by
Employer in connection with its business activities; and
WHEREAS, Employee desires to provide his services to Employer.
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL UNDERTAKINGS OF THE
PARTIES AND OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY
OF WHICH IS ACKNOWLEDGED BY, BETWEEN AND AMONG THE PARTIES, THE PARTIES HERETO
HEREBY AGREE AS FOLLOWS:
1. Employment and Term
1.1 Employer hereby employs Employee and Employee hereby accepts
employment in the capacity of Senior Vice President of the Employer, for the
period commencing with the date of this Agreement and ending (subject to
earlier termination pursuant to this Agreement) thirty-six (36) months
thereafter on the terms, conditions and provisions as set forth in this
Agreement.
1.2 Employee shall, to the best of his abilities, devote his full
business time, energy and attention to the faithful and diligent performance
of his services to Employer as set forth in this Agreement and as the Chief
Executive Officer of Employer may from time to time require and in accordance
with all applicable business policies of Employer. Employee shall perform
such services at the direction of and report to the Chief Executive Officer
of Employer.
2. Compensation.
2.1 For all services rendered hereunder, Employer agrees to pay to
Employee and Employee agrees to accept from Employer, annual base
compensation computed at the rate of Sixty Five Thousand Dollars ($65,000.00)
per annum during the term of Employee's employment, prorated based on the
period of actual service and payable in accordance with Employer's standard
payroll policies. Additionally, Employee shall receive a 3% commission
override on all business personally consummated on behalf of the company. The
Board of Directors of Employer may increase Employee's compensation from time
to time and will review Employee's performance hereunder and his compensation
therefor in accordance with principles and practices generally applicable to
Employer's employees. Employee shall further receive 25,000 shares of the
Common Stock of Global TeleMedia International, Inc. (GTMI) upon execution of
this Agreement and an additional 25,000 shares on the six (6) month
anniversary date of execution.
2.2 Employer shall provide Employee with family medical insurance
commensurate with that provided to other Executive Officers of Employer at
this time, and if medical insurance benefits are added by Employer for other
Executive Officers, corresponding benefits will be added for Employee.
2.3 Employer agrees that it shall, in accordance with applicable
tax laws and Employer's policies relating to reimbursed expenses for its
employees of comparable standing, reimburse Employee for all reasonable
business expenses incurred by him during the term of his employment hereunder
in connection with the performance of services hereunder. It is further
understood that the Employer shall provide Employee with a corporate
apartment during the term of this Agreement if Employee's employment requires
that he spend more than seven (7) days per month in the Employer's
headquarters in Atlanta, Georgia.
2.4 In addition to the annual base compensation set forth above,
Employee shall receive bonus compensation as follows:
(a) Employee shall receive, if earned, stock bonus compensation
in accordance with the following terms:
(i) For the purposes of this paragraph, the term "Gross
Monthly Revenues" means all revenues and income actually received by the
Company during the calendar month in question from its business operations,
less and except sales taxes, excise taxes and other taxes collected from
consumers or other payors which must be, in turn, paid over directly to any
federal, state or local taxing authority or agency.
(ii) For the purposes of this paragraph, the term "Base
Gross Monthly Revenues" shall mean the sum of Four Hundred Fifty Thousand
Dollars ($450,000.00).
(iii) Each calendar month during the term of this
Agreement, the Gross Monthly Revenues of the Company for such month shall be
calculated and the Company shall place 100,000 shares of its common stock
into a fund (the "Executive Stock Bonus Compensation Fund") for each
additional full $250,000.00 increment by which Gross Monthly Revenues of the
Company for such calendar month in question exceed the Base Gross Monthly
Revenues. For example, and for illustration purposes only:
(a) If in August of 1995, the Company were to have
$550,000.00 of Gross Monthly Revenues, no shares of Company common stock would
be placed in the Executive Stock Bonus Compensation Fund with respect to such
month;
(b) If in September of 1995, the Company were to
have $750,000.00 of Gross Monthly Revenues, 100,000 shares of Company common
stock would be placed in the Executive Stock Bonus Compensation Fund with
respect to such month; and
(c) If in October of 1995, the Company were to have
$1,000,000.00 of Gross Monthly Revenues, an additional 100,000 shares of
Company Common Stock would be placed in the Executive Stock Bonus Compensation
Fund with respect to such month.
(iv) The Employee shall receive as his Executive Stock
Bonus Compensation payment under this Agreement with respect to each calendar
month while this Agreement is in effect a percentage to be determined of the
shares of Company common stock placed in the Executive Stock Bonus Compensation
Fund with respect to such month, which shares shall be distributed to Employee
on or before the 15th day of the following month. For example, using for
illustration purposes only the figures set forth in the example in (c) above,
Employee would receive as his Executive Stock Bonus Compensation payment zero
(0) shares of Company common stock with respect to September of 1995 (payable
in October of 1995), and a to be determined amount shares of Company common
stock with respect to October of 1995 (payable in November of 1995), if the
Company would have actual Gross Monthly Revenues as hypothesized in such
example.
(v) Employee understands that other executive officers
of Company will also be sharing in the Executive Stock Bonus Compensation Fund
shares, that the Company's Board of Directors shall determine which executive
officers shall be eligible from time to time to share in such Executive Stock
Bonus Compensation Fund shares, that the Company has no obligation to have
100% of the Executive Stock Bonus Compensation Fund shares shared or
distributed at any time in view of the fact that the Company reserves the
right to retain certain percentages in the Executive Stock Bonus Compensation
Fund for yet undetermined executive officers, that Employee's percentage will
not be increased except by action of the Company's Board of Directors, and that
Employee's percentage represents the maximum percentage of shares in the
Executive Stock Bonus Compensation Fund to which Employee is entitled at any
time even if all shares in such Executive Stock Bonus Compensation Fund are
not distributed. The Company shall have the right to withdraw any
undistributed common shares from the Employee Stock Bonus Compensation Fund
at any time when the same are not shared to the extent of 100%.
(vi) It is understood and agreed that the common shares
placed in the Executive Stock Bonus Compensation Fund and distributed to
Employee may be unregistered shares, the sale or transferability of which is
restricted and limited by Federal and State Securities laws. The Employee
agrees to comply with all Federal and State Securities laws in any transfer
or sale of shares so received by the Employee and the Employee acknowledges
that the Company has no obligation to register any such unregistered common
shares distributed to the Employee.
All shares of GTMI common stock to be delivered hereunder in the event
Employee becomes entitled to the same pursuant to the preceding provisions are
restricted stock which shall not be marketable or transferable by Employee at
such time. Employee represents that he is acquiring such shares for
investment and that he will not sell, assign, transfer, pledge, convey or
hypothecate any of the same until they are registered and no longer
restricted. Each share of GTMI common stock delivered to Employee pursuant
hereto shall bear the following restrictive legend:
The securities represented by this certificate have been acquired
pursuant to an investment representation on the part of Employee and have not
been registered under the Securities Acts of any sate in reliance on
exemptions contained therein or the in applicability thereof, and have not
been registered under the Securities Act of 1933 (the 1933 Act) in reliance on
exemptions therefrom. Said securities shall not be sold, pledged,
hypothecated, donated, or otherwise transferred, whether or not for
consideration, by Employee until they are duly registered under applicable
federal and state securities laws except upon the issuance to Global TeleMedia
International, Inc. (the Company), of a favorable opinion of its counsel
and/or the submission to the Company of such other evidence as may be
satisfactory to counsel of the Company, in either case to the effect that any
such transfer shall not be in violation of the 1933 Act, as amended, and
applicable state securities law.
It being the parties' desire to reduce the Company's expenses by
coordinating the securities registration(s) contemplated herein with the
filing of the Company's annual report on Form 10-KSB, on or before April 15,
1996, April 15, 1997 and then April 15, 1998 (if applicable), if Employee is
not then in breach of this Agreement, Employer shall cause the Company to
file a Registration Statement to register any shares which have been
transferred to the Employee pursuant to this subparagraph which have not been
previously registered and shall cause Company to use its best efforts to make
such Registration Statement become effective at the earliest time possible.
Upon appropriate federal and state registration, the restrictive legend set
forth above will be removed. Prior to such time Employer and the Company
agree that Employee shall not be barred from making bona fide hypothecations
or pledges of any shares transferred hereunder provided such pledges or
hypothecations are to unrelated third parties, are made subject tot he
restrictive legend and are not made for the purpose of avoiding either federal
or state securities laws. The Company will pay all costs associated with the
filing of such Registration Statement.
3. Termination.
3.1 This Agreement and Employee's employment hereunder shall
immediately terminate, and all payments hereunder shall cease, except to the
extent then accrued, upon the death of Employee.
3.2 Employer shall have the right to terminate this Agreement and
Employee's employment hereunder:
(a) In the event Employee shall become "disabled" for more than
six (6) months in any twelve (12) month period during the term hereof,
Employer shall have the right to terminate this Agreement as of the last day
of the month following the month in which Employer shall give notice to
Employee of its intention to terminate this Agreement because of such
disability. "Disability" shall mean the Employee's inability, due to sickness
or injury, to perform effectively his duties hereunder; or
(b) Immediately upon the determination of the Board of
Directors of Chief Executive Officer that Employee has engaged or failed to
engage in activities, such as Employee's failure to satisfactorily perform and
carry out his duties and responsibilities under, or the breach of any of the
terms of, this Agreement, which in the sole discretion of the Board of
Directors or Chief Executive Officer would make it unreasonable to require
Employer to retain Employee in its employ; or
(c) Immediately upon Employee's being found guilty by a court of
competent jurisdiction of any felony; or his being found guilty of any other
type of crime involving fraud, dishonesty, or embezzlement; or in the event of
Employee's willfully aiding a competitor of Employer to the detriment of
Employer; or in the event of Employee's committing an act of moral turpitude;
or in the event of Employee's repeated alcohol, drug or other substance abuse;
or in the vent Employee shall willfully or maliciously engage in any conduct
which as a material adverse effect on Employer; or
(d) Upon mutual agreement of the parties.
3.3 Employee may terminate this Agreement upon (1) a material
adverse change in Employee's terms of employment without Employee's consent or
(11) a material breach of the terms hereof by Employer. For the purpose of
this Agreement, "a material adverse change in Employee's terms of employment"
shall mean any demotion from the position of Chief Executive Officer.
3.4 In the event of (1) the termination by Employer by Employee's
employment hereunder pursuant to Section 3.2(a) or 3.2(b) hereof, (ii) the
termination by Employee of his employment hereunder for material adverse
change in his terms of employment (as defined in Section 3.3 hereof) or (iii)
a material breach of the terms hereof by Employer, Employer shall continue
for the period set forth below to pay to Employee the base salary compensation
set forth in Section 2.1, and Employer shall pay Employee any cash or stock
bonus compensation which is earned and accrued through but remains unpaid
at the date of any such termination (but no additional bonus compensation
amounts shall accrue or be payable after the date of any such termination).
The base salary compensation pay provided for herein shall remain in effect
under the circumstances provided for in this Section 3.4 until the end of the
original term hereof specified in Section 1.1 above unless termination occurs
under Section 3.2(b), in which case the base salary compensation pay provided
for herein shall remain in effect only for the lesser of: (a) the end of the
original term hereof specified in Section 1.1 above or (b) ninety (90) days
following such termination. The base salary provided for in Section 2.1 and
the termination salary or compensation required pursuant to this Agreement to
be paid to Employee during any period of disability, including the period of
disability following Employee's termination of employment, shall be reduced
by the amount of any disability insurance benefits paid to Employee derived
form disability insurance policies paid for by Employer.
3.5 In the event of the termination of Employee's employment pursuant
to Section 3.2(c) or 3.2(d) or the termination of employment by Employee for
reason other than as set forth in Section 3.3 herein, all rights and interests
of Employee to salary, reimbursement, bonus compensation (whether cash or
stock) and other benefits (if any) granted under this Agreement shall cease
immediately; provided, however, Employee shall be entitled to receive any
accrued and earned but unpaid base salary under Section 2.1 relating to the
period prior to such termination.
3.6 In the event of Employee's employment due to change in control
of the company, Employee shall be paid the sum of $25,000 in cash and issued
the amount of 50,000 shares of the common stock of the company.
4. Covenant Not To Compete or Solicit. During the term of Employee's
employment with Employer and if Employee chooses not to renew this Agreement
at its expiration, this covenant not to compete will remain in effect for a
period of two (2) years following the termination of his employment with
Employer for whatever reason other than default by Employer, Employee agrees
that within the contiguous forty-eight states of the United States of America,
Employee will not without the consent of Employer: (a) as an individual
proprietor, partner, stockholder, officer, principal, agent, employee,
supervisor, manager, consultant, guarantor, creditor, lender, co-endorser or
in any other capacity whatsoever, own, participate in the ownership of,
manage, operate, exercise any control over, render services to, or engage in
any of the foregoing for, any business, firm, corporation, partnership or
other entity which operates a business similar to or competitive with the
business of Employer, including but not limited to any long distance telephone
services or any telecommunications-related business offered or engaged in by
Employer at such time; (b) solicit any business from any customer or clients
of Employer at such time; (c) in any manner, whether directly or indirectly,
seek to persuade any director, officer or other employee of Employer to
discontinue their employment or relationship with Employer in order to become
employed or involved in any business activity similar to or competitive with
the business of Employer at such time, nor will Employee solicit or retain any
such person for such purpose.
5. Confidential Information. Employee hereby agrees, both during the
term of his employment with Employer and at any time after the termination
thereof for any reason, not to disclose or divulge to third parties any of the
trade secrets or other confidential or proprietary information of Employer,
knowledge of which was acquired by Employee during the term of Employee's
employment by Employer, and which trade secrets or confidential or proprietary
information are material to the conduct of the business of Employer. The
term "third party" as used herein shall not include officers, directors,
employees, agents, affiliates or representatives of Employer. No information
can be considered a trade secret or confidential proprietary information
subject to this paragraph if the same is otherwise in the public domain
(provided that if such information is in the public domain solely by reason of
Employee's having disclosed the same in violation of this Agreement, such
information shall be a trade secret or confidential proprietary information
hereunder). Specifically, but not by way of limitation, information is a
trade secret or confidential proprietary information subject to this paragraph
if the same is a unique process or method material to the conduct of
Employer's business, or if the same is a customer list or similar list of
parties engaged in business with Employer.
6. Inventions, Copyrights, and Processes. The Employee hereby agrees to
transfer and to assign to Employer all of the right, title and interest of the
Employee in and to all inventions and improvements thereto, and all written
materials, made or conceived by the Employee solely or jointly, in whole or
in part, during the term hereof which relate to the business of Employer and
which, in the case of inventions and improvements thereto, are the subject of
the grant of a United States or foreign patent relating thereto, and which, in
the case of written material, is actually copyrighted under the applicable
copyright laws of the United States of America. Employee shall obtain
copyright protection for all business plans, training materials, brochures,
advertising and promotional materials, form contracts, and customer and
representative applications used or developed by Employer. Employee shall,
during the term hereof, execute and deliver to Employer such formal transfers
and assignments as are reasonably required to give effect tot he provisions of
this paragraph.
Employee acknowledges that the above covenants and agreements contained
in Sections 4, 5 and 6 of this Agreement are a condition of his commencing and
continuing employment with Employer and are in part consideration of the
salary and such other compensation received by Employee from Employer. The
terms and conditions of Sections 4, 5 and 6 shall survive the termination of
Employee's employment by Employer and/or the termination of this Agreement.
In the event of the breach of Sections 4, 5 or 6, it shall be presumed that
irreparable harm has occurred for which any remedy at law is inadequate and
that Employer shall have the right to injunctive relief.
7. Miscellaneous.
7.1 If any section, subsection or other provision of this Agreement
is determined by a court of competent jurisdiction to be unenforceable for any
reason, such section, subsection or provision shall be deemed to be severable
and this Agreement shall otherwise continue in full force and effect. If the
term and/or scope of any provision contained in Section 4 or in Section 5 or
in Section 6 above are found to be invalid or unenforceable as written, the
Court or other body so ruling may reform and revise the offending provision as
necessary and appropriate to make the same a valid and enforceable provision.
7.2 This Agreement shall be binding upon the parties hereto, their
respective successors, assigns, legal representatives and any corporation
which acquires by merger, stock acquisition, asset sale or otherwise, all or
substantially all of the assets of Employer, and shall inure to the benefit of
the parties hereto and their respective successors, assigns and
representatives.
7.3 No modification, amendment or waiver of any of the provisions of
this Agreement shall be effective unless in writing and signed by both parties
thereto.
7.4 The failure to enforce at any time any of the provisions of this
Agreement or the failure to require at any time performance of any of the
provisions of this Agreement shall in no way be construed to be a waiver of
such provisions or to affect either the validity of this Agreement or any
part hereof, or the right thereafter to enforce each and every such provision
in accordance with the terms of this Employment Agreement.
7.5 This Agreement constitutes the entire understanding of the
parties hereto with respect to the terms of Employee's employment and his
compensation therefor and supersedes any and all prior oral or written
understandings between the parties as to such terms.
7.6 This Agreement is to be construed under and in accordance with
the laws of the State of Georgia. Jurisdiction and exclusive venue for
purposes of any action enforcing this Agreement shall vest and lie solely in
the courts of Fulton County, Georgia.
7.7 In the event of breach of this Agreement and in the event that
counsel is employed to enforce this Agreement, then the successful party shall
be entitled to its legal costs and reasonable attorney's fees for the
enforcement of this Agreement from the unsuccessful party.
7.8 Each party to this Agreement has been represented by Counsel,
and this Agreement has been reviewed by the parties and their counsel and each
party hereto has had the opportunity to participate in the drafting of this
Agreement. Therefore, any ambiguous language in this Agreement shall not be
construed against any party as the drafter of this Agreement.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals as
of the day and year first above written.
EMPLOYEE
/S/ Geoffrey F. McClain
------------------------
Geoffrey F. McClain
EMPLOYER:
GLOBAL TELEMEDIA INTERNATIONAL, INC.
By: /S/ Roderick A. McClain
-----------------------------
Roderick A. McClain
Its Chief Executive Officer
<PAGE>
(m) Employment Agreement of Melissa D. Hart Effective May 26, 1995
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made as of the 26th day of May, 1995, by
and between GLOBAL TELEMEDIA INTERNATIONAL, INC., a Florida corporation having
a usual place of business at 500 Northridge Road, Suite 780, Atlanta, Georgia
30350 (hereinafter "Employer") and MELISSA D. HART of 6048 Coventry Circle,
Alpharetta, Georgia 30201, (hereinafter "Employee").
W I T N E S S E T H:
WHEREAS, Employer is a corporation engaged in the business of marketing
long distance telephone services and products and otherwise engages in
activities in the telecommunications industry; and
WHEREAS, Employee is an individual with extensive experience in the
areas of executive support and regulatory affairs and desires to be employed
by Employer in connection with its business activities; and
WHEREAS, Employee desires to provide his services to Employer.
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL UNDERTAKINGS OF THE
PARTIES AND OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY
OF WHICH IS ACKNOWLEDGED BY, BETWEEN AND AMONG THE PARTIES, THE PARTIES HERETO
HEREBY AGREE AS FOLLOWS:
1. Employment and Term
1.1 Employer hereby employs Employee and Employee hereby accepts
employment in the capacity of Regulatory Affairs Director of the Employer, for
the period commencing with the date of this Agreement and ending (subject to
earlier termination pursuant to this Agreement) thirty-six (36) months
thereafter on the terms, conditions and provisions as set forth in this
Agreement.
1.2 Employee shall, to the best of his abilities, devote his full
business time, energy and attention to the faithful and diligent performance
of his services to Employer as set forth in this Agreement and as the Chief
Executive Officer of Employer may from time to time require and in accordance
with all applicable business policies of Employer. Employee shall perform
such services at the direction of and report to the Chief Executive Officer
of Employer.
2. Compensation.
2.1 For all services rendered hereunder, Employer agrees to pay to
Employee and Employee agrees to accept from Employer, annual base salary of
Thirty Thousand Dollars ($30,000.00) per annum during the term of Employee's
employment, prorated based on the period of actual service and payable in
accordance with Employer's standard payroll policies. The Board of Directors
of Employer may increase Employee's compensation from time to time and will
review Employee's performance hereunder and his compensation therefor in
accordance with principles and practices generally applicable to Employer's
employees. Employee shall also receive a Two Thousand Dollar ($2,000.00) per
quarter additional cash compensation for regulatory responsibilities, for a
total annual salary of Thirty Eight Thousand Dollars ($38,000).
2.2 Employer shall provide Employee with medical insurance
commensurate with that provided to other Executive Officers of Employer at
this time, and if medical insurance benefits are added by Employer for other
Executive Officers, corresponding benefits will be added for Employee.
2.3 Employer agrees that it shall, in accordance with applicable tax
laws and Employer's policies relating to reimbursed expenses for its
employees of comparable standing, reimburse Employee for all reasonable
business expenses incurred by him during the term of his employment hereunder
in connection with the performance of services hereunder.
2.4 In addition to the annual base compensation set forth above,
Employee shall receive bonus compensation as follows:
(a) Employee shall receive 20,000 shares of Global TeleMedia
International, Inc. ("GTMI") within fifteen (15) days of the date of the
execution of this Agreement; and
(b) Employee shall receive an additional 20,000 shares of GTMI
stock on January 1, 1996, and an additional 20,000 shares if there is a change
in control; and
(c) Employee shall receive stock bonus compensation payments in
accordance with the following terms:
(i) For the purposes of this paragraph, the term "Gross
Monthly Revenues" means all revenues and income actually received by the
Company during the calendar month in question from its business operations,
less and except sales taxes, excise taxes and other taxes collected from
consumers or other payors which must be, in turn, paid over directly to any
federal, state or local taxing authority or agency.
(ii) For the purposes of this paragraph, the term "Base
Gross Monthly Revenues" shall mean the sum of Four Hundred Fifty Thousand
Dollars ($450,000.00).
(iii) Each calendar month during the term of this
Agreement, the Gross Monthly Revenues of the Company for such month shall be
calculated and the Company shall place 100,000 shares of its common stock into
a fund (the "Executive Stock Bonus Compensation Fund") for each additional
full $250,000.00 increment by which Gross Monthly Revenues of the Company for
such calendar month in question exceed the Base Gross Monthly Revenues. For
example, and for illustration purposes only:
(iv) If in August of 1995, the Company were to have
$550,000.00 of Gross Monthly Revenues, no shares of Company common stock would
be placed in the Executive Stock Bonus Compensation Fund with respect to such
month;
(a) If in September of 1995, the Company were to
have $750,000.00 of Gross Monthly Revenues, 100,000 shares of Company common
stock would be placed in the Executive Stock Bonus Compensation Fund with
respect to such month; and
(b) If in October of 1995, the Company were to have
$1,000,000.00 of Gross Monthly Revenues, an additional 100,000 shares of
Company Common Stock would be placed in the Executive Stock Bonus Compensation
Fund with respect to such month.
(v) The Employee shall receive as his Executive Stock
Bonus Compensation payment under this Agreement with respect to each calendar
month while this Agreement is in effect a percentage to be determined of the
shares of Company common stock placed in the Executive Stock Bonus
Compensation Fund with respect to such month, which shares shall be
distributed to Employee on or before the 15th day of the following month. For
example, using for illustration purposes only the figures set forth in the
example in (c) above, Employee would receive as his Executive Stock Bonus
Compensation payment zero (0) shares of Company common stock with respect to
September of 1995 (payable in October of 1995), and a to be determined number
of shares of Company common stock with respect to October of 1995 (payable in
November of 1995), if the Company would have actual Gross Monthly Revenues as
hypothesized in such example.
(vi) Employee understands that other executive officers
of Company will also be sharing in the Executive Stock Bonus Compensation Fund
shares, that the Company's Board of Directors shall determine which executive
officers shall be eligible from time to time to share in such Executive Stock
Bonus Compensation Fund shares, that the Company has no obligation to have
100% of the Executive Stock Bonus Compensation Fund shares shared or
distributed at any time in view of the fact that the Company reserves the
right to retain certain percentages in the Executive Stock Bonus Compensation
Fund for yet undetermined executive officers, that Employee's percentage will
not be increased except by action of the Company's Board of Directors, and
that Employee's percentage represents the maximum percentage of shares in the
Executive Stock Bonus Compensation Fund to which Employee is entitled at any
time even if all shares in such Executive Stock Bonus Compensation Fund are
not distributed. The Company shall have the right to withdraw any
undistributed common shares from the Employee Stock Bonus Compensation Fund at
any time when the same are not shared to the extent of 100%.
(vii) It is understood and agreed that the common shares
placed in the Executive Stock Bonus Compensation Fund and distributed to
Employee may be unregistered shares, the sale or transferability of which is
restricted and limited by Federal and State Securities laws. The Employee
agrees to comply with all Federal and State Securities laws in any transfer
or sale of shares so received by the Employee and the Employee acknowledges
that the Company has no obligation to register any such unregistered common
shares distributed to the Employee.
All shares of GTMI common stock to be delivered hereunder in the event
Employee becomes entitled to the same pursuant to the preceding provisions are
restricted stock which shall not be marketable or transferable by Employee at
such time. Employee represents that he is acquiring such shares for
investment and that he will not sell, assign, transfer, pledge, convey or
hypothecate any of the same until they are registered and no longer
restricted. Each share of GTMI common stock delivered to Employee pursuant
hereto shall bear the following restrictive legend:
The securities represented by this certificate have been acquired
pursuant to an investment representation on the part of Employee and have not
been registered under the Securities Acts of any sate in reliance on
exemptions contained therein or the in applicability thereof, and have not
been registered under the Securities Act of 1933 (the 1933 Act) in reliance
on exemptions therefrom. Said securities shall not be sold, pledged,
hypothecated, donated, or otherwise transferred, whether or not for
consideration, by Employee until they are duly registered under applicable
federal and state securities laws except upon the issuance to Global
TeleMedia International, Inc. (the Company), of a favorable opinion of its
counsel and/or the submission to the Company of such other evidence as may be
satisfactory to counsel of the Company, in either case tot he effect that any
such transfer shall not be in violation of the 1933 Act, as amended, and
applicable state securities law.
It being the parties' desire to reduce the Company's expenses by
coordinating the securities registration(s) contemplated herein with the
filing of the Company's annual report on Form 10-KSB, on or before April
15, 1996, April 15, 1997 and then April 15, 1998 (if applicable), if Employee
is not then in breach of this Agreement, Employer shall cause the Company
to file a Registration Statement to register any shares which have been
transferred to the Employee pursuant to this subparagraph which have not
been previously registered and shall cause Company to use its best efforts
to make such Registration Statement become effective at the earliest time
possible. Upon appropriate federal and state registration, the restrictive
legend set forth above will be removed. Prior to such time Employer and
the Company agree that Employee shall not be barred from making bona fide
hypothecations or pledges of any shares transferred hereunder provided
such pledges or hypothecations are to unrelated third parties, are made
subject tot he restrictive legend and are not made for the purpose of
avoiding either federal or state securities laws. The Company will pay
all costs associated with the filing of such Registration Statement.
3. Termination.
3.1 This Agreement and Employee's employment hereunder shall
immediately terminate, and all payments hereunder shall cease, except to the
extent then accrued, upon the death of Employee.
3.2 Employer shall have the right to terminate this Agreement and
Employee's employment hereunder:
(a) In the event Employee shall become "disabled" for more than
six (6) months in any twelve (12) month period during the term hereof,
Employer shall have the right to terminate this Agreement as of the last day
of the month following the month in which Employer shall give notice to
Employee of its intention to terminate this Agreement because of such
disability. "Disability" shall mean the Employee's inability, due to sickness
or injury, to perform effectively his duties hereunder; or
(b) Immediately upon the determination of the Board of Directors
of Chief Executive Officer that Employee has engaged or failed to engage in
activities, such as Employee's failure to satisfactorily perform and carry out
his duties and responsibilities under, or the breach of any of the terms of,
this Agreement, which in the sole discretion of the Board of Directors or
Chief Executive Officer would make it unreasonable to require Employer to
retain Employee in its employ; or
(c) Immediately upon Employee's being
found guilty by a court of competent jurisdiction of any felony; or his
being found guilty of any other type of crime involving fraud, dishonesty,
or embezzlement; or in the event of Employee's willfully aiding a
competitor of Employer to the detriment of Employer; or in the event of
Employee's committing an act of moral turpitude; or in the event of
Employee's repeated alcohol, drug or other substance abuse; or in the
vent Employee shall willfully or maliciously engage in any conduct which
as a material adverse effect on Employer; or
(d) Upon mutual agreement of the parties.
3.3 Employee may terminate this Agreement upon (1) a material
adverse change in Employee's terms of employment without Employee's consent
or (11) a material breach of the terms hereof by Employer. For the purpose of
this Agreement, "a material adverse change in Employee's terms of employment"
shall mean any demotion from the position of Chief Executive Officer.
3.4 In the event of (1) the termination by Employer by Employee's
employment hereunder pursuant to Section 3.2(a) or 3.2(b) hereof, (ii) the
termination by Employee of his employment hereunder for material adverse
change in his terms of employment (as defined in Section 3.3 hereof) or (iii)
a material breach of the terms hereof by Employer, Employer shall continue for
the period set forth below to pay to Employee the base salary compensation
set forth in Section 2.1, and Employer shall pay Employee any cash or stock
bonus compensation which is earned and accrued through but remains unpaid at
the date of any such termination (but no additional bonus compensation amounts
shall accrue or be payable after the date of any such termination). The base
salary compensation pay provided for herein shall remain in effect under the
circumstances provided for in this Section 3.4 until the end of the original
term hereof specified in Section 1.1 above unless termination occurs under
Section 3.2(b), in which case the base salary compensation pay provided for
herein shall remain in effect only for the lesser of: (a) the end of the
original term hereof specified in Section 1.1 above or (b) ninety (90) days
following such termination. The base salary provided for in Section 2.1 and
the termination salary or compensation required pursuant to this Agreement to
be paid to Employee during any period of disability, including the period of
disability following Employee's termination of employment, shall be reduced by
the amount of any disability insurance benefits paid to Employee derived form
disability insurance policies paid for by Employer.
3.5 In the event of the termination of Employee's employment pursuant
to Section 3.2(c) or 3.2(d) or the termination of employment by Employee for
reason other than as set forth in Section 3.3 herein, all rights and interests
of Employee to salary, reimbursement, bonus compensation (whether cash or
stock) and other benefits (if any) granted under this Agreement shall cease
immediately; provided, however, Employee shall be entitled to receive any
accrued and earned but unpaid base salary under Section 2.1 relating to the
period prior to such termination.
4. Covenant Not To Compete or Solicit. During the term of Employee's
employment with Employer and if Employee chooses not to renew this Agreement
at its expiration, this covenant not to compete will remain in effect for a
period of two (2) years following the termination of his employment with
Employer for whatever reason other than default by Employer, Employee agrees
that within the contiguous forty-eight states of the United States of America,
Employee will not without the consent of Employer: (a) as an individual
proprietor, partner, stockholder, officer, principal, agent, employee,
supervisor, manager, consultant, guarantor, creditor, lender, co-endorser or
in any other capacity whatsoever, own, participate in the ownership of,
manage, operate, exercise any control over, render services to, or engage in
any of the foregoing for, any business, firm, corporation, partnership or
other entity which operates a business similar to or competitive with the
business of Employer, including but not limited to any long distance telephone
services or any telecommunications-related business offered or engaged in by
Employer at such time; (b) solicit any business from any customer or clients
of Employer at such time; (c) in any manner, whether directly or indirectly,
seek to persuade any director, officer or other employee of Employer to
discontinue their employment or relationship with Employer in order to become
employed or involved in any business activity similar to or competitive with
the business of Employer at such time, nor will Employee solicit or retain any
such person for such purpose.
5. Confidential Information. Employee hereby agrees, both during the
term of his employment with Employer and at any time after the termination
thereof for any reason, not to disclose or divulge to third parties any of the
trade secrets or other confidential or proprietary information of Employer,
knowledge of which was acquired by Employee during the term of Employee's
employment by Employer, and which trade secrets or confidential or proprietary
information are material to the conduct of the business of Employer. The
term "third party" as used herein shall not include officers, directors,
employees, agents, affiliates or representatives of Employer. No information
can be considered a trade secret or confidential proprietary information
subject to this paragraph if the same is otherwise in the public domain
(provided that if such information is in the public domain solely by reason of
Employee's having disclosed the same in violation of this Agreement, such
information shall be a trade secret or confidential proprietary information
hereunder). Specifically, but not by way of limitation, information is a
trade secret or confidential proprietary information subject to this paragraph
if the same is a unique process or method material to the conduct of
Employer's business, or if the same is a customer list or similar list of
parties engaged in business with Employer.
6. Inventions, Copyrights, and Processes. The Employee hereby agrees to
transfer and to assign to Employer all of the right, title and interest of the
Employee in and to all inventions and improvements thereto, and all written
materials, made or conceived by the Employee solely or jointly, in whole or in
part, during the term hereof which relate to the business of Employer and
which, in the case of inventions and improvements thereto, are the subject of
the grant of a United States or foreign patent relating thereto, and which, in
the case of written material, is actually copyrighted under the applicable
copyright laws of the United States of America. Employee shall obtain
copyright protection for all business plans, training materials, brochures,
advertising and promotional materials, form contracts, and customer and
representative applications used or developed by Employer. Employee shall,
during the term hereof, execute and deliver to Employer such formal transfers
and assignments as are reasonably required to give effect tot he provisions of
this paragraph.
Employee acknowledges that the above covenants and agreements contained
in Sections 4, 5 and 6 of this Agreement are a condition of his commencing and
continuing employment with Employer and are in part consideration of the
salary and such other compensation received by Employee from Employer. The
terms and conditions of Sections 4, 5 and 6 shall survive the termination of
Employee's employment by Employer and/or the termination of this Agreement.
In the event of the breach of Sections 4, 5 or 6, it shall be presumed that
irreparable harm has occurred for which any remedy at law is inadequate and
that Employer shall have the right to injunctive relief.
7. Miscellaneous.
7.1 If any section, subsection or other provision of this Agreement
is determined by a court of competent jurisdiction to be unenforceable for any
reason, such section, subsection or provision shall be deemed to be severable
and this Agreement shall otherwise continue in full force and effect. If the
term and/or scope of any provision contained in Section 4 or in Section 5 or
in Section 6 above are found to be invalid or unenforceable as written, the
Court or other body so ruling may reform and revise the offending provision as
necessary and appropriate to make the same a valid and enforceable provision.
7.2 This Agreement shall be binding upon the parties hereto, their
respective successors, assigns, legal representatives and any corporation
which acquires by merger, stock acquisition, asset sale or otherwise, all or
substantially all of the assets of Employer, and shall inure to the benefit of
the parties hereto and their respective successors, assigns and representatives.
7.3 No modification, amendment or waiver of any of the provisions of
this Agreement shall be effective unless in writing and signed by both parties
thereto.
7.4 The failure to enforce at any time any of the provisions of this
Agreement or the failure to require at any time performance of any of the
provisions of this Agreement shall in no way be construed to be a waiver of
such provisions or to affect either the validity of this Agreement or any
part hereof, or the right thereafter to enforce each and every such provision
in accordance with the terms of this Employment Agreement.
7.5 This Agreement constitutes the entire understanding of the
parties hereto with respect to the terms of Employee's employment and his
compensation therefor and supersedes any and all prior oral or written
understandings between the parties as to such terms.
7.6 This Agreement is to be construed under and in accordance with
the laws of the State of Georgia. Jurisdiction and exclusive venue for
purposes of any action enforcing this Agreement shall vest and lie solely in
the courts of Fulton County, Georgia.
7.7 In the event of breach of this Agreement and in the event that
counsel is employed to enforce this Agreement, then the successful party shall
be entitled to its legal costs and reasonable attorney's fees for the
enforcement of this Agreement from the unsuccessful party.
7.8 Each party to this Agreement has been represented by Counsel,
and this Agreement has been reviewed by the parties and their counsel and each
party hereto has had the opportunity to participate in the drafting of this
Agreement. Therefore, any ambiguous language in this Agreement shall not be
construed against any party as the drafter of this Agreement.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals as
of the day and year first above written.
EMPLOYEE
/S/ Melissa D. Hart
--------------------
Melissa D. Hart
EMPLOYER:
GLOBAL TELEMEDIA INTERNATIONAL, INC.
By: /S/ Roderick A. McClain
-----------------------------
Roderick A. McClain
Its Chief Executive Officer
<PAGE>
(n) Amendment Number One (1) to Employment Contract of Melissa D. Hart
Dated November 1, 1995
AMENDMENT NUMBER ONE (1)
TO
Employment Contract Dated May 26, 1995
Between
Global TeleMedia International, Inc.
and
Melissa D. Hart
This Amendment Number One (1) dated November 1, 1995 to that certain
Employment Agreement dated May 26, 1995 by and between Global TeleMedia
International, Inc. and Melissa D. Hart shall be amended as follows
Article 2. shall be amended as follows
2. Compensation.
2.1 For all services rendered hereunder, Employer agrees to pay to
Employee and Employee agrees to accept from Employer, annual base salary of
Thirty Two Thousand Dollars ($32,000.00) per annum during the term of
Employee's employment, prorated based on the period of actual service and
payable in accordance with Employer's standard payroll policies. The Board of
Directors of Employer may increase Employee's compensation from time to time
and will review Employee's performance hereunder and his compensation therefor
in accordance with principles and practices generally applicable to Employer's
employees. Employee shall also receive Four Thousand Dollar ($4,000.00)
per quarter additional cash compensation for regulatory responsibilities, for
a total annual salary of Thirty Eight Thousand Dollars ($48,000).
All other terms and conditions of the original agreement dated May 26, 1995
shall remain in full force and effect.
GLOBAL TELEMEDIA INTERNATIONAL, INC. MELISSA D. HART
INC.
By: /S/ Roderick A. McClain By: /S/ Melissa D. Hart
- -----------------------------------------
Its: President and Chief Executive Officer
<PAGE>
(o) Employment Agreement of Herbert S. Perman Effective May 26, 1995
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made as of the 1st day of October, 1995, by
and between GLOBAL TELEMEDIA INTERNATIONAL, INC., a Florida corporation having
a usual place of business at 500 Northridge Road, Suite 780, Atlanta, Georgia
30350 (hereinafter "Employer") and Herbert S. Perman of 1714 Johnson Ferry
Road, Atlanta, Georgia 30319, (hereinafter "Employee").
W I T N E S S E T H:
WHEREAS, Employer is a corporation engaged in the business of marketing
long distance telephone services and products and otherwise engages in
activities in the telecommunications industry; and
WHEREAS, Employee is an individual with extensive experience in the
business, financial and legal arenas and desires to be employed by Employer in
connection with its business activities; and
WHEREAS, Employee desires to provide his services to Employer.
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL UNDERTAKINGS OF THE
PARTIES AND OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY
OF WHICH IS ACKNOWLEDGED BY, BETWEEN AND AMONG THE PARTIES, THE PARTIES HERETO
HEREBY AGREE AS FOLLOWS:
1. Employment and Term
1.1 Employer hereby employs Employee and Employee hereby accepts
employment in the capacity of Chief Financial Officer of the Employer, for the
period commencing with the date of this Agreement and ending (subject to
earlier termination pursuant to this Agreement) thirty-six (36) months
thereafter on the terms, conditions and provisions as set forth in this
Agreement.
1.2 Employee shall, to the best of his abilities, devote his energy
and attention to the faithful and diligent performance of his services to
Employer as set forth in this Agreement and as the Chief Executive Officer of
Employer may from time to time require and in accordance with all applicable
business policies of Employer. Employee shall perform such services at the
direction of and report to the Chief Executive Officer of Employer.
1.3 During the first ninety (90) days hereof (October 1, 1995 -
December 31, 1995), Employee shall perform same functions as Chief Financial
Officer; however, due to other requirements, Employee shall perform as an
Independent Consultant, compensated at $22,875, paid semi-monthly at $3,812.50.
2. Compensation.
2.1 For all services rendered hereunder, Employer agrees to pay to
Employee and Employee agrees to accept from Employer, annual base compensation
computed at the rate of Eighty Five Thousand Dollars and No Cents ($85,000.00)
per annum during the term of Employee's employment, prorated based on the
period of actual service and payable in accordance with Employer's standard
payroll policies. The Board of Directors of Employer may increase Employee's
compensation from time to time and will review Employee's performance
hereunder and his compensation therefor in accordance with principles and
practices generally applicable to Employer's employees.
2.2 Employer shall provide Employee with family medical insurance
commensurate with that provided to other Executive Officers of Employer at
this time, and if medical insurance benefits are added by Employer for other
Executive Officers, corresponding benefits will be added for Employee.
2.3 Employer agrees that it shall, in accordance with applicable
tax laws and Employer's policies relating to reimbursed expenses for its
employees of comparable standing, reimburse Employee for all reasonable
business expenses incurred by him during the term of his employment hereunder
in connection with the performance of services hereunder.
2.4 In addition to the annual base compensation set forth above,
Employee shall receive bonus compensation as follows:
(a) Employee shall receive upon execution of this Agreement
100,000 shares of common stock of Global TeleMedia International, Inc.
("GTMI"). However, in the event Employee is terminated for cause under 3.2(b)
or 3.2(c) hereunder, shares shall be forfeited as follows:
During the period 10/1/95 - 12/31/95 - 60,000 shares
During the period 1/1/95 - 3/31/95 - 30,000 shares
(b) In addition, Employee shall receive stock bonus
compensation payments on Company generated one-plus long distance sales
(excluding any and all mergers and acquisitions) in accordance with the
following terms:
(i) For the purposes of this paragraph, the term "Gross
Monthly Revenues" means all revenues and income actually received by the
Company during the calendar month in question from its business operations,
less and except sales taxes, excise taxes and other taxes collected from
consumers or other payors which must be, in turn, paid over directly to any
federal, state or local taxing authority or agency.
(ii) For the purposes of this paragraph, the term "Base
Gross Monthly Revenues" shall mean the sum of Four Hundred Fifty Thousand
Dollars ($450,000.00).
(iii) Each calendar month during the term of this
Agreement, the Gross Monthly Revenues of the Company for such month shall be
calculated and the Company shall place 100,000 shares of its common stock
into a fund (the "Executive Stock Bonus Compensation Fund") for each new
additional full $250,000.00 increment by which Gross Monthly Revenues of the
Company for such calendar month in question exceed the Base Gross Monthly
Revenues. For example, and for illustration purposes only:
(a) If in August of 1995, the Company were to have
$550,000.00 of Gross Monthly Revenues, no shares of Company common stock would
be placed in the Executive Stock Bonus Compensation Fund with respect to such
month;
(b) If in September of 1995, the Company were to
have $750,000.00 of Gross Monthly Revenues, 100,000 shares of Company common
stock would be placed in the Executive Stock Bonus Compensation Fund with
respect to such month; and
(c) If in October of 1995, the Company were to
have $1,000,000.00 of Gross Monthly Revenues, an additional 100,000 shares of
Company Common Stock would be placed in the Executive Stock Bonus Compensation
Fund with respect to such month.
(iv) The Employee shall receive as his Executive Stock
Bonus Compensation payment under this Agreement with respect to each calendar
month while this Agreement is in effect a percentage to be determined of the
shares of Company common stock placed in the Executive Stock Bonus
Compensation Fund with respect to such month, which shares shall be
distributed to Employee on or before the 15th day of the following month. For
example, using for illustration purposes only the figures set forth in the
example in (a) and (c) above, Employee would receive as his Executive Stock
Bonus Compensation payment zero (0) shares of Company common stock with
respect to August, 1995 (payable in September, 1995), and a to be determined
number of shares of Company common stock with respect to October of 1995
(payable in November of 1995), if the Company would have actual Gross Monthly
Revenues as hypothesized in such example.
(v) Employee understands that other executive officers
of Company will also be sharing in the Executive Stock Bonus Compensation Fund
shares, that the Company's Board of Directors shall determine which executive
officers shall be eligible from time to time to share in such Executive Stock
Bonus Compensation Fund shares, that the Company has no obligation to have
100% of the Executive Stock Bonus Compensation Fund shares shared or
distributed at any time in view of the fact that the Company reserves the
right to retain certain percentages in the Executive Stock Bonus Compensation
Fund for yet undetermined executive officers, that Employee's percentage will
not be increased except by action of the Company's Board of Directors, and
that Employee's percentage represents the maximum percentage of shares in the
Executive Stock Bonus Compensation Fund to which Employee is entitled at any
time even if all shares in such Executive Stock Bonus Compensation Fund are
not distributed. The Company shall have the right to withdraw any
undistributed common shares from the Employee Stock Bonus Compensation Fund at
any time when the same are not shared to the extent of 100%.
(vi) It is understood and agreed that the common shares
placed in the Executive Stock Bonus Compensation Fund and distributed to
Employee may be unregistered shares, the sale or transferability of which is
restricted and limited by Federal and State Securities laws. The Employee
agrees to comply with all Federal and State Securities laws in any transfer or
sale of shares so received by the Employee and the Employee acknowledges that
the Company has no obligation to register any such unregistered common shares
distributed to the Employee.
All shares of GTMI common stock to be delivered hereunder in the event
Employee becomes entitled to the same pursuant to the preceding provisions are
restricted stock which shall not be marketable or transferable by Employee at
such time. Employee represents that he is acquiring such shares for
investment and that he will not sell, assign, transfer, pledge, convey or
hypothecate any of the same until they are registered and no longer
restricted. Each share of GTMI common stock delivered to Employee pursuant
hereto shall bear the following restrictive legend:
The securities represented by this certificate have been acquired
pursuant to an investment representation on the part of Employee and
have not been registered under the Securities Acts of any sate in reliance
on exemptions contained therein or the in applicability thereof, and have
not been registered under the Securities Act of 1933 (the 1933 Act) in
reliance on exemptions therefrom. Said securities shall not be sold, pledged,
hypothecated, donated, or otherwise transferred, whether or not for
consideration, by Employee until they are duly registered under applicable
federal and state securities laws except upon the issuance to Global TeleMedia
International, Inc. (the Company), of a favorable opinion of its counsel
and/or the submission to the Company of such other evidence as may be
satisfactory to counsel of the Company, in either case to the effect that any
such transfer shall not be in violation of the 1933 Act, as amended, and
applicable state securities law.
It being the parties' desire to reduce the Company's expenses by
coordinating the securities registration(s) contemplated herein with the
filing of the Company's annual report on Form 10-KSB, on or before April
15, 1996, April 15, 1997 and then April 15, 1998 (if applicable), if Employee
is not then in breach of this Agreement, Employer shall cause the Company
to file a Registration Statement to register any shares which have been
transferred to the Employee pursuant to this subparagraph which have not
been previously registered and shall cause Company to use its best efforts
to make such Registration Statement become effective at the earliest time
possible. Upon appropriate federal and state registration, the restrictive
legend set forth above will be removed. Prior to such time Employer and
the Company agree that Employee shall not be barred from making bona fide
hypothecations or pledges of any shares transferred hereunder provided such
pledges or hypothecations are to unrelated third parties, are made subject to
the restrictive legend and are not made for the purpose of avoiding either
federal or state securities laws. The Company will pay all costs associated
with the filing of such Registration Statement.
3. Termination.
3.1 This Agreement and Employee's employment hereunder shall
immediately terminate, and all payments hereunder shall cease, except to the
extent then accrued, upon the death of Employee.
3.2 Employer shall have the right to terminate this Agreement and
Employee's employment hereunder:
(a) In the event Employee shall become "disabled" for more than
six (6) months in any twelve (12) month period during the term hereof,
Employer shall have the right to terminate this Agreement as of the last day
of the month following the month in which Employer shall give notice to
Employee of its intention to terminate this Agreement because of such
disability. "Disability" shall mean the Employee's inability, due to sickness
or injury, to perform effectively his duties hereunder; or
(b) Immediately upon the determination of the Board of
Directors or Chief Executive Officer that Employee has engaged or failed to
engage in activities, such as Employee's failure to satisfactorily perform and
carry out his duties and responsibilities under, or the breach of any of the
terms of, this Agreement, which in the sole discretion of the Board of
Directors or Chief Executive Officer would make it unreasonable to require
Employer to retain Employee in its employ; or
(c) Immediately upon Employee's being found guilty by a court
of competent jurisdiction of any felony; or his being found guilty of any
other type of crime involving fraud, dishonesty, or embezzlement; or in the
event of Employee's willfully aiding a competitor of Employer to the detriment
of Employer; or in the event of Employee's committing an act of moral
turpitude; or in the event of Employee's repeated alcohol, drug or other
substance abuse; or in the vent Employee shall willfully or maliciously
engage in any conduct which as a material adverse effect on Employer; or
(d) Upon mutual agreement of the parties.
3.3 Employee may terminate this Agreement upon (1) a material
adverse change in Employee's terms of employment without Employee's consent
or (11) a material breach of the terms hereof by Employer. For the purpose
of this Agreement, "a material adverse change in Employee's terms of
employment" shall mean any demotion from the position of Chief Financial
Officer.
3.4 In the event of (i) the termination by Employer by Employee's
employment hereunder pursuant to Section 3.2(a) or 3.2(b) hereof, (ii) the
termination by Employee of his employment hereunder for material adverse
change in his terms of employment (as defined in Section 3.3 hereof) or (iii)
a material breach of the terms hereof by Employer, Employer shall continue for
the period set forth below to pay to Employee the base salary compensation
set forth in Section 2.1, and Employer shall pay Employee any cash, stock or
stock bonus compensation which is earned and accrued through but remains
unpaid at the date of any such termination (but no additional bonus
compensation amounts shall accrue or be payable after the date of any such
termination). The base salary compensation pay provided for herein shall
remain in effect under the circumstances provided for in this Section 3.4
until the end of the original term hereof specified in Section 1.1 above
unless termination occurs under Section 3.2(b), in which case the base salary
compensation pay provided for herein shall remain in effect only for the
lesser of: (a) the end of the original term hereof specified in Section 1.1
above or (b) ninety (90) days following such termination. The base salary
provided for in Section 2.1 and the termination salary or compensation
required pursuant to this Agreement to be paid to Employee during any period
of disability, including the period of disability following Employee's
termination of employment, shall be reduced by the amount of any disability
insurance benefits paid to Employee derived form disability insurance policies
paid for by Employer.
3.5 In the event of the termination of Employee's employment
pursuant to Section 3.2(c) or 3.2(d) or the termination of employment by
Employee for reason other than as set forth in Section 3.3 herein, all rights
and interests of Employee to salary, reimbursement, bonus compensation
(whether cash or stock) and other benefits (if any) granted under this
Agreement shall cease immediately; provided, however, Employee shall be
entitled to receive any accrued and earned but unpaid base salary under
Section 2.1 relating to the period prior to such termination.
4. Confidential Information. Employee hereby agrees, both during the
term of his employment with Employer and at any time after the termination
thereof for any reason, not to disclose or divulge to third parties any of the
trade secrets or other confidential or proprietary information of Employer,
knowledge of which was acquired by Employee during the term of Employee's
employment by Employer, and which trade secrets or confidential or proprietary
information are material to the conduct of the business of Employer. The term
"third party" as used herein shall not include officers, directors, employees,
agents, affiliates or representatives of Employer. No information can be
considered a trade secret or confidential proprietary information subject to
this paragraph if the same is otherwise in the public domain (provided that if
such information is in the public domain solely by reason of Employee's having
disclosed the same in violation of this Agreement, such information shall be
a trade secret or confidential proprietary information hereunder).
Specifically, but not by way of limitation, information is a trade secret or
confidential proprietary information subject to this paragraph if the same is
a unique process or method material to the conduct of Employer's business, or
if the same is a customer list or similar list of parties engaged in business
with Employer.
5. Inventions, Copyrights, and Processes. The Employee hereby agrees to
transfer and to assign to Employer all of the right, title and interest of the
Employee in and to all inventions and improvements thereto, and all written
materials, made or conceived by the Employee solely or jointly, in whole or
in part, during the term hereof which relate to the business of Employer and
which, in the case of inventions and improvements thereto, are the subject of
the grant of a United States or foreign patent relating thereto, and which, in
the case of written material, is actually copyrighted under the applicable
copyright laws of the United States of America. Employee shall obtain
copyright protection for all business plans, training materials, brochures,
advertising and promotional materials, form contracts, and customer and
representative applications used or developed by Employer. Employee shall,
during the term hereof, execute and deliver to Employer such formal transfers
and assignments as are reasonably required to give effect to the provisions of
this paragraph.
Employee acknowledges that the above covenants and agreements contained
in Sections 3, 4 and 5 of this Agreement are a condition of his commencing and
continuing employment with Employer and are in part consideration of the
salary and such other compensation received by Employee from Employer. The
terms and conditions of Sections 4, 5 and 6 shall survive the termination of
Employee's employment by Employer and/or the termination of this Agreement.
In the event of the breach of Sections 3, 4 and 5, it shall be presumed that
irreparable harm has occurred for which any remedy at law is inadequate and
that Employer shall have the right to injunctive relief.
6. Miscellaneous.
6.1 If any section, subsection or other provision of this Agreement
is determined by a court of competent jurisdiction to be unenforceable for any
reason, such section, subsection or provision shall be deemed to be severable
and this Agreement shall otherwise continue in full force and effect. If the
term and/or scope of any provision contained in Section 3 or in Section 4 or
in Section 6 above are found to be invalid or unenforceable as written, the
Court or other body so ruling may reform and revise the offending provision
as necessary and appropriate to make the same a valid and enforceable
provision.
6.2 This Agreement shall be binding upon the parties hereto, their
respective successors, assigns, legal representatives and any corporation
which acquires by merger, stock acquisition, asset sale or otherwise, all or
substantially all of the assets of Employer, and shall inure to the benefit of
the parties hereto and their respective successors, assigns and
representatives.
6.3 No modification, amendment or waiver of any of the provisions of
this Agreement shall be effective unless in writing and signed by both parties
thereto.
6.4 The failure to enforce at any time any of the provisions of this
Agreement or the failure to require at any time performance of any of the
provisions of this Agreement shall in no way be construed to be a waiver of
such provisions or to affect either the validity of this Agreement or any
part hereof, or the right thereafter to enforce each and every such provision
in accordance with the terms of this Employment Agreement.
6.5 This Agreement constitutes the entire understanding
of the parties hereto with respect to the terms of Employee's employment
and his compensation therefor and supersedes any and all prior oral or
written understandings between the parties as to such terms.
6.6 This Agreement is to be construed under and in accordance with
the laws of the State of Georgia. Jurisdiction and exclusive venue for
purposes of any action enforcing this Agreement shall vest and lie solely in
the courts of Fulton County, Georgia.
6.7 In the event of breach of this Agreement and in the event that
counsel is employed to enforce this Agreement, then the successful party shall
be entitled to its legal costs and reasonable attorney's fees for the
enforcement of this Agreement from the unsuccessful party.
6.8 Each party to this Agreement has been represented by Counsel,
and this Agreement has been reviewed by the parties and their counsel and each
party hereto has had the opportunity to participate in the drafting of this
Agreement. Therefore, any ambiguous language in this Agreement shall not be
construed against any party as the drafter of this Agreement.
6.9 This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof. It supersedes all
prior negotiations, letters and understandings relating to the subject matter
hereof.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals as
of the day and year first above written.
EMPLOYEE
/S/ Herbert S. Perman
----------------------
Herbert S. Perman
EMPLOYER:
GLOBAL TELEMEDIA INTERNATIONAL, INC.
By: /S/ Roderick A McClain
----------------------------
Roderick A. McClain
Its: President and Chief Executive Officer
<PAGE>
Exhibit - 27
(27) Financial Data Schedule
Cash 193,000.00
Securities 0.00
Receivables 15,000.00
Allowances 0.00
Inventory 0.00
Prepaid Exp. & Deposits 0.00
Current Assets 289,000.00
PP&E 150,000.00
Depreciation (71,000.00)
Total Assets 368,000.00
Current Liabilities 765,000.00
Bonds 0.00
Common 40,000.00
Preferred Mandatory 0.00
Preferred 0.00
Other-SE (437,000.00)
Total Liability-and-Equity 368,000.00
Sales 63,000.00
Total Revenues 2,864,000.00
CGS 56,000.00
Total Costs 4,320,000.00
Other Expenses 0.00
Loss Provision 0.00
Interest Expense 59,000.00
Income-Pretax (2,321,000.00)
Income Tax 0.00
Income Continuing (2,321,000.00)
Discontinued 0.00
Extraordinary 0.00
Changes 0.00
Net Income (2,321,000.00)
EPS-Primary (0.30)
EPS-Diluted (0.30)
