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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made
and entered into as of May , 2007, by and between
The Phone Card Warehouse Inc . , a
Florida corporation, with an office located at 10376 E. Colonial
Drive #135, Orlando, FL 32817 (the " Company"), and Pradip
Patel , an individual and resident of New
York ("Executive").
WHEREAS, the Company is in the business of
distributing prepaid telephone service products; and
WHEREAS, Executive has had experience in the
operations of businesses distributing prepaid telephone service
products; and
WHEREAS, the Company desires to retain the services
of Executive; and
WHEREAS, Executive is willing to be employed by the
Company; and
WHEREAS, the Company is a wholly-owned subsidiary
of Reliablecom, Inc., a Delaware corporation
(“Parent”);
NOW, THEREFORE, in consideration of the mutual
covenants contained herein, the parties agree as follows:
1. Employment . Executive is hereby
employed and engaged to serve the Company as the Chief Executive
Officer of the Company, or such additional titles as the Board of
Directors of the Company shall specify from time to time, and
Executive does hereby accept, and Executive hereby agrees to such
engagement and employment.
2. Duties. Executive shall be
responsible for the overall development and operations of the
Company. In addition, Executive’s duties shall be such duties
and responsibilities as the Company shall specify from time to
time, and shall entail those duties customarily performed by the
President of a corporate business unit with a sales volume and
number of employees commensurate with those of the Company.
Executive shall diligently and faithfully execute and perform
such duties and responsibilities, subject to the general
supervision and control of the Company’s board of directors.
Executive shall be responsible and report only to the
Company’s board of directors. The Company’s board
of directors, in its sole and absolute discretion, shall determine
Executive’s duties and responsibilities and may assign or
reassign Executive to such duties and responsibilities as it deems
in the Company's best interest. Executive shall devote his
full-time attention, energy, and skill during normal business hours
to the business and affairs of the Company and shall not, during
the Employment Term, as that term is defined below, be actively
engaged in any other business activity, except with the prior
written consent of the Company’s board of directors.
Notwithstanding the foregoing, Executive shall have the following
duties for the Company, subject to the supervision of the
Company’s Board of Directors and the participation of the
Company’s Chief Financial Officer and other appropriate
officers:
a.
Collection and expenditure of revenues of the
Company, in conjunction with the Company’s Chief Financial
Officer and controller.
b.
Determination and provision of compensation and
benefits to the employees of Company so long as such
compensation and benefits are consistent with the prior business
practices of the Company for the twelve month period prior to
the date hereof. In no event shall Executive be required
to utilize the revenues of the Company for the payment of
salaries of employees who are off-site from the business
location of Company at 10376 E. Colonial Drive, #135, Orlando,
Florida 32817, or such other location as the Company shall
occupy.
c.
Hiring, management and termination of employees
of the Company, other that executive officers of the Company
which shall be made solely with the written consent of the Board
of Directors of the Company.
1
d.
Day to Day management of all business of the
Company in the same manner as Executive provided for the Company
prior to the date of this Agreement, subject to the supervision
of the Board of Directors.
During the term of this Agreement, Company shall
continue its business activities in substantially the same manner
as had existed during the twelve month period immediately preceding
the date of this Agreement. Company shall not transfer its
business operations to any affiliate or nonaffiliate of Company
during the term of the Agreement. Executive shall devote
Executive’s full-time attention, energy, and skill during
normal business hours to the business and affairs of the Company
and shall not, during the Employment Term, as that term is defined
below, be actively engaged in any other business activity, except
with the prior written consent of the Company’s board of
directors.
Nothing
in this Agreement shall preclude Executive from devoting reasonable
periods required for:
(a)
serving as a director or member of a committee of any
organization or corporation involving no conflict of interest with
the interests of the Company;
(b)
serving as a consultant in his area of expertise (in
areas other than in connection with the business of the Company),
to government, industrial, and academic panels where it does not
conflict with the interests of the Company; and
(c)
managing his personal investments or engaging in any
other non-competing business;
provided that such activities do not interfere with the
regular performance of his duties and responsibilities under this
Agreement as determined by the Company.
3. Best Efforts of Executive . During
his employment hereunder, Executive shall, subject to the direction
and supervision of the Company’s board of directors, devote
his full business time, best efforts, business judgment, skill, and
knowledge to the advancement of the Company's interests and to the
discharge of his duties and responsibilities hereunder.
4. Employment Term . This Agreement shall
have a term of three (3) years, beginning on the date of this
Agreement (the "Employment Term"). Upon the initial expiration of
the Employment Term or any renewal thereof (a “Term”),
this Agreement shall automatically be extended for one additional
year, unless a written notice of termination shall be provided at
least 90 days prior to the expiration of the Term or unless
terminated by either party pursuant to Section 12.
5. Compensation of Executive . During
the first three years of the Term of this Agreement, the Executive
shall be paid a salary of $14,583.33 per month, payable in
accordance with the Company’s regular payroll practices.
Commencing after three years, as preliminary compensation for
the services provided by Executive under this Agreement, the
Company shall pay Executive a monthly draw of $14,583.33 as an
advance on actual compensation, to be paid in accordance with the
Company's usual payroll procedures. Within fifty (50) days after
the end of each of the first three fiscal quarters of the Company,
the Company’s Chief Financial Officer shall prepare quarterly
financial statements in accordance with generally accepted
accounting principals (“GAAP”). Such financial
statement shall include a calculation of the Company’s net
profit for quarter in accordance with GAAP and after deduction for
accounts receivable which have been outstanding for more than 45
days (“Quarterly Net Profit”). The Executive
shall be paid an amount, if any, by which 25% of the Quarterly Net
Profit exceeds $62,500 (each, a “Quarterly Payout”).
Notwithstanding the foregoing, in the event 25% of the
Quarterly Net Profit shall be less than $62,500 (the
“Quarterly Shortfall Amount”), the monthly draw for the
following quarter shall be reduced by an amount equal to the
Quarterly Sho
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