Exhibit 10.1


 


EMPLOYMENT AGREEMENT


 


This
Employment Agreement (this “Agreement”) is entered into as of this 5th day of January,
2006, by and among Vistula Communications Services, Inc., a Delaware
corporation (the “Employer”), and Ian Cope (the “Employee”).


 


The
parties hereto agree as follows:


 


§1.           Employment.  Upon the terms and subject to the conditions
described in this Agreement, the Employer hereby employs the Employee and the
Employee hereby accepts employment by the Employer.


 


§2.           Term.  Employee’s employment with the Employer
pursuant to this Agreement shall be for the period beginning on the date of
this Agreement (the “Commencement Date”) and continuing until such employment
is terminated as provided for in Section 9 (the “Term”).


 


§3.           Services.  The Employee shall serve as the Employer’s
Chief Operations Officer, reporting to the Employer’s Chief Executive Officer.
The Employee shall devote his full business and professional time, attention,
energy, loyalty, and skill to the Employer’s business, performing such
executive or administrative tasks and having such responsibilities as may be
assigned to him from time to time by the Employer’s Chief Executive Officer.


 


§4.           Compensation.


 


(a)           As
compensation for his services under this Agreement, the Employer shall pay the
Employee a base salary at the annual rate of $140,000 (the “Base Salary”),
payable in monthly installments, in arrears, and in accordance with the
Employer’s general policies and procedures for payment of salaries to its
management personnel. The Employee’s performance shall be reviewed not less
often than annually for the purpose, among others, of considering potential
increases in the Base Salary, but the Employer shall not be obligated to make
any such increases.


 


(b)           In
addition to the compensation described in Section 4(a) above, the Employee
shall be eligible to participate in any bonus or incentive compensation plans
that may be established by the Board from time to time applicable to the
Employee’s services; provided, however, that the payment of any
additional compensation under this Section 4(b) shall be at the sole discretion
of the Board.


 


§5.           Fringe
Benefits and Perquisites; Expense Reimbursement.  During the term of this Agreement, the
Employee shall also be entitled to the following fringe benefits and
perquisites:


 


(a)           Group
health and welfare benefits comparable to those offered generally to the
Employer’s personnel from time to time;


 





















 


(b)           Fifteen (15)
days paid vacation during the first year of this Agreement and twenty (20) days
paid vacation during each subsequent year during the Term (prorated for any
partial years during the term of this Agreement); and


 


(c)           Such other
benefits and perquisites as may be offered generally to the Employer’s
management personnel from time to time pursuant to such terms, conditions, and
policies as may be approved by the Board and solely to the extent that the
Employee’s position, tenure, salary, age, health and other qualifications make
him eligible to participate.


 


During the term of his
employment, the Employer shall reimburse the Employee for all reasonable
expenses incurred by him in connection with the performance of his duties
hereunder in accordance with the Employer’s regular reimbursement policies as
in effect from time to time and upon receipt of itemized vouchers or receipts
therefor and such other supporting information as the Employer may reasonably
require.


 


§6.           Option
Grant.  Upon execution of this
Agreement, the Employer shall grant to the Employee an incentive stock option (the
“Option”) to purchase 250,000 shares of the Employer’s common stock, par value
$0.001 per share (“Common Stock”). The Option shall vest as follows: (i) 50,000
of the shares subject to such Option shall be immediately vested and
purchasable thereunder; and (ii) the remainder of the shares subject to such
Option shall vest and become purchasable thereunder in four equal annual
installments of 50,000 shares commencing on the first anniversary of the
Commencement Date and thereafter on each subsequent anniversary of the
Commencement Date until fully vested. The Option will be subject to the terms
and conditions of the Employer’s 2004 Amended and Restated Stock Incentive
Plan.  The exercise price per share of
the Option shall be $1.42.


 


§7.           Confidentiality;
Noncompetition.  The Employee shall
not, directly or indirectly, at any time (whether during the term of this
Agreement or thereafter), disclose any Confidential Information (defined below)
to any person, association, or other entity (other than the Affiliated
Companies, as defined below), or use, or permit or assist any person,
association, or other entity (other than an Affiliated Company) to use, any
Confidential Information, excepting only: (i) Confidential Information which
(A) is then generally available to or obtainable by the public and which did
not become so available or obtainable through the breach of any provision of
this Agreement by the Employee, or (B) is obtained by the Employee on a
non-confidential basis from a source other than an Affiliated Company or any
agent or other representative of an Affiliated Company and such source had the
right to disclose such Confidential Information to the Employee without
violating any legal, contractual, fiduciary, or other obligation; and (ii)
disclosures required by applicable law.


 


Upon termination of his employment by the Employer
(for any reason), the Employee shall immediately deliver to the Employer all
documents and other materials containing any Confidential Information which are
in his possession or under his control.


 


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During the Restricted
Period (defined below), the Employee shall not, directly or indirectly (whether
individually or as a shareholder or other owner, partner, member, director, officer,
employee, consultant, creditor or agent of any person, association, or other
entity):


 


(a)           Enter
into, engage in, or promote or assist (financially or otherwise), directly or
indirectly, any business which competes with the business of any Affiliated
Company (the “Business”), provided that the foregoing shall not preclude the
Employee from owning less than 1% of the outstanding capital stock of any
corporation whose shares are publicly traded on a national securities exchange
or system;


 


(b)           Solicit
or attempt to solicit business in competition with the Business from any person
or entity (in any such case, a “Restricted Company”), or interfere or attempt
to interfere with any relationship of any Affiliated Company with any
Restricted Company;


 


(c)           Induce
or encourage any employee, officer, director, agent, supplier, or independent
contractor of any Affiliated Company to terminate its relationship with any
such Affiliated Company, or otherwise interfere or attempt to interfere in any
way with any Affiliated Company’s relationships with its employees, officers,
directors, agents, suppliers, independent contractors, or others;


 


(d)           Employ
or engage any person who, at any time within the one-year period immediately
preceding such employment or engagement, was an employee, officer, director, or
agent of any Affiliated Company; or


 


(e)           Make
any statement (oral or written) or take any other action which would tend to
disparage or diminish the reputation of any Affiliated Company.


 


For purposes of this
Agreement:


 


(i) “Affiliated
Company” shall include the Employer and all subsidiaries or affiliates of the
Employer;


 


(ii) “Confidential
Information” shall mean all trade secrets, proprietary data, and other
confidential information of any Affiliated Company, including without
limitation financial information, information relating to business operations,
services, promotional practices, suppliers, employees, independent contractors,
or other parties, and any information which any Affiliated Company is obligated
to treat as confidential pursuant to any course of dealing or any agreement to
which it is a party or otherwise bound;


 


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(iii) the “Restricted
Period” shall mean the period beginning on the date hereof and ending on the
first anniversary of the date (the “Termination Date”) of termination (for any
reason) of Employee’s employment with the Employer (whether pursuant to this
Agreement or otherwise); and


 


The Employee acknowledges that (1) the provisions of
this section are fundamental and essential for the protection of the Employer’s
legitimate business and proprietary interests, (2) such provisions are
reasonable and appropriate in all respects, and (3) in the event of any
violation by the Employee of any of such provisions, the Employer would suffer
irreparable harm and its remedies at law would be inadequate.  In the event of any violation or attempted
violation of such provisions by the Employee, the Employer shall be entitled to
a temporary restraining order, temporary and permanent injunctions, specific
performance, and other equitable relief, without any showing of irreparable
harm or damage or the posting of any bond, in addition to any other rights or
remedies which may then be available to the Employer.


 


§8.           Developments.


 


(a)           The
Employee agrees that all originals and all copies of all manuscripts, drawings,
prints, manuals, diagrams, letters, notes, notebooks, reports, models, and all
other materials containing, representing, evidencing, recording, or constituting
any Confidential Information (as defined in Section 7 hereof) however and
whenever produced (whether by Employee or others), shall be the sole property
of the Employer.


 


(b)           The
Employee agrees that all Confidential Information and all other discoveries,
inventions, ideas, concepts, research and other information, processes,
products, methods and improvements, or parts thereof conceived, developed, or
otherwise made by the Employee alone or jointly with others and in any way
relating to any Affiliated Company’s present or proposed products, programs or
services or to tasks assigned to the Employee during the course of the Employee’s
employment, whether or not patentable or subject to copyright protection and
whether or not reduced to tangible form or reduced to practice during the
period of the Employee’s employment with the Employer, whether or not made
during the Employee’s regular working hours, and whether or not disclosed by
the Employee to the Employer (hereinafter referred to as “Developments”),
together with all products or services which embody or emulate such
Developments, shall be the sole property of the Employer.  The Employee agrees to, and hereby does
assign to the Employer, all the Employee’s right, title and interest throughout
the world in and to all Developments and to anything tangible which evidences,
incorporates, constitutes, represents or records any such Developments.  The Employee agrees that all such
Developments shall constitute works made for hire under the copyright laws of
the United States and hereby assigns and, to the extent any such assignment
cannot be made at present, the Employee hereby agrees to assign to the Employer
all copyrights, patents, and other proprietary rights he may have in any such
Developments, together with the right to file for and/or own wholly without
restriction United States and foreign patents, trademarks, and copyrights.  The Employee agrees to waive, and hereby
waives, all moral rights or proprietary rights in or to any


 


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Developments and, to the
extent that such rights may not be waived, agrees not to assert such rights
against any Affiliated Company or its licensees, successors or assigns.


 


§9.           Termination.  The Employee’s employment with the Employer
shall terminate automatically upon the death of the Employee and may be
terminated by the Employer, without any further obligation on the part of the
Employer (except as provided in clause (c) below), immediately upon notice to
the Employee under any of the following circumstances:


 


(a)           At
any time for Cause (defined below);


 


(b)           At
any time when the Employee is under a Long-Term Disability (defined below); or


 


(c)           At
any time without Cause; provided, however, that if the Employer terminates the
Employee’s employment pursuant to this clause (c) and no other basis for
termination exists under this Agreement, then the Employee shall be entitled to
severance payments in an aggregate amount equal to the pro rata monthly portion
of Employee’s Base Salary for a period equal to three (3) months (any such
severance payments shall be payable periodically in the same manner as the Base
Salary is payable under §4 of this Agreement) and the noncompetition
obligations of the Employee under clauses (a) and (b) of the third paragraph of
Section 7 shall cease.


 


For purposes of this Agreement:


 


(i)            “Cause”
shall mean:


 


(A) any act
constituting (1) a felony under the federal laws of the United States, the laws
of any state, or any other applicable law, regardless of whether a conviction
has been obtained, (2) fraud, embezzlement, misappropriation of assets, willful
misfeasance, or dishonesty, or (3) any other criminal conduct which in any way
adversely affects the reputation, goodwill, or business position of the Employer
or any other Affiliated Company; or


 


(B) the failure of
the Employee: (1) to perform any obligation required to be performed by the
Employee under this Agreement, or (2) to perform his duties in accordance with
the policies, programs, budgets, procedures, and directions established from
time to time by the Employer including, without limitation, the Company’s code
of ethics (any such failure, a “Performance Failure”).


 


(ii)           “Long-Term
Disability” shall mean that, because of physical or mental incapacity, it is
more likely than not that the Employee will be unable, within 180 days after
such incapacity commenced, to perform the essential functions of his position
with the Employer, with or without reasonable accommodation.  In the event of any disagreement about
whether or when the Employee is under a Long-Term Disability, the question
shall be determined:  (A) by a physician
selected by agreement between the Employee and the Employer if such a physician
is selected within 10 days after either of them requests the other so to agree;
or, if not, (B) by two


 


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physicians, the first of whom shall be selected by the Employee and the
second of whom shall be selected by the Employer or, if the Employee fails to
make a selection within 10 days after being requested to do so by the Employer,
the second physician shall be selected by the first physician; or, if the two
physicians fail to agree, (C) by a third physician selected by the first two
physicians.  The Employee shall submit to
all reasonable examinations requested by any such physicians.


 


§10.         No
Conflict. The Employee represents and warrants that Employee is not subject
to any agreement, order, judgment or decree of any kind which would prevent
Employee from entering into this Agreement or performing fully the Employee’s
obligations hereunder.  Employee
acknowledges being instructed:  (a) that
it is the Employer’s policy not to seek access to or make use of trade secrets
or confidential business information belonging to other persons or
organizations, including but not limited to competitors or former employers;
and (b) that the Employee should not, under any circumstances, reveal to the
Employer or any Affiliated Company or make use of trade secrets or confidential
business information belonging to any other person or organization.  The Employee represents and warrants that the
Employee has not violated and shall not violate such instructions.


 


§11.         Remedies.  All rights and remedies of any party under
this Agreement are cumulative and in addition to all other rights and remedies
which may be available to that party from time to time, whether under any other
agreement, at law, or in equity.


 


§12.         Survival.  The termination of the Employee’s employment
with the Employer (for any reason) shall not relieve any party of any of that
party’s obligations under this Agreement existing at, arising as a result of,
or relating to acts or omissions occurring prior to, such termination.  Without limiting the generality of the preceding
sentence, in no event shall the termination of such employment modify or affect
any obligations of the Employee or rights of the Employer under §7 and §8 of
this Agreement, all of which shall survive the termination of such employment.


 


§13.         Notices. All
notices and other communications under this Agreement to any party shall be in
writing and shall be deemed given when delivered personally, telecopied (which
is confirmed) to that party at the telecopy number for that party set forth
below, mailed by certified mail (return receipt requested) to that party at the
address for that party (or at such other address for such party as such party
shall have specified in notice to the other party) or delivered to Federal
Express, UPS, or any similar express courier service for delivery to that party
at that address:


 


	
  (a)

  	
   

  	
  If to the Employer:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Vistula Communications
  Services, Inc.

  
	
   

  	
   

  	
  Suite 801, 405
  Park Avenue

  
	
   

  	
   

  	
  New York, NY 10022

  
	
   

  	
   

  	
  Telecopy No.:
  (212) 832-7563

  
	
   

  	
   

  	
  Attention: Chief
  Executive Officer

  



 


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  with a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Foley Hoag LLP

  
	
   

  	
   

  	
  155 Seaport Boulevard

  
	
   

  	
   

  	
  Boston, MA 02210

  
	
   

  	
   

  	
  Attention: Paul Bork,
  Esq.

  
	
   

  	
   

  	
  Telecopy No.: (617)
  832-7000

  
	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  If to the Employee:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Ian Cope

  
	
   

  	
   

  	
  1039 Hollywood AV

  
	
   

  	
   

  	
  Bronx, NY 10465

  
	
   

  	
   

  	
  Telecopy No.: (718)
  931-7616

  



 


§14.         Severability.  The intention of the parties is to comply
fully with all rules, laws, and public policies to the extent possible.  If and to the extent that any court of
competent jurisdiction is unable so to construe any provision of this Agreement
and holds that provision to be invalid, such invalidity shall not affect the
remaining provisions of this Agreement, which shall remain in full force and
effect.  With respect to any provision in
this Agreement finally determined by such a court to be invalid or
unenforceable, such court shall have jurisdiction to reform this Agreement to
the extent necessary to make such provision valid and enforceable, and, as
reformed, such provision shall be binding on the parties.


 


§15.         Non-Waiver.  No failure by any party to insist upon strict
compliance with any term of this Agreement, to exercise any option, to enforce
any right, or to seek any remedy upon any default of another party shall
affect, or constitute a waiver of, the other party’s right to insist upon such
strict compliance, exercise that option, enforce that right, or seek that
remedy with respect to that default or any prior, contemporaneous, or
subsequent default.  No custom or
practice of the parties at variance with any provision of this Agreement shall
affect, or constitute a waiver of, any party’s right to demand strict
compliance with all provisions of this Agreement.


 


§16.         Complete
Agreement.  This Agreement and all
documents referred to in this Agreement, all of which are hereby incorporated
herein by reference, contain the entire Agreement between the parties and
supersede all other agreements and understandings between the parties with
respect to the subject matter of this Agreement.  No alterations, additions, or other changes
to this Agreement shall be made or be binding unless made in writing and signed
by both parties.


 


§17.         Governing
Law.  This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
without regard to principles of conflicts of law.  The Employee hereby consents to the exclusive
jurisdiction of the courts of the State of New York in the event of any dispute
arising hereunder.


 


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§18.         Captions.  The captions of the various sections of this
Agreement are not part of the context of this Agreement, are only guides to
assist in locating those sections, and shall be ignored in construing this
Agreement.


 


§19.         Genders
and Numbers.  Where permitted by the
context, each pronoun used in this Agreement includes the same pronoun in other
genders and numbers, and each noun used in this Agreement includes the same
noun in other numbers.


 


§20.         Successors.  This Agreement shall be personal to the Employee
and no rights or obligations of the Employee under this Agreement may be
assigned by the Employee to any third party. 
Any assignment or attempted assignment by the Employee in violation of
the preceding sentence shall be null and void. 
Subject to the foregoing, this Agreement shall be binding upon, inure to
the benefit of, and be enforceable by and against the successors and assigns of
each party.


 


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


 


 


	
  Vistula
  Communications Services, Inc.

  	
  Employee

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
  /s/ George R. Vaughn

  	
   

  	
  /s/ Ian Cope

  	
   

  
	
  Name:

  	
  George R. Vaughn

  	
  Ian Cope

  
	
  Title:

  	
  Chief Financial Officer

  	
   

  
						



 


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