Document:

Exhibit 10.1

            EMPLOYMENT AGREEMENT

             

            THIS EMPLOYMENT AGREEMENT (“Agreement”) is entered into on October 23, 2009 and is effective as of October 1, 2009 (“Effective Date”), by and between:

            CASPIAN SERVICES, INC., a Nevada corporation (the “Company”), and

            DR. MIRGALI S. KUNAYEV, an individual residing in the city of Almaty, Republic of Kazakhstan (“Dr. Kunayev”).

            PREAMBLE

            With the commencement of a new fiscal year, the Company and Dr. Kunayev enter into this Agreement to replace the standard statutory employment agreement required in the Republic of Kazakhstan pursuant to which Dr. Kunayev was previously employed with the Company. Therefore, the parties hereto, intending to be legally bound, agree as follows.

            AGREEMENT

            1. Employment.  

             

            Dr. Kunayev currently serves as the Chairman of the Company’s Board of Directors (“Chairman”) and hereby agrees to continue to perform all duties and accept all responsibilities incident to the position of Chairman as required by the Company’s Articles of Incorporation and Bylaws, and from time to time, as may be assigned to him by the resolution of the Board
            of Directors of the Company (the “Board”) for so long as he continues to serve as the Chairman, or until the expiration of the term of this Agreement, whichever shall occur earlier.  Dr. Kunayev shall devote his full time, best efforts, knowledge, and experience in discharging his duties under this Agreement. 

            2.Compensation.  

             

            (a)

            Salary.  During the term of this Agreement, the Company agrees to pay to Dr. Kunayev a base salary at an annual rate of Two Hundred Fifty Thousand U.S. Dollars ($250,000), payable in monthly installments in accordance with the Company’s standard payroll practice. To the extent the salary payment is being paid and received by Dr. Kunayev in the
            Republic of Kazakhstan, income and social taxes in the Republic of Kazakhstan will be paid by the Company.

             

            (b)

            Benefits.  Effective October 1, 2009, Dr. Kunayev shall be entitled to participate in all health insurance and life insurance benefit plans available on a general basis to the Company’s executive officers whether residents or non-residents of the Republic of Kazakhstan; provided, however, that the Company reserves the right, from
            time to time, to amend in any respect and to terminate all such benefit plans; and provided further that any reduction in such benefits must be applicable to all employees or a class of employees generally.

             

            
                

            

             

            (c)

            Annual bonus. Dr. Kunayev shall be eligible to receive annual bonuses during the employment period, in such amounts and at such times, if any, as may be approved by the Company’s Board in its sole discretion.  Annual bonuses, if any, shall be subject to the limitations set forth in this Employment Agreement and shall not exceed 25% of Dr.
            Kunayev’s annual base salary. 

             

            (d)

            Expenses.  The Company will reimburse Dr. Kunayev for all reasonable expenses incurred by him in the course of performing his duties under this Agreement which are consistent with the Company’s policies in effect from time to time with respect to travel, entertainment and other business expenses and to the Company’s requirements with
            respect to reporting and documentation of such expenses.

             

            (e)

            Vacation.  Dr. Kunayev shall be entitled to five (5) weeks vacation annually.  Dr. Kunayev also will be entitled to personal time on an annual basis during the term of this Agreement, as may be from time to time mutually agreed upon by Dr. Kunayev and the Board.

             

            (f)

            Company Vehicle.  The Company agrees to lease an executive class vehicle (as mutually agreed to by the Company and Dr. Kunayev) for his business use (and ancillary personal use).  The Company will cover all repairs and operating expenses of said vehicle, including the cost of liability insurance, comprehensive and collision insurance.  Upon
            termination of Dr. Kunayev’s employment hereunder for any reason, Dr. Kunayev shall either immediately return the vehicle to the Company or make arrangement to assume the lease. Upon request by the Company, Dr. Kunayev shall submit to the Company on a timely basis documentation which defines the percentage of Dr. Kunayev’s use of the vehicle which was for business purposes.

             

            (g)

            Administrative Staff. During performance of the his duties the Company agrees to provide Dr. Kunayev with, or reimburse reasonable expenses incurred by him not exceeding One Hundred and Twenty Thousand U.S. Dollars ($120,000) annually associated with: i) retaining a personal assistant; ii) retaining an executive secretary; iii) retaining a dedicated
            vehicle driver; iv) maintaining a security protocol in the Republic of Kazakhstan; and v) as approved by the Board, providing for such other administrative and logistics expenses as may be required for the purpose of effective discharge of his duties. 

             

             

             

            
                

            

            3. Term of Employment.

             

            (a)

            The term of this Agreement shall commence on the Effective Date and shall continue until the next election of Directors by the Company’s stockholders. Thereafter, the Agreement shall renew automatically following each election of Directors by the Company’s stockholders at which Dr. Kunayev is re-elected to the Board and appointed Chairman. 

             

            (b)

            Notwithstanding the provisions of Section 3(a) of this Agreement, except for provisions which by their terms extend beyond termination of this Agreement and except following a Change of Control as defined in Section 4(b) herein, this Agreement will terminate, and all rights of Dr. Kunayev hereunder (including, without limitation, rights to any compensation or other benefits under
            Section 2 of this Agreement) shall cease: 

             

            i) 

            upon any meeting of the Company’s stockholders at which the Chairman is nominated for re-election but is not elected to serve as a director by the Company’s stockholders; 

             

            ii)

            in the event Dr. Kunayev shall fail to be appointed as Chairman of the Board of Directors following an election of Directors during the term of this Agreement; 

             

            iii)

            in the event Dr. Kunayev shall resign from his positions with the Company; or

             

            iv)

            in the event Dr. Kunayev shall be removed from office as a Director pursuant to a vote of the stockholders of the Company in accordance with Section 3.12 of the Company’s Bylaws.

             

            During the term of this Agreement, the Board shall use its best efforts to nominate and recommend Dr. Kunayev for election to the Board at each meeting of stockholders at which Directors are to be elected.

             

            (c)

            Notwithstanding the provisions of Section 3(a) of this Agreement, Company may terminate this Agreement and Dr. Kunayev’s employment hereunder, at any time for Cause (as defined below) immediately and automatically upon giving Dr. Kunayev written notice of such termination.  As used in this Agreement, “Cause” shall mean any of the following events: 

             

            (i)

            a material breach of this Agreement by Dr. Kunayev that is not cured by him within thirty (30) days following the date he received written notice from the Company of its intent to terminate his employment for Cause as a result of such material breach; 

             

            
                

            

            (ii)

            Dr. Kunayev’scommission of any act involving dishonesty or fraud or conduct, which brings the Company into public disgrace or disrepute in any respect, including but not limited to acts of dishonesty or fraud, commission of a felony or a crime of moral turpitude; or

            (iii)

            gross negligence or willful misconduct by Dr. Kunayev with respect to business affairs of the Company that is directly or materially harmful to the business or reputation of the Company or any subsidiary of the Company.

             

            If this Agreement, and Dr. Kunayev’s employment hereunder, is terminated for Cause pursuant to the provisions of this Section 3(c) or Section 3(b)(iii) above, all rights of Dr. Kunayev under this Agreement (including, without limitation, rights to any compensation or other benefits under Section 2 of this Agreement) shall cease as of the effective date of such
            termination.

            (d)

            Notwithstanding the provisions of Section 3(a) of this Agreement, except for provisions which by their terms extend beyond termination of this Agreement, this Agreement shall terminate automatically upon Dr. Kunayev’s voluntary termination of employment (other than in accordance with Section 4 of this Agreement), his decision to retire or otherwise not stand for re-election,
            his death, his removal by vote of the Company’s stockholders or his failure to be re-elected by the Company’s stockholders and all his rights hereunder (including, without limitation, rights to any compensation or other benefits under Section 2 of this Agreement) shall cease as of the date of such voluntary termination, retirement or decision not to stand for re-election at Dr. Kunayev’s election, his failure to be re-elected, or his death; provided, however, that,
            if Dr. Kunayev dies after he delivers a Notice of Termination (as defined in Section 4(a) of this Agreement), the provisions of Section 16(b) of this Agreement shall apply.  Dr. Kunayev shall provide to Company not less than thirty (30) days prior written notice of his voluntary termination of employment (other than in accordance with Section 3 (a) and Section 4 of this Agreement) or retirement.

             

            (e)

            Notwithstanding the provisions of Section 3(a) of this Agreement, except for provisions which by their terms extend beyond termination of this Agreement, this Agreement and Dr. Kunayev’s employment hereunder shall terminate automatically upon Dr. Kunayev’s Disability and all of his rights under this Agreement (including, without limitation, rights to any compensation or
            other benefits under Section 2 of this Agreement) shall cease as of the date of such termination; provided, however, that, if he becomes Disabled after he delivers a Notice of Termination (as defined in Section 5(a) of this Agreement), Dr. Kunayev shall nevertheless be absolutely entitled to receive all of the compensation and benefits provided for in, and for the term set forth in, Section 6 of this Agreement.  For purposes of this Agreement, “Disability” shall
            mean a mental or physical disability, illness or incapacity of Dr. Kunayev which renders him unable to perform a substantial portion ofhisduties as an employee of the Company for a period of three (3) consecutive months or an aggregate period of six (6) months in any eighteen (18) month period or that renders Dr. Kunayev unable to earn a livelihood as an employee of a business comparable to the Company’s business, unless further time is required as a reasonable
            accommodation under any applicable employee protection legislation.  The Company shall provide to Dr. Kunayev not less than thirty (30) days prior written notice of its intent to terminate his employment for Disability.

             

            
                

            

             

            (f)

            The Company and Dr. Kunayev agree that, in the event employment under this Agreement terminates for any reason, he shall not concurrently resign as a director of the Company unless such resignation is warranted under the circumstances. 

             

            4. Termination of Employment Following Change in Control.

             

            (a)

                       If a Change in Control (as defined in Section 4(b) of this Agreement) shall occur and if thereafter, at any time during the term of this Agreement, there shall be:

             

            (i)

            any involuntary termination of Dr. Kunayev’s employment (other than for Cause or Disability);

            (ii)

            a reduction in Dr. Kunayev’s title, responsibilities, including reporting responsibilities, or authority, including such title, responsibilities, or authority as such may have been increased from time to time during the term of this Agreement, which results in a material negative change to Dr. Kunayev in the employment relationship;

            (iii)

            the assignment of Dr. Kunayev to duties inconsistent with his office as existed on the day immediately prior to the date of a Change in Control, which results in a material negative change to Dr. Kunayev in the employment relationship;

            (iv)

            a reduction in Dr. Kunayev’s annual base salary in effect on the day immediately prior to the date of the Change in Control;

            (v)

            a termination of Dr. Kunayev’s participation, on substantially similar terms, in any incentive compensation or bonus plans of the Company in which he participated immediately prior to the Change in Control, or any change or amendment to any of the substantive provisions of any of such plans which would materially decrease the potential benefits to Dr.
            Kunayev under any of such plans;

            (vi)

            a failure by the Company to provide Dr. Kunayev with benefits at least as favorable as those enjoyed by him under any pension, life insurance, medical, health and accident, disability or other employee plans of the Company in which he participated immediately prior to the Change in Control, or the taking of any action by the Company that would
            materially reduce any of such benefits in effect at the time of the Change in Control, unless such reduction relates to a reduction in benefits applicable to all employees generally;

             

            
                

            

            (vii)

            a material breach of this Agreement by the Company;

             

            (viii)

            a failure by the Company or its Board to recommend Dr. Kunayev for election to the Board or failure by the Board to elect Dr. Kunayev as its Chairman. 

             

            Then, at the option of Dr. Kunayev, exercisable by him within ninety (90) days of the occurrence of any of the foregoing events, Dr. Kunayev may resign from employment with the Company (or, if involuntarily terminated, give notice of intention to collect benefits under this Agreement) by delivering a notice in writing (the “Notice of Termination”) to the Company and
            the provisions of Section 5 of this Agreement shall apply, provided, however, that such resignation by Dr. Kunayev shall become effective only if the Company does not cure the relevant event (excluding the event listed in Section 4(a)(i)) within thirty (30) days of such Notice of Termination.  Notwithstanding the foregoing, any amounts payable upon a termination under this Section shall be paid only if Dr. Kunayev actually terminates employment within two (2) years following
            the initial existence of the above-referenced event(s) which gives rise to such termination.

             

            (b)

            As used in this Agreement, “Change in Control” shall mean the occurrence of any of the following:

             

            (i)

            If during the term of this Agreement any “person” or “group” which is not an affiliate of the Company or Dr. Kunayev (as those terms are defined or used in Section 13(d) of the Securities Exchange Act of 1934 (the “Exchange Act”), as enacted and in force on the date hereof) is or becomes the “beneficial owner”
            (as that term is defined in Rule 13d-3 under the Exchange Act, as enacted and in force on the date hereof) of securities of the Company representing fifty one percent (51%) or more of the combined voting power of the Company’s securities then outstanding; or

            (ii)

            If during the term of this Agreement there occurs a merger, consolidation, share exchange, division or other reorganization involving the Company and another entity which is not an affiliate of the Company or Dr. Kunayev as defined by the Exchange Act, in which the Company’s shareholders do not continue to hold a majority of the capital stock of the
            resulting entity, or a sale, exchange, transfer, or other disposition of substantially all of the assets of the Company to another entity or other person which is not an affiliate of the Company or Dr. Kunayev.

             

            
                

            

            (c)

            Anything in this Agreement to the contrary notwithstanding, if Dr. Kunayev’s employment with the Company is terminated by the Company prior to the date on which a Change in Control occurs other than for Cause or Disability and it is reasonably demonstrated that such termination of employment (i) was at the request of a third party who has taken steps reasonably calculated to
            effect the Change in Control or (ii) otherwise arose in connection with or anticipation of the Change in Control, then for all purposes of this Section, the termination shall deemed to have occurred upon a Change in Control and Dr. Kunayev will be entitled to the compensation and benefits provided for in Section 6 hereof.  Notwithstanding the foregoing, any benefits received by Dr. Kunayev as a result of a termination of employment under this Section 4(c) shall be offset by any
            benefits received by him under Section 6.

             

            5. Rights in Event of Termination Following Changes in Control.

             

            (a)

            In the event that Dr. Kunayev delivers a Notice of Termination (as defined in Section 4(a) of this Agreement) after the occurrence of a Change in Control or if his employment terminates pursuant to Section 4(c):

             

            (i)

            he shall be entitled to receive a lump-sum cash payment within thirty (30) days following the date of termination in an amount equal two (2) times his annual base salary then in effect (or immediately prior to any reduction resulting in a termination under Section 4(a)(iv)); 

            (ii)

            for the three (3) year period immediately following the date of termination, the Company shall arrange to provide Dr. Kunayev (which includes his eligible dependents) with health insurance benefits substantially similar to those which he was receiving immediately prior to the date of termination.

            6. Rights in Event of Termination Absent Change in Control.

             

            (a)

            In the event that Dr. Kunayev’s employment is terminated by the Company other than for Cause or Disability or by Dr. Kunayev for Good Reason (as defined below), and no Change in Control shall have occurred at the date of such termination:

             

            (i)

            he shall be entitled to receive a lump-sum cash payment within thirty (30) days following the date of termination in an amount equal one (1) times his annual base salary then in effect; and

             

            
                

            

            (ii)

            for the two (2) year period immediately following the date of termination, the Company shall arrange to provide Dr. Kunayev (which includes his eligible dependents) with health insurance benefits substantially similar to those which he was receiving immediately prior to the date of termination;

            (b)

            Dr. Kunayev shall be considered to have terminated employment hereunder for “Good Reason” if such termination of employment occurs absent a Change in Control and is on account of a reduction in his annual base salary except for (i) across-the-board salary reductions similarly affecting all salaried employees of the Company or (ii) across-the-board salary reductions
            similarly affecting all senior executive officers of the Company.  Dr. Kunayev’s right to terminate employment for Good Reason shall be subject to the following conditions: (i) any amounts payable upon a Good Reason termination shall be paid only if he actually terminates employment within two (2) years following the initial existence of the Good Reason event and (ii) he must provide written notice to the Company of the Good Reason event within ninety (90) days of the
            initial existence of the event and the Company must be given at least thirty (30) days to remedy such situation.

             

            7. Sale of Company’s Stock.

            Dr. Kunayev shall not be eligible to receive severance benefits under Sections 5 or 6 of this Agreement if at any time during the term of this Agreement or two (2) years thereafter he sells or otherwise disposes of a substantial portion of his holding of the Company’s common stock. For the purpose of this Agreement substantial is defined as 50% or more of Dr. Kunayev’s
            total shareholding (direct or indirect) at the time of the Effective Date. 

            8. Requirement of Release. 

             

            Notwithstanding anything in this Agreement to the contrary, Dr. Kunayev’s entitlement to any payments under this Agreement other than his accrued but unpaid base compensation and any accrued but unpaid or otherwise vested benefits under any benefit or incentive plan determined at the time of his termination of employment shall be contingent upon his prior agreement with and
            signature to a complete release and hold harmless agreement (in the form satisfactory to the Company) which shall completely release the Company, its parent, affiliates, officers, directors and employees (collectively the “Released Parties” and individually a “Released Party”) and which shall forever waive all claims of any nature that Dr. Kunayev may have against any Released Party, including without limitation all claims arising out of his employment within
            the Company or the termination of that employment.

            9. Restrictive Covenants.  

             

            (a)

            During Dr. Kunayev’s employment with the Company and, if he receives severance benefits under Sections 5 or 6 of this Agreement, for a period of two (2) years thereafter:

             

            
                

            

            (i)

            he shall not directly for himself or any third party, become engaged in any business or activity which is directly in competition with any services or products sold by, or any business or activity engaged in by, the Company or any of its affiliates within the Republic of Kazakhstan; provided, however, that this provision shall not restrict Dr. Kunayev from
            owning or investing in an institution (including venture, partnership, or entity) so long as his aggregate holdings in any such institution do not exceed 49% of the outstanding capital stock of such institution. The restrictions of this Section 9 (i) shall not apply to Dr. Kunayev’s shareholding interest with the Kazakhstan registered company JSC KazakhstanCaspiShelf. 

            (ii)

            he shall not solicit any person who was a customer of the Company or any of its affiliates, or solicit potential customers who are or were identified through leads developed during the course of employment with the Company, or otherwise divert or attempt to divert any existing business of the Company or any of its affiliates; and

            (iii)

            he shall not, directly for himself or any third party, solicit, induce, recruit or cause another person in the employment of the Company or any of its affiliates to terminate such employee’s employment for the purposes of joining, associating, or becoming employed with any business or activity which is in competition with any services or products sold, or
            any business or activity engaged in, by the Company or any of its affiliates.

             

            (b)

            Dr. Kunayev agrees that he will not, while employed with the Company or at any time thereafter for any reason, in any fashion, form or manner, either directly or indirectly, divulge, disclose or communicate to any person, firm, corporation or other business entity, in any manner whatsoever, any confidential information or trade secrets concerning the business of the Company,
            including, without limiting the generality of the foregoing, any customer lists or other customer identifying information, the techniques, methods or systems of the Company’s operation or management, any information regarding its financial matters, or any other material information concerning the business of the Company, its manner of operation, its plan or other material data. The provisions of this Section 9(b) shall not apply to (i) information that is public knowledge
            other than as a result of disclosure by Dr. Kunayev in breach of this Section 9(b), (ii) information disseminated by the Company to third parties in the ordinary course of business, (iii) information lawfully received by Dr. Kunayev from a third party who, based upon inquiry by him, is not bound by a confidential relationship to the Company, or (iv) information disclosed under a requirement of law or as directed by applicable legal authority having jurisdiction over Dr.
            Kunayev.

             

             

            
                

            

            (c)

            Dr. Kunayev agrees that he will not, while employed with the Company or at any time thereafter for any reason, in any fashion, form or manner, either directly or indirectly, disparage or criticize the Company, or otherwise speak of the Company, in any negative or unflattering way to anyone with regard to any matters relating to his employment by the Company or
            the business or employment practices of the Company. The Company agrees that it will not, in any fashion, form or manner, either directly or indirectly, disparage or criticize Dr. Kunayev or otherwise speak of Dr. Kunayev in any negative or unflattering way to anyone with regard to any matters relating to his employment with the Company. This Section shall not operate as a bar to (i) statements reasonably necessary to be made in any judicial, administrative or arbitral proceeding,
            or (ii) internal communications between and among the employees of the Company with a job-related need to know about this Agreement or matters related to the administration of this Agreement.

             

            (d)

            Dr. Kunayev understands that in the event of a material violation of any provision of this Section 9 as determined in good faith by the Board, the Company shall have the right to seek injunctive relief, in addition to any other existing rights provided in this Agreement or by operation of law, without the requirement of posting bond. Dr. Kunayev understands that the Company may
            suspend future payments of the severance payments and benefits provided under this Agreement; provided, however, that the Company shall provide him with written notice of such suspension at least fifteen (15) days prior to the date of such suspension. The remedies provided in this Section 9(d) shall be in addition to any legal or equitable remedies existing at law or provided for in any other agreement between Dr. Kunayev and the Company or any of its affiliates, and shall not be
            construed as a limitation upon, or as an alternative or in lieu of, any such remedies. If any provisions of Section 9 shall be determined by a court of competent jurisdiction to be unenforceable in part by reason of it being too great a period of time or covering too great a geographical area, it shall be in full force and effect as to that period of time or geographical area determined to be reasonable by the court.

             

            (e)

            Dr. Kunayev acknowledges that the provisions of Section 9 shall extend to any offices or facilities of any business that becomes an affiliate of or successor to the Company or any of its affiliates on account of such Change in Control. 

             

            (f)

            Dr. Kunayev agrees that he will not act in any way or manner that might be interpreted as him seeking to sell or otherwise dispose of his disclosed stake in the Company, except as might be in the normal course of a business transaction involving the Company. 

             

            10. Additional Covenants of Dr. Kunayev.

             

            (a)

            Employee Work.  All written and graphic materials, computer software, inventions, discoveries, patents, patent applications developed, authored, prepared, conceived or made by Dr. Kunayev during the term ofhisemployment hereunder and which are related to or are the product of the tasks, assignments and performance by him of the duties of his
            employment and relate to the Business (defined below) of the Company or any of its affiliates (collectively, “Employee Work”) shall be the sole property of the Company and, to the extent applicable, shall be “work made for hire” under and as defined in the Copyright Act of 1976, 17 U.S.C. §1 et seq.  For purposes of this subsection (a), the term “Business”
            shall mean providing and/or developing financial services.  Dr. Kunayev hereby agrees to disclose promptly to the Company all Employee Work and hereby agrees to assign to the Company all right, title and interest in and to such Employee Work and shall execute all such documents and instruments as the Company may reasonably determine are necessary or desirable in order to give effect to this subsection or to preserve, protect or enforce the Company’s rights
            with respect to any Employee Work.

             

            
                

            

            (b)

            Return of Company Property.  Promptly after termination of Dr. Kunayev’s employment hereunder for any reason, Dr. Kunayev orhispersonal representative shall return to the Company all property of the Company then inhispossession, including without limitation papers, documents, computer disks, vehicles, keys, credit cards and confidential
            information, and shall neither make nor retain copies of the same.  

             

            11. Representations and Warranties of Dr. Kunayev.  

             

            Dr. Kunayev hereby represents and warrants to the Company thatheis not a party to or otherwise subject to or bound by any contract, agreement, understanding, legal proceeding, order, judgment, or otherwise which would limit or otherwise adversely affecthis ability to serve as Chairman of the Board, as a Director, or to otherwise perform his duties hereunder or which would be
            breached or violated by his execution and delivery of this Agreement or by the performance of his duties hereunder. Dr. Kunayev further represents and warrants that his employment by the Company will not require him to disclose or use any confidential information belonging to prior employers or other persons or entities.  

            12. Notice.  

             

            Any notice required to be provided to Dr. Kunayev hereunder shall be given to him in writing by certified mail, return receipt requested, or by Federal Express, addressed to him at the address of record with the Company, or at such other place as he may from time-to-time designate in writing.  Any notice which Dr. Kunayev is required to give to the Company hereunder shall be
            given in writing by certified mail, return receipt requested, or by Federal Express, addressed to the Senior Human Resources Officer at its principal office.  The dates of mailing any such notice shall be deemed to be the date of delivery thereof.

            13. Arbitration.

             

            The parties hereby specifically agree that any controversy or claim arising out of or relating to this Employment Agreement, or the breach thereof, shall be finally resolved by arbitration administered by the American Arbitration Association under its Employment Dispute Resolution Rules, and judgment on the award rendered by the arbitrators may be entered in any court having
            jurisdiction thereof. There shall be three arbitrators, named in accordance with such rules. Absent the agreement between the Company and Dr. Kunayev at the time of such dispute, arbitration shall be conducted in English language in Salt Lake City, Utah in accordance with the Unites States Arbitration Act and the arbitrators shall decide the dispute in accordance with the substantive law of the state of Utah.

             

            
                

            

            14. Miscellaneous.  

            The validity or enforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.  This Agreement embodies the entire Agreement between the parties hereto and supersedes any and all prior or contemporaneous, oral or written understandings, negotiations, or communications on behalf of such parties.  This Agreement may be
            executed in several counterparts, each of which shall be deemed original, but all of which together shall constitute one and the same instrument.  This Agreement may be delivered by telefax, and such telefax copy shall be as effective as delivery of a manually executed counterpart.  The waiver by either party of any breach or violation of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach or violation hereof.  All
            compensation and benefits provided in this Agreement shall, to the extent required by law, be subject to federal, state, and local tax withholding.  This Agreement is executed in and shall be governed by and construed in accordance with the laws of the State of Utah without giving effect to any conflict of laws provision.  This Agreement shall be amended only by written agreement of both parties hereto.

            15. Survival. 

             

            Notwithstanding the termination of this Agreement, the provisions which specify continuing obligations, compensation and benefits, and rights shall remain in effect until such time as all such obligations are discharged, all such compensation and benefits are received, and no party or beneficiary has any remaining actual or contingent rights under this Agreement.

             

            16. Successors; Binding Agreement.

             

            (a)

            The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all of the businesses or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.
             Failure by the Company to obtain such assumption and agreement prior to the effectiveness of any such succession shall constitute a breach of this Agreement.  As used in this Agreement, the “Company” shall mean the Company as defined previously and any successor to its respective businesses or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law or otherwise.

            (b)

            This Agreement shall inure to the benefit of, and be enforceable by, Dr. Kunayev and the Company, and their respective personal or legal representatives, executors, administrators, heirs, distributees, devisees, legatees, successors and permitted assigns.  If Dr. Kunayev should die after a Notice of Termination is delivered by him, or following termination of his employment
            without Cause, and any amounts would be payable to Dr. Kunayev under this Agreement if he had continued to live, all such amounts shall be paid in accordance with the terms of this Agreement to Dr. Kunayev’s devisee, legatee, or other designee, or, if there is no such designee, to Dr. Kunayev’s estate.

             

            
                

            

            17. Assignment. 

             

            This Agreement shall not be assignable by either party hereto, except by the Company to any successor in interest to the business of the Company, provided that the Company (if it remains a separate entity) shall remain fully liable under this Agreement for all obligations, payments and otherwise.

            18. No Mitigation or Offset.  

             

            In the event of termination of Dr. Kunayev’s employment, he will be under no obligation to seek other employment and there will be no offset against any payment or benefit provided for in this Agreement on account of any remuneration or benefits from any subsequent employment that he may obtain.

            19. Legal Fees.  

             

            The Company shall reimburse Dr. Kunayev for all reasonable legal fees and expenses incurred by him in attempting to obtain or enforce rights or benefits provided by this Agreement, if, with respect to any such right or benefit, he is successful in obtaining or enforcing such right or benefit (including by negotiated settlement).  

            20. Excise Tax Matters. 

             

            Notwithstanding anything in this Agreement to the contrary, in the event the payments and benefits payable hereunder to or on behalf of Dr. Kunayev, when added to all other amounts and benefits payable to or on behalf of Dr. Kunayev, would result in the imposition of an excise tax under Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), the
            amounts and benefits payable hereunder shall be reduced to such extent as may be necessary to avoid such imposition.  All calculations required to be made under this subsection will be made by the Company’s independent public accountants, subject to the right of Dr. Kunayev’s representative to review the same.  The parties recognize that the actual implementation of the provisions of this subsection are complex and agree to deal with each other in good faith to
            resolve any questions or disagreements arising hereunder.

            21. Application of Code Section 409A.  

             

            Shall at any time any payment under this Agreement become subject to the US tax jurisdiction or application of the Code the following sections shall apply. 

            (a)

            Notwithstanding anything in this Agreement to the contrary, the receipt of any benefits under this Agreement as a result of a termination of employment shall be subject to satisfaction of the condition precedent that Dr. Kunayev undergo a “separation from service” within the meaning of Treas. Reg. § 1.409A-1(h) or any successor thereto.  In addition, if a
            payment or benefit is considered to be a deferral of compensation subject to Code Section 409A and Dr. Kunayev is deemed to be a “specified employee” within the meaning of that  term under Code  Section 409A(a)(2)(B),  then with  regard to any  payment or  the provisions of any benefit 

             

            
                

            

            that is required to be delayed pursuant to Code Section 409A(a)(2)(B), such payment or benefit shall not be made or provided prior to the earlier of (i) the expiration of the six (6) month period measured from the date of his “separation from service” (as such term is defined in Treas. Reg. § 1.409A-1(h)), or (ii) the date of his death (the “Delay Period”).  Within
            ten (10) days following the expiration of the Delay Period, all payments and benefits delayed pursuant to this Section (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to Dr. Kunayev in a lump sum, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.  Notwithstanding the
            foregoing, to the extent that the foregoing applies to the provision of any ongoing welfare benefits to Dr. Kunayev that would not be required to be delayed if the premiums therefore were paid by him, Dr. Kunayev shall pay the full costs of premiums for such welfare benefits during the Delay Period and the Company shall pay Dr. Kunayev an amount equal to the amount of such premiums paid by him during the Delay Period within ten (10) days after the conclusion of such Delay
            Period.

            (b)

            Except as otherwise expressly provided herein, to the extent any expense reimbursement or other in-kind benefit is determined to be subject to Code Section 409A, the amount of any such expenses eligible for reimbursement or in-kind benefits in one calendar year shall not affect the expenses eligible for reimbursement or in-kind benefits in any other taxable year (except under any
            lifetime limit applicable to expenses for medical care), in no event shall any expenses be reimbursed or in-kind benefits be provided after the last day of the calendar year following the calendar year in which Dr. Kunayev incurred such expenses or received such benefits, and in no event shall any right to reimbursement or in-kind benefits be subject to liquidation or exchange for another benefit.

            (c)

            Any payments made pursuant to Sections 5 and 6, to the extent of payments made from the date of termination of Dr. Kunayev’s employment through March 15th of the calendar year following such termination, are intended to constitute separate payments for purposes of Treas. Reg. §1.409A-2(b)(2) and thus payable pursuant to the “short-term deferral” rule set
            forth in Treas. Reg. §1.409A-1(b)(4); to the extent such payments are made following said March 15th, they are intended to constitute separate payments for purposes of Treas. Reg. §1.409A-2(b)(2) made upon an involuntary termination from service and payable pursuant to Treas. Reg. §1.409A-1(b)(9)(iii), to the maximum extent permitted by said provision.  Notwithstanding the foregoing, if the Company determines that any other payments hereunder fail to satisfy the
            distribution requirement of Code section 409A(a)(2)(A), the payment of such benefit shall be delayed to the minimum extent necessary so that such payments are not subject to the provisions of Code section 409A(a)(1).

            (d)

            To the extent it is determined that any benefits described in Sections 6(a)(ii) or 7(a)(ii) are taxable to Dr. Kunayev, they are intended to be payable pursuant to Treas. Reg. §1.409A-1(b)(9)(v), to the maximum extent permitted by said provision.

             

            
                

            

            22. Recovery of Bonuses and Incentive Compensation. 

             

            (a)

            Notwithstanding anything in this Agreement to the contrary, all bonuses and incentive compensation paid hereunder (whether in stock or in cash) shall be subject to recovery by the Company in the event that such bonuses or incentive compensation is based on materially inaccurate financial statements (which includes, but is not limited to, statements of earnings, revenues, or gains) or
            other materially inaccurate performance metric criteria; provided that a determination as to the recovery of a bonus or incentive compensation shall be made within twelve (12) months following the date such bonus or incentive compensation was paid (or such longer period as required by EESA). 

             

            (b)

            In the event that the Board determines by at least a majority vote that a bonus or incentive compensation payment to Dr. Kunayev is recoverable, Dr. Kunayev shall reimburse all or a portion of such bonus or incentive compensation, to the fullest extent permitted by law, as soon as practicable following written notice to him by the Company of the same.

             

            SIGNATURES

             

            
                	
                             

                        	
                            CASPIAN SERVICES, INC.

                        

            

             

            By: /s/ Kerry T. Doyle

            Name: Kerry T. Doyle

            Title: CEO & President

             

             

            CHAIRMAN: 

            By: /s/ Mirgali S. Kunayev

            Name: Mirgali S. KunayevQuickLinks
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 Exhibit 10.25  

 
 

SEVERANCE AGREEMENT    
    

        This Severance Agreement ("Agreement"), which is effective as of August 26, 2009
(the "Effective Date"), is by and between Christopher K. Ancell ("Executive"), who is an officer of Qwest Communications International Inc., a
Delaware corporation having its principal executive offices in Denver, Colorado or one of its subsidiaries or affiliates ("Company") and who is employed by Qwest Corporation, a subsidiary of the
Company, and Company and any successor thereto: 

        WHEREAS,
the Company wishes to encourage Executive's continued service and dedication in the performance of Executive's duties; and 

        WHEREAS,
in order to induce Executive to remain in the employ of the Company, and in consideration for Executive's continued service to the Company, the Company agrees that Executive
shall receive the benefits set forth in this Agreement in the event that Executive's employment with the Company is terminated in the circumstances described herein. 

        Therefore,
in consideration of the mutual promises set forth below, Company and Executive hereby agree as follows: 

        1.    TERM OF EMPLOYMENT; AT-WILL EMPLOYMENT.    This Agreement does not contain any promise or
representation concerning the duration of Executive's employment. Executive's employment is at-will, and may be altered or terminated by either Executive or the Company at any time, with
or without cause, and with or without notice. This at-will employment relationship may not be modified unless in a written agreement signed by Executive and either the Chief Executive
Officer or the Chief Administrative Officer. 

        2.    CHANGE IN CONTROL    

        a.    CHANGE IN CONTROL DEFINED:    For purposes of this Agreement, "Change in Control" shall
have the definition currently in the Qwest Equity Incentive Plan ("Stock Plan"). 

        b.    STOCK OPTIONS/EQUITY:    The Board of Directors may, in its discretion, periodically
grant Executive additional stock options or other awards under the Equity Incentive Plan. Notwithstanding the terms of any stock option agreement to the contrary, upon a Change in Control, all awards
granted to Executive between September 19, 2002 and August 26, 2009 under the Equity Incentive Plan shall immediately vest and all stock options shall remain exercisable for the full
term of such option. All awards granted after August 26, 26, 2009 will vest according to the terms of the applicable equity agreement 

        3.    TERMINATION.    

        a.    Termination for Cause.    The Company may, in its sole discretion, immediately terminate
this Agreement and Executive's employment for Cause by giving notice to Executive. If Executive's employment is terminated for Cause pursuant to this paragraph 3.a., Executive shall not be
entitled to any severance payment or any other post-employment obligation provided under this Agreement. Any one or more of the following events shall, for purposes of this Agreement,
constitute Cause: 

        (1)   Commission
of an act deemed by the Company in its sole discretion to be an act of dishonesty, fraud, misrepresentation or other act of moral turpitude that would reflect
negatively upon Qwest or compromise the effective performance of Executive's duties; 

        (2)   Unlawful
conduct that would reflect negatively upon Qwest or compromise the effective performance of Executive's duties, as determined by the Company in its sole
discretion; 

        (3)   Conviction
of (or pleading nolo contendere to) any felony or a misdemeanor involving moral turpitude; 

 

        (4)   Continued
failure to substantially perform Executive's duties to the satisfaction of the Chief Executive Officer (other than such failure resulting from Executive's
incapacity due to physical or mental illness) after the Chief Executive Officer delivers written notice to Executive specifically identifying the manner in which Executive has failed to substantially
perform his or her duties and Executive has been afforded a reasonable opportunity to substantially perform his or her duties; or 

        (5)   A
willful violation of the Qwest Code of Conduct or other Qwest policies that would reflect negatively upon Qwest or compromise the effective performance of Executive's
duties as determined by the Company in its sole discretion. 

For
two years following a Change in Control, a termination for Cause shall require the approval of the Board of Directors. 

        b.    Severance Payments When Termination Not By Executive.    

        (1)    Termination without Cause by Company.    The parties agree that the Company may
terminate Executive's employment without Cause. Except under circumstances described in subparagraph 3.b(2) below, if Company terminates Executive's employment without Cause, and Executive
signs a complete waiver and release of claims against Qwest acceptable to Company in the form attached hereto as Attachment A ("Waiver"), then Company shall pay Executive the "Standard Severance
Amount" defined below. The Waiver includes, among other terms, a provision requiring Executive to pay back to Qwest any severance received by Executive if after the payments are made it is determined
that, while employed by Qwest or any Qwest entity, Executive engaged in conduct constituting Cause. The Waiver does not include a release of Qwest's obligations, if any, to indemnify Executive under
Qwest bylaws or applicable state law. The Standard Severance Amount will equal one and one-half times Executive's highest annual base salary in effect during the 12 months preceding
the termination of Executive's employment. The Standard Severance Amount will be paid over an 18-month period through the Company's regular management payroll processes, commencing on the
Severance Payment Date, as defined in subparagraph 22.d., below. If, at the end of
the 18-month period, Executive has not breached or threatened to breach any part of this Agreement, Executive will also receive a lump-sum payment equal to one and
one-half times Executive's highest target annual bonus in effect during the 12 months preceding the termination of Executive's employment, minus any applicable or legally-required
withholdings. 

        (2)    Change in Control Termination.    If Company (with the required approval of the Board
of Directors) terminates Executive's employment without Cause within two years following a Change in Control, then, provided Executive signs a Waiver, as described in subparagraph 3.b.(1)
above, Company shall pay Executive the Change in Control Severance Amount defined in the following sentence: The Change in Control Severance Amount payable to Executive will equal (a) (i) 2.99
times Executive's annual base salary in effect at the time of the termination of Executive's employment, or, if greater, Executive's annual base salary in effect at the time of the Change in Control,
plus (ii) 2.99 times Executive's target annual bonus in effect at the time of the termination of Executive's employment, or, if greater, Executive's target annual bonus in effect at the time of
the Change in Control. The Change in Control Severance amount will be paid in a lump sum on the Severance Payment Date, as defined in subparagraph 22.d., below. 

        c.    Change in Control Termination for Good Reason.    Executive may terminate his or her
employment for Good Reason after giving written notice to the Company within 60 days after an event constituting Good Reason, (as defined in subparagraph 3.c.(1) below), following which,
the Company will have a period of 30 days in which to remedy the condition without triggering payment under this subparagraph 3.c. If the Company fails to remedy the condition and
Executive 

2

 

terminates
Executive's employment for Good Reason within two years following a Change in Control, then, provided Executive signs a Waiver (as defined in subparagraph 3.b.(1) above), Company
shall pay Executive the Change in Control Severance Amount, as described in subparagraph 3.b.(2) above in a lump sum on the Severance Payment Date, as defined in subparagraph 22.d.,
below. 

        (1)    Termination for Good Reason Following a Change in Control.    For purposes of this
subparagraph 3.c., Good Reason shall mean:  

	(A)
	a
reduction of either base salary or Executive's target annual bonus, where the salary or annual target bonus are measured immediately prior to such
reduction, as opposed to at the time of Executive's execution of this Agreement;

	(B)
	a
material reduction of Executive's responsibilities, where such responsibilities are measured immediately prior to such reduction, as opposed to at the
time of Executive's execution of this Agreement;

	(C)
	Company's
material breach of this Agreement;

	(D)
	Company's
failure to obtain the agreement of any successor to honor the terms of this Agreement; or

	(E)
	A
requirement that Executive's primary work location be moved to a location that is greater than thirty-five straight line miles from
Executive's primary work location immediately prior to the imposition of such requirement. 

"Good
Reason" shall not include any other circumstances, including but not limited to, Executive's discharge for Cause, Executive's resignation or retirement (other than in the circumstances set forth
in (A)—(E) above), or any leave of absence. 

        d.    COBRA Coverage.    If Executive's employment is terminated pursuant to
subparagraph 3.b(1) above, Executive may be eligible for Qwest-subsidized COBRA for a period of 18 months (unless Executive becomes ineligible for or forfeits severance benefits pursuant
to the terms of this Agreement) following the Executive's election of COBRA health care continuation coverage (generally beginning as of the first day of the first month following the month in which
Executive is designated as terminated on the Qwest payroll system) on the same basis as for active employees under the group medical plan. This provision shall not extend the period for which any
Executive is eligible for COBRA continuation coverage. 

        4.    OFFSET.    To the extent permitted by law, any severance benefits received under this Agreement may be reduced
by the amount(s) of any outstanding monetary debts Executive owes to Qwest; provided however, that no such offset shall accelerate or defer any benefit provided under this Agreement in violation of
Code Section 409A. Such debts will be treated as satisfied to the extent of the withheld payments. 

        It
is the express intent of Qwest that the monies received under this Agreement be a set-off against amounts to which you are entitled under any applicable state unemployment
statute. 

        5.    NONDISCLOSURE.    Executive will not disclose outside of Qwest or to any person within Qwest who does not have a
legitimate business need to know, any Confidential Information (as defined below) during Executive's employment with the Company or any other Qwest entity. Executive will not disclose to anyone or
make any use of any Confidential Information of Qwest after Executive's employment with Qwest ends for any reason, except as required by law after timely notice is given by Executive to Qwest. This
agreement not to disclose or use Confidential Information means, among other things, that Executive, for a period of 18 months beginning on the effective date of the termination of Executive's
employment with the Company or any other Qwest entity for any reason, 

3

 

may
not take or perform a job whose responsibilities would likely lead Executive to disclose or use Confidential Information. Executive acknowledges and agrees that the assumption and performance of
such responsibilities, in that situation, would likely result in the disclosure or use of Confidential Information and would likely result in irreparable injury to Qwest. Moreover, during Executive's
employment with Qwest, Executive shall not disclose or use for the benefit of Qwest, Executive or any other person or entity any confidential or trade secret information belonging to any former
employer or other person or entity to which Executive owes a duty of confidence or nondisclosure of such information. If a court determines that this provision is too broad, Executive and Company
agree that the court shall modify the provision to the extent (but not more than is) necessary to make the provision enforceable. "Confidential Information" is any oral or written information not
generally known outside of Qwest, including without limitation, trade secrets, intellectual property, software and documentation, customer information (including, without limitation, customer lists),
company policies, practices and codes of conduct, internal analyses, analyses of competitive products, strategies, merger and acquisition plans, marketing plans, corporate financial information,
information related to negotiations with third parties, information protected by Qwest's privileges (such as the attorney-client privilege), internal audit reports, contracts and sales proposals,
training materials, employment and personnel records, performance evaluations, and other sensitive information. This agreement does not relieve Executive of any obligations Executive has to Qwest
under law. Nothing in this agreement shall limit, restrict, preclude or influence Executive's testimony in any way or cause Executive not to provide truthful testimony or information in any manner or
in response to any inquiry by a governmental official. 

        6.    NONCOMPETE.    In light of Executive's senior level position with Qwest, an international corporation engaged in
a highly competitive business environment, for a period of 18 months beginning on the effective date of the termination of Executive's employment with the Company or any other Qwest entity,
regardless of the reason for the termination and regardless of the party bringing about the termination, Executive agrees not to, directly or indirectly, engage in any business or activity which is in
direct competition with the Company or of any of its subsidiaries or affiliates in the telecommunications business. The foregoing shall not apply to passive investments by Executive of up to 2% of the
voting stock of any publicly traded company or 5% of the voting stock or other securities of any privately held company, or to service by Executive on boards of directors of companies as permitted
under this Agreement, regardless of whether such company competes with the Company. If a court or arbitrator determines that this provision is too broad, Executive and Company agree that the court or
arbitrator should modify the provision to the extent (but not more than is) necessary to make the provision enforceable. 

        7.    NONSOLICITATION/NO-HIRE.    For a period of one year beginning on the effective date of the
termination of Executive's employment with the Company or any other Qwest entity, regardless of the reason for the termination and regardless of the party bringing about the termination, Executive
agrees not to induce any employee of Qwest to leave Qwest's employment. This agreement means, among other things, that Executive may not have any part in hiring anyone who is a Qwest employee, even if
Executive is contacted by the Qwest employee first. For these purposes, employees of Qwest shall include all persons who are employed by the Company or any other Qwest entity at the time Executive
violates this paragraph 7 or were employed by the Company or any other Qwest entity at any time during the six months preceding such violation. If a court determines that this provision is too
broad, Executive and Company agree that the court should modify the provision to the extent (but not more than is) necessary to make the provision enforceable. 

        8.    REMEDIES FOR VIOLATION OF PARAGRAPHS 5, 6, OR 7.    The Executive agrees that it would be difficult to measure
any damages caused to Qwest which might result from any breach by the Executive of the promises set forth in paragraphs 5, 6, and 7, and that in any event money damages would be an inadequate
remedy for any such breach. Accordingly, subject to paragraph 9, the Executive 

4

 

agrees
that if the Executive breaches, or proposes to breach, any portion of this Agreement, Qwest or the Company shall be entitled, in addition to all other remedies that it may have, to an
injunction or other appropriate equitable relief to restrain any such breach without showing or proving any actual damage to Qwest. 

        9.    DISPUTE RESOLUTION; ARBITRATION.    Executive and the Company agree that in the event a
dispute arises concerning or relating to Executive's employment with the Company, or any termination therefrom, the parties first shall attempt in good faith to resolve such dispute through mediation.
If a resolution through mediation is not reached, then such dispute shall be submitted to binding arbitration in accordance with the employment arbitration rules of Judicial Arbitration and Mediation
Services ("JAMS") by a single impartial arbitrator experienced in employment law selected as follows: Company and Executive will attempt in good faith
to agree upon impartial arbitrator within thirty days of a request for arbitration. If the parties cannot agree, they shall request a panel of ten arbitrators from JAMS and select an arbitrator
pursuant to the JAMS rules. The arbitration shall take place in Denver, Colorado, and both Executive and the Company agree to submit to the jurisdiction of the arbitrator selected in accordance with
JAMS' rules and procedures. The Federal Arbitration Act, as amended, 9 U.S.C. § 1 et seq.,
("FAA") and not state law, shall govern the arbitrability of all claims, provided they are enforceable under the FAA. Other than as set forth herein,
the arbitrator shall have no authority to add to, detract from, change, amend, or modify existing law. The arbitrator shall have the authority to order such discovery as is necessary for a fair
resolution of the dispute. The arbitrator shall also have the authority to award any and all relief or remedies provided under the statute or other law pursuant to which an asserted prevailing claim
or defense is raised, as if the matter were being decided in court. The arbitrator may award punitive damages, if and only to the extent allowed by Title VII of the Civil Rights Act of 1964, as
amended; the Civil Rights Act of 1991, as amended; the Age Discrimination in Employment Act of 1967, as amended; and the Americans with Disabilities Act of 1990, as amended; and the arbitrator shall
be bound by any limitations on the amount of punitive or other damages imposed by said statutes. The arbitrator has no other authority to award punitive damages. The arbitrator will apply applicable
statutes of limitation, including contractual statutes of limitations, will honor claims of privilege recognized by law, and will take reasonable steps to protect confidential or proprietary
information, including the use of protective orders. The prevailing party in any arbitration shall be entitled to receive reasonable attorneys' fees, only to the extent such fees are provided by the
statute or other law pursuant to which an asserted claim or defense is raised, as if the matter were being decided in court. The arbitrator's decision and award shall be final and binding, as to all
Claims that were or could have been raised in the arbitration, and judgment upon the award rendered by the arbitrator may be entered by any court having jurisdiction thereof. Executive will pay the
arbitrator's fees and expenses up to $150 and Qwest will pay any arbitrator fees and expenses in excess of such amount. Qwest will pay all of the arbitrator's fees and expenses if it commences the
arbitration. The existence and subject matter of all arbitration proceedings, including without limitation, any settlements or awards there under, shall remain confidential and be subject to the
Confidentiality provision of this Agreement. Executive and Qwest agree that if any term or portion of this Arbitration provision is, for any reason, held to be invalid or unenforceable or to be
contrary to public policy or any law, then the invalid or unenforceable term or portion shall be severed in its entirety from this Agreement and the remainder of this Arbitration provision shall not
be affected by any such invalidity or unenforceability but shall remain in full force and effect, as if the invalid or unenforceable term or portion thereof had not existed within the Arbitration
provision. Executive understands that Qwest would suffer irreparable harm in the event of breached confidentiality, and such harm would not be fully compensable in monetary damages. If any party
hereto files a judicial action asserting Claims subject to this Arbitration provision, and another party successfully stays such action and/or compels arbitration of such Claims, the party
filing the initial judicial action shall pay the other party's costs and expenses incurred in seeking such stay and/or compelling arbitration, including reasonable attorneys' fees. THE COMPANY AND
EMPLOYEE FURTHER AGREE THAT THE DISPUTE 

5

 

RESOLUTION
PROCEDURE AS PROVIDED IN THIS PARAGRAPH 9 SHALL BE THE EXCLUSIVE AND BINDING METHOD FOR RESOLVING ANY SUCH DISPUTE AND WILL BE USED INSTEAD OF ANY COURT ACTION, WHICH IS HEREBY EXPRESSLY
WAIVED,
EXCEPT FOR ANY REQUEST BY EITHER PARTY HERETO FOR TEMPORARY OR PRELIMINARY INJUNCTIVE RELIEF, OR A CHARGE OF DISCRIMINATION FILED WITH AN ADMINISTRATIVE AGENCY. 

        10.    COOPERATION AND REIMBURSEMENT.    Executive agrees, both during Executive's employment and following the
termination of Executive's employment, to cooperate reasonably with the Company or any other Qwest entity in connection with any dispute, lawsuit, arbitration, or any internal or external
investigation involving Qwest or any of their predecessors (a "Proceeding") with respect to which Qwest believes in good faith that Executive may possess relevant information. In that event, upon
reasonable notice and at reasonable times, and for reasonable periods, Executive agrees to make himself or herself available for interviews, witness preparation sessions, and appearances in connection
with any Proceeding (including, but not limited to, appearances at depositions, hearings and trials). Recognizing that upon Executive's separation from Company, participating in interviews or witness
preparation sessions may be a burden, Company agrees to reimburse Executive for the time Executive spends involved in interviews and witness preparation sessions requested by Qwest at a rate equal to
Executive's final base salary, computed on an hourly basis (assuming a 40 hour work week), for such time actually spent in such interviews or witness preparation sessions. In addition, Company
will reimburse Executive for reasonable expenses Executive incurs in connection with such interviews and witness preparation sessions. Company will not be obligated to reimburse Executive for lost
wages, lost opportunities, or other financial consequences of such cooperation, or to make any other payment to Executive other than the payments by Company referred to in the two previous sentences
of this paragraph of this Agreement; provided, however, nothing in this paragraph 10 shall impair or limit any rights or entitlement Executive may have to indemnification and director's and
officer's liability insurance coverage. The parties further agree that Company will not, and will not be obligated to, reimburse Executive for any time spent testifying in any Proceeding (including,
but not limited to, appearances at depositions, hearings and trials), although Company will reimburse reasonable expenses for such appearances, as provided above. Nothing in this Agreement shall
limit, restrict, preclude, require or influence Executive's testimony in any Proceeding or cause Executive not to provide truthful testimony or information in any matter or in response to any inquiry
by a government official or representative. Company's obligation to reimburse Executive as described above is conditional upon Executive providing, at all times, information that he objectively,
reasonably and in good faith believes to be truthful in connection with any Proceeding. 

        11.    INDEMNIFICATION.    Both during Executive's employment and after the termination of Executive's employment for
any reason, Company, or any subsidiary or successor of Company of which Executive is an officer or member of the board of directors, shall indemnify Executive and the Company shall advance Executive's
related expenses when and as incurred, including but not limited to attorney fees to the fullest extent required or permitted by the current Bylaws and applicable law. 

        12.    SUCCESSORS AND ASSIGNS.    This Agreement is intended to bind and inure to the benefit of and be enforceable by
Executive, Executive's assigns, the Company, any other Qwest entity, and their successors and assigns. 

        13.    CHOICE OF LAW.    All questions concerning the construction, validity and interpretation of this Agreement
shall be governed by the internal law, and not the law of conflicts, of the State of Colorado. 

        14.    SEVERABILITY.    If one or more terms, provisions or parts of this Agreement are found by a court or arbitrator
to be invalid, illegal, or incapable of being enforced by any rule of law or public policy, the terms, provisions or parts shall be modified to the extent (but not more than is) necessary to 

6

 

make
the provision enforceable. Additionally, all other terms, provisions and parts of this Agreement shall nevertheless remain in full force and effect. 

        15.    COMPLETE AGREEMENT.    This Agreement contains the entire understanding of the parties with respect to the
matters addressed in this Agreement, and supersedes all prior representations, understandings and agreements of the parties with respect to the matters addressed in this Agreement, including, but not
limited to, any and all prior agreements for the payment of severance benefits. The parties acknowledge that no promises or representations have been made to induce Company or Executive to sign this
Agreement other than as expressly set forth in this Agreement, and that each party has signed this Agreement as a free and voluntary act. No term or provision of this Agreement may be modified or
extinguished, in whole or in part, except by a writing which is dated and signed by both Executive and the Chief Executive Officer or Chief Administrative Officer of Company and approved by the Board
Of Directors. 

        16.    CONSTRUCTION; REPRESENTATION.    In any interpretation of this Agreement, any ambiguities shall not be
construed against any party on the basis that the party was the drafter. Executive represents that Executive is knowledgeable and sophisticated as to business matters, including the subject matter of
this Agreement, that he or she has read this Agreement and that he understands its terms. Executive acknowledges that, prior to assenting to the terms of this Agreement, Executive has been encouraged
to, and has been given a reasonable amount of time to review it, to consult with counsel of Executive's choice, and to negotiate at arm's-length with the Company as to its contents. Executive and
Company agree that the language used in this Agreement is the language chosen by the parties to express their mutual intent, and that they have entered into this Agreement freely and voluntarily and
without pressure or coercion from anyone. 

        17.    CONDITIONAL REPAYMENT OF PAYMENTS AND BENEFITS.    If Executive receives benefits under
Paragraph 3.b.(1) above, and, within two years following Executive's termination of employment, Company determines that during Executive's employment with Qwest, Executive engaged in conduct
that would have constituted "Cause" for termination (as defined in 3.a. above), regardless of (i) when during Executive's employment with Qwest such conduct occurred, (ii) when Qwest
knew or learns of such conduct or should have known of such conduct, or (iii) what Qwest now knows or should have known about Executive's conduct, then Company shall provide to Executive (or,
if applicable, Executive's estate or beneficiary) written notification of such determination, which written notification shall expressly set forth the basis for Company's determination in reasonable
detail. After Company provides this written notification to Executive, it may stop or withhold any payments which have not been made under this Agreement. If Executive disputes that such Cause exists
or existed, Executive and his or her counsel shall make a presentation to the Company to request that Company withdraw such determination. If the matter is not settled or resolved after Executive's
presentation to the Company,
either party may commence an action in a court of competent jurisdiction, subject to the waiver of any right to jury trial in Paragraph 9 above. In addition, if Executive breaches Executive's
obligations under the Nondisclosure or Noncompete provisions of this Agreement, Company may stop or withhold any payments which have not been made under this Agreement. 

        If
a court finds that Cause exists or existed or that Executive has breached Executive's obligations under the Nondisclosure (Paragraph 5) or Noncompete (Paragraph 6)
provisions of this Agreement, or if Executive does not timely commence an action disputing Company's Cause determination, Executive shall make prompt repayment to Company of the cash payments provided
in Section 3 of this Agreement and other benefits received by Executive pursuant to this Agreement (including, but not limited to, the value of any discounted COBRA coverage). Consistent with
applicable law, any repayments shall include an interest factor equal to the applicable federal short term interest rate pursuant to Internal Revenue Code section 1274. Interest shall begin to
accrue on the 31st day after Executive (or, if applicable, Executive's estate or beneficiary) received Company's written notification of its determination that such Cause exists or existed, and
shall continue to accrue until complete 

7

 

repayment
is made to Company. If Company notifies Executive (or, if applicable, Executive's estate or beneficiary) in writing of the determination that Cause for termination exists prior to having
made the payment required pursuant to Section 3 of this Agreement, such payment shall not be made unless the Company withdraws its determination, if the arbitrator determines that Cause did not
exist, or if the parties agree otherwise. 

        18.    RE-EMPLOYMENT.    Executive agrees that if at any time during Executive's severance period
Executive accepts employment with Qwest Communications International Inc., Qwest Corporation, any of their wholly-owned subsidiaries or any successor(s) thereto, all severance benefits to which
he or she is entitled for the remainder of the severance period shall cease effective the date Executive accepts the position. 

        19.    WAIVER OF BREACH.    The waiver by either Company or Executive of a breach of any provision of this Agreement
shall not operate or be construed as a waiver of any prior or subsequent breach by either party. 

        20.    HEADINGS.    The headings contained in this Agreement are for convenience only, do not constitute part of the
Agreement and shall not limit, be used to interpret or otherwise affect in any way the provisions of the Agreement. 

        21.    NOTICES.    Any notices provided hereunder must be in writing and shall be deemed effective on the earlier of
personal delivery (including personal delivery by telecopy or private overnight carrier) or the third day after mailing by first class mail to the recipient at the address indicated below: 

 

 

			
	To the Company:	 	Executive Vice President, General Counsel and Chief Administrative Officer

Qwest Communications International Inc.

1801 California Street

Denver, CO 80202
	
 To Executive:	
 	
 Christopher K. Ancell

at the address on file

 

 or
to such other address or to the attention of such other person as the recipient party shall have specified by prior written notice to the sending party. 

        22.    COMPLIANCE WITH SECTION 409A OF THE INTERNAL REVENUE CODE.    Notwithstanding any other provision of
this Agreement, in the event that any payment or the provision of any benefit provided under this Agreement constitutes "deferred compensation" within the meaning of Section 409A of the Code
and any related guidance or regulations (collectively "Section 409A"), the following provisions shall apply: 

        a.    Separation from Service.    No payment or provision of benefits shall be made upon a "termination of employment"
unless such termination of employment also constitutes a "separation from service" under Section 409A ("Separation from Service"). 

        b.    Six Month Delay.    If Executive is a "specified employee" within the meaning of Section 409A, then the
payment or provision of benefits shall be made as set forth below; provided, however, no such payment or provision shall be made before the date that is six months after Executive's Separation from
Service (or, if earlier, the date of Executive's death) (the "6-Month Delay"). The determination of whether Executive is a "specified employee" shall be made by the Company in accordance
with Section 409A. 

8

 

        (1)    Payment of Cash Benefits.    Any cash payment hereunder to Executive, including, but not limited to the
Standard Severance Amount, shall be paid according to the following provisions: 

        (A)  the
Standard Severance Amount shall be paid out as follows: 

        (i)    a
lump sum payment equal to one-third of the Standard Severance Amount will be paid within 15 business days following the 6-Month Delay; 

        (ii)   the
remainder of the Standard Severance Amount will be paid, in equal installments in accordance with the Company's regular management payroll processes for
12 months beginning as soon as administratively feasible after the payment under paragraph 22(b)(1)(A)(i) is made; and 

        (iii)  if,
at the end of the 18-month period following Separation from Service, Executive has not breached or threatened to breach any part of this Agreement,
Executive also will receive a lump-sum payment equal to one and one half times Executive's highest annual target bonus in effect during the 12 months preceding the termination of
Executive's employment, minus any applicable or legally-required withholdings, and such payment will be paid within 15 business days following the end of the 18-month period following
Executive's Separation from Service. 

        (B)  Any
other provision of cash benefits that are subject to Section 409A and that are payable before the 6-Month Delay shall be paid as follows: 

        (i)    a
lump sum payment equal to one-third of the total cash benefit will be within 15 business days following the 6-Month Delay; and 

        (ii)   the
remainder of the total cash benefit will be paid, in equal installments in accordance with the Company's regular management payroll processes for 12 months
beginning as soon as administratively feasible after the payment under paragraph 22(b)(1)(B)(i) is made. 

        (2)    Payment of Noncash Benefits.    The payment for any noncash benefits that are subject to Section 409A,
including, but not limited to, any applicable premium payments related to such noncash benefits, shall be made by Executive during the 6-Month Delay, and Executive shall be reimbursed by
the Company for such payments as soon as administratively practicable following the expiration of the 6-Month Delay. Executive shall be solely liable for all timely payments and elections
as may be necessary to retain such noncash benefits, and the Company shall not be liable to Executive, any dependent and/or qualified beneficiary for any loss of any kind, including the loss of
noncash benefits relating to Executive's failure to timely make any payments or elections as required under the applicable benefit plan or this paragraph 22. By signing this Agreement,
Executive acknowledges this provision and the ramifications, including the potential loss of benefits, of the failure to comply with this provision. 

        c.    Modification.    The payment or provision of benefits under any other arrangement under this Agreement that is
subject to Section 409A may be modified or amended in order to comply with Section 409A. 

        d.    Waiver.    To the extent any payments due under the Agreement as a result of Executive's Separation from Service
are subject to Executive's execution and delivery of a Waiver, in the absence of a bona fide dispute regarding the amounts owed, (1) the payments shall commence on the Severance Payment Date,
(2) if Executive fails to execute such Waiver on or prior to the Severance Payment Date or timely revokes such Waiver thereafter, Executive shall not be entitled to any payments or benefits
otherwise subject to the Waiver, and (3) in any case where the 

9

 

Separation
from Service date and the Severance Payment Date fall in two separate taxable years, any payments required to be made to Executive that are subject to the Waiver and are treated as
nonqualified deferred compensation for purposes of Section 409A shall be made in the later taxable year. The term "Severance Payment Date" shall mean the date that is 45 days after the
Executive's Separation from Service. 

        23.    NO MITIGATION OF DAMAGES.    Executive shall not be required to mitigate damages or the amount of any payment
provided for under this Agreement by seeking other employment or otherwise, nor shall the amount of any payment provided for under this Agreement be reduced by any compensation earned by Executive as
a result of employment by another employer or by retirement benefits after the Date of Termination. The provisions of this Agreement, and any payment provided for hereunder, shall not reduce any
amounts otherwise payable, or in any way diminish Executive's then existing rights, or rights which would accrue solely as a result of the passage of time, under any Company benefit plan or other
contract, plan or arrangement. 

        IN
WITNESS WHEREOF, the parties now execute this Agreement, to be effective as of the Effective Date. 

 

 

					
	

 	
 	
QWEST COMMUNICATIONS INTERNATIONAL INC.:
	

 	
 	
By:	
 	
  

  Richard N. Baer

Executive Vice President,

General Counsel and

Chief Administrative Officer
	

 	
 	
EXECUTIVE:
	

 	
 	
By:	
 	
  

 Christopher K. Ancell

Executive Vice President

 

 10

 

  ATTACHMENT A  

WAIVER AND RELEASE AGREEMENT  

	1.
	Release and Waiver of Claims and Covenant Not to Sue.  

        As a free and voluntary act, you hereby release and discharge and covenant not to sue, Qwest Communications International Inc., any present or former
subsidiary or affiliated Company, any predecessor (including U S WEST and all its affiliates) or successor, and the directors, officers, employees, shareholders and agents of any or all of them,
(hereinafter "Qwest"), from any and all debts, obligations, claims, liability, damages, punitive damages, demands, judgments and/or causes of action of any kind whatsoever, including specifically but
not exclusively: 

	•
	all claims relating to or arising out of your employment with Qwest and/or U S WEST;   

	•
	all claims arising out of your Severance Agreement (except for claims arising under this Agreement);  

	•
	all claims relating to or arising from any claimed breach of an alleged oral or written employment contract,
quasi-contracts, implied contracts, payment for services, wages or salary and/or promissory estoppel;   

	•
	any alleged tort claims;   

	•
	any claims for libel and/or slander;   

	•
	all claims relating to purported employment discrimination or civil rights violations or arising under any federal or
state employment statutes including, without limitation, claims under Title VII of the Civil Rights Act of 1964, as amended; claims under the Civil Rights Act of 1991; claims under the Age
Discrimination in Employment Act of 1967, as amended; claims under 42 U.S.C. § 1981, § 1981a, § 1983, § 1985, or
§ 1988; claims under the Family and Medical Leave Act of 1993; claims under the Americans with Disabilities Act of 1990, as amended; claims under the Rehabilitation Act of 1973;
claims under the Fair Labor Standards Act of 1938, as amended; claims under the Worker Adjustment and Retraining Notification Act; claims under the Colorado Anti-Discrimination Act; and
claims under the Employee Retirement Income Security Act of 1974, as amended; or any other applicable federal, state or local statute or ordinance, including claims for attorneys' fees;  

	•
	any claim for any disability payments under the Qwest Disability Plan or Qwest Pension Plan after your termination date.
The reference to the Qwest Disability Plan and Qwest Pension Plan includes any successor or predecessor of such plans such as the former Sickness and Accident Disability Plan or Long Term Disability
Plan of any Qwest or U S WEST entity and all benefits thereunder;   

	•
	any and all claims which you might have or assert against Qwest (1) by reason of your employment with and/or
termination of employment from Qwest and all circumstances related thereto; or (2) by reason of any other matter, cause, or dispute whatsoever between you and Qwest which arose prior to the
effective date of this Agreement. This Agreement excludes any claims you may make under (1) the applicable state unemployment compensation laws, (2) applicable workers' compensation
statutes, (3) for indemnification to the extent permitted or required by the bylaws of a Qwest company, your Severance Agreement or applicable state law; (4) claims as a shareholder of
Qwest; (5) the right to enforce the severance and benefit continuation provisions of your Severance Agreement and any other provision of your Severance Agreement that by its terms extends
beyond your termination of employment; (6) claims for vested employee benefits; and (7) claims which arise after the execution of this Waiver and Release Agreement; 

11

 

	•
	your right to seek individual relief on your own behalf for any charges of discrimination filed with any federal, state or
local agency, pending or otherwise, arising from or related to your employment or termination of employment with Qwest.

	2.
	Dispute Resolution; Arbitration.    By signing this Waiver and Release Agreement, you voluntarily,
knowingly and intelligently reaffirm your agreement to paragraph 9 (Dispute Resolution; Arbitration of your Severance Agreement.

	3.
	You
agree that the monies and benefits described above are considerations to which you would not otherwise be entitled unless you sign this Agreement, and
that these considerations constitute payment in exchange for signing this Agreement.

	4.
	If
one or more terms, provisions or parts of this Agreement are found by a court or arbitrator to be invalid, illegal, or incapable of being enforced by any
rule of law or public policy, the terms, provisions or parts shall be modified to the extent (but not more than is) necessary to make the provision enforceable. You agree that if any portion of this
Agreement is found to be unenforceable or prohibited, the remainder of this Agreement shall remain in full force and effect, unless the material terms and intent of this Agreement are materially
changed by the fact that a portion of this Agreement is unenforceable or prohibited.

	5.
	You
agree that this Agreement shall not be admissible in any proceeding as evidence of any improper conduct by Qwest against you and Qwest denies that it has
taken any improper action against you in violation of any federal, state, or local law or common law principle.

	6.
	You
acknowledge that no promises or representations have been made to induce you to sign this Agreement other than as expressly set forth herein and that you
have signed this Agreement as a free and voluntary act.

	7.
	You
acknowledge that this release means, in part, that you give up all your rights to damages and/or money based upon any claims against Qwest of age
discrimination. You do not waive your rights to make claims for damages and/or money which arise after the date this Agreement is signed. Under the Age Discrimination in Employment Act, you have the
right within seven days of the date you sign this Agreement to revoke your waiver of rights to claim damages and/or money. In the event you revoke your agreement to be obligated to the terms of this
Agreement, the benefits offered herein shall be null and void, meaning you will receive no involuntary termination benefits under your Severance Agreement. To be effective, your revocation must be in
writing and delivered to Executive Vice President, General Counsel and Chief Administrative Resources Officer, Qwest Communications International Inc. 1801 California Street, Denver, Colorado
80202, within the seven-day period. If by mail, the revocation must be (1) postmarked within the seven-day period, (2) properly addressed, and (3) sent by
certified mail, return receipt requested.

	8.
	You
acknowledge that you (a) have had sufficient opportunity (not less than 45 days) to review this Waiver and Release Agreement,
(b) have been encouraged to consult with and have had sufficient opportunity to consult with your attorney and financial advisor before signing this Waiver and Release Agreement, and
(c) that you understand and agree to all of the terms of this Waiver and Release Agreement. 

12

 
AGREEMENT  

        I have read and I understand the terms of the foregoing Waiver and Release, and I hereby agree to all of the
terms of the foregoing Agreement.

 

 

					
	

 	 	

 	 	 
	Executive's Signature	 	(Date)	 	 

 

 Please
return all pages of this signed agreement to: 

Executive
Compensation

1801 California Street

23rd Floor

Denver, Colorado 80202 

13

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