Exhibit 10.1

EXECUTIVE SEVERANCE COMPENSATION AGREEMENT

This Executive Severance Compensation Agreement (“Agreement”) is made and
entered into as of February 26, 2010 by and between Patrick Gray (“Executive”)
and Axesstel, Inc., a Nevada corporation (“Axesstel”), with reference to the
following facts:

A. Executive is currently employed as the Chief Financial Officer for Axesstel.

B. Executive has been employed on an at will basis under the terms of an
employee offer letter dated February 11, 2004 (the “Employment Agreement”).

C. Axesstel desires to provide Executive with certain severance benefits in the
event that his employment is terminated, all on the terms and conditions
contained in this Agreement.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants contained herein, and intending to be legally bound, the parties
expressly agree as follows:

ARTICLE I

SEVERANCE BENEFITS

1.1 Severance Benefits. If (i) Axesstel terminates Executive’s employment under
this Agreement without Cause (as defined below), or (ii) if Executive resigns
for Good Reason (as defined below), then in each such case and subject to
compliance with the conditions of Article IV of this Agreement, Executive will
be eligible to receive the following benefits (the “Severance Benefits”):

1.1.1 A cash payment equal to twelve (12) months of Executive’s base salary in
effect on the date of termination of the Executive’s employment with Axesstel
(the “Termination Date”), with such cash severance payments payable to Executive
in a single lump sum upon satisfaction of the conditions of Article IV of this
Agreement; and

1.1.2 Axesstel shall to pay Axesstel’s portion of the premiums required to
continue Executive’s (and his dependents) group health insurance benefits for
twelve (12) months after the Termination Date under the applicable provisions of
COBRA, provided that Executive timely elects to continue and remains eligible
for these benefits under COBRA, and does not obtain health insurance benefits
through another employer during this period. Executive shall provide advance
written notice to Axesstel informing Axesstel when the Executive is offered or
becomes eligible for other group health insurance benefits in connection with
new employment. In addition, if periodically requested by Axesstel, the
Executive will provide Axesstel with written confirmation that he has not been
offered other group health insurance benefits.

 

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ARTICLE II

TERMINATION FOR CAUSE

2.1 Termination for Cause. In the event that Executive’s employment is
terminated for Cause, Executive shall not be entitled to the Severance Package.
Termination by Axesstel shall constitute a termination for “Cause” if such
termination is for one or more of the following reasons:

2.1.1 the failure or refusal of Executive to fulfill his obligations under the
Employment Agreement or the material breach by Executive of any of the terms of
the Employment Agreement which is not cured within 15 days written notice to
Executive identifying the nature of the failure;

2.1.2 the failure or refusal of Executive to fulfill the lawful directives of
the Chief Executive Officer or Board of Directors of Axesstel, which is not
cured within 15 days written notice to Executive identifying the nature of the
failure;

2.1.3 gross negligence, a material breach by Executive of his fiduciary duties
or the commission by Executive of an act of fraud or embezzlement or his
misappropriation of any money or other assets or property (whether tangible or
intangible) of Axesstel or its subsidiaries;

2.1.4 Executive’s engagement in conduct resulting in a material injury to the
business, financial condition or operations of Axesstel or its subsidiaries and
which is not authorized by the Board; or

2.1.5 the conviction of, or plea of guilty or nolo contendere by, Executive of a
felony or any crime or civil violation involving moral turpitude.

ARTICLE III

RESIGNATION FOR GOOD REASON

3.1 Resignation for Good Reason. If Executive resigns his employment for Good
Reason, then Executive shall be eligible to receive the Severance Package. “Good
Reason” shall mean:

3.1.1 a material diminution in the Executive’s authority, duties or
responsibilities;

3.1.2 any reduction in the Base Salary other than reductions commensurate with
salary reduction programs implemented across all executive officers of Axesstel;
or

3.1.3 Axesstel’s material breach of the Employment Agreement.

3.2 For purposes of this Agreement, Executive may resign his employment from
Axesstel for Good Reason within sixty (60) days after the date that any one of
the Good Reason events listed above has first occurred without Executive’s
written consent. Executive’s resignation for Good Reason will only be effective
if Axesstel has not cured or remedied the Good Reason event within 30 days after
its receipt of Executive’s written notice (such notice shall describe in detail
the basis and underlying facts supporting Executive’s belief that a Good Reason
event has occurred). Such written notice must be provided by Executive to
Axesstel within 30 days of the initial existence of the alleged Good Reason
event. Failure to timely provide such written notice to Axesstel means that
Executive will be deemed to have consented to and waived the Good Reason event.
If Axesstel does timely cure or remedy the Good Reason event, then Executive may
either resign his employment with Good Reason or Executive may continue to
remain employed subject to the terms of this Agreement.

 

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ARTICLE IV

CONDITIONS TO PAYMENT

As a condition of this Agreement and to Executive’s receipt of any portion of
the Severance Benefits, Executive agrees that Executive will fully and timely
comply with all of the covenants set forth in this Article (which shall survive
the Termination Date).

4.1 Release of Claims and Covenant Not to Sue. Executive shall execute (and not
revoke) a release of claims and covenant not to use (the “Release”)
substantially in the form provided in the attached Exhibit A (and as may be
reasonably modified by Axesstel) and remains in full compliance with such
Release and such Release must become effective within 60 days after the
Termination Date.

4.2 Return of Property. Upon the Termination Date, Executive shall return to
Axesstel all Company property including, but not limited to, computers, cell
phones, pagers, keys, laboratory notebooks, business cards, intellectual
property, etc. Notwithstanding the foregoing, Executive shall be entitled to
retain ownership of Executive’s electronic appliances including laptop computer,
cell phone, pagers once Axesstel confirms that any services charges have been
transferred to Executive’s personal account and all Company proprietary
information on the appliances has been removed. Executive shall not retain any
copies, facsimiles or summaries of any Company proprietary information.

4.3 Repayment of Loans. Executive will fully pay off any outstanding advances,
loans or debts owed to Axesstel.

4.4 Expenses Reimbursement. Executive will submit any outstanding business
expense reports to Axesstel prior to the Termination Date.

4.5 Cooperation. Executive shall, upon Axesstel’s request and without any
payment therefore, reasonably cooperate with Axesstel (and be available as
necessary) after the Termination Date in connection with any legal matters
involving events that occurred during Executive’s period of employment with
Axesstel.

ARTICLE V

TAXES

5.1 Executive Tax Obligations. Anything to the contrary notwithstanding, all
payments made under this Agreement to Executive or Executive’s estate or
beneficiaries will be subject to tax withholding pursuant to any applicable laws
or regulations. Executive will be solely liable and responsible for the payment
of Executive’s taxes arising as a result of any payment hereunder including
without limitation any unexpected or adverse tax consequence.

 

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5.2 Section 409A. This Agreement is intended to comply with the requirements of
section 409A of the Internal Revenue Code (the “Code”). In the event this
Agreement or any benefit paid to Executive hereunder is deemed to be subject to
Code Section 409A, Executive consents to Axesstel adopting such conforming
amendments as Axesstel deems necessary, in its reasonable discretion, to comply
with Code Section 409A. In addition, if Executive is a specified employee
(within the meaning of Code Section 409A) at the time of Executive’s separation
from service, then to the extent necessary to comply with Code Section 409A and
avoid the imposition of taxes under Code Section 409A, the payment of certain
benefits owed to Executive under this Agreement will be delayed and instead paid
(without interest) to Executive upon the earlier of the first business day of
the seventh month following Executive’s separation from service or ten business
days after Executive’s death.

5.3 Code Section 280G. In the event that it is determined that any payment or
distribution of any type to or for Executive’s benefit made by Axesstel, by any
of its affiliates, by any person who acquires ownership or effective control or
ownership of a substantial portion of Axesstel’s assets (within the meaning of
Section 280G of the Code) or by any affiliate of such person, whether paid or
payable or distributed or distributable pursuant to the terms of an employment
agreement or otherwise, would be subject to the excise tax imposed by
Section 4999 of the Code or any interest or penalties with respect to such
excise tax (such excise tax, together with any such interest or penalties, are
collectively referred to as the “Excise Tax”), then such payments or
distributions or benefits shall be payable either: (i) in full; or (ii) as to
such lesser amount which would result in no portion of such payments or
distributions or benefits being subject to the Excise Tax. Executive shall
receive the greater, on an after-tax basis, of (i) or (ii) above, provided
however that to the extent applicable, Executive may elect to subject the
payments that are in excess of the permissible maximum payment amount specified
under Code section 280G(b)(2)(A)(ii) to a stockholder vote as provided for under
Code section 280G(b)(5). Unless Executive and Axesstel agree otherwise in
writing, any determination required under this Section 5.3 shall be made in
writing by an independent accountant selected by Axesstel (the “Accountant”)
whose determination shall be conclusive and binding. Executive and Axesstel
shall furnish the Accountant such documentation and documents as the Accountant
may reasonably request in order to make a determination. Axesstel shall bear all
costs that the Accountant may reasonably incur in connection with performing any
calculations contemplated by this Section.

ARTICLE VI

MISCELLANEOUS

6.1 Governing Law and Choice of Forum. This Agreement shall be interpreted and
governed by the laws of the State of California and, as applicable, the laws of
the United States, without giving effect to the principles of choice of law or
conflicts of laws of California.

6.2 Authority. Each party warrants that it has proper authority to enter into
this Agreement. Execute represents and warrants to Axesstel that the execution
or performance of this Agreement does not and will not constitute a breach of
any other agreement to which it is a party or bound.

 

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6.3 Interpretation. The captions in this Agreement are for convenience and
reference only and the words contained therein shall in no way be held to
explain, modify, amplify or aid in the interpretation, construction or meaning
of the provisions of this Agreement. Both Axesstel and Executive have had the
opportunity to consult with an attorney of his choice before executing this
Agreement. Accordingly this Agreement shall be construed in accordance with its
fair meaning and not strictly for or against either party.

6.4 Waiver. The waiver by either of the parties, express or implied, of any
right under this Agreement or any failure to perform under this Agreement by the
other party, shall not constitute or be deemed a waiver of any other right under
this Agreement or of any other failure to perform under this Agreement by the
other party, whether of a similar or dissimilar nature.

6.5 Specific Performance. Executive acknowledges that (i) upon a violation of
any of the covenants contained in this Agreement or (ii) if Axesstel is
terminating Executive’s employment for Cause, Axesstel would sustain irreparable
harm, and, therefore, Executive agrees that in addition to any other remedies
which Axesstel may have, Axesstel shall be entitled to obtain equitable relief
including specific performance and injunctions restraining Executive from
committing or continuing any such violation.

6.6 Severability. Should any part or provision of this Agreement be held
unenforceable or in conflict with the law of any jurisdiction, the validity of
the remaining parts or provisions shall not be affected by such holding.

6.7 Entire Agreement. This Agreement and the Exhibits attached hereto set forth
the entire agreement and understanding of the parties relating to the subject
matter contained in this Agreement and merges all prior and contemporaneous
discussions and agreements between them. Any modification of any of the
provisions of this Agreement shall not be valid unless in writing and signed by
authorized representatives of the party against whom such modification is sought
to be enforced. All notices pursuant to this Agreement must be in writing (which
may be by facsimile or electronic transmission) to be effective and shall be
deemed to have been given on the day actually delivered or received (upon
confirmation thereof). All notices to the Executive shall be hand delivered or
addressed to the address set forth below his signature and all the notices to
Axesstel shall be sent to Axesstel’s headquarters.

6.8 Assignment. This Agreement shall inure to the benefit of, and be binding
upon, the parties to this Agreement, and their respective executors,
administrators, successors and assigns. In the case of assignment by Axesstel,
by operation of law, including merger, consolidation or otherwise, the successor
assignee shall be deemed to be Axesstel for all purposes under this Agreement.

6.9 Attorneys’ Fees. In the event of any disputes arising out of this Agreement,
the prevailing party shall be entitled to reasonable attorneys’ fees and other
fees and costs related thereto.

 

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6.10 Counterparts. This Agreement may be executed in multiple counterparts and
transmitted by facsimile or by electronic mail in “portable document format”
(“PDF”) form, or by any other electronic means intended to preserve the original
graphic and pictorial appearance of a party’s a signature. Each such counterpart
and facsimile or PDF signature shall constitute an original and all of which
together shall constitute one and the same original.

[Signature Page to Executive Employment Agreement Follows]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.

 

AXESSTEL, INC.     PATRICK GRAY By:  

/s/Clark Hickock

   

/s/ Patrick Gray

  Clark Hickock, CEO     Signature      

 

Street Address

     

 

City             State             Zip Code

 

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EXHIBIT A

RELEASE OF CLAIMS AND COVENANT NOT TO SUE

This Release of Claims and Covenant Not To Sue (the “Release”) is entered into
by              (“Executive”). This Release is effective only if (i) it has been
executed by the Executive after his/her termination of employment with Axesstel,
Inc. (the “Axesstel”), (ii) such executed Release has been provided to Axesstel
on or before [DATE] and (iii) the revocation period has expired without
revocation as set forth in Section 5(c) below (the “Effective Date”). Axesstel
and the Executive are collectively referred to herein as the Parties.

WHEREAS, Executive was an employee of Axesstel and served as Axesstel’s [JOB
TITLE];

WHEREAS, pursuant to the Executive Severance Compensation Agreement executed by
the Parties on [DATE] (the “Severance Agreement”), the Executive is eligible for
specified severance benefits upon the occurrence of certain events with such
benefits conditioned upon, among other things, the Executive’s execution and
non-revocation of this Release;

WHEREAS, the Executive’s employment was terminated [by Axesstel without Cause]
[by the Executive for Good Reason] (as defined in the Severance Agreement) on
[DATE] (the “Separation Date”); and

WHEREAS, pursuant to the terms of the Severance Agreement, Axesstel has
determined to treat the termination of Executive’s employment as eligible for
payment of certain separation benefits provided in the Severance Agreement.

NOW, THEREFORE, in consideration of the covenants contained herein, and
intending to be legally bound, the Executive agrees as follows:

1. Termination of Employment. Executive acknowledges and agrees that Executive’s
employment with Axesstel terminated as of the close of business on the
Separation Date. As of the Separation Date, Executive agrees that he/she is no
longer an employee of Axesstel and no longer holds any positions or offices with
Axesstel.

2. Separation Benefits. In consideration for the release of claims set forth
below and other obligations under this Release and the Severance Agreement and
in satisfaction of all of Axesstel’s obligations to Executive and further
provided that (i) this Release is signed by Executive and not revoked by
Executive under Section 5(c) herein and (ii) the Executive remains in continuing
compliance with all of the terms of this Release and the Severance Agreement,
the Executive is eligible to receive the Severance Package benefits specified in
the Severance Agreement.

3. Integration. This Release and the Severance Agreement (and any agreements
referenced therein) represents the entire agreement and understanding between
the Parties as to the subject matter hereof and supersedes all prior agreements
whether written or oral.

 

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4. Right to Advice of Counsel. Executive acknowledges that Executive has had the
opportunity to fully review this Release and, if Executive so chooses, to
consult with counsel, and is fully aware of Executive’s rights and obligations
under this Release.

5. Executive’s Release of Claims. Executive hereby expressly covenants not to
sue and releases and waives any and all claims, liabilities, demands, damages,
penalties, debts, accounts, obligations, actions, grievances, and causes of
action (“Claims”), whether now known or unknown, suspected or unsuspected,
whether in law, in equity or in arbitration, of any kind or nature whatsoever,
which Executive has or claims to have, now or hereafter, against Axesstel and
its divisions, facilities, subsidiaries and affiliated entities, successors and
assigns, or any of its or their respective past or present officers, directors,
trustees, shareholders, agents, employees, attorneys, insurers, representatives
(collectively, the “Releasees”), including, but not limited to, any Claims
arising out of or relating in any way to Executive’s employment at Axesstel and
the termination thereof. Without limiting the foregoing, Executive hereby
acknowledges and agrees that the Claims released by this Release include, but
are not limited to, any and all claims which arise or could arise under Title
VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of
1967, the Federal Worker Adjustment and Retraining Notification Act (or any
similar state, local or foreign law), the California Fair Employment and Housing
Act, California statutory or common law, the Orders of the California Industrial
Welfare Commission regulating wages, hours, and working conditions, and federal
statutory law, or any Claim for severance pay, bonus, sick leave, disability,
holiday pay, vacation pay, life insurance, health or medical insurance or any
other fringe benefit. Nothing in this Release shall limit in any way Executive’s
right under California Workers’ Compensation laws to file or pursue any workers’
compensation claim. Nothing herein shall release any rights to indemnification
Executive may have in connection with Executive’s actions taken in the course of
his/her duties with Axesstel. This release shall not apply to any claims that
may not be waived as a matter of applicable law.

(a) As part of this general release, Executive expressly releases, waives and
relinquishes all rights under Section 1542 of the California Civil Code which
states:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.”

Executive acknowledges that he/she may later discover facts in addition to or
different from those which Executive now knows, or believes to be true, with
respect to any of the subject matters of this Release, but that it is
nevertheless Executive’s intention to settle and release any and all Claims
released herein.

(b) Executive warrants and represents that there is not now pending any action,
complaint, petition, executive charge, grievance, or any other form of
administrative, legal or arbitral proceeding by Executive against Axesstel and
further warrants and represents that no such proceeding of any kind shall be
instituted by or on Executive’s behalf based upon any and all Claims released
herein.

 

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(c) Executive expressly acknowledges, understands and agrees that this Release
includes a waiver and release of all claims which Executive has or may have
under the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C.
§621, et seq. (“ADEA”). The following terms and conditions apply to and are part
of the waiver and release of ADEA claims under this Release:

(i) Executive is advised to consult an attorney before signing this Release;

(ii) Executive is granted twenty-one (21) days after he/she is presented with
this Release to decide whether or not to sign this Release;

(iii) Executive will have the right to revoke the waiver and release of claims
under the ADEA within seven (7) days of signing this Release, and this Release
shall not become effective and enforceable until that revocation period has
expired without such revocation;

(iv) Executive hereby acknowledges and agrees that he/she is knowingly and
voluntarily waiving and releasing Executive’s rights and claims in exchange for
consideration (something of value) in addition to anything of value to which
he/she is already entitled; and

(v) Nothing in this Release prevents or precludes Executive from challenging or
seeking a determination in good faith of the validity of this waiver under the
ADEA, nor does it impose any condition precedent, penalties or costs from doing
so, unless specifically authorized by federal law.

6. Labor Code Section 206.5. Executive agrees that Axesstel has paid to
Executive his/her salary and vacation accrued as of the Separation Date and that
these payments represent all such monies due to Executive through the Separation
Date. In light of the payment by Axesstel of all wages due, or to become due to
Executive, California Labor Code Section 206.5 is not applicable. That section
provides in pertinent part as follows:

No employer shall require the execution of any release of any claim or right on
account of wages due, or to become due, or made as an advance on wages to be
earned, unless payment of such wages has been made.

7. Severability. Executive understands that whenever possible, each provision of
this Release will be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Release is held to be
invalid, illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality or unenforceability will
not affect any other provision or any other jurisdiction, but this Release will
be reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.

8. No Representations. Executive has not relied upon any representations or
statements made by Axesstel in deciding whether to execute this Release.

 

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9. Voluntary Execution of Release. This Release is executed voluntarily by
Executive and without any duress or undue influence and with the full intent of
releasing all claims. The Executive acknowledges that:

(a) He/She has read this Release;

(b) He/She has been represented in the preparation, negotiation, and execution
of this Release by legal counsel of his/her own choice or that he/she has
voluntarily declined to seek such counsel;

(c) He/She understands the terms and consequences of this Release and of the
releases it contains;

(d) He/She is fully aware of the legal and binding effect of this Release.

IN WITNESS WHEREOF, the Executive has executed this Release as shown below.

 

  EXECUTIVE  

 

  Dated:  

 

 

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