EXHIBIT 10.25
EMPLOYMENT AGREEMENT
This employment agreement (the "Agreement"), is to be effective on
March 14, 2005 (the "Effective Date"), by and between iLinc Communications,
Inc., a Delaware corporation (the "Company"), and David J. Iannini ("Employee").
WHEREAS, the Company wishes to offer employment to Employee on the
terms and conditions expressed herein; and,
WHEREAS, the Employee wishes to accept employment with the Company on
the terms and conditions described herein;
NOW THEREFORE, in consideration of the mutual premises and conditions
contained herein, including the recitals hereto, which, by this reference, are
incorporated herein and made a part hereof, the parties agree as follows:
1. EMPLOYMENT. The Company hereby agrees to employ Employee, and Employee
hereby accepts employment by the Company, upon the terms and subject to
the conditions hereinafter set forth.
2. DUTIES. Employee shall serve as a Senior Vice President and Chief
Financial Officer of the Company (the "Position") reporting to the
Company's President. Employee's duties and powers shall be those
consistent with the Position, with such additional duties or titles as
determined necessary and appropriate from time to time by the Company's
President. Employee agrees to devote his full time, attention and best
efforts to the Company in the performance of Employee's duties. All of
the Employee's powers and authorities shall be subject to the
reasonable direction and control of the Company's President. Employee
acknowledges that the executive offices of the Company will be located
in Phoenix, Arizona and that he shall be required to perform his duties
under this Agreement from those offices.
3. TERM. Unless earlier terminated in accordance with Section 6 hereof,
the term of this Agreement shall be for twelve (12) months (the
"Term"), beginning on the Effective Date. The Company shall have the
option, but not the obligation, to renew this Agreement for one like
period of time as the initial Term by providing no less than sixty (60)
days prior written notice of its intent to renew this Agreement.
4. COMPENSATION AND BENEFITS. In consideration for the services of the
Employee hereunder, the Company will compensate Employee as follows:
a. BASE SALARY. Beginning with the Effective Date and continuing
thereafter until this Agreement is terminated, Employee shall
receive a monthly minimum base salary (the "Base Salary")
equal to fourteen thousand five hundred eighty three and
34/100 dollars ($14,583.34) per month. Employee's Base Salary
shall be paid in accordance with Company's standard policy
regarding payment of compensation to employees but no less
frequently than monthly.
b. BONUS. Commencing on April 1, 2005 and continuing thereafter
until this Agreement is terminated, Employee will be eligible
to receive an annual bonus of up to twenty five percent (25%)
of the Employee's Base Salary that shall be based upon the
Company achieving the revenue and/or net income targets, or
other financial performance targets established by the
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President, as may be amended hereafter from time to time. Such
bonus, if any, shall be payable by the Company to Employee
annually as approved by the Compensation Committee of the
Company's Board of Directors. Notwithstanding anything to the
contrary herein or contained in the writing related hereto,
any bonus due to Employee shall be due up to and including the
termination date of this Agreement, but no bonus shall accrue
after the termination date of this Agreement.
c. BENEFITS. Employee shall be entitled to medical, dental and
retirement benefits which are generally made available to
employees of a like position, and specifically Company will
pay the total premium costs associated with the medical and
dental insurance, not including deductibles and/or
co-payments, covering the health of Employee, Employee's
spouse and Employee's dependants. During each year of his
employment Employee shall be entitled to fifteen (15) days of
paid vacation, and such other days of compensated absences,
(i.e. sick leave or personal days) in accordance with the
Company's policies and procedures as determined from time to
time by the President.
5. EXPENSES. It is acknowledged by the parties that Employee, in
connection with the services to be performed by him pursuant to the
terms of this Agreement, will be required to make payments for travel,
meals, hotel, entertainment of business associates, mobile telephone
and similar expenses (the "Out of Pocket Expenses"). The Company will
reimburse Employee for all reasonable and necessary Out of Pocket
Expenses incurred by Employee in the performance of his duties.
Employee will comply with such budget limitations, approval and
reporting requirements with respect to such Out of Pocket Expenses as
the Company may establish from time to time.
6. TERMINATION. Employee's employment will begin on the Effective Date and
continue until the end of the Term, including any renewals thereof,
except that the employment of Employee hereunder will terminate upon
the occurrence of the following events:
a. BY EMPLOYEE. Employee's employment will terminate upon
Employee's notice to Company, in writing at least thirty (30)
days prior to Employee's last day of employment, of Employee's
intent to terminate this Agreement. In the event of the
termination of this Agreement pursuant to this sub-section
6(a), Employee will not be entitled to any Severance Amount
(as hereinafter defined) or further consideration, except for
any portion of the Base Salary accrued but unpaid from the
last monthly payment date to the date of termination and
expense reimbursements under Section 5 hereof for expenses
incurred in the performance of his duties hereunder prior to
termination.
b. DEATH OR DISABILITY. Employee's employment will terminate
immediately upon the death of Employee during the term of his
employment hereunder or, at the option of the Company, in the
event of Employee's disability, upon 30 days notice to
Employee. Employee will be deemed "disabled" if, as a result
of Employee's incapacity due to physical or mental illness,
Employee shall have been continuously absent from his duties
with the company on a full-time basis for 120 consecutive
business days, and Employee shall not reasonably be expected
to be able to resume his duties within 60 days of the end of
such 120 day period. In the event of the termination of this
Agreement pursuant to this subsection 6(b), Employee will not
be entitled to any Severance Amount (as hereinafter defined)
or other compensation except for any portion of his Base
Salary accrued but unpaid from the last monthly payment date
to the date of termination and expense reimbursements under
Section 5 hereof or for expenses incurred in the performance
of his duties hereunder prior to termination.
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c. FOR CAUSE. The Company may terminate the Employee's employment
"for cause" immediately upon written notice by the Company to
Employee. For purposes of this Agreement, a termination will
be for Cause if: (i) Employee willfully and continuously fails
to perform his duties with the Company (other than any such
failure resulting from incapacity due to physical or mental
illness); (ii) Employee willfully engages in gross misconduct
materially and demonstrably injurious to the Company; (iii)
Employee has been convicted of a felony which the President
reasonably believes will result in injury to the Company or
which would disqualify employee for coverage by the Company's
surety bond; (iv) Employee materially breaches the
representations contained in Section 9 (Employee
Representations) after written notice and failure to cure such
breach. In the event of the termination of this Agreement
pursuant to this sub-section 6(c), Employee will not be
entitled to any Severance Amount (as hereinafter defined) or
further consideration, except for any portion of the Base
Salary accrued but unpaid from the last monthly payment date
to the date of termination and expense reimbursements under
Section 5 hereof for expenses incurred in the performance of
his duties hereunder prior to termination.
d. BY COMPANY WITHOUT CAUSE. The Company may terminate this
Agreement during the Term at any time for any reason "without
cause." In the event of the termination of this Agreement
pursuant to this subsection 6(d) and only in that event, then
the Company will pay Employee, as Employee's sole remedy in
connection with such termination, severance (the "Severance
Amount") in an amount determined by multiplying Employee's
monthly Base Salary by twelve (12) months. The Company will
also pay Employee the portion of his Base Salary accrued but
unpaid from the last monthly payment date to the date of
termination and expense reimbursements under Section 5 hereof
for expenses incurred in the performance of his duties
hereunder prior to termination. The Company will pay the
Severance Amount in a lump sum and within thirty (30) days of
the Employee's last day of employment. The Company will be
entitled to offset or mitigate the amount due under this
subsection by any other amounts payable to Employee, including
amounts payable or paid to Employee by third parties for
Employee's services after the date of termination.
e. CHANGE OF CONTROL. Notwithstanding anything to the contrary
contained in this Section 6, in the event Employee's
employment with the Company terminates for any reason (other
than death or disability) within the twelve (12) month period
following a Change of Control (as defined hereafter), then the
Company will pay Employee a lump sum payment (the "Termination
Payment") in cash equal to the amount of the Severance Amount;
plus, the amount of Employee's base salary accrued but unpaid
and any expense reimbursement for expenses incurred in the
performance of the duties described herein prior to the
termination date. A "Change of Control" shall be deemed to
have occurred: (i) when in a single transaction or a series of
transactions a change of stock ownership of the Company of a
nature that would be required to be reported in response to
Item 6(e) of Schedule 14A promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and any
successor item of a similar nature has occurred; or (ii) upon
the acquisition of beneficial ownership, directly or
indirectly, by any person (as such term is used in Section
13(d) and 14(d)(2) of the Exchange Act of securities of the
Company) in a single transaction or a series of transactions
representing 50% or more of the combined voting power of the
Company's then outstanding securities; or (iii) sale of
substantially all of the assets of the Company in a single
transaction or a series of transactions. The Company shall pay
the Termination Payment to Employee upon written notice by
Employee. The Termination Payment due under this Section will
not be affected by the manner in which Employee's employment
is terminated and accordingly will be whether the Change of
Control occur after termination of this Agreement and whether
Employee's termination of employment is voluntary,
involuntary, for cause, or without cause.
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7. STOCK OPTIONS. Employee shall be granted options (the "Options") to
purchase from the Company all or any part of a total of 250,000 shares
of the Company's Common Stock, par value $.001 per share, at an
exercise price equal to or above the closing price of the Company's
Common stock on the date of grant (the "Date of Grant") of the Options.
One half of the option shares will be issued as an "incentive stock
option" and one half will be issued as a "non-qualified stock option"
within the meaning of Section 422 of the Internal Revenue Code. The
Options will expire on the day prior to the tenth (10th) anniversary of
the Date of Grant, or such earlier date as may be provided in the 1997
Stock Compensation Plan (the "Plan"). Subject to the provisions of
Plan, the Options may be exercised as follows; on the date that is six
(6) months from the Date of Grant, twenty-five percent (25.000%) of the
options granted shall be vested, and thereafter beginning on the first
day of the seventh month after the Date of Grant, one thirty-sixth
(1/36) of the remaining portion shall vest on the first day of each
month, from month to month, until fully vested. In addition to the
foregoing stock option grant, Employee will be eligible to participate
in the Company's stock option plan and therefore be eligible for an
annual grant of additional stock options, if any, that are awarded to
all of the Company's employees. If Employee is terminated "without
cause" under Section 6(d) above, then the effect of the termination of
the Employee's employment on such options shall be determined by the
terms of the Plan and the option agreement related to such Options. If
Employee is terminated "for cause" under Section 6(c) above, then the
Options shall be terminated. In the event of a "Change of Control" as
defined in the Plan or the issuance of 33% of the outstanding shares of
the Company while this Agreement remains in effect, then the Options
issued and outstanding to Employee shall immediately vest (100%), and
the Employee may exercise his options at any time during the original
term of the option agreement (as defined therein), and such termination
of this Agreement shall not cause termination or expiration of the
Options.
8. CONFIDENTIAL INFORMATION. Employee recognizes and acknowledges that
certain assets of the Company and its affiliates, including without
limitation information regarding customers, pricing policies, methods
of operation, proprietary computer programs, sales, products, profits,
costs, markets, key personnel, formulae, product applications,
technical processes, and trade secrets (herein called "Confidential
Information") are valuable, special and unique assets of the Company
and its affiliates. Employee will not, during or after the term of his
employment, disclose any of the Confidential Information to any person,
firm, corporation, association, or any other entity for any reason or
purpose whatsoever, directly or indirectly, except as may be required
pursuant to his employment hereunder, unless and until such
Confidential Information becomes publicly available other than as a
consequence of the breach by Employee of his confidentiality
obligations hereunder. In the Event of the termination of his
employment, whether voluntary or involuntary, and whether by the
Company or Employee, Employee will deliver to the Company all documents
and data pertaining to the Confidential Information and will not take
with him any documents or data of any kind or any reproductions (in
whole or in part) of any items relating to the Confidential
Information.
9. REPRESENTATIONS OF EMPLOYEE.
a. NON-COMPETITION AND NON-SOLICITATION. For the period beginning
with the Effective Date and continuing thereafter until the
expiration of twelve (12) months after termination of
Employee's employment with the Company, then Employee
covenants, warrants and represents that he will not: (i)
engage directly or indirectly, alone or as a shareholder,
partner, officer, director, employee or consultant of any
other business organization, including as an agent or reseller
of another company that engages in any business activities
that are directly competitive with the Company, including but
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not limited to the web conferencing, eLearning or audio
conferencing industries; (ii) divert to any competitor of the
Company any customer of the Company or induce a customer to
cease doing business with the Company or, (iii) solicit or
encourage any employee of the Company to leave their
employment with the Company or seek employment by or with any
competitor of the Company or hire directly or indirectly any
employee of the Company. The parties hereto acknowledge that
Employee's non-competition obligations hereunder will not
preclude Employee from owning less than 5% of the common stock
of any publicly traded corporation conducting business
activities that are competitive with the Company or serving as
an officer, director, stockholder or employee of an entity
whose business operations are not competitive with those of
the Company. Employee will continue to be bound by the
provisions of this Section 9 until their expiration and will
not be entitled to any compensation from the Company with
respect thereto. If at any time the provisions of this Section
9 are determined to be invalid or unenforceable, by reason of
being vague or unreasonable as to area, duration or scope of
activity, this Section 9 will be considered divisible and will
become and be immediately amended to only such area, duration,
scope of activity as will be determined to be reasonable and
enforceable by the court or other body having jurisdiction
over the matter; and Employee agrees that this Section 9 as so
amended will be valid and binding as though any invalid or
unenforceable provision had not been included herein.
b. GENERAL REPRESENTATIONS. As of the Effective Date, Employee
expressly warrants and represents to the Company that: (i) All
employment agreements, employment letters or employment
relationships, whether as an employee or as an independent
contractor, have been terminated (ii) The execution and
delivery of this Agreement does not violate any provision of
any existing employment agreement to which Employee is a party
and which on the Effective Date remain in effect; and (iii)
Employee is not (by virtue of any act or omission) in
violation of any non-competition or like covenant that would
have the effect of prohibiting Employee from lawfully engaging
in the activities contemplated by this Agreement.
c. MOONLIGHTING. Moonlighting and other dealings that involve
investment banking, M&A and corporate development on behalf of
organizations or persons other than iLinc are prohibited, and
any compensation due to employee will be offset by any
compensation earned outside of the Company if the prohibition
against moonlighting is breached.
10. GENERAL.
a. NOTICES. All notices and other communications hereunder will
be in writing or by written telecommunication, and will be
deemed to have been duly given if delivered personally or if
mailed by certified mail, return receipt requested or by
written telecommunication, to the relevant address set forth
below, or to such other address as the recipient of such
notice or communication will have specified to the other party
hereto in accordance with this Section 10(a):
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If to the Company, to: If to Employee:
iLinc Communications, Inc. Mr. David J. Iannini
2999 N. 44th Street, Suite 650 8224 E. Wingspan Way
Phoenix, Arizona 85018 Scottsdale, AZ 85255
Attn: President davidiannini@yahoo.com
Fax No.: (602) 952-0544
b. WITHHOLDING AND OFFSET. All payments required to be made by
the Company under this Agreement to Employee will be subject
to the withholding of such amounts, if any, relating to
federal, state and local taxes as may be required by law. All
payments under this Agreement will be subject to offset or
reduction attributable to any amount Employee may owe to the
Company.
c. EQUITABLE REMEDIES. Each of the parties hereto acknowledges
and agrees that upon any breach by Employee of his obligations
under any of the Sections 8 and 9 hereof, the Company will
have no adequate remedy at law, and accordingly will be
entitled to specific performance and other appropriate
injunctive and equitable relief.
d. SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid or unenforceable, such provision will be
fully severable and this Agreement will be construed and
enforced as if such illegal, invalid or unenforceable
provision never comprised a part hereof; and the remaining
provisions hereof will remain in full force and effect and
will not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom. Furthermore, in lieu
of such illegal, invalid or unenforceable provision, there
will be added automatically as part of this Agreement a
provision as similar in its terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid
and enforceable. Any and all covenants and obligations of
either party hereto which by their terms or by reasonable
implication are to be performed, in whole or in part, after
the termination of this Agreement, shall survive such
termination, including specifically the obligations arising
under Sections: 6, 7, 8 and 9.
e. WAIVERS. No delay or omission by either party hereto in
exercising any right, power or privilege hereunder will impair
such right, power or privilege, nor will any single or partial
exercise of any such right, power or privilege preclude any
further exercise thereof or the exercise of any other right,
power or privilege.
f. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which will be deemed an original, and
all of which together will constitute one and the same
instrument.
g. CAPTIONS. The captions in this Agreement are for convenience
of reference only and will not limit or otherwise affect any
of the terms or provisions hereof.
h. REFERENCE TO AGREEMENT. Use of the words "herein," "hereof,"
"hereto " and the like in this Agreement refer to this
Agreement only as a whole and not to any particular subsection
or provision of this Agreement, unless otherwise noted.
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i. BINDING AGREEMENT. This Agreement will be binding upon and
inure to the benefit of the parties and will be enforceable by
the personal representatives and heirs of Employee and the
successors of the Company. If Employee dies while any amounts
would still be payable to him hereunder, such amounts will be
paid to Employee's estate. This Agreement is not otherwise
assignable by Employee.
j. ENTIRE AGREEMENT. Except as provided in the benefit plans and
programs referenced herein, this Agreement contains the entire
understanding of the parties, supersedes all prior agreements
and understandings relating to the subject matter hereof and
may not be amended except by a written instrument hereafter
signed by each of the parties hereto. Any modification of this
Agreement shall be effective only if it is in writing and
signed by the parties hereto.
k. GOVERNING LAW. This Agreement and the performance hereof will
be construed and governed in accordance with the laws of the
State of Arizona, without regard to its choice of law
principles.
l. ATTORNEYS' FEES. If legal action is commenced by either party
to enforce or defend its rights under this Agreement, the
prevailing party in such action shall be entitled to recover
its court costs and reasonable attorneys' fees, including
expert witnesses fees actually incurred which shall be awarded
to the that party, in addition to any other relief granted.
m. AUTHORITY. The signatories to this Agreement represent and
warrant that such signatory has the authority to enter into
this Agreement, and that neither that signatory nor the party
on whose behalf this Agreement may be signed has assigned any
claims related to the parties' relationship or this Agreement
to any person or entity.
11. BINDING ARBITRATION. Any controversy or claim arising out of or
relating to this Agreement, or breach thereof, shall be settled
exclusively by arbitration in Phoenix, Arizona, in accordance with the
Commercial Arbitration Rules of the American Arbitration Association
then in effect. A sole arbitrator shall conduct Arbitration and he
shall render his award, if any, within five (45) days of the
arbitration hearing. Judgment upon the award rendered by the arbitrator
may be entered in, and enforced by, any court having jurisdiction
thereof. The award of the arbitrator may grant any relief consistent
with the terms and provisions of this Agreement, in law or in equity;
and the award may contain a provision for payment of costs and
attorney's fees to the prevailing party.
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EXECUTED to be effective as of the Effective Date first written above.
ILINC COMMUNICATIONS, INC. EMPLOYEE:
By: /s/ James M. Powers, Jr. By: /s/ David J. Iannini
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James M. Powers, Jr., David J. Iannini,
President Individually
Date: 3/15/05 Date: 3/15/05
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