General Counsel Employment Agreement

Exhibit 10.2
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I-LINK INCORPORATED
EMPLOYMENT AGREEMENT
David E. Hardy, Senior Vice President
General Counsel


THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into by and between I-LINK INCORPORATED, a Florida corporation with its principal place of business located at 13751 South Wadsworth Park Drive, Suite 200, Salt Lake City, Utah 84120 (the "Company"), and DAVID E. HARDY ("Employee"), effective this 3rdth day of January, 2000;


RECITALS


WHEREAS, the Company, itself and through its subsidiaries, is in the business of developing, marketing and providing telephony and communications products and services; and


WHEREAS, Employee has acknowledged skills and experience in managing corporate legal affairs; and


WHEREAS, the Company desires to obtain the benefit of Employee's knowledge, skills, and experience and assure itself of the ongoing right to Employee's services from and after the date hereof, and is willing to do so on the terms and conditions set forth in this Agreement; and


WHEREAS, Employee is willing and able to render services to the Company, from and after the date hereof, on the terms and conditions set forth in this Agreement;


A G R E E M E N T S


NOW, THEREFORE, in consideration of the premises and the mutual agreements, provisions, and covenants contained in this Agreement, the Company and Employee hereby agree as follows:


1. Employment.
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(a) Title and Duties of Employee. Subject to all of the terms and conditions herein provided, the Company hereby employs Employee in the position of Senior Vice President and General Counsel, and Employee hereby accepts such employment with the Company. Employee's duties shall consist of those generally associated with his title, as well as those duties assigned to him from time-to-time by the Company, consistent with Employee's position and qualifications and the best interests of the Company. Employee shall at all times be subject to and shall observe and carry out such reasonable rules, regulations, policies, directions, and restrictions as may be established from time-to-time by the Company.


(b) Performance. Throughout the Employment Term, Employee shall devote his business time, attention, knowledge, and skills, faithfully diligently, and to the best of his ability, to the active performance of his duties and responsibilities hereunder, and do such traveling as may reasonably be required in connection with the performance of such duties and responsibilities. Employee shall be entitled to maintain his offices separate from those of the Company (at the Company's expense), and to engage in limited legal representation of clients provided it does not conflict or interfere with the performance of his duties hereunder.


2. Term of Employment. Unless terminated as provided in Section 5 hereof, the term of this Agreement shall be for a period of three (3) years, commencing on the date hereof and continuing through and including the day immediately preceding the second anniversary of the date hereof (the "Initial Period"), and thereafter shall automatically continue on a year-to-year basis (including the Initial Period, the "Employment Term") unless either party shall deliver written notice to the other party not more than sixty (60), nor less than thirty (30), days preceding the expiration of the Initial Period or any one-year extension thereof of its intention not to extend the term of this Agreement.


3. Compensation and Benefits.
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(a) Salary. For services rendered by Employee to the Company and upon the conditions that Employee fully and faithfully performs all of his duties and obligations owed during the Employment Term under this Agreement, the Company shall pay Employee an annual base salary equal to $200,000, payable in equal semi-monthly installments, less income tax withholdings and other normal employee deductions. This base salary set forth herein shall be reviewed annually by the Company at the end of each fiscal year of the Company (hereafter "Fiscal Year") (with the first such review to occur after the Fiscal Year ending December 31, 2000, with respect to base salary for the Fiscal Year ending December 31, 2001), or at such other times as deemed appropriate by the Company, and may at the sole discretion of the Company, be adjusted by an amount which it deems appropriate, provided that said base salary shall not be less than $200,000.


(b) Bonus Compensation. Employee shall be eligible to receive such bonus compensation, if any, as and when determined by the Company's board of directors commensurate with Employee's position as a Senior Vice President.


(c) Stock Options. The Company grants to Employee non-qualified options to purchase 100,000 shares of its common stock at an exercise price of $2.750 per common share, which is equal to the closing price of the Company's publicly traded shares as of the effective date of this Agreement (the "Options"). The Options shall vest in twelve equal quarterly increments over a three-year period, with the first quarterly vesting to occur on the effective date of this Agreement for that partial quarter ended March 31, 2000, the second quarterly vesting to occur on April 1, 2000, and similarly on the first day of each subsequent


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calendar quarter with the final quarterly vesting to occur October 1, 2002. A change of control of the Company shall not accelerate vesting of the Options, except in the event of a change of control pursuant to which the Company's stock is exchanged for the stock of another entity and the Options are not rolled-over or otherwise exchanged for similar options of such entity (with like terms and conditions). In such event all of Employee's then unvested Options shall vest and be exercisable immediately prior to the consummation of such transaction. It is the intent of the parties that the Options continue to vest on a quarterly basis according to their terms notwithstanding a change of control, without being subject to loss or forfeiture by virtue of a change of control. The Option grant shall be evidenced by a written Option Agreement, the terms of which shall be consistent with the terms of this Agreement. The Company's Board of Directors, at their sole discretion, shall determine what number of additional stock options, if any, shall be granted to Employee, and upon what terms.


(d) Benefits. During the Employment Term, Employee shall be eligible to participate in and receive coverage and benefits under all group insurance, executive life insurance, pension, profit-sharing, bonus, stock option, stock ownership, and other employee benefit plans, programs, and arrangements of the Company which are now or hereafter adopted by the Company for the benefit of its employees, subject to and on a basis consistent with the terms, conditions, and overall administration of such plans, programs, and arrangements.


(e) Expense Reimbursement. The Company shall reimburse Employee for the business expenses reasonably incurred by Employee within the scope of his employment, pursuant to standard employee expense reimbursement policy and procedure as established by the Company.


(f) Severance. In the event this Agreement is terminated by the Company prior to the expiration of the full term of this Agreement for any reason other than for cause pursuant to Section 5(b) below, Employee shall be entitled to receive upon such termination a lump sum equal to Employee's salary payable over twelve (12) months, together with the immediate accelerated vesting of all the Options.


4. Compensation Upon Termination or During Disability.
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(a) Compensation Upon Termination. If Employee's employment hereunder is terminated under Section 5 hereof, Employee shall be entitled to exercise, pursuant to the terms and conditions of the Option Agreement, the Options that shall have vested as of the date of such termination, and the Company shall have no further liability under this Agreement except (i) to pay Employee within ten days of the Date of Termination any accrued salary or other compensation due under this Agreement on the Date of Termination (or in the event of Employee's subsequent death, to his estate or devisee, legatee, or other designee, as applicable), and (ii) provide Employee, or his estate, or devisee, legatee, or other designee, with any benefits payable (including any death benefit, if applicable) under all employee benefit plans, programs, or arrangements of the Company in which Employee is a participant on the Date of Termination.


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(b) Compensation Upon Disability. During any period that Employee fails to perform his duties hereunder as a result of incapacity due to a "disabled condition," as such term is defined in Section 5(c) hereof (the "disability period"), Employee shall continue to receive his full base salary at the rate then in effect for the disability period until Employee's employment hereunder is terminated pursuant to Section 5(c) hereof; provided, however, that such salary payments so made to Employee during the first 180 days of the disability period shall be reduced by the sum of the amounts, if any, actually received by Employee prior to or during this period, as the result of such incapacity, under any disability benefit plan of the Company in which Employee participates.


5. Termination.
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(a) By Employee. This Agreement may be terminated by Employee at any time upon sixty (60) days written notice to the Company. In the event of such termination by Employee, Employee shall be entitled to exercise, pursuant to the terms of this Agreement and the Option Agreement, the Options that shall have vested as of the date of such termination, and the Company shall have no further obligation to Employee beyond the timely payment of all salary and bonus (if any) accrued through the date of such termination.


(b) Cause. This Agreement may be terminated at any time at the option of the Company for cause. As used herein, the term "cause" shall mean and be limited to: (i) any felony conviction of Employee; (ii) Employee's willful misconduct or failure to reasonably perform in connection with the performance of Employee's duties, responsibilities, agreements, and covenants hereunder, or Employee's refusal to comply with the reasonable rules, regulations, policies, directions, and restrictions as may be established from time-to-time by the Company, which misconduct, non-performance, or refusal to so compl ...