Cto Employment Agreement

EMPLOYMENT AGREEMENT


This Employment Agreement ("Agreement") is entered into this 11th day of May, 2000 by and between eSat, Inc., a Nevada corporation ("eSat"), and Leon Shpilsky ("Executive"), to be effective as of May 8, 2000 (the "Effective Date"), and is based in part on the existence of the following facts:


RECITALS


A. eSat has been formed to, among other things, provide technology
to internet businesses and satellite communications systems; and


B. The Executive has certain expertise in technology and management
issues concerning entities such as eSat; and


C. eSat desires to employ Executive in the capacity of Senior Vice
President - Managing Director of European Operations and
Executive desires to accept employment with eSat pursuant to the
provisions of this Agreement.


TERMS OF EMPLOYMENT


In consideration of the mutual promises, covenants, terms and conditions set forth below, eSat and the Executive agree as follows:


1. Employment. eSat hereby employs Executive as a Senior Vice President - Managing Director of European Operations of eSat for and during the term hereof subject to the reasonable discretion of eSat's Board of Directors and Executive hereby accepts such employment. Beginning on or before July 15, 2000, and continuing for a period of not less than twelve months thereafter, Executive shall be based at eSat's office in Western Europe.


2. Duties of Executive. The Executive shall have the duties, responsibilities and authorities set forth in the position description, attached hereto as Exhibit "A," and as may be reasonably assigned to the Executive from time to time by the Chief Executive Officer or the Board of Directors. The Executive agrees to devote the Executive's full time, best efforts, abilities, knowledge and experience to the faithful performance of the duties, responsibilities and authorities which reasonably may be assigned to the Executive and which are consistent with the Executive's position.


3. Term. This Agreement shall be effective as of the Effective Date and shall continue in force and effect for a period of 36 months thereafter (the "Term") unless terminated as provided in Section 6 hereof. At the end of the Term, this Agreement will automatically renew for successive one year terms (each a "Renewal Term"), unless either party provides written notice no less than 120 days prior to the end of any subsequent Renewal Term of such party's intention not to renew the Agreement.


4. Compensation. eSat shall pay the Executive, as full compensation for services rendered by the Executive under this Agreement, as follows:


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(a) Base Salary. eSat initially shall pay the Executive a base salary
(the "Base Salary") at the rate of $125,000 per year. Such Base
Salary for each year shall be paid by eSat to the Executive in
equal semi-monthly installments. The Executive's salary shall be
reviewed for increase by the Board of Directors no less than
annually thereafter.


(b) Bonus Compensation. Each year during the Term (and any subsequent
Renewal Term) , Executive shall be eligible to earn an annual
bonus ("Bonus Compensation") based upon Executive's performance
as determined by eSat's Board of Directors. Such Bonus
Compensation, if any, shall be determined by eSat and paid to the
Executive within 30 days after completion of eSat's annual
audited financial statements.


(c) Salary Adjustment. The parties hereto intend that during the time
that Executive is based in Western Europe, Executive's monthly
net cash compensation (after payment of all U.S. and Austrian
taxes and reasonable living expenses) will not be lower than such
compensation would have been had Executive been employed by eSat
at the same gross compensation level in Los Angeles, California.
If Executive's net cash compensation during any month during the
Term or a Renewal Term is less than the monthly compensation that
would be received by Executive had he been based in Los Angeles,
California (as determined by Executive, subject to review and
approval by eSat), eSat shall pay Executive a cash salary
adjustment to compensate for such difference. Such salary
adjustment (if any) shall be paid within 30 days of the end of
each month for which such adjustment is due. The parties hereto
understand and agree that, at the end of each Term or Renewal
Term, the aggregate amount of such monthly adjustments shall be
subject to review and further adjustment consistent with the
intent of this paragraph.


5. Employment Benefits. In addition to the compensation payable to the Executive hereunder, the Executive shall be entitled to the following benefits commencing on the Effective Date:


(a) Employment Benefits. As an employee of eSat, the Executive shall
participate in and receive such fringe benefits as may be in
effect from time to time for regular, full-time employees in
similar positions with eSat, including, but not limited to, an
expense account to be used solely for business purposes. In
addition, effective upon execution of this Agreement, Executive
will be provided worldwide health/dental insurance coverage for
himself and his dependents.


(b) Vacation Time. The Executive shall be entitled to twenty paid
vacation business days per year. Such vacation may not be
cumulated from year to year.


(c) Sick Time. Executive will receive five paid sick days per year,
which will be available to Executive for actual days off for
illness. Unused sick days will not accrue from year to year.


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(d) Professional Meetings. The Executive also shall be entitled to
five paid days per year in which to attend conferences or
seminars. The costs of the Executive's attendance at such
conferences or seminars shall be borne by eSat. This provision
shall not be construed to limit Executive's ability to travel for
business purposes or eSat's reimbursement for pre-approved
expenses incurred in such business travel.


(e) Stock Options.


(1) Grant of Options. Executive shall be granted 300,000
eSat common stock options (the "Options") with an
exercise price of $3.00 per share.


(2) Vesting. The Options shall vest 100,000 per each year
covered by this Agreement, subject to subsection (c)
below.


(3) Accelerated Vesting.


(a) Termination Without Cause. If Executive is
terminated without cause, the Options shall vest
as follows: (i) if Executive has been employed
by eSat for at least one year and one day,
200,000 of the Options shall immediately vest
upon such termination; and (ii) if Executive has
been employed by eSat for at least two years and
one day all 300,000 of the Options shall
immediately vest upon such termination. If
Executive is terminated for cause (as defined in
Section 6(c) below), all unvested options shall
be forfeited.


(b) Change in Control. All unvested Options shall
immediately vest upon the occurrence of a change
in control as defined in Section 7 hereof.


(f) Automobile Allowance. eSat will provide Executive with a monthly
automobile expense allowance, which shall include an allowance
for monthly automobile lease or rental payments, automobile
insurance, repairs, tax, title and registration fees. In
addition, Executive shall be provided a gasoline expense
allowance sufficient to cover all business-related and reasonable
and normal personal commuting expenses.


(g) Moving Expenses. eSat shall pay all reasonable and pre-approved
moving/relocation expenses related to Executive and his family's
relocation to Western Europe.


6. Termination. This Agreement and the Executive's employment hereunder may be terminated without any breach of this Agreement at any time only by reason of and in accordance with the following provisions:


(a) Death. The Executive's death.


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(b) Total Disability. The Executive shall be prevented from
performing the Executive's duties hereunder by reason of becoming
totally disabled as hereinafter defined. For purposes of this
Agreement, the Executive shall be deemed to have become totally
disabled when (i) the Executive either receives "total disability
benefits" under (a) Social Security, or (b) eSat's disability
plan, if any (whether funded with insurance or self-funded by
eSat), or (ii) the Board of Directors of eSat, upon the written
report of a qualified physician designated by the Board of
Directors of eSat or its insurers, shall have determined that the
Executive has become physically and/or mentally incapable of
performing the Executive's duties under this Agreement on a
permanent basis. The foregoing notwithstanding, if Executive
suffers an illness or injury which prevents executive from
attending to Executive's duties hereunder for a period of six
consecutive months during any 12 month period during the Term, or
any subsequent Renewal Term, Executive will be considered
"totally disabled".


(c) Termination by eSat for Cause. eSat may discharge the Executive
for cause and terminate this Agreement immediately upon written
notice to the Executive. For purposes of this Agreement, a
"discharge for cause" ...