EMPLOYMENT AGREEMENT
This Employment Agreement
(“Agreement”), effective August 24, 2009, is entered into by and between
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Telecom International, Inc. (the “Employer”), a Washington
corporation, and its wholly-owned subsidiaries (the ‘Employer”), and
Xxxxxxx
Xxxxxxxx, 000
Xxxxxx Xxxxx, Xxxxxxx, Xxxxx 00000 (the “Employee”).
WITNESSETH:
WHEREAS, Employer is engaged
in the telecommunications technology and related businesses, including but not
limited to internet telecommunication services, hardware and software
development and sales, and information technology (the “Telecommunications
Technologies”); and conducts research, experimentation, development, and
exploitation of related technologies and engages in other businesses;
and
WHEREAS, Employer desires to
employ Employee to serve as Chief Financial Officer of the
Employer, and Employee desires to be employed by Employer in such
capacities pursuant to the terms and conditions hereinafter set
forth.
NOW THEREFORE, in
consideration of the foregoing and the mutual promises and covenants herein
contained, it is agreed as follows:
1. EMPLOYMENT:
DUTIES AND RESPONSIBILITIES
Employer
hereby employs Employee as Chief Financial Officer of the
Employer. Subject at all times to the direction of the
Chief Executive Officer of the Employer, Employee shall have direct
responsibility over all financial matters of the Employer. Employee
will also perform other services and duties as the Chief Executive Officer
and/or Board of Directors shall determine. Employee’s permanent job
site shall be in the Dallas/Ft. Worth, Texas area. Employee shall
serve, by mutual consent, in such other positions and offices of the Employer
and its affiliates, if selected, without any additional
compensation.
2. FULL TIME
EMPLOYMENT
Employee
hereby accepts employment by Employer, upon the terms and conditions contained
herein, and agrees that during the term of this Agreement the Employee shall
devote substantially all of his business time, attention, and energies to the
business of the Employer. Employee, during the term of this Agreement, will not
perform any services for any other business entity, whether such entity conducts
a business which is competitive with the business of Employer or is engaged in
any other business activity; provided, however, that nothing herein contained
shall be construed as (a) preventing Employee from investing his personal assets
in any business or businesses which do not compete directly or indirectly with
the Employer, provided such investment or investments do not require any
services on his part in the operation of the affairs of the entity in which such
investment is made and in which his participation is solely that of an investor,
(b) preventing Employee from purchasing securities in any corporation whose
securities are regularly traded, if such purchases shall not result in his
owning beneficially, at any time, more than 5% of the equity securities
of any corporation engaged in a business which is competitive, directly or
indirectly, to that of Employer, or (c) preventing Employee from engaging in any
other activities, if he receives the prior written approval of the Board of
Directors of Employer with respect to his engaging in such
activities.
3. RECORDS
In
connection with his engagement hereunder, Employee shall accurately maintain and
preserve all notes and records generated by Employer which relate to Employer
and its business and shall make all such reports, written if required, as
Employer may reasonably require.
4. TERM
Employee’s
employment hereunder shall be for a single twelve month period (the “Initial
Term”), to commence on August 24, 2009 and end twelve months from the date of
this Agreement. Thereafter, the Employer may elect to extend
employment to Employee for one or more additional twelve-month periods (the
“Subsequent Term”), commencing twelve months from the date hereof. A
twelve-month period shall be deemed a Contract Year. For all
compensation and benefit purposes, other than those specifically addressed
herein, the Employee shall be deemed to have been continually employed with the
Employer from August 24, 2009.
5. SALARY
As full
compensation (“Base Salary”) for the performance of his duties on behalf of
Employer, Employee shall be compensated as follows:
(i) Base Salary.
Employer, during the Initial Term hereof, shall pay Employee a base salary at
the rate of Fifteen Thousand, Eight Hundred and Thirty-Three Dollars and 33/100
($15,833.33)
per month, payable semi-monthly commencing on the date hereof.
(ii) Annual Bonus. In
addition to the Base Salary, Employee will be eligible for an annual performance
bonus in an amount up to fifty percent (50%) of Base Salary, to be payable upon
achievement of performance goals and objectives to be mutually agreed upon by
the Employee and the Employer’s Board of Directors in advance of the relevant
performance period.
(iii) Other Meritorious
Adjustments. The Employer’s Board of Directors may, in their sole
discretion, consider other meritorious adjustments in compensation, or a bonus,
under appropriate circumstances, including the conception of valuable or unique
inventions, processes, discoveries or improvements capable of profitable
exploitation.
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6.
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EQUITY
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(i) Incentive Stock
Options. Employee shall be eligible to receive options, under Employer’s
i2 Telecom International, Inc. Incentive Stock Option Plan (the “ISO Plan”)
during the Term of this Agreement as determined by the Employer’s Board of
Directors from time to time.
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(ii) Change of
Control. In the event of a merger, acquisition or sale
transaction by the Employer which causes a Change of Control of the Employer
(“the Trigger Event”), any stock options or similar securities held beneficially
by the Employee shall automatically become fully vested. For
purposes of this Section 6, Change of Control shall mean the occurrence of any
of the following events: (i) a majority of the outstanding voting
stock of Employer shall have been acquired or beneficially owned by any person
(other than Employer or a subsidiary of Employer) or any two or more persons
acting as a partnership, limited partnership, syndicate or other group, entity
or association acting in concert for the purpose of voting, acquiring, holding,
or disposing of voting stock of Employer; or (ii) a merger or a consolidation of
Employer with or into another corporation, other than (A) a merger or
consolidation with a subsidiary of Employer, or (B) a merger or consolidation in
which the holders of voting stock of Employer immediately prior to the merger as
a class hold immediately after the merger at least a majority of all outstanding
voting power of the surviving or resulting corporation or its parent; or (iii) a
statutory exchange of shares of one or more classes or series of outstanding
voting stock of Employer for cash, securities, or other property, other than an
exchange in which the holders of voting stock of Employer immediately prior to
the exchange as a class hold immediately after the exchange at least a majority
of all outstanding voting power of the entity with which Employer stock is being
exchanged; or (iv) the sale or other disposition of all or substantially all of
the assets of Employer, in one transaction or a series of transactions, other
than a sale or disposition in which the holders of voting stock of Employer
immediately prior to the sale or disposition as a class hold immediately after
the exchange at least a majority of all outstanding voting power of the entity
to which the assets of Employer are being sold; or (v) the liquidation or
dissolution of Employer.
(iii) In
the event the Employee is terminated by Employer subsequent to a merger,
acquisition or sale transaction by the Employer causing the Trigger Event, then
any stock, options or similar securities held beneficially by the Employee shall
automatically become 100% vested and the Employee shall be entitled to an
additional number of options equal to 30% of the Employee’s total ISO Plan
position at the time of the Trigger Event. Such additional shares
shall be priced at the then prevailing value of the Common Stock vested as
determined by the Employer’s Board of Directors
7. BUSINESS
EXPENSES
The
Employer also shall reimburse the Employee for all business expenses incurred by
Employee in the performance of his duties hereunder including, but not limited
to, travel on business, attending technical and business meetings, professional
activities, and customer entertainment, such reimbursement to be made in
accordance with regular Employer policy and within a reasonable period following
Employee’s presentation of the details of, and proof of, such
expenses.
8. FRINGE
BENEFITS
(i) During
the term of this Agreement, Employer shall provide to Employee, at its sole
expense, hospitalization, major medical, life insurance and other fringe
benefits on the same terms and conditions as it shall afford other senior
management employees. Nothing herein shall require Employee to obtain or
maintain such coverage.
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(ii) During
the term of this Agreement, Employer shall provide paid vacation, to Employee,
which accrues from the date of execution of this Agreement. The annual paid
vacation earned for each Contract Year is: (i) three (3) weeks per Contract Year
for the first three (3) Contract Years of full-time employment; (ii) four (4)
weeks per Contract Year for more than three (3) and up to seven (7) Contract
Years of full-time employment; and (iii) five (5) weeks per Contract Year
for more than seven (7) Contact Years of full-time employment.
9. SUBSIDIARIES
For the
purposes of this Agreement all references to business products, services and
sales of Employer shall include those of Employer’s affiliates.
10. INVENTORIES:
SHOP RIGHTS
All
systems, inventions, discoveries, apparatus, techniques, methods, know-how,
formulae or improvements made, developed or conceived by Employee during
Employee’s employment by Employer, whenever or wherever made, developed or
conceived, and whether or not during business hours, which constitute an
improvement, on those heretofore, now or at any during Employee’s employment,
developed, manufactured or used by Employer in connection with the manufacture,
process or marketing of any product heretofore or now or hereafter developed or
distributed by Employer, or any services to be performed by Employer or of any
product which shall or could reasonably be manufactured or developed or marketed
in the reasonable expansion of Employer’s business, shall be and continue to
remain Employer’s exclusive property, without any added compensation or any
reimbursement for expenses to Employee, and upon the conception of any and every
such invention, process, discovery or improvement and without waiting to perfect
or complete it, Employee promises and agrees that Employee will immediately
disclose it to Employer and to no one else and thenceforth will treat it as the
property and secret of Employer.
Employee
will also execute any instruments requested from time to time by Employer to
vest in it complete title and ownership to such invention, discovery or
improvement and will, at the request of Employer, do such acts and execute such
instrument as Employer may require, but at Employer’s expense to obtain Letters
of Patent, trademarks or copyrights in the United States and foreign countries,
for such invention, discovery or improvement and for the purpose of vesting
title thereto in Employer, all without any reimbursement for expenses (except as
provided in Section 5 or otherwise) and
without any additional compensation of any kind to Employee.
11. CONFIDENTIAL
INFORMATION and TRADE SECRETS
(i) All
Confidential Information shall be the sole property of
Employer. Employee will not, during the period of his employment and
for a period ending two years after termination of his employment for any
reason, disclose to any person or entity or use or otherwise exploit for
Employee’s own benefit or for the benefit of any other person or entity any
Confidential Information which is disclosed to Employee or which becomes known
to Employee in the course of his employment with Employer without the prior
written consent of an officer of Employer except as may be necessary and
appropriate in the ordinary course of performing his duties to Employer during
the period of his employment with Employer. For purposes of this Section 11(a),
“Confidential Information” shall mean any data or information
belonging to Employer, other than Trade Secrets, that is of value to Employer
and is not generally known to competitors of Employer or to the public, and is
maintained confidential by Employer, including but not limited to non-public
information about Employer’s clients, executives, key contractors and other
contractors and information with respect to its products, designs, services,
strategies, pricing, processes, procedures, research, development, inventions,
improvements, purchasing, accounting, engineering and marketing (including any
discussions or negotiations with any third parties). Notwithstanding
the foregoing, no information will be deemed to be Confidential Information
unless such information is treated by Employer as confidential and shall not
include any data or information of Employer that has been voluntarily disclosed
to the public by Employer (except where such public disclosure has been made
without the authorization of Employer), or that has been independently developed
and disclosed by others, or that otherwise enters the public domain through
lawful means.
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(ii) All
Trade Secrets shall be the sole property of Employer. Employee agrees that
during his employment with Employer and after its termination, Employee will
keep in confidence and trust and will not use or disclose any Trade Secret or
anything relating to any Trade Secret, or deliver any Trade Secret, to any
person or entity outside Employer without the prior written consent of an
officer of Employer. For purposes of this Section 11(b), “Trade
Secrets” shall mean any scientific, technical and non-technical data,
information, formula, pattern, compilation, program, device, method, technique,
drawing, process, financial data, financial plan, product plan or list of actual
or potential customers or vendors and suppliers of Employer or any portion or
part thereof, whether or not copyrightable or patentable, that is of value to
Employer and is not generally known to competitors of Employer or to the public,
and whose confidentiality is maintained, including unpatented and un-copyrighted
information relating to Employer’s products, information concerning proposed new
products or services, market feasibility studies, proposed or existing marketing
techniques or plans and customer consumption data, usage or load data, and any
other information that constitutes a trade secret, as such term as defined in §
10-1-761 of the Official Code of Georgia Annotated, in each case to the extent
that Employer, as the context requires, derives economic value, actual or
potential, from such information not being generally known to, and not being
readily ascertainable by proper means by, other persons or entities who can
obtain economic value from its disclosure or use.
12. NON-SOLICITATION
OF EMPLOYEES
During
the term of Employee’s employment and for one year thereafter, Employee will not
cause or attempt to cause any employee of Employer to cease working for Employer
to retain employment with another employer that is a competitor of
Employer’s. However, this obligation shall not affect any
responsibility Employee may have as an employee of Employer with respect to the
bona fide hiring and firing of Employer’s personnel.
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13.
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NON-SOLICITATION
OF CUSTOMERS AND PROSPECTIVE
CUSTOMERS
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Employee
will not, during the period of his employment and for a period ending two years
after the termination of his employment for any reason, directly or indirectly,
solicit the business of any customer for the purpose of, or with the intention
of, selling or providing to such customer any product or service in competition
with any product or service sold or provided by Employer during the 12 months
immediately preceding the termination of Employee’s employment with Employer;
provided that the provisions contained in this Section 13 shall apply only to a
customer who is or was during the 12 months immediately preceding the
termination of Employee’s employment with Employer either (a) a customer of
Employer, with whom Employee had material contact and/or whom Employee serviced
in his role as an employee of Employer or (b) a prospective customer of
Employer, with whom Employee had material contact and/or whom
he serviced in his role as an employee of Employer.
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14. NON-COMPETITION
Employee
agrees that during his employment with Employer, Employee will not engage in any
employment, business, or activity that is in any way competitive with the
business or proposed business of Employer, and Employee will not assist any
other person or organization in competing with Employer or in preparing to
engage in competition with the business or proposed business of Employer. The
provisions of this paragraph shall apply both during normal working hours and at
all other times including, without limitation, nights, weekends and vacation
time, while Employee is employed with Employer.
15. TERMINATION
Employee’s
employment with Employer may be terminated as follows:
(a) Termination Without Just
Cause.
(i) Employer,
in its sole discretion, may terminate Employee’s employment hereunder for any
reason without Just Cause (as defined below), at any time, by giving written
notice to Employee. If Employer terminates Employee’s employment hereunder
without Just Cause Employer shall have no liability to Employee except to pay
the Continued Benefits for the Continuation Period as defined
below.
(ii) If
Employer terminates Employee’s employment hereunder without Just Cause Employer
shall continue to pay to Employee his then-current base salary, plus accrued but
unpaid vacation time, accrued but unpaid benefits and reimbursement of all
unpaid business expenses (in each case, as of the date of termination)
(collectively the “Continued Benefits”) for a period of six months (the
“Continuation Period”).Employee shall be entitled to continued participation in
all medical and disability plans, to the extent such plans are provided by
Employer, at the same benefit level at which he was participating on the date of
termination of the Employee’s employment until the expiration of the
Continuation Period.
(b) Termination With Just
Cause.
(i) Employer
may immediately terminate Employee’s employment hereunder for Just Cause (as
defined below) at any time upon delivery of written notice to
Employee.
(ii) For
purposes of this Agreement, the phrase “Just Cause” means: (A) Employee’s
material fraud, gross malfeasance, gross negligence, or willful misconduct done
in bad faith, with respect to Employer’s business affairs; (B) Employee’s
refusal or repeated failure to follow Employer’s established reasonable and
lawful policies of Employer; (C) Employee’s material breach of this Agreement;
or (D) Employee’s conviction of a felony or crime involving moral turpitude. A termination of
Employee for Just Cause based on clause (A), (B) or (C) of the preceding
sentence will take effect 30 days after Employee receives from Employer written
notice of its intent to terminate Employee’s employment and Employer’s
description of the alleged cause, unless Employee, in the good-faith opinion of
Employer, during such 30-day period, remedies the events or circumstances
constituting Just Cause.
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(iii) If
Employee’s employment hereunder is terminated by Employer for Just Cause,
Employer will be required to pay to Employee only that portion of his Base
Salary, accrued vacation, and to the extent required under the terms of any
benefit plan or this Agreement, the vested portion of any benefit under such
plan, all as earned through the date of termination.
(c) For Good
Reason.
(i) Employee
may terminate employment hereunder For Good Reason (as defined below), at any
time, by giving written notice to Employer of such intent at least 30 days in
advance of the effective date of termination.
(ii) For
purposes of this Agreement, the phrase “For Good Reason” means (A) any material
reduction in duties, responsibility, position or compensation; (B) Employer’s
material breach of this Agreement; (C) relocation of Employee’s permanent job
site outside of the Dallas/ Ft. Worth, Texas area; or (D) Employer’s refusal or
failure to establish and follow lawful policies and practices.
(iii) If
Employee terminates employment hereunder For Good Reason, Employer shall
continue to pay to Employee the Continued Benefits for the Continuation
Period. Employee shall be entitled to continued participation in all
medical and disability plans, to the extent such plans are provided by Employer,
at the same benefit level at which he was participating on the date of
termination of the Employee’s employment until the expiration of the
Continuation Period.
(d) Disability and
Death.
Employee’s
employment hereunder will be terminated immediately upon his disability (as
determined for purposes of Employer’s long-term disability plan) or his
death. If Employee’s employment is terminated due to such disability
or death, Employer will be required to pay to Employee or Employee’s estate, as
the case may be, in addition to the amounts payable under Employer’s short-term
and long-term disability plans or life insurance plans (as applicable), only his
base salary and accrued vacation, earned through the date of termination, and to
the extent required under the terms of any benefit plan or this Agreement, the
vested portion of any benefit under such plan. Employee or Employee’s
estate, as the case may be, will not by operation of this provision forfeit any
rights in which Employee is vested at the time of Employee’s disability or
death.
16. INJUNCTION
(i) Should
Employee at any time reveal, or threaten to reveal, any such secret knowledge or
information, or during any restricted period engage, or threaten to engage, in
any business in competition with that of Employer, or perform, or threaten to
perform, any services for anyone engaged in such competitive business, or in any
way violate, or threaten to violate, any of the provisions of this Agreement,
Employer shall be entitled to an injunction restraining Employee from doing, or
continuing to do, or performing any such acts; and Employee hereby consents to
the issuance of such an injunction.
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(ii) In
the event that a proceeding is brought in equity to enforce the provisions of
this Paragraph, Employee shall not argue as a defense that there is an adequate
remedy at law, nor shall Employer be prevented from seeking any other remedies
which may be available.
(iii) The
existence of any claim or cause of action by Employer against Employee, or by
Employee against Employer, whether predicated upon this Agreement or otherwise,
shall not constitute a defense to the enforcement by Employer of the foregoing
restrictive covenants but shall be litigated separately.
17. ARBITRATION
(i) In
the event that there shall be a dispute (a “Dispute”) among the parties arising
out of or relating to this Agreement, or the breach thereof, the parties agree
that such dispute shall be resolved by final and binding arbitration before a
single arbitrator in Dallas, Texas, administered by the American Arbitration
Association (the “AAA”), in accordance with AAA’s Employment ADR
Rules. The arbitrator’s decision shall be final and binding upon the
parties, and may be entered and enforced in any court of competent jurisdiction
by either of the parties. The arbitrator shall have the power to
grant temporary, preliminary and permanent relief, including without limitation,
injunctive relief and specific performance.
(ii) The
Employer will pay the direct costs and expenses of the arbitration, including
arbitration and arbitrator fees. Except as otherwise provided by
statute, Employee and the Employer are responsible for their respective
attorneys’ fees incurred in connection with enforcing this
Agreement. Employee and the Employer agree that, to the extent
permitted by law, the arbitrator may, in his or her discretion, award reasonable
attorneys’ fees to the prevailing party.
18. MISCELLANEOUS
If any
provision of this Agreement shall be declared, by a court of competent
jurisdiction, to be invalid, illegal or incapable of being enforced in whole or
in part, the remaining conditions and provisions or portions thereof shall
nevertheless remain in full force and effect and enforceable to the extent they
are valid, legal and enforceable, and no provision shall be deemed dependent
upon any covenant or provision so expressed herein.
The
parties hereto have made no agreements, representations or warranties relating
to the subject matter of this Agreement which are not set forth herein. The
provisions of this Agreement may not be amended, supplemented, waived, or
changed orally, but only in writing and signed by the party as to whom
enforcement of any such amendment, supplement, waiver, or modification is sought
and making specific reference to this Agreement.
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The
rights, benefits, duties and obligations under this Agreement shall inure to,
and be binding upon, the Employer, its successors and assigns, and upon the
Employee and his legal representatives, heirs and legatees. This Agreement
constitutes a personal service agreement, and the performance of the Employee’s
obligations hereunder may not be transferred or assigned by the
Employee.
The
failure of either party to insist upon the strict performance of any of the
terms, conditions and provisions of this Agreement shall not be construed as a
waiver or relinquishment of future compliance therewith, and said terms,
conditions and provisions shall remain in full force and effect. No waiver of
any term or condition of this Agreement, on the part of either party, shall be
effective for any purpose whatsoever unless such waiver is in writing and signed
by such party.
This
Agreement shall be construed and governed by the laws of the State of
Texas.
IN WITNESS WHEREOF, this
employment agreement is dated as of August 24, 2009.
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On
behalf of Employer:
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i2
TELECOM INTERNATIONAL, INC.
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By:
/s/ Xxxxx X. Xxxxxxxxxxxx
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Name:
Xxxxx X. Xxxxxxxxxxxx
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Position: President
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By:
/s/ Xxxxxxx Xxxxxxxx
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Xxxxxxx
Xxxxxxxx, Employee
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