EXHIBIT 10.1
EMPLOYMENT AGREEMENT No. 81
This Employment Agreement (“Agreement”) is entered into on January 3, 2002 by
and between EDN Sovintel LLC (“Company”), with its registered address at 25
Dubovaya Roshcha St., Moscow 127427, Russian Federation, and citizen Ilya
Alexandrovich Smirnov, residing at 7 Pribrezhnyi Projezd Bldg. 1 Apt. 100,
Moscow 125445, holder of the passport series XXIX-MIO No. 616362, issued by the
14th Militia Precinct, Moscow, on July 12, 1983 (“Employee”).
The Parties hereto hereby agree as follows:
     1. Subject of the Agreement
     1.1 The Company hereby hires the Employee and the Employee hereby agrees to
perform work in the capacity of Director of the Legal Department of the
Company’s Administrative Division, on the terms and conditions and in compliance
with the requirements set forth herein.
     1.2 As an employee of the Company the Employee shall perform the duties
assigned to him and shall be vested with the authorities and powers stipulated
by this Agreement and designated from time to time by the 1st Deputy General
Director of the Company. During the period of his employment the Employee shall
report to the 1st Deputy General Director of the Company and the higher-level
executives..
     1.3 This Agreement is a agreement of full-time employment..
     1.4 The Employee’s place of work shall be the Company’s Moscow office in
the Russian Federation. Should the Employee be required to fulfill assignments
for the Company outside Moscow, the Employee hereby agrees to perform such
assignments.
     2. Term of the Agreement
     This Agreement is concluded for an indefinite period of time.
     3. Payment Procedure
     3.1 On a regular basis, the Company shall pay the Employee his salary
together with other kinds of remuneration in accordance with the policies of the
Company.
     3.2 The Employee’s salary, as determined in accordance with the staffing
plan of the Company and the Employee’s position, to an equivalent is equal to
4,600 US dollars per month. The salary shall be paid to the Employee in
accordance with the “Regulation on the Amounts, Systems and Forms of Labor
Remuneration of Staff Employees of EDN Sovintel LLC” and shall consist of a
fixed part (basic pay) and a variable part..

 

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     3.3 As a rule, the salary shall be calculated for payment as of the last
calendar date of the current month. In some cases, provided by the labor laws,
salary calculation may be shifted to an earlier date of the current calendar
month, as required for timely payment of the salary. In this case, the salary
calculation date shall be established by an internal regulation. The Company
shall withhold taxes from the aforementioned sum and from the other income paid
by the Company, at the rate and in the procedure established by the applicable
Russian laws.
     3.3 This provision does not release the Employee from the responsibility
established by the applicable Russian laws for the payment of taxes on the
income from all other sources which are not connected with the labor
relationships between the Company and the Employee.
     3.4 The salary and other remuneration stipulated by this Agreement shall be
paid to the Employee not later than the 10th day of the month which follows the
month for which the payment is to be made.
     4. Bonuses
     The Company may pay the Employee bonuses and other kinds of remuneration
depending on the results of his work and successful activity of the Company,
subject to the “Regulation on the Systems, Amounts and Forms of Bonuses Paid to
Employees of the Commercial Division of EDN Sovintel LLC.”
     5. Benefits and Allowances
     5.1 The Employee shall be entitled to additional benefits and allowances,
both individual and collective, established by the Company, including health
insurance, life insurance and disability insurance for the periods of business
trips, in accordance with the general policies of the Company.
     5.2 The Employee shall, in a timely manner, inform the Company of
additional grounds for receiving benefits, which are provided for by the
applicable laws of the Russian Federation.
     5.3 The Employee shall be entitled to receive information about benefits
and allowances from the HR specialist of the Company.
     6. Payment of Expenses
     The Company shall compensate the Employee for all reasonably incurred
actual expenses incidental to the performance of his official duties, provided
such expenses have been agreed upon in advance with the 1st Deputy General
Director of the Company. The expenses shall be paid if the Employee presents
proper confirming documents in the procedure established by the Company.
     7. Obligations of the Employee
     The Employee hereby assumes the following obligations:

 

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     7.1 The Employee shall perform his duties and carry out the assignments of
the Company promptly and efficiently, using his skills and experience to the
utmost. He shall always abide by the instructions and the internal policies of
the Company and shall use his best efforts to protect the interests and
reputation of the Company.
     7.2 The Employee shall handle with care the materials, office equipment,
communication devices and other tangible assets given to him by the Company. The
Employee shall bear financial liability both for direct real damages suffered by
the Company though his fault and for damages suffered by the Company because of
the damages paid by the Employee to other persons.
     7.3 The Company shall, at all times, keep the Employee advised, and shall
have him sign for being advised, of the requirements of the Safety Engineering
Instructions. The Employee shall, upon the Company’s request, regularly undergo
the instruction in this subject and shall not violate the safety engineering
instructions in force in the Company. For breaching the provisions of these
instructions the Employee shall bear responsibility under the applicable laws of
the Russian Federation.
     7.4 The Employee shall not, without a prior written consent of the Company,
either directly or through any third persons:
(i) during the term of this Agreement and for two years after its termination,
encourage or compel any person, who is an employee of the Company or of any of
the related companies, to terminate or refuse to prolong the employment
agreement of this person with the Company or any company related to the Company,
or
(ii) during the term of this Agreement and for two years after its termination,
encourage or compel any natural person or legal entity, who/which is a customer
or supplier of the Company or of any of the related companies, to break off or
refuse to prolong his/its relations with the Company or its branch.
     7.5 If the nature of the Employee’s work is such that it is connected with
the acceptance, transfer, safekeeping and movement of tangible assets, the
Employee agrees to sign a document prepared by the administration of the
Company, which establishes the full responsibility of the Employee for the
assets entrusted to him.
     7.6 Upon quitting his job the Employee shall not take away from the Company
any materials or any concepts developed while he was employed by the Company.
     7.7 The Employee shall promptly advise the Company of all items of
intellectual property created by him during the term of this Agreement. By
signing this Agreement the Employee agrees that all exclusive rights to the use
of any inventions, useful models, industrial designs, domain names, web pages
and software in the source and object codes and in other forms, created in
connection with the performance by the Employee of the duties set forth in this
Agreement (“Items of

 

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Intellectual Property”), and all related documentation shall be owned by the
Company. The Employee also agrees that the Company shall have exclusive rights
to the use of the Items of Intellectual Property and to their publication in any
manner it sees fit. The Company shall have the right to file, in its name,
patent applications, applications for all inventions, useful models and
industrial designs created by the Employee in the course of the performance of
his duties. The Employee shall also assist the Company in the protection of the
rights both when these rights are infringed by third persons and when any claims
or lawsuits are filed against the Company in connection with the use by the
Company of these rights.
     7.8 The Employee represents and warrants that Annex 2 to this Agreement is
a full list of all Items of Intellectual Property, patented by the Employee, all
trademarks and domain names, registered by the Employee, and all Items of
Intellectual Property, trademarks and domain names, for which applications for
registration have been filed by the Employee. Annex 2 must also contain the list
of all copyrighted materials which are related to the sphere of the Company’s
activity.
     8. Obligations of the Employer
     8.1 The Employer shall provide employment for the Employee in accordance
with the labor function stipulated by the Agreement.
     8.2 The Employer shall provide the Employee with the equipment, tools,
technical documentation and other means required by the Employee to perform his
duties under this Agreement.
     8.3 The Employer shall ensure the working conditions complying with the
requirements of the applicable laws.
     8.4 The Employer shall, promptly and fully, pay the Employee the salary and
other kinds of remuneration stipulated by this Agreement.
     8.5 The Employer shall bear other obligations in accordance with the Labor
Code of the Russian Federation.
     9. Working Time and Leisure
     9.1 The normal established duration of the working time is forty (40) hours
per week, with a five-day working week.
     9.2. The Employee shall be entitled to an annual leave twenty four
(24) working days long as calculated on the basis of a six-day working week. The
Employee hereby agrees that the schedule of leaves shall be agreed upon with the
1st Deputy General Director of the Company or with other Company executives in
accordance with the policies of the Company.
     9.3 The schedule of leaves of each division of the Company is approved by
the General Director of the Company or by the person who acts for him.
     10. Temporary Incapacity

 

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     10.1 In the event of temporary incapacity (sickness, accident, etc.) the
Employee shall, if possible, immediately report this fact to his direct superior
or the other authorized official of the Employer.
     10.2 The Employee shall submit a document confirming his temporary
incapacity (sickness, accident, etc.) to the Employer within three (3) days of
the date when the period of such temporary incapacity ends.
     11. Non-Disclosure of Confidential Information
     During the term of this Agreement and for three years after its expiration,
the Employee shall not disclose, directly or indirectly, to any person, firm,
corporation, partnership, association or any other legal entity any confidential
information about the financial position, suppliers, customers, sources and
methods of obtaining new orders or modus operandi of the Company, the related
and subsidiary companies, with the exception of the information which is in the
public domain or subject to disclosure under law.
     12. Real Compliance
     The Employee admits that his failure to comply with the provisions of
Sections 11 and 13 of this Agreement will harm the Company and, therefore, that
the Company has the right to enforce real compliance with these provisions
through a court. This right supplements other rights of the Company to the
protection and to compensation for the damages caused by the Employee. The
Company reserves the right to claim damages and other economic compensation for
the failure of the Employee to comply with the obligations and provisions set
forth in Sections 11 and 13.
     13. Delegation
     The Parties to this Agreement shall not delegate their obligations to any
third persons. The Company may transfer the Employee to another enterprise,
organization or institution in accordance with the rules established by the
Labor Code of the Russian Federation.
     14. Notices
     All notices shall be addressed as follows:
if to the Company:
A.Ya. Vinogradov, General Director
25 Dubovaya Roshcha St., Moscow 127427
Tel.: 258 78 00;
if to the Employee:
I.A. Smirnov
7 Pribrezhnyi Projezd Bldg. 1 Apt. 100, Moscow 125445
Tel.: 283 50 37

 

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The Parties shall advise each other in writing about changes in their addresses.
     15. Entire Agreement
     15.1 This Agreement and the Annexes hereto constitute the entire employment
agreement between the Parties and shall supersede all previous agreements,
written or oral, between the Parties. All modifications of the essential terms
and conditions of this Agreement shall be in the form of Addenda signed by the
Parties.
     15.2 All amendments and modifications hereto shall form integral parts of
the Agreement.
     16. Termination of the Agreement
     This Agreement may be terminated on the grounds stipulated by the Labor
Code of the Russian Federation.
     17. Payments Made Upon Termination of the Agreement
     17.1 When this Agreement is terminated by one of the Parties hereto the
Company shall pay the Employee the whole salary due to him up to the date of
termination and the cash compensation for all leaves that were not used by him..
     17.2 If the Company terminates the Agreement on the grounds stipulated by
Paras. 3 and 6, Article 29 and Paras. 2 and 6, Article 33 of the Labor Code of
the Russian Federation, the Company shall pay the Employee a severance pay in
the amount of not less than an average two-week salary and the cash compensation
for all leaves that has not been used.
     17.3 If, during the term of this Agreement, the Employee has not used all
or a part of the sums to which he was entitled in accordance with the
regulations on the benefits and allowances (such as health insurance), the
Employee shall not receive any compensation in the form of cash or any other
form when this Agreement is terminated.
     18. Binding Force of the Agreement
     This Agreement may be binding upon legal successors of the Parties if this
is stipulated by the Russian Federation laws..
     19. Choice of Law
     This Agreement shall be governed by the Russian Federation laws. In the
cases which are not regulated by this Agreement the Parties shall abide by the
applicable laws of the Russian Federation.
     20. Labor Disputes

 

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     20.1 The Parties shall settle all disputes or lawsuits connected with this
Agreement by means of negotiation. If the dispute is initiated by the Employee,
the negotiations shall be held with the head of the division and the CEO or the
acting CEO of the Company, with the participation of the HR and legal services
of the Company.
     20.2 If the Parties fail to come to terms, the dispute shall be resolved in
accordance with the applicable laws of the Russian Federation.
     21. Miscellaneous
     If the Employee or any member of his family becomes associated with any
government structure or institution, the Employee shall immediately advise the
Company of this fact.
     IN WITNESS WHEREOF, the Parties have executed this Agreement in two
counterparts as of the date first referenced above.

     
On behalf of the Company:
  Employee:
 
   
(Signature)
  (Signature)
 
   
A.Ya. Vinogradov
   
General Director
  I.A. Smirnov

 

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Annex 1
to Employment Agreement Dated January 3, 2002
The Parties hereby confirm that the documents listed below form an integral part
of this Agreement:
1. “Regulation on the Amounts, Systems and Forms of Labor Remuneration of Staff
Employees of EDN Sovintel LLC.”
2. “Regulation on the Systems, Amounts and Forms of Bonuses Paid to Employees of
the Commercial Division of EDN Sovintel LLC.”

     
On behalf of the Company:
  Employee:  
(Signature)
  (Signature)  
A.Ya. Vinogradov
   
General Director
  I.A. Smirnov

 

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Annex 2
to Employment Agreement Dated January 3, 2002
List of Items of Intellectual Property Owned by the Employee

 

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AMENDMENT
TO EMPLOYMENT AGREEMENT NO.81 DATED 03.01.02
The city of Moscow
     25.07.2006
The present Amendment (hereinafter referred to as the Amendment) to Employment
Agreement No.81 dated 03.01.02 was entered into by and between the limited
liability company EDN SOVINTEL (hereinafter referred to as the Employer) in the
person of O.E.Novikova, Head of the Personnel Department, acting on the basis of
letter of attorney No.M213/09/05 dated 20.09.05 located at the address: Russian
Federation, 115114, 1 Kozhevnichevsky proezd, on the one hand, and citizen Ilya
Alexandrovich Smirnov, passport of series 45 04, number 545115, issued by the
militia precinct Ramenki, the city of Moscow, on December 3, 2002 residing at
the address: 117607, Moscow, 29/1/apt.108 Michurinsky prospect, on the other
hand (referred to collectively as the Parties and individually as the Party).
The Parties agreed as follows:
1. The clause of the Agreement with relation to the Employee’s salary shall be
worded as follows:
‘The Employer shall pay the Employee a monthly official salary in the amount
equivalent to the sum of 10,000.00 (ten thousand dollars 00 cents) US in rubles
at the rate of the Central Bank of the Russian Federation as of the date of
calculation.’
The date of salary calculation is, as a rule, the last calendar date of the
current month. In some cases the date of calculation may be transferred to an
earlier date of the current calendar month necessary for the timely payment of
the salary. In this case the date of salary calculation is set by an internal
normative act. From the above amount and from other proceeds paid or transferred
in another form to the Employee by the Employer the Employer shall withhold and
pay taxes in the amount and in the procedure established by the effective
Russian legislation.’
2. Other articles of the Agreement remain unchanged.
3. The present Agreement becomes effective on 01.07.2006.
4. The present Agreement is made in 2 (two) counterparts with one for each of
the Parties.

     
On behalf of the Employer (signature)
  On behalf of the Employee (signature)
Head of Personnel Department, EDN
  I.A.Smirnov
SOVINTEL
  Residential address: Moscow 117607,
 
  29/1/apt 108 Michurinsky prospect;
 
  tel.683-50-37
Moscow, 115114, 1 Kozhevnichevsky
   
proezd, tel.258-78-00