EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), dated as of May 3, 2000,
is entered into between PAUL SILVERSTEIN, residing at 32 Edgewood Avenue,
Larchmont, New York 10538 ("Executive"), and GLOBAL TELECOMMUNICATION SOLUTIONS,
INC., a Delaware corporation having its principal office at 317 Madison Avenue,
Suite 807, New York, NY 10017 ("Company").
WHEREAS, the Company and Executive desire to provide for the employment
of Executive by the Company on the terms set forth herein;
IT IS AGREED:
1. Employment, Duties and Acceptance.
1.1 The Company hereby employs Executive as its Chief Strategy
Officer to develop strategic business opportunities for the Company and assist
in developing a strategic plan for the Company. All of Executive's powers and
authority in any capacity shall at all times be subject to the reasonable
direction and control of the Company's Chairman of the Board or President.
1.2 The Chairman of the Board or President may assign to
Executive such other executive duties for the Company or any Affiliate (as
defined in Section 5.1) as are consistent with Executive's status as Chief
Strategy Officer.
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1.3 Executive accepts such employment and agrees to devote
substantially all of his business time, energies and attention to the
performance of his duties.
1.4 Executive's services under this Agreement shall be
performed primarily in and about the New York City metropolitan area, subject to
reasonable domestic and overseas travel on behalf of the Company.
2. Compensation and Benefits.
2.1 The Company shall pay to Executive a base salary
("Salary") at the aggregate rate of $125,000 per annum during the Employment
Term (as such term is defined in Section 3.1, below). Executive's Salary shall
be paid in equal, periodic installments, in accordance with the Company's normal
payroll procedures and shall be subject to withholding taxes and other normal
payroll deductions.
2.2 In addition to Executive's Salary, Executive may receive a
quarterly bonus commencing with the quarter ending June 30, 2000 as may be
awarded to him from time to time in the sole and absolute discretion of the
Board of Directors.
2.3 (a) As additional compensation for services to be rendered
by Executive hereunder, the Company shall grant to Executive options (the
"Options") to purchase 700,000 shares of Company Common Stock at the per share
exercise prices and vesting dates set forth in the schedule below. These Options
(i) are not granted under any plan, including the Company's 1994 Performance
Equity Plan; (ii) are evidenced by a Stock Option Agreement of
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even date herewith between the Company and Executive; and (iii) shall remain
exercisable for a period of five years after the date of vesting, except as
otherwise set forth in the Stock Option Agreement.
Number of Options Exercise Price Date Exercisable
250,000 $0.50 Immediately
200,000 $0.75 At such time as the
closing price of one
share of the Company's
Common Stock is equal to
or greater than $4.00 for
fifteen (15) consecutive
trading days
250,000 $1.50 At such time as the
closing price of one
share of the Company's
Common Stock is equal to
or greater than $7.00 for
fifteen (15) consecutive
trading days
(b) The Company agrees to include the shares underlying the
Option for sale and resale under any Form S-8 registration statement (and, if
necessary, Form S-3) filed by the Company after the execution of this Agreement,
and to maintain such registration for a period of two years longer than the end
of the vesting periods set forth below; provided the Company shall not be
obligated to maintain such registration if the Executive no longer has
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the right to exercise the Option or has exercised all of the Option and no
longer owns any of the shares received upon exercise.
2.4 Executive shall be entitled to such medical, dental,
disability, life insurance and other benefits (the "Benefits") and perquisites
no less favorable than such as are afforded to other senior executives of the
Company generally. Executive shall be entitled to three weeks of vacation in
each calendar year and to a reasonable number of other days off for religious
and personal reasons.
2.5 The Company will pay or reimburse Executive for all
transportation, hotel and other expenses reasonably incurred by Executive on
business trips and for all other ordinary and reasonable out-of-pocket expenses
actually incurred by him in the conduct of the business of the Company against
itemized vouchers submitted with respect to any such expenses approved in
accordance with customary procedures.
3. Term and Termination.
3.1 The term of this Agreement shall commence as of May 3,
2000 and shall continue until May 2, 2001 (the "Employment Term"), unless sooner
terminated or extended as herein provided.
3.2 If Executive dies during the term of this Agreement, this
Agreement shall thereupon terminate, except that the Company shall continue to
pay to the legal representative of Executive's estate the Salary under Section
2.1 hereof through the period ending on the earlier of the Termination Date or
the six-month anniversary of Executive's death.
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3.3 The Company, by notice to Executive, may terminate this
Agreement if Executive shall fail because of illness or incapacity to render,
for six consecutive months, services of the character contemplated by this
Agreement. Notwithstanding such termination, the Company shall continue to pay
to Executive his Salary under Section 2.1 hereof through the period ending on
the earlier of the Termination Date or the six-month anniversary of such
termination.
3.4 The Company, by notice to Executive, may terminate this
Agreement and Executive's employment with the Company for cause. As used herein,
"cause" shall mean: (a) the refusal or failure by Executive to carry out
specific legal directions of the Chairman of the Board or President which are of
a material nature and consistent with his status as Chief Strategy Officer, or
the refusal or failure by Executive to perform a material part of Executive's
duties hereunder; (b) fraudulent or dishonest action by Executive in his
relations with the Company or any of its subsidiaries or affiliates, or with any
customer or business contact of the Company or any of its subsidiaries or
affiliates ("dishonest" for these purposes shall mean Executive's knowingly or
recklessly making of a material misstatement or omission for his personal
benefit); or (c) the conviction of Executive of any crime involving an act of
moral turpitude. Notwithstanding the foregoing, no "cause" for termination shall
be deemed to exist with respect to Executive's acts described in clause (a)
above, unless the Company shall have given written notice to Executive
specifying the "cause" with reasonable particularity and, within five business
days after such notice, Executive shall not have cured or eliminated the problem
or thing giving rise to such "cause;" PROVIDED, HOWEVER, that a breach of clause
(a) above, involving the same or substantially similar actions or conduct for
which the Company previously gave notice of termination and with respect to
which, Executive satisfactorily cured, shall
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be grounds for termination for cause without any additional notice from the
Company. Notwithstanding such termination, the provisions of paragraph 4 shall
survive.
3.5 In the event of the termination of this Agreement by the
Company for any reason other than for "cause" (as defined in Section 3.4 above),
death (as provided in Section 3.2) or disability (as provided in Section 3.3),
the Company shall continue to pay to Executive his Salary under Section 2.1
hereof for the remainder of the Employment Term. Additionally, the Company shall
continue to provide Executive with insurance under the Company's group insurance
plan or plans (as such plan or plans may be modified, changed or replaced from
time to time) to the extent that t is permitted by the plan or plans and under
applicable law. If the Company is unable to continue Executive under the plan or
plans, the Company shall pay to Executive each month that amount that it would
have been paying for such participation (had Executive been employed by the
Company) through the Employment Term.
3.6 If, for any reason (i) Executive terminates his employment
with the Company, or (ii) the Company terminates Executive's employment under
the terms of this Agreement, or (iii) this Agreement expires without being
renewed or extended, then Executive will resign as a director, effective upon
the occurrence of such termination or expiration, whichever is applicable.
4. Protection of Confidential Information; Non-Competition.
4.1 Executive acknowledges that:
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(a) As a result of his employment with the Company, Executive
will obtain secret and confidential information concerning the business of the
Company and/or its subsidiaries and affiliates (referred to collectively in this
paragraph 4 as the "Company"), including, without limitation, financial
information, designs and other proprietary rights, trade secrets and "know-how,"
customers, sources and business methodologies ("Confidential Information").
(b) The Company will suffer substantial damage which will be
difficult to compute if, during the period of his employment with the Company or
thereafter, Executive should enter a business competitive with the Company or
divulge Confidential Information.
(c) The provisions of this Agreement are reasonable and
necessary for the protection of the business of the Company.
4.2 Executive agrees that he will not at any time, either during the
term of this Agreement or two years thereafter, divulge to any person or entity
any Confidential Information obtained or learned by him as a result of his
employment with, or prior retention by, the Company, except (i) in the course of
performing his duties hereunder; (ii) with the Company's express written
consent; (iii) to the extent that any such information is in the public domain
other than as a result of Executive's breach of any of his obligations
hereunder; or (iv) where required to be disclosed by court order, subpoena or
other government process. If Executive shall be required to make disclosure
pursuant to the provisions of clause (iv) of the preceding sentence, Executive
promptly, but in no event more than 72 hours after learning of such subpoena,
court order, or other government process, shall notify, by personal delivery or
by electronic means, confirmed by mail, the Company and, at the Company's
expense, Executive shall: (a) take all reasonably necessary and
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lawful steps required by the Company to defend against the enforcement of such
subpoena, court order or other government process, and (b) permit the Company to
intervene and participate with counsel of its choice in any proceeding relating
to the enforcement thereof.
4.3 Upon termination of his employment with the Company,
Executive will promptly deliver to the Company all memoranda, notes, records,
reports, manuals, drawings, blueprints and other documents (and all copies
thereof) relating to the business of the Company and all property associated
therewith, which he may then possess or have under his control; provided,
however, subject to Executive's obligations under this Section 4, that Executive
shall be entitled to retain copies of such documents reasonably necessary to
document his financial relationship (both past and future) with the Company.
4.4 During the one-year period following termination of
Executive's employment with the Company for any reason, Executive, without the
prior written permission of the Company, shall not, anywhere in the United
States, directly or indirectly (i) employ or retain, or have or cause any other
person or entity to employ or retain, any person who was employed or retained by
the Company in the six-month period prior to the expiration of the Executive's
employment hereunder; or (ii) solicit, interfere with, or endeavor to entice
away from the Company, for the benefit of a Competitive Business, any of its
customers or other persons with whom the Company has a contractual relationship
or is otherwise doing business or has done business during the term of this
Agreement. Notwithstanding the foregoing, nothing in this Agreement shall
preclude Executive from investing his personal assets in the securities of any
corporation or other business entity which is engaged in a Competitive Business
if such securities are traded on a national stock exchange or in the
over-the-
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counter market and if such investment does not result in his beneficially
owning, at any time, more than 4.9% of the publicly-traded equity securities of
such Competitive Business.
4.4 If Executive commits a breach, or threatens to commit a
breach, of any of the provisions of Sections 4.2, 4.4 or 4.5, the Company shall
have the right and remedy:
(a) to have the provisions of this Agreement
specifically enforced by any court having equity jurisdiction, it being
acknowledged and agreed by Executive that the services being rendered hereunder
to the Company are of a special, unique and extraordinary character and that any
such breach or threatened breach will cause irreparable injury to the Company
and that money damages will not provide an adequate remedy to the Company; and
(b) to require Executive to account for and pay over
to the Company all monetary damages suffered by the Company as the result of any
transactions constituting a breach of any of the provisions of Sections 4.2, 4.4
or 4.5, and Executive hereby agrees to account for and pay over such damages to
the Company.
Each of the rights and remedies enumerated in this Section 4.6
shall be independent of the other, and shall be severally enforceable, and such
rights and remedies shall be in addition to, and not in lieu of, any other
rights and remedies available to the Company under law or equity.
In connection with any legal action or proceeding arising out
of Section 4.5, the prevailing party in such action or proceeding shall be
entitled to be reimbursed by the other party for the reasonable attorneys' fees
and costs incurred by the prevailing party.
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4.5 If Executive shall violate any covenant contained in
Section 4.4 or 4.5, the duration of such covenant so violated shall be
automatically extended for a period of time equal to the period of such
violation.
4.6 If any provision of Sections 4.2, 4.4 or 4.5 is held to be
unenforceable because of the scope, duration or area of its applicability, the
tribunal making such determination shall have the power to modify such scope,
duration, or area, or all of them, and such provision or provisions shall then
be applicable in such modified form.
4.7 The provisions of this paragraph 4 shall survive the
termination of this Agreement for any reason.
5. Definitions.
As used in this Agreement:
5.1 "Affiliate" shall mean any entity that, directly or
indirectly, is controlled by, controlling, or under common control with the
Company.
5.2 "Competitive Business" shall mean (i) any business
involved in any aspect of promotional and other direct marketing services
utilizing telephony, the Internet and/or wireless communication technologies or
(ii) any other business as the Company may actively engage in, or actively
contemplate engaging in,during Executive's employment by the Company.
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6. Miscellaneous Provisions.
6.1 All notices provided for in this Agreement shall be in
writing, and shall be deemed to have been duly given when delivered personally
to the party to receive the same, when transmitted by electronic means, or when
delivered by reputable overnight courier, postage prepaid, addressed to the
party to receive the same at his or its address set forth below, or such other
address as the party to receive the same shall have specified by written notice
given in the manner provided for in this Section 6.1. All notices shall be
deemed to have been given upon actual receipt.
If to Executive:
Paul Silverstein
32 Edgewood Avenue
Larchmont, New York 10538
Marked "Personal and Confidential"
If to the Company:
Global Telecommunication Solutions, Inc.
317 Madison Avenue, Suite 807
New York, NY 10017
Attention: Chief Financial Officer
With a copy in either case to:
Tobin & Reyes, P.A.
7251 West Palmetto Park Road
Suite 205
Boca Raton, Florida 33433
6.2 This Agreement sets forth the entire agreement of the
parties relating to the employment of Executive and are intended to supersede
all prior negotiations, understandings and agreements. No provisions of this
Agreement may be waived or changed except by a writing by the party against whom
such waiver or change is sought to be enforced. The failure of any party to
require
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performance of any provision hereof or thereof shall in no manner affect the
right at a later time to enforce such provision.
6.3 All questions with respect to the construction of this
Agreement, and the rights and obligations of the parties hereunder, shall be
determined in accordance with the law of the State of New York applicable to
agreements made and to be performed entirely in New York.
6.4 This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of the Company. This Agreement shall not
be assignable by Executive, but shall inure to the benefit of and be binding
upon Executive's heirs and legal representatives.
6.5 Should any provision of this Agreement become legally
unenforceable, no other provision of this Agreement shall be affected, and this
Agreement shall continue as if the Agreement had been executed absent the
unenforceable provision.
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IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
EXECUTIVE
-----------------------------------
Paul Silverstein
GLOBAL TELECOMMUNICATION
SOLUTIONS, INC.
By:________________________________
Lee R. Montellaro,
Vice President and Chief Financial Officer
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