Chief Technical Officer Employment Agreement - Jon Deong

EXHIBIT 10.2

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (this " Agreement" ) is made as of the 1st day of January, 2004 by and between InterMetro Communications, Inc., a California corporation (the " Company" ), and Jon deOng, an individual (" Employee" ), and is made with respect to the following facts: R E C I T A L S

A. The Company and the Employee wish to ensure that the Company will receive the benefit of Employee' s loyalty and service.

B. In order to help ensure that the Company receives the benefit of Employee' s loyalty and service, the parties desire to enter into this formal Employment Agreement to provide Employee with appropriate compensation arrangements and to assure Employee of employment stability.

C. The parties have entered into this Agreement for the purpose of setting forth the terms of employment of the Employee by the Company.

NOW, THEREFORE , in consideration of the premises and mutual covenants herein contained, THE PARTIES HERETO AGREE AS FOLLOWS :

1. Employment of Employee and Duties . The Company hereby hires Employee and Employee hereby accepts employment upon the terms and conditions described in this Agreement. The Employee will be the Chief Technical Officer of the Company with all of the duties, privileges and authorities usually attendant upon such office, including but not limited to responsibility for the day-to-day oversight of the Company' s technical operations. Subject to (a) the general supervision of the Chief Executive Officer, and (b) the Employee' s duty to report to the Chief Executive Officer and to follow Company directives and policies, Employee will have all of the authority to perform his employment duties for the Company.

2. Time and Effort . Employee agrees to devote his full working time and attention to the management of the Company' s business affairs, the implementation of its strategic plan, as determined by the Chief Executive Officer and the Board of Directors, and the fulfillment of his duties and responsibilities as the Company' s Chief Technical Officer. Expenditure of a reasonable amount of time for personal matters and business and charitable activities will not be deemed to be a breach of this Agreement, provided that those activities do not materially interfere with the services required to be rendered to the Company under this Agreement.


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3. The Company' s Authority . Employee agrees to comply with the Company' s rules and regulations as adopted by the Company' s Chief Executive Officer and Board of Directors regarding performance of his duties, and to carry out and perform those orders, directions and policies established by the Company with respect to his engagement. Employee will promptly notify the Company' s Chief Executive Officer or Board of Directors of any objection he has to the Chief Executive Officer' s or the Board' s directives and the reasons for such objection.

4. Noncompetition by Employee and Proprietary Information, Confidentiality, Loyalty, and Nonsolicitation . During the term of this Agreement, the Employee will not, directly or indirectly, either as an employee, employer, consultant, agent, principal, partner, stockholder (in a private company), corporate officer, director, or in any other individual or representative capacity, engage or participate in any business that is in competition with the business of the Company or its affiliates. Additionally, Employee agrees to execute the Employee Proprietary Information, Confidentiality, Loyalty, and Nonsolicitation Agreement attached to this Agreement as Exhibit A.

5. Term of Agreement . This Agreement will commence to be effective on January 1, 2004 (the " Commencement Date" ), and will continue until for a period of five years, unless sooner terminated as provided in Section 14 hereof. Thereafter, this Agreement will automatically be renewed for consecutive one (1) year periods unless either party provides the other party with written notification, at least sixty (60) days prior to the expiration of the then current term of this Agreement, of its intention not to renew this Agreement.

6. Compensation . During the term of this Agreement, the Company will pay the following compensation to Employee:

6.1 Annual Compensation . Employee will be paid a fixed salary of $185,000 per year, payable in two installments per month of $7,708 each on the 5th and 20th day of each month, commencing for the first period after the Commencement Date of this Agreement. Employee will receive an annual 11% increase in said fixed salary effective each January 1 st during the term of this Agreement.

6.2 Additional Compensation . In addition to the compensation set forth in Sections 6.1 and 6.3 of this Agreement, Employee may be paid a bonus or bonuses during each year at a target annual amount equal to seventy-five percent (75%) of the Employee' s then in effect annual salary, as determined at the sole discretion of the Company' s Board of Directors based on the Board' s evaluation of the Employee' s definable efforts, accomplishments and similar contributions.

6.3 Stock Incentives . On January 2, 2004 the Company will grant to the Employee 250,000 stock options to purchase 250,000 shares of the Company' s Common Stock pursuant to the Company' s 2004 Stock Option Plan for Directors, Officers, Employees, and Key Consultants of InterMetro Communications, Inc. (" Stock Option Plan" ) having an exercise price of $0.05 per share and an exercise period of ten years after the date of grant, with a vesting schedule as follows: 20% upon grant and 1/16 of the balance each quarter thereafter until the

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remaining stock options have vested. The stock options granted to Employee pursuant to this Agreement will be governed by the terms and conditions of the Stock Option Plan and the stock option agreement executed by the Company which applies to the options. Upon recommendation of the Compensation Committee of the Company' s Board of Directors and approval of the Company' s full Board of Directors, the Employee may be granted additional stock options to purchase additional stock of the Company after the first year of the term of this Agreement. 7. Equipment . Employee will receive one laptop computer, one cellular phone, and one wireless handheld devise for his exclusive use during his employment with the Company. Within thirty (30) days after his termination as a director, officer, employee, and consultant of the Company, as the case may be, Employee agrees to either (i) return such computer, cellular phone, and wireless handheld devise to the Company or (ii) purchase such computer, cellular phone, and wireless handheld devise from the Company for an amount equal to the then fair market value of such computer, cellular phone, and wireless handheld devise.

8. Fringe Benefits . Employee will be entitled to all fringe benefits which the Company or its subsidiaries may make available from time-to-time for persons with comparable positions and responsibilities, as approved by duly adopted resolutions of the Company' s Board of Directors. Without limitation, such benefits will include participation in any life and disability insurance programs, profit incentive plans, pension or retirement plans, and bonus plans as are maintained or adopted from time-to-time by the Company. The Company will also provide Employee with medical group insurance coverage or equivalent coverage for Employee and his dependents. The medical insurance coverage will begin on the Commencement Date and will continue throughout the term of this Agreement. 9. Office and Staff . In order to enable Employee to discharge his obligations and duties pursuant to this Agreement, the Company agrees that it will provide suitable office space for Employee in the Simi Valley Metropolitan Area, together with all necessary and appropriate supporting staff and secretarial assistance, equipment, stationery, books and supplies. The Company agrees to provide at its expense parking for one vehicle by the Employee at the Company' s executive offices.

10. Reimbursement of Expenses . The Company will reimburse Employee for all reasonable travel, mobile telephone, promotional and entertainment expenses incurred in connection with the performance of Employee' s duties hereunder. Employee' s reimbursable expenses will be paid promptly by the Company upon presentment by Employee of an itemized list of invoices describing such expenses. All compensation provided in Sections 6, 8, and 10 of this Agreement will be subject to customary withholding tax and other employment taxes, to the extent required by law.

11. Vacation . Employee will be entitled to three weeks of paid vacation per year or pro rata portion of each year of service by Employee under this Agreement. The Employee will be entitled to the holidays provided in the Company' s established corporate policy for employees with comparable duties and responsibilities.


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12. Automobile and Electronic Communication Devices . Notwithstanding anything else herein to the contrary, the Company will pay to the Employee a fixed amount equal to (a) $500 per month on the last day of each month during the term of this Agreement as reimbursement to the Employee on a nonaccountable basis of all expenses incurred by the Employee for the use of his automobile, including but not limited to depreciation, repairs and insurance, and (b) $300 per month on the last day of each month during the term of this Agreement as reimbursement to the Employee on a nonaccountable basis for all expenses incurred by the Employee for the use of his electronic communication devices.

13. Arbitration . Any dispute under this Agreement will be resolved by binding arbitration conducted in accordance with the rules and procedures of the American Arbitration Association as they are then in effect in the County of Los Angeles, State of California. In order to select an arbitrator, each party to the dispute will select an arbitrator of its choice, and those selected arbitrators will then select by mutual agreement a single arbitrator for the proceeding. The decision of the arbitrator shall be final and binding on th ...