EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT
This
Agreement
is
entered into as of May 17, 2006, by and between Xxxxxx
X. Xxxxx (the
“Employee”) and Multi
Link Communications, Inc.,
a
Colorado corporation (the “Company”).
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1.
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Duties
and Scope of Employment.
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(a) Position.
For the
term of his employment under this Agreement (the “Employment”), the Company
agrees to employ the Employee in the position of Chief Executive Officer. The
Employee shall report to the Company’s Board of Directors (the
“Board”).
(b) Obligations
to the Company.
During
his Employment, the Employee shall devote his full business efforts and time
to
the Company. The Employee shall comply with the Company’s policies and rules, as
they may be in effect from time to time during his Employment.
(c) No
Conflicting Obligations.
The
Employee represents and warrants to the Company that he is under no obligations
or commitments, whether contractual or otherwise, that are inconsistent with
his
obligations under this Agreement. The
Employee represents and warrants that he will not use or disclose, in connection
with his Employment, any trade secrets or other proprietary information or
intellectual property in which the Employee or any other person has any right,
title or interest and that his Employment will not infringe or violate the
rights of any other person. The
Employee represents and warrants to the Company that he has returned all
property and confidential information belonging to any prior
employer.
(d) Commencement
Date.
The
Employee shall commence full-time Employment on May 17, 2006.
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2.
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Cash
and Incentive
Compensation.
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(a) Salary.
The
Company shall pay the Employee as compensation for his services a base salary
at
a gross annual rate of $360,000. Such salary shall be payable in accordance
with
the Company’s standard payroll procedures and shall be reviewed annually. (The
annual compensation specified in this Subsection (a), as adjusted from time
to time, is referred to in this Agreement as “Base Salary.”)
(b) Incentive
Bonuses.
The
Employee shall be eligible to be considered for an annual incentive bonus.
Such
bonus (if any) shall be awarded based on objective or subjective criteria
established in advance by the Company’s Board or
its
Compensation Committee. The determinations of the Board or its Compensation
Committee with respect to such bonus shall be final and binding. The bonus
for a
fiscal year (if any) shall be paid within 60 days after the close of such
year.
3. Indemnification,
Employee Benefits and Vacation.
The
Employee shall enter into an Indemnification Agreement with the Company, which
is incorporated herein by this reference. During his Employment, the Employee
shall be eligible to participate in the employee benefit plans maintained by
the
Company for its senior officers, subject in each case to the generally
applicable terms and conditions of the plan in question and to the
determinations of any person or committee administering such plan. During his
Employment, the Employee shall be eligible for paid vacations in accordance
with
the Company’s vacation policy, as it may be amended from time to time; provided
that he shall be entitled to not less than 15 days of paid vacation per
year.
4. Business
Expenses.
During
his Employment, the Employee shall be authorized to incur reasonable travel,
entertainment and other business expenses in connection with his duties
hereunder. The Company shall reimburse the Employee for such expenses upon
presentation of an itemized account and appropriate supporting documentation,
all in accordance with the Company’s generally applicable policies.
5. Term
of Employment.
(a) Termination
of Employment.
The
Company may terminate the Employee’s Employment at any time and for any reason
(or no reason), and with or without Cause, by giving the Employee notice in
writing. The Employee may terminate his Employment by giving the Company two
weeks’ advance notice in writing. The Employee’s Employment shall terminate
automatically in the event of his death. The termination of the Employee’s
Employment shall not limit or otherwise affect his obligations under
Section 8.
(b) Employment
at Will.
The
Employee’s Employment with the Company shall be “at will,” meaning that either
the Employee or the Company shall be entitled to terminate the Employee’s
Employment at any time and for any reason, with or without Cause. Any contrary
representations that may have been made to the Employee shall be superseded
by
this Agreement. This Agreement shall constitute the full and complete agreement
between the Employee and the Company on the “at will” nature of the Employee’s
Employment, which may only be changed in an express written agreement signed
by
the Employee and a duly authorized officer of the Company.
(c) Rights
Upon Termination.
Except
as expressly provided in Section 6, upon the termination of the Employee’s
Employment, the Employee shall only be entitled to the compensation, benefits
and expense reimbursements that the Employee has earned under this Agreement
before the effective date of the termination. The payments under this Agreement
shall fully discharge all responsibilities of the Company to the
Employee.
6. Termination
Benefits Absent Change in Control.
(a) General
Release and Resignations.
Any
other provision of this Agreement notwithstanding, Subsections (b), (c) and
(d) below shall not apply unless the Employee:
(i) Has
executed a general release of all claims (in a reasonable form prescribed by
the
Company);
(ii) Has
returned all property of the Company in the Employee’s possession;
and
(iii) If
requested by the Board, has resigned as a member of the Board (and, to the
extent applicable, as a member of the Boards of Directors of any subsidiaries
of
the Company).
(b) Severance
Pay.
If,
during the term of this Agreement, the Company terminates the Employee’s
Employment for any reason other than Cause, then the Company shall pay the
Employee his Base Salary for a period of 12 months following the termination
of
his Employment. Such Base Salary shall be paid at the rate in effect at the
time
of the termination of Employment and in accordance with the Company’s standard
payroll procedures.
(c) Additional
Vesting.
If,
during the term of this Agreement, the Company terminates the Employee’s
Employment for any reason other than Cause, then the vested portion of the
shares of the Company’s Common Stock subject to the Warrant shall be determined
by adding 12 months to the actual length of his service with the Company.
(d) Health
Insurance.
If,
during the term of this Agreement, the Company terminates the Employee’s
Employment for any reason other than Cause, and if the Employee elects to
continue health insurance coverage under the Consolidated Omnibus Budget
Reconciliation Act (“COBRA”) for himself and, if applicable, his dependents
following the termination of his Employment, then the Company shall pay the
monthly premium under COBRA for the Employee and, if applicable, such dependents
until the earliest of (i) the first anniversary of the termination of his
Employment, (ii) the expiration of the Employee’s continuation coverage
under COBRA or (iii) the date when the Employee receives substantially
equivalent health insurance coverage in connection with new employment or
self-employment.
(e) Definition
of “Cause.”
For all
purposes under this Agreement, “Cause” shall mean:
(i) Any
act of misconduct or dishonesty by the Employee in the performance of his duties
under this Agreement;
(ii) Any
willful failure by the Employee to attend to his duties under this
Agreement;
(iii) Any
material breach of this Agreement; or
(iv) The
Employee's conviction of, or pleading guilty or nolo
contendere to,
any
felony or misdemeanor involving theft, embezzlement, dishonesty or moral
turpitude.
7. Termination
Benefits After Change in Control.
(a) General
Release and Resignations.
Any
other provision of this Agreement notwithstanding, Subsections (b), (c) and
(d) below shall not apply unless the Employee:
(i) Has
executed a general release of all claims (in a reasonable form prescribed by
the
Company);
(ii) Has
returned all property of the Company in the Employee’s possession;
and
(iii) If
requested by the Board, has resigned as a member of the Board (and, to the
extent applicable, as a member of the Boards of Directors of any subsidiaries
of
the Company).
(b) Severance
Pay.
If,
within 12 months after a Change in Control, the Company or its successor
terminates the Employee’s Employment for any reason other than Cause or he
resigns for Good Reason, then the Company or its successor shall pay the
Employee the sum of (i) his Base Salary for one year at the rate in effect
at the time of the termination of Employment plus (ii) his target bonus for
the year in which the termination of Employment occurs. Such amount shall be
paid in a lump sum within 30 days after the effective date of the termination
of
Employment.
(c) Additional
Vesting.
If,
within 12 months after a Change in Control, the Company terminates the
Employee’s Employment for any reason other than Cause or he resigns for Good
Reason, then all shares of the Company’s Common Stock subject to the Warrant
shall vest.
(d) Health
Insurance.
If,
within 12 months after a Change in Control, the Company terminates the
Employee’s Employment for any reason other than Cause or he resigns for Good
Reason, and if the Employee elects to continue health insurance coverage under
the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) for himself and, if
applicable, his dependents following the termination of his Employment, then
the
Company shall pay the monthly premium under COBRA for the Employee and, if
applicable, such dependents until the earliest of (i) the first anniversary
of the termination of his Employment, (ii) the expiration of the Employee’s
continuation coverage under COBRA or (iii) the date when the Employee
receives substantially equivalent health insurance coverage in connection with
new employment or self-employment.
(e) Definition
of “Change in Control.”
For all
purposes under this Agreement, “Change in Control” shall mean:
(i) A
merger, consolidation or reorganization approved by the Company’s stockholders,
unless securities representing more than 50% of the total combined voting power
of the outstanding voting securities of the successor corporation are
immediately thereafter beneficially owned, directly or indirectly and in
substantially the same proportion, by the persons who beneficially owned the
Company’s outstanding voting securities immediately prior to such
transaction;
(ii) The
sale, transfer or other disposition of all or substantially all of the Company’s
assets as an entirety or substantially as an entirety to any person, entity
or
group of persons acting in consort other than a sale, transfer or disposition
to
an entity, at least 50% of the combined voting power of the voting securities
of
which is owned by the Company or by stockholders of the Company in substantially
the same proportion as their ownership of the Company immediately prior to
such
sale; or
(iii) Any
transaction or series of related transactions pursuant to which any person
or
any group of persons comprising a “group” within the meaning of
Rule 13d-5(b)(1) under the Securities Exchange Act of 1934, as amended
(other than the Company or a person that, prior to such transaction or series
of
related transactions, directly or indirectly controls, is controlled by or
is
under common control with, the Company), becomes directly or indirectly the
beneficial owner (within the meaning of Rule 13d-3 under such Act) of
securities possessing (or convertible into or exercisable for securities
possessing) more than 35% of the total combined voting power of the Company’s
securities outstanding immediately after the consummation of such transaction
or
series of related transactions, whether such transaction involves a direct
issuance from the Company or the acquisition of outstanding securities held
by
one or more of the Company’s stockholders.
(f) Definition
of “Good Reason.”
For all
purposes under this Agreement, “Good Reason” shall mean:
(i) Any
reduction in the aggregate level of the Employee’s Base Salary and annual target
bonus; or
(ii) Any
material reduction in the Employee’s duties or responsibilities (measured in
number of employees or budget responsibility).
8. Proprietary
Information and Inventions Agreement.
The
Employee has entered into a Proprietary Information and Inventions Agreement
with the Company in the form attached hereto as Exhibit
A,
which
is incorporated herein by this reference.
9. Successors.
(a) Company’s
Successors.
This
Agreement shall be binding upon any successor (whether direct or indirect and
whether by purchase, lease, merger, consolidation, liquidation or otherwise)
to
all or substantially all of the Company’s business and/or assets. For all
purposes under this Agreement, the term “Company” shall include any successor to
the Company’s business and/or assets which becomes bound by this
Agreement.
(b) Employee’s
Successors.
This
Agreement and all rights of the Employee hereunder shall inure to the benefit
of, and be enforceable by, the Employee’s personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees.
10. Arbitration.
(a) Scope
of Arbitration Requirement.
The
parties hereby waive their rights to a trial before a judge or jury and agree
to
arbitrate before a neutral arbitrator any and all claims or disputes arising
out
of this Agreement and any and all claims arising from or relating to the
Employee’s Employment, including (but not limited to) claims against any current
or former employee, director or agent of the Company, claims of wrongful
termination, retaliation, discrimination, harassment, breach of contract, breach
of the covenant of good faith and fair dealing, defamation, invasion of privacy,
fraud, misrepresentation, constructive discharge or failure to provide a leave
of absence, or claims regarding commissions, stock options or bonuses,
infliction of emotional distress or unfair business practices.
(b) Procedure.
The
arbitrator’s decision shall be written and shall include the findings of fact
and law that support the decision. The arbitrator’s decision shall be final and
binding on both parties, except to the extent applicable law allows for judicial
review of arbitration awards. The arbitrator may award any remedies that would
otherwise be available to the parties if they were to bring the dispute in
court. The arbitration shall be conducted in accordance with the National Rules
for the Resolution of Employment Disputes of the American Arbitration
Association; provided, however that the arbitrator shall allow the discovery
that the arbitrator deems necessary for the parties to vindicate their
respective claims or defenses. The arbitration shall take place in Atlanta,
Georgia, or, at the Employee’s option, the county in which the Employee
primarily worked with the Company at the time when the arbitrable dispute or
claim first arose.
(c) Attorneys’
Fees and Costs.
The
Company shall bear the cost of the arbitrator’s fee. The parties shall share the
other costs of arbitration equally. In the event of arbitration or litigation
between the parties, the prevailing party shall be entitled to reasonable
attorneys’ fees.
(d) Applicability.
This
Section 10 shall not apply to (i) workers’ compensation or
unemployment insurance claims, (ii) claims concerning the validity,
infringement or enforceability of any trade secret, patent right, copyright
or
any other trade secret or intellectual property held or sought by either the
Employee or the Company (whether or not arising under the Proprietary
Information and Inventions Agreement between the Employee and the Company)
and
(iii) claims concerning violations of Section 8. The Employee
acknowledges that any breach of Section 8 will cause irreparable harm to
the Company for which damages would not be an adequate remedy and that the
Company, therefore, will be entitled to injunctive relief with respect thereto
in addition to any other remedies.
11. Miscellaneous
Provisions.
(a) Notice.
Notices
and all other communications contemplated by this Agreement shall be in writing
and shall be deemed to have been duly given when personally delivered or when
mailed by U.S. registered or certified mail, return receipt requested and
postage prepaid. In the case of the Employee, mailed notices shall be addressed
to him at the home address that he most recently communicated to the Company
in
writing. In the case of the Company, mailed notices shall be addressed to its
corporate headquarters, and all notices shall be directed to the attention
of
its Secretary.
(b) Modifications
and Waivers.
No
provision of this Agreement shall be modified, waived or discharged unless
the
modification, waiver or discharge is agreed to in writing and signed by the
Employee and by an authorized officer of the Company (other than the Employee).
No waiver by either party of any breach of, or of compliance with, any condition
or provision of this Agreement by the other party shall be considered a waiver
of any other condition or provision or of the same condition or provision at
another time.
(c) Whole
Agreement.
No
other agreements, representations or understandings (whether oral or written
and
whether express or implied) that are not expressly set forth in this Agreement
have been made or entered into by either party with respect to the subject
matter hereof. This Agreement and the Proprietary Information and Inventions
Agreement contain the entire understanding of the parties with respect to the
subject matter hereof.
(d) Withholding
Taxes.
All
payments made under this Agreement shall be subject to reduction to reflect
taxes or other charges required to be withheld by law.
(e) Choice
of Law and Severability.
This
Agreement shall be interpreted in accordance with the laws of the State of
Georgia (except their provisions governing the choice of law). If any provision
of this Agreement becomes or is deemed invalid, illegal or unenforceable in
any
applicable jurisdiction by reason of the scope, extent or duration of its
coverage, then such provision shall be deemed amended to the minimum extent
necessary to conform to applicable law so as to be valid and enforceable or,
if
such provision cannot be so amended without materially altering the intention
of
the parties, then such provision shall be stricken and the remainder of this
Agreement shall continue in full force and effect. If any provision of this
Agreement is rendered illegal by any present or future statute, law, ordinance
or regulation (collectively the “Law”), then such provision shall be curtailed
or limited only to the minimum extent necessary to bring such provision into
compliance with the Law. All the other terms and provisions of this Agreement
shall continue in full force and effect without impairment or
limitation.
(f) No
Assignment.
This
Agreement and all rights and obligations of the Employee hereunder are personal
to the Employee and may not be transferred or assigned by the Employee at any
time. The Company may assign its rights under this Agreement to any entity
that
assumes the Company’s obligations hereunder in connection with any sale or
transfer of all or a substantial portion of the Company’s assets to such
entity.
(g) Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument.
IN
WITNESS WHEREOF,
each of
the parties has executed this Agreement, in the case of the Company by its
duly
authorized officer or a duly authorized member of its Board, as of the day
and
year first above written.
MULTI
LINK
TELECOMMUNICATIONS,
INC.
By
/s/
Xxxxx Xxxxxxx
Title:
Director
XXXXXX
X. XXXXX
/s/
Xxxxxx X. Xxxxx
EXHIBIT A
PROPRIETARY
INFORMATION AND INVENTIONS AGREEMENT
In
consideration of my employment or continued employment by Multi
Link Telecommunications, Inc.
(the
“Company”), and the compensation now and hereafter paid to me, I hereby agree as
follows:
1. I
have not entered into, and I agree I will not enter into, any agreement either
written or oral in conflict with this Agreement or my employment with Company.
I
will not violate any agreement with or rights of any third party or, except
as
expressly authorized by Company in writing hereafter, use or disclose my own
or
any third party’s confidential information or intellectual property when acting
within the scope of my employment or otherwise on behalf of Company. Further,
I
have not retained anything containing any confidential information of a prior
employer or other third party, whether or not created by
me.
2. Company
shall own all right, title and interest (including patent rights, copyrights,
trade secret rights, mask work rights, sui
generis database
rights and all other intellectual and industrial property rights of any sort
throughout the world) relating to any and all inventions (whether or not
patentable), works of authorship, mask works, designs, know-how, ideas and
information made or conceived or reduced to practice, in whole or in part,
by me
during the term of my employment with Company to and only to the fullest extent
allowed by law (collectively “Inventions”) and I will promptly disclose all
Inventions to Company. I hereby make all assignments necessary to accomplish
the
foregoing. I shall further assist Company, at Company’s expense, to further
evidence, record and perfect such assignments, and to perfect, obtain, maintain,
enforce, and defend any rights specified to be so owned or assigned. I hereby
irrevocably designate and appoint Company as my agent and attorney-in-fact,
coupled with an interest and with full power of substitution, to act for and
in
my behalf to execute and file any document and to do all other lawfully
permitted acts to further the purposes of the foregoing with the same legal
force and effect as if executed by me. If I wish to clarify that something
created by me prior to my employment that relates to Company’s actual or
proposed business is not within the scope of this Agreement, I have listed
it on
Appendix A in a manner that does not violate any third party rights. Without
limiting Section 1 or Company’s other rights and remedies, if, when acting
within the scope of my employment or otherwise on behalf of Company, I use
or
(except pursuant to this Section 2) disclose my own or any third party’s
confidential information or intellectual property (or if any Invention cannot
be
fully made, used, reproduced, distributed and otherwise exploited without using
or violating the foregoing), Company will have and I hereby grant Company a
perpetual, irrevocable, worldwide royalty-free, non-exclusive, sublicensable
right and license to exploit and exercise all such confidential information
and
intellectual property rights.
3. To
the extent allowed by law, Section 2 includes all rights of paternity,
integrity, disclosure and withdrawal and any other rights that may be known
as
or referred to as “moral rights,” “artist’s rights,” “droit moral,” or the like
(collectively “Moral Rights”). To the extent I retain any such Moral Rights
under applicable law, I hereby ratify and consent to any action that may be
taken with respect to such Moral Rights by or authorized by Company and agree
not to assert any Moral Rights with respect thereto. I will confirm any such
ratifications, consents and agreements from time to time as requested by
Company.
4. I
agree that all Inventions and all other business, technical and financial
information (including, without limitation, the identity of and information
relating to customers or employees) I develop, learn or obtain during the term
of my employment that relate to Company or the business or demonstrably
anticipated business of Company or that are received by or for Company in
confidence, constitute “Proprietary Information.” I will hold in confidence and
not disclose or, except within the scope of my employment, use any Proprietary
Information. However, I shall not be obligated under this paragraph with respect
to information I can document is or becomes readily publicly available without
restriction through no fault of mine. Upon termination of my employment, I
will
promptly return to Company all items containing or embodying Proprietary
Information (including all copies), except that I may keep my personal copies
of
(i) my compensation records, (ii) materials distributed to
shareholders generally and (iii) this Agreement. I also recognize and agree
that I have no expectation of privacy with respect to Company’s
telecommunications, networking or information processing systems (including,
without limitation, stored computer files, e-mail messages and voice messages)
and that my activity and any files or messages on or using any of those systems
may be monitored at any time without notice.
5. Until
one (1) year after the term of my employment, I will not hire (or assist any
other party or entity in hiring) any employee or consultant of Company or
encourage or solicit any employee or consultant of Company to leave Company
for
any reason (except for the bona fide firing of Company personnel within the
scope of my employment).
6. I
agree that during the term of my employment with Company (whether or not during
business hours) and for a period of one (1) year after termination of such
employment for any reason, I will not, within the United States and its
territories, engage in any activity that is in any way competitive with the
business or demonstrably anticipated business of Company, and I will not assist
any other person or organization in competing or in preparing to compete with
any business or demonstrably anticipated business of Company.
(a) I
understand and acknowledge that Company has made substantial investments to
develop its business interests and goodwill. I agree that the limitations as
to
time, geographical area and scope of activity to be restrained in this
Section 6 are reasonable and are not greater than necessary to protect the
goodwill or other business interests of Company. I further agree that such
investments are worthy of protection and that Company’s need for protection
afforded by this Section 6 is greater than any hardship I may experience by
complying with its terms.
(b) I
acknowledge that my violation or attempted violation of the agreements in this
Section 6 will cause irreparable damage to Company or its affiliates, and I
therefore agree that Company shall be entitled as a matter of right to an
injunction, out of any court of competent jurisdiction, restraining any
violation or further violation of such agreements by me or others acting on
my
behalf. Company’s right to injunctive relief shall be cumulative and in addition
to any other remedies provided by law or equity.
(c) Although
the parties believe that the limitations as to time, geographical area and
scope
of activity contained herein are reasonable and do not impose a greater
restraint than necessary to protect the goodwill or other business interests
of
Company, if it is judicially determined not to be the case, the limitations
shall be reformed to the extent necessary to make them reasonable and not to
impose a restraint that is greater than necessary to protect the goodwill or
other business interests of Company.
7. I
agree that this Agreement is not an employment contract for any particular
term
and that I have the right to resign and Company has the right to terminate
my
employment at will, at any time, for any or no reason, with or without cause.
In
addition, this Agreement does not purport to set forth all of the terms and
conditions of my employment, and, as an employee of Company, I have obligations
to Company which are not set forth in this Agreement. However, the terms of
this
Agreement govern over any inconsistent terms and can only be changed by a
subsequent written agreement signed by the President of
Company.
8. I
agree that my obligations under Sections 2, 3, 4, 5 and 6 of this Agreement
shall continue in effect after termination of my employment, regardless of
the
reason or reasons for termination, and whether such termination is voluntary
or
involuntary on my part, and that Company is entitled to communicate my
obligations under this Agreement to any future employer or potential employer
of
mine. My obligations under Sections 2, 3 and 4 also shall be binding upon
my heirs, executors, assigns, and administrators and shall inure to the benefit
of Company, it subsidiaries, successors and assigns.
9. Any
dispute in the meaning, effect or validity of this Agreement shall be resolved
in accordance with the laws of the State of Georgia without regard to the
conflict of laws provisions thereof. I further agree that if one or more
provisions of this Agreement are held to be illegal or unenforceable under
applicable Georgia law, such illegal or unenforceable portion(s) shall be
limited or excluded from this Agreement to the minimum extent required so that
this Agreement shall otherwise remain in full force and effect and enforceable
in accordance with its terms. I also understand that any breach of this
Agreement will cause irreparable harm to Company for which damages would not
be
an adequate remedy, and, therefore, Company will be entitled to injunctive
relief with respect thereto in addition to any other remedies and without any
requirement to post bond.
I
HAVE READ THIS AGREEMENT CAREFULLY AND I UNDERSTAND AND ACCEPT THE OBLIGATIONS
WHICH IT IMPOSES UPON ME WITHOUT RESERVATION. NO PROMISES OR REPRESENTATIONS
HAVE BEEN MADE TO ME TO INDUCE ME TO SIGN THIS AGREEMENT. I SIGN THIS AGREEMENT
VOLUNTARILY AND FREELY, IN DUPLICATE, WITH THE UNDERSTANDING THAT THE COMPANY
WILL RETAIN ONE COUNTERPART AND THE OTHER COUNTERPART WILL BE RETAINED BY
ME.
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Date:
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Employee
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Signature
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Name
(Printed)
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