Document:

viking_8k-ex1003.htm

    EXHIBIT
10.3

    

    VIKING SYSTEMS,
INC.

    AMENDMENT #2
TO

    EXECUTIVE EMPLOYMENT
AGREEMENT

    

    This
Amendment (the “Amendment”) is effective as of November 2, 2008, to amend that
certain Employment Agreement (the “Agreement”) dated as of January 4, 2008, by
and between William C. Bopp, an
individual and a resident of the State of Nevada (the “Executive”) and Viking Systems, Inc., a
Delaware corporation with a principal place of business at 134 Flanders Road,
Westborough, MA 01581, (the “Company”).

    

    RECITALS

    

    WHEREAS
the Company and the Executive entered into the Agreement.

    

    WHEREAS
the Company and the Executive wish to amend the Agreement to reduce the annual
salary of the Executive.

    

    NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby mutually acknowledged, the Company and the Executive hereby
agree as follows:

    

    I.           Amendment

     

    The
annual base salary amount in section 3.1 of the Agreement is hereby reduced from
$39,000 to $1.

     

    II.           Other
Provisions

     

    A.           Conflict.  In
the event of a conflict between the provisions of this Amendment and the
Agreement, the provisions of this Amendment shall prevail and the provisions of
the Agreement shall be deemed modified by this Amendment as necessary to resolve
such conflict.

     

    B.           Effect of
Amendment.  Except as expressly amended by this Amendment, the
terms and provisions of the Agreement shall continue in full force and
effect.

     

    C.           Counterparts.  This
Amendment may be executed in one or more counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.

     

    [THE NEXT
PAGE IS THE SIGNATURE PAGE]

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    

    

    

    

    
      	
              Executive:

            	
              Viking
      Systems, Inc.:

            
	 
      	 
      
	 
      	 
      
	
              /s/ William C.
      Bopp                   
      

            	
              /s/ Robert
      Mathews

            
	
              William
      C. Bopp

            	
              By:  Robert
      Mathews,

            
	
              November
      17, 2008

            	
              Executive
      Vice President and

            
	 
      	
              Chief
      Financial Officer

            
	 
      	
              November
      17, 20081ST AMENDEMENT TO THE 7% NOTES DUE MAY 31, 2008

AMENDMENT TO LOAN TRANSACTION AGREEMENT

THIS AMENDMENT TO LOAN TRANSACTION AGREEMENT (the “Amendment”) is made and entered into effective as of the 31st day of October, 2008, by and between Silvergraph International, Inc. (the “Company”) and the undersigned holders of promissory notes referenced below (the “Holders”), upon the following premises:

A.

Holders are the holders of certain 7% Convertible Promissory Notes dated January 25, 2008 (the “Notes”) which were purchased from the Company pursuant to the terms of a Subscription Agreement and Security Agreement of the same date.   

B.

The obligations represented by the Notes have been amended by a 1st Amendment to the 7% Notes due May 31, 2008, dated May 31, 2008; a 2nd Amendment to the 7% Notes Due June 30, 2008, dated June 20, 2008; and a 3rd Amendment to the 7% Notes due August 31, 2008, dated August 31, 2008 (the “Prior Amendments”) which are incorporated herein by reference.   For purposes of this Amendment, the Notes, Subscription Agreement and Security Agreement, as amended by the Prior Amendments, are hereby collectively referred to as the “Bridge Loan Agreement.”   

C.

Under the terms of the Bridge Loan Agreement, the Maturity Date of the Notes is October 31, 2008.    

D.

The Company has asked for, and the Holders have agreed to provide, an extension to the Maturity Date.   As consideration for such extension, the Company has agreed to grant to Holders shares of common stock of the Company.  

NOW, THEREFORE, in consideration of the above premises and for good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto agree as follows:    

1.

Section 2.0 of the Note entitled Maturity. The Maturity Date for the Notes is hereby extended from October 31, 2008, to December 15, 2008. 

2.

Issuance of Shares.  Contemporaneously with the execution of this Amendment, and as compensation for Holders’ agreement to extend the Maturity Date, as set forth in paragraph 1 above, the Company shall issue to the Holders, pro rata, a total of 9,000,000 shares of Common Stock of the Company, par value $0.001 (the “Shares”), in the respective amounts set forth listed opposite Holder’s signature, below.  The Company will issue to each Holder a stock certificate of the Company representing the respective number of shares of Common Stock opposite Holder’s name, below.  The Company represents that Shares upon issuance:  (a) shall be free of any liens, claims and encumbrances, subject to restrictions upon transfer under the Securities Act of 1933 (the “1933 Act”) and any applicable state securities laws; and (b) shall not have been issued or sold in violation of any preemptive or other similar rights of the holders of any securities of the Company.  Holders each represent that:  (a)  Holder is an “accredited investor” as such term is defined in Regulation D promulgated under the 1933 Act and is experienced in investments and business matters; and (b) Holder is acquiring the Shares as set 

Amendment to Loan Transaction Agreement

Page 1

forth opposite Holder’s signature, as principal for its or his own account for investment purposes only and not with a view to or for distributing or reselling such Shares or any part thereof, without prejudice, however, to Holder’s right at all times to sell or otherwise dispose of all or part of the Shares in compliance with applicable federal and state securities laws.    Holders further acknowledge the Shares are “restricted securities” within the meaning of the 1933 Act, and as such may not be sold in the absence of registration or an exemption from such registration.  

3.

Cooperation.  Each of the Parties to this Amendment agree to execute such documents and take such further action as may be necessary to carry out the objectives of this Amendment.  In addition, the Company covenants to take all reasonable steps to comply with the terms of the Bridge Loan Agreement.

4.

Scope of Amendment.  Except as amended above, the terms contained in the Bridge Loan Agreement (including the Prior Amendments) shall remain the same and in full force and effect.   

[Signature page follows]

Amendment to Loan Transaction Agreement

Page 2

IN WITNESS WHEREOF, this Amendment has been executed and delivered on the date hereof by the duly authorized representative of the Company and the Holders.

COMPANY:

SILVERGRAPH INTERNATIONAL, INC.

By:

/s/ James R. Simpson

Name:

James R. Simpson

Title:

Chief Executive Officer

Date:

11/12/2008

HOLDERS:

ANTAEUS CAPITAL PARTNERS, LLC

By: 

/s/ Cesar Moya

5,447,368

Name: 

Cesar Moya

No. of Shares

Title:

Authorized Signatory

Date: 

11/12/2008

THOMAS G. SCHUSTER

/s/ Thomas G. Schuster

2,368,421

Name:

Thomas G. Schuster

No. of Shares

Date:

11/12/2008

ROBERT J. NEBORSKY M.D. INC. 

COMBINATION RETIREMENT TRUST

By: 

/s/ Robert J. Neborsky

1,184,211

Name: Robert J. Neborsky

No. of Shares

Title:

Authorized Signatory

Date: 

11/10/2008

Amendment to Loan Transaction Agreement

Page 315th November, 2008

             

            Mr. Kerry Doyle

            221 Blind Lane

            Flackwell Heath

            Bucks, HP10 9LD

            UK

             
        

        LETTER OF ENGAGEMENT

        

        This letter outlines the terms and conditions relating to your employment with Caspian Services Inc., further detailed in the Employment Agreement attached hereto.

         

        

        	
                	
                    1.     

                	
                    Position: President and Chief Executive Officer

                

        

        

        	
                	
                    2.     

                	
                    The position reports to: Board of Directors

                

        

        

        	
                	
                    3.     

                	
                    The Effective Date of the Agreement is November 15th 2008. The Employment Start Date is also November 15th 2008.

                

        

        

        	
                	
                    4.     

                	
                    The engagement term is unlimited. A minimum term of 1 year shall apply commencing the Employment Start Date.

                

        

        

        	
                	
                    5.     

                	
                    The post is based in Almaty (place of assignment), Kazakhstan, but extensive travel within the region and overseas may be required.

                

        

        

        	
                	
                    6.     

                	
                    Home Base – UK.

                

        

        

        	
                	
                    7.     

                	
                    Salary US $24,000.00 (twenty four thousand) per month equating to $288,800.00 (two hundred and eighty eight thousand eight hundred) per annum.

                

        

        

        	
                	
                    8.     

                	
                    Republic of Kazakhstan (excludes any home base taxes or social payments) income and social taxes will be paid by the Company.

                

        

        

        	
                	
                    9.     

                	
                    Feeding and accommodation costs whilst on work assignment outside Almaty will be borne by the Company.

                

        

        

        	
                	
                    10.     

                	
                    Housing or appropriate housing allowance will be provided by the Company. The allowance will not exceed $6,000 per month and be fully inclusive: utilities, satellite TV, domestic staff, inter alia.

                

         

        
            ACTIONS OF THE BOARD OF DIRECTORS OF CASPIAN SERVICES, INC.

            BY UNANIMOUS WRITTEN CONSENT OF NOVEMBER 11, 2008

            Page 1 of 16

        

        
            

        

        

         

        

        	
                	
                    11.     

                	
                    The Company will be responsible for relocation costs on retirement, resignation or termination, namely one shipment of personal effects from Almaty to the UK.

                

        

        

        	
                	
                    12.     

                	
                    The Company will provide a dedicated vehicle and driver.

                

        

        

        	
                	
                    13.     

                	
                    School fees will be borne by the Company: 100% fees for Kazakhstan based schooling. 80% fees for foreign based schooling.

                

        

        

        	
                	
                    14.     

                	
                    30 days vacation per annum. Company will provide two business class family round trip airline tickets per annum.

                

        

        

        	
                	
                    15.     

                	
                    BUPA International family medical insurance will be provided by the Company. The policy excludes the US.

                

        

        

        	
                	
                    16.     

                	
                    Stock option grant:

                

        

        

        The number of mandatory stock options to be issued annually (on December 31 of each year following the first full year of employment) to Executive Employee shall be equal to the amount of the Executive Employee’s annual base salary divided by the closing market price of the Company’s common stock on the date of the grant. The exercise (or grant) price of the options shall be equal to
        the closing market price of the Company’s common stock on the date of such grant.

        In lieu of any mandatory stock option grant to which the Executive Employee may become entitled under the provisions of the Employment Agreement, the Company may issue, in full or in part, a restricted stock grant, or cash payment or combination thereof as may be from time to time determined by the Compensation Committee or in the absence of a Compensation Committee by the Board of Directors.

        If the Company, in its sole discretion, determines to issue a restricted stock grant in lieu of stock options, the Executive Employee shall be entitled to one share of restricted common stock for three stock options Executive Employee was entitled to receive in accordance with the formula described above.

        

        All stock option/grant awards vest over 3 years, exercisable within 5 years of full vesting.

        

        

        	
                	
                    17.     

                	
                    At the Company’s discretion you may also be considered for other discretionary stock options or grants.

                

        

        

        Yours sincerely,

        For and behalf of Caspian Services Inc.

         

        

         

         

        
            ACTIONS OF THE BOARD OF DIRECTORS OF CASPIAN SERVICES, INC.

            BY UNANIMOUS WRITTEN CONSENT OF NOVEMBER 11, 2008

            Page 2 of 16

        

        
            

        

        
            Employment Agreement
        

        
             
        

        
             
        

        ACTIONS OF THE BOARD OF DIRECTORS OF CASPIAN SERVICES, INC.

        BY UNANIMOUS WRITTEN CONSENT OF NOVEMBER 11, 2008

        Page 3 of 16

        
            

        

         

         

        
            	
                        LETTER OF ENGAGEMENT

                    	
                        3

                    
	
                        Form of Agreement

                    	
                        5

                    
	
                        Executive Employee Employment Agreement

                    	
                        5

                    
	
                        Absences

                    	
                        5

                    
	
                        Compassionate Leave

                    	
                        5

                    
	
                        Medical Leave

                    	
                        5

                    
	
                        Family Status

                    	
                        6

                    
	
                        Married Status

                    	
                        6

                    
	
                        Dependent Children

                    	
                        6

                    
	
                        Children’s Educational Assistance

                    	
                        6

                    
	
                        Eligibility

                    	
                        6

                    
	
                        Educational Assistance

                    	
                        6

                    
	
                        Housing and Transportation

                    	
                        7

                    
	
                        Remuneration

                    	
                        7

                    
	
                        Currency of Payment

                    	
                        7

                    
	
                        Health Care Plan

                    	
                        8

                    
	
                        Insurance Plans

                    	
                        8

                    
	
                        Vacation

                    	
                        9

                    
	
                        General

                    	
                        9

                    
	
                        Vacation Days Accrual

                    	
                        9

                    
	
                        Vacation Salary

                    	
                        9

                    
	
                        Vacation Travel Entitlement

                    	
                        9

                    
	
                        Relocation

                    	
                        11

                    
	
                        Temporary living expenses

                    	
                        11

                    
	
                        Relocation

                    	
                        11

                    
	
                        Departures

                    	
                        11

                    
	
                        Business Travel & Related Expenses

                    	
                        11

                    
	
                        General

                    	
                        12

                    
	
                        Travel Management

                    	
                        12

                    
	
                        Travel Class

                    	
                        12

                    
	
                        Miscellaneous

                    	
                        12

                    
	
                        Entertainment

                    	
                        12

                    
	
                        Expense Reports

                    	
                        12

                    
	
                        Legal Fees and Arbitration

                    	
                        13

                    
	
                        Legal Fees

                    	
                        13

                    
	
                        Arbitration

                    	
                        13

                    
	
                        Severance Plan, Change in Control and Stock Options Plan

                    	
                        13

                    
	
                        Executive Employee Severance Agreement

                    	
                        13

                    
	
                        Change in Control

                    	
                        15

                    
	
                        Stock Option Grant

                    	
                        15

                    
	
                        For Company

                    	
                        16

                    

        

         

         

        
            ACTIONS OF THE BOARD OF DIRECTORS OF CASPIAN SERVICES, INC.

            BY UNANIMOUS WRITTEN CONSENT OF NOVEMBER 11, 2008

            Page 4 of 16

        

        
            

        

        
            Form of Agreement

        

        

        Executive Employee Employment Agreement

        

        This Executive Employee Employment Agreement, is entered into by and between Caspian Services Incorporated ("Company") incorporated under the laws of the state of Nevada on July 14, 1998 and Mr. Kerry Doyle ("Executive Employee"), the
        15th day of November 2008 (the "Effective Date").

         

        WHEREAS, Company is desirous of employing the Executive Employee pursuant to the terms and conditions and for the consideration set forth in this Agreement, and Executive Employee is desirous of being engaged by the Company pursuant to such terms and conditions and for such consideration.

         

        NOW, THEREFORE, for and in consideration of the mutual promises, covenants, and obligations contained herein, Company and Executive Employee agree as follows:

        

        Absences

        

        Compassionate Leave

        Executive Employee

        In case of death of a direct relative (spouse, child, parent or a brother or sister) of the Executive Employee, Compassionate Leave of up to seven days is granted. Remuneration continues

        during this leave, and travel expenses (travel class as per vacation) for the Executive Employee to attend the funeral are reimbursed by Company.

        Spouse

        In case of the death of a direct relative (parent, or a brother or sister) of the Executive Employee’s spouse, travel expenses (travel class as per vacation) for the spouse to attend the funeral

        are reimbursed by Company.

        Medical Leave

        Any absence from work arising from temporary incapacity due to an accident or illness is considered as medical leave.

        Under this condition, the Executive Employee will receive:

        • 100% of remuneration for a maximum period of six months from the day of interruption of work,

        • 50% of remuneration for a maximum of six additional months.

        

        In the event that employer liability insurance does not cover in full the above specified twelve month remuneration period, the Company will compensate the shortfall. After twelve months of continuous incapacity, the Company Insurance Plan, if any, becomes operative.

        
            ACTIONS OF THE BOARD OF DIRECTORS OF CASPIAN SERVICES, INC.

            BY UNANIMOUS WRITTEN CONSENT OF NOVEMBER 11, 2008

            Page 5 of 16

        

        

        
            

        

        Successive periods of medical leave separated by less than six months and occurring within a twelve month period are added together and considered as one continuous period of incapacity.

         

        If required and when applicable, in-country Company accommodation continues to be provided for the family. Vacation does not accrue during the absence from work.

        A medical certificate is required as an evidence of the Executive Employee’s incapacity. The Company may require the Executive Employee to have a medical examination at any time.

        

        Family Status

        

        The Family Status of the Executive Employee is defined as "Married". This can be further categorized by the number of "Dependent Children", if any.

        The Family Status is used in connection with policies and plans pertaining to housing, transportation, health care, educational assistance, and vacation travel.

        Married Status

        "Married Status" means the Executive Employee is partnered with Claire Holland, and the partner’s primary residence is at the place of assignment.

        Dependent Children

        A “Dependent Child” is defined as one who is unmarried, unemployed, in the legal custody of the Executive Employee, under nineteen years of age and who lives with the Executive Employee in a customary parent-child relationship.

        

        In other cases, such as divorce or re-marriage, the Executive Employee is encouraged to expose his family situation to his/her Executive Employee Motivation Manager who will consider each case on

        its own merits.

        

        In all cases, documentary evidence, such as birth certificates, legal custody agreements, proof of alimony payments, etc., are necessary for reimbursement of any expenses.

         

        Children’s Educational Assistance

        Eligibility

        The Company participates in schooling expenses under the following conditions:

        Reimbursement applies to children in the legal custody of Executive Employees under Married Status assigned outside their country of origin.

        Reimbursement applies to Dependent Children. It covers that part of the school year following the child's third birthday and is extended until the end of the school year in which the child reaches eighteen.

        Educational Assistance

        Two cases are considered depending on the availability and the quality of the local schooling and the age of the child:

        1: Schooling facilities available and deemed adequate by Executive Employee at place of assignment.

         

        
            ACTIONS OF THE BOARD OF DIRECTORS OF CASPIAN SERVICES, INC.

            BY UNANIMOUS WRITTEN CONSENT OF NOVEMBER 11, 2008

            Page 6 of 16

        

        
            

        

        

        The Executive Employee's child is expected to attend these schools and the Company will reimburse full (100%) all tuition and registration fees. Not reimbursable are schoolbooks, school insurance, uniforms and transportation costs.

         

        2 : Schooling facilities not available or deemed inadequate at place of assignment by Executive Employee.

        Executive Employee is authorized to send his/her children outside the place of assignment. In that instance, he/she will be reimbursed as per below:

         

        - Eighty percent (80%) of the cost of tuition and registration fees. Not reimbursable are school insurance, uniforms, schoolbooks the indirect school expenses (room and board).

         

        - one round-trip airfare, per calendar year, per child, at the most economic rate, between the school and the Executive Employee's place of assignment, provided the trip is actually taken. This trip is in addition to the travel entitlement under "vacation" policy.

         

        Housing and Transportation

        

        The Company provides an allowance to Executive Employee to secure suitable and appropriate accommodation for the Executive Employee and his/her immediate family. The allowance will not exceed $6,000 per month and be fully inclusive: utilities, satellite TV, domestic staff, inter alia.

        The allowance will be reviewed by Company and Executive Employee for appropriateness as and when the housing rental market or assignment location changes.

         

        Company will provide a dedicated driver and suitable vehicle for the term of employment.

        

        Remuneration

        Currency of Payment

        

        The salary for Executive Employee is expressed, and paid as below, in US dollars through a dollar transfer according to the Executive Employee's written instructions.

         

        Salary is US $24,000.00 (twenty four thousand) per month, equating to $288,000 (two hundred and eighty eight thousand) per annum, effective November 15th 2008.

         

        This amount is NET. The Republic of Kazakhstan (excludes any home base taxes or social payments) income and social taxes will be paid by the Company.

         

        Executive Employee's base salary may thereafter be increased from time to time with the approval of the Board of Directors or its delegate, as applicable. Such increased base salary shall become the minimum base salary under this Agreement and may not be decreased thereafter without the written consent of Executive Employee.

         

        
            ACTIONS OF THE BOARD OF DIRECTORS OF CASPIAN SERVICES, INC.

            BY UNANIMOUS WRITTEN CONSENT OF NOVEMBER 11, 2008

            Page 7 of 16

            

            
                

            

            

            

        

        

        Feeding and accommodation costs whilst on work assignment outside place of assignment will be borne by the Company.

        

        While employed by Company, Executive Employee shall be allowed to participate, on the same basis generally as other employees of Company, in all general employee benefit plans and programs, including improvements or modifications of the same, which on the Effective Date or thereafter are made available by Company to all or substantially all of Company's similarly situated employees. Such
        benefits, plans, and programs may include, without limitation, medical, health, and dental care, life insurance, disability protection, and qualified and non-qualified retirement plans. Except as specifically provided herein, nothing in this Agreement is to be construed or interpreted to increase or alter in any way the rights, participation, coverage, or benefits under such benefit plans or programs than provided to similarly situated employees pursuant to the terms and conditions of
        such benefit plans and programs. While employed by Company, Executive Employee shall be eligible to receive awards under any plan provided, however, that the foregoing shall not be construed as a guarantee with respect to the type, amount or frequency of such awards, if any, such decisions being solely within the discretion of the Company or its delegate, as applicable.

        

        Health Care Plan

        

        BUPA International or equivalent.

         

        The Health Care Plan covers the Executive Employees and their spouses, partners and dependent children. The Company pays the full cost of the program.

         

        The Plan provides comprehensive medical, dental, and vision care coverage. It encourages prevention and offers the possibility of medical evacuation and assistance services, 365 days a year, including off-duty and vacation periods. Coverage is worldwide, except USA, and there are no restrictions on the choice of doctors, laboratories, clinics, or hospitals as long as dealing with recognized medical practitioners and institutions, which are pre-approved by the health care provider.

         

        Coverage begins on the Effective Date of hire. Executive Employees and their spouses and dependent children are covered under this Plan from the first day of their employment with the Company until 180 days after the day of termination or until the day they start working for another Company which ever occurs first.

        

        Eligible dependents include spouse, partner, dependent unmarried children up to age eighteen. There is no eligibility age limit for children who are physically or mentally incapacitated before their eighteenth birthday. The Plan or Company shall pay for a check-up a year for each insured person.

        

        Insurance Plans

        

        The Insurance Plan is designed to help Executive Employees and their dependents meet the financial difficulties which could result from their permanent (partial or total) disability, total work incapacity, or death.

        
            ACTIONS OF THE BOARD OF DIRECTORS OF CASPIAN SERVICES, INC.

            BY UNANIMOUS WRITTEN CONSENT OF NOVEMBER 11, 2008

            Page 8 of 16

        

        
            

        

        

        Where the Company does not provide a dedicated Company Insurance Plan, the Executive Employee will have the option to subscribe to a private insurance policy to which the Company shall refund 50% of the cost of premiums of such insurance plan.

        

        Vacation

        

        Vacation is intended to provide Executive Employee with the opportunity to take paid leave away from the place of assignment.

        General

        Management schedules vacation in advance, taking into account both the Executive Employee's wishes and work requirements.

        

        Vacation starts on the first day the Executive Employee is not available for work and ends on the day prior to returning to work. During this period any normal weekend days (any Saturday and Sunday) are not included as vacation.

         

        At the close of the calendar year Company and Executive Employee will agree whether to pay off any unused vacation days or to roll over the amount of days into to following year. Payment is at the discretion of the Company.

        Vacation Days Accrual

        

        Vacation days are accrued as follows:

        2.5 days per calendar month

         

        It is expected that Executive Employees will return to their home country for vacation once during a calendar year. Such a trip may require a significant amount of travel time. Consequently,

        two travel days are allowed - one for travel from the assigned location to the home country, and one for travel from the home country to the assignment location. The following

        rules govern the use of these two travel days:

        - a maximum of 2 days is allowed per calendar year

        - both days must be used on the same vacation trip

        Vacation Salary

        

        Vacation salary is paid at the current salary.

        

        In case of termination of employment, prorated vacation is computed and paid in the Executive Employee’s final pay-check.

        Vacation Travel Entitlement

        

        The Vacation Travel Entitlement is intended to cover the travel costs when an Executive Employee,

        
            ACTIONS OF THE BOARD OF DIRECTORS OF CASPIAN SERVICES, INC.

            BY UNANIMOUS WRITTEN CONSENT OF NOVEMBER 11, 2008

            Page 9 of 16

            

            
                

            

            

            

        

        his/her spouse, partner and dependent children return to the home country of the Executive Employee for vacation. Although the entitlement is computed on the basis of travel to the Executive Employee’s country of origin, it may be used for travel to any destination.

         

        Period of validity:

        Vacation travel entitlement will be assigned for the period beginning January 1 and ending December 31. The entitlement has to be used within the allotted period. The vacation travel

        entitlement cannot be carried over to the next calendar year. Any outstanding entitlement at year-end is lost unless the Executive Employee is on vacation during the change of the calendar year, in which case, upon return from vacation, expenses may be claimed against outstanding entitlement from the previous year.

         

        Computation of Entitlement:

        The allocated entitlement amount is based on the cost of two full fare business class round trip air tickets per person from the assignment location to the home base origin (as specified in the letter of employment) of the Executive Employee as quoted by IATA, and confirmed by the Company (location closest international airport to city of origin closest international airport). The Executive Employee’s spouse, partner and Dependent children residing in the assigned location are
        included in the computation. In some cases, a Dependent Child (Children) may not be residing in the assigned location because schooling facilities are either not available or deemed inadequate at place of assignment. In these cases, the entitlement for such a child (children) will be computed as though they were residing in the assigned location.

         

        For children, airlines quote the cost for the aforementioned ticket as follows:

        -under 2 years of age charged 10% of adult rate,

        -2-12 years of age charged 50% of adult rate

        - above 12 years of age charged at adult rate.

        

        The Company will maintain the same rules as the airlines. If a portion of the trip requires ground travel, then this will be computed as first class train fare ("single" berth), or other equivalent transport.

         

        Reimbursable Expenses

        Any travel expenses related to vacation incurred by the Executive Employee, his/her spouse and dependent children may be claimed up to the allocated entitlement.

        Reimbursable expenses are:

        - Tickets for public transport - planes, trains, buses, etc.

        - Excess luggage,

         

        Miscellaneous travel expenses such as taxis, airport taxes, or meals and single night of hotel for transit purposes are reimbursed through expense reports, provided they are

        justified, reasonable and actually incurred. All other expenses are not reimbursable.

         

        Reimbursement procedure

        The Executive Employee prepares an expense report respecting the following:

        - expenses should be supported by an invoice or receipt. For public transport, only tickets must be provided.

        
            ACTIONS OF THE BOARD OF DIRECTORS OF CASPIAN SERVICES, INC.

            BY UNANIMOUS WRITTEN CONSENT OF NOVEMBER 11, 2008

            Page 10 of 16

        

        

        
            

        

        - expenses should be less than three months old.

        - although multiple trips may be made, no more than 2 expense reports may be submitted each year.

        

        Resignation / Termination

        In the case of resignation or termination, all outstanding vacation travel entitlements are lost. If the Executive Employee resigns while on vacation, expenses will be reimbursed up to a one-way economy ticket from place of assignment to City of Origin.

         

        DAYS OF REST

        All Executive Employees are entitled to at least eight Days of Rest per month. In a “normal” work-leisure cycle, this would be the local days off of the week. It is intended that as far as possible, Days of Rest be taken in this “normal” fashion, i.e. on a weekly basis.

         

        Relocation

        

        This section applies to the Executive Employee relocating to the assignment location.

        Temporary living expenses

        The Company will reimburse, upon presentation of supporting documents, temporary living expenses (rental car, food and lodging) for Executive Employees and their families while locating and settling into adequate housing in their new assignment.

        Relocation

        The Company pays for the Executive Employee, his/her spouse, partner and Dependent children to travel to the assigned location. The Company also pays for the shipping of personal effects to the assignment location.

        Departures

        Redundancy / Termination

        The Company pays for the Executive Employee, his/her spouse and Dependent children to return to the Executive Employee’s country of origin as per the rules stated in this Section under ‘Vacation’.

        The Company also pays for the shipping of personal effects back to the Executive Employee’s country of origin.

         

        Lease cancellation

        The Company will reimburse costs arising from the cancellation of an unexpired lease agreement on any rented accommodation at the sending location.

        

        Business Travel & Related Expenses

        

        This section applies to travel other than that pertaining to vacation or relocation.

        
            ACTIONS OF THE BOARD OF DIRECTORS OF CASPIAN SERVICES, INC.

            BY UNANIMOUS WRITTEN CONSENT OF NOVEMBER 11, 2008

            Page 11 of 16

        

        

        
            

        

        

        General

        During the Term, Company shall pay or reimburse Executive Employee for all actual, reasonable and customary expenses incurred by Executive Employee in the course of his employment; including, but not limited to, travel, entertainment, subscriptions and dues associated with Executive Employee's membership
        in professional, business and civic organizations; provided that such expenses are incurred and accounted for in accordance with Company's applicable policies and procedures.

        Travel Management

        All business travel must be coordinated and approved through the Executive Management team and or Board of Directors.

        Travel Class

        Air

        

        International outside flights

        < 8 hours Business class (i.e. to/from Europe)

        > 8 hours Business class (i.e. Transatlantic)

        

        Domestic flights – Business Class

        Rail

        First class, and, when applicable, a single sleeping berth.

        Miscellaneous

        Additional travel expenses such as taxis, airport fees, hotel and meals between connecting flights are refunded by the Company provided they are actually incurred and reasonable.

        Entertainment

        The main purpose of entertainment is to help improve customer relations. For reimbursement of entertainment expenses, name, Company affiliation, job title and the

        purpose of the business entertainment should identify the guest.

        Expense Reports

        All requests for the reimbursement of expenses, whatever their nature, must be made on expense reports.

        The Executive Employee prepares an expense report respecting the following:

        - expenses should be supported by an invoice or receipt;

        - expenses should be less than three months old Expenses are reimbursed in US Dollars.

        
            ACTIONS OF THE BOARD OF DIRECTORS OF CASPIAN SERVICES, INC.

            BY UNANIMOUS WRITTEN CONSENT OF NOVEMBER 11, 2008

            Page 12 of 16

        

        
            

        

        

        Legal Fees and Arbitration

        Legal Fees

        In the event of any dispute, each party shall bear without limitation its own legal costs unless otherwise awarded in a ruling by a competent court or tribunal.

        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 Executive at the time of such dispute arbitration shall be conducted in English language in the 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.

        

        Severance Plan, Change in Control and Stock Options Plan

        

        The Deferred Benefits package consists of the following plans:

        - Severance Plans

        - Change in Control

        - Stock Option Plan

        Executive Employee Severance Agreement

         

        The Executive Employee shall be eligible for termination compensation and benefits described below terminated under the following conditions:

         

        (a) The Executive Employee’s employment is Involuntarily Terminated or Voluntarily Terminated;

         

        (b) A Change in Control occurs with the result that the Executive Employee’s employment is Involuntarily or Voluntarily Terminated within thirty six (36) months following the date of the Change in Control;

         

        (c) A Change in Control occurs with the result that the Executive Employee’s employment is Involuntarily or Voluntarily Terminated within six (6) months prior to the date of the Change in Control; or

        

        The Executive Employee shall not be eligible for the termination compensation and benefits described below terminated under the following conditions:

         

        
            ACTIONS OF THE BOARD OF DIRECTORS OF CASPIAN SERVICES, INC.

            BY UNANIMOUS WRITTEN CONSENT OF NOVEMBER 11, 2008

            Page 13 of 16

        

        
            

        

        

        

        (a)  The Executive Employee’s employment is Terminated for Cause

        

        (b) The Executive Employee Resigns, except for reasons detailed under Voluntary Termination.

         

        Benefits Upon Termination. If the Executive Employee becomes eligible for benefits under the above section, the Company shall pay or provide to the Executive Employee the following compensation and benefits:

         

        (a) Salary. The Executive Employee will continue to receive his current salary for the twelve (12) month period following the Executive Employee’s date of termination in the same manner as it was being paid as of the date of termination. For purposes hereof, the Executive Employee’s “current salary” shall be the highest rate in effect during the
        twelve-month period prior to the Executive Employee’s termination.

         

        (b) Stock Option Grant. The Executive Employee shall continue to participate in the stock option grant during the twelve (12) month period following the Executive Employee’s date of termination unless the Executive Employee commences Employment prior to the end of the twelve (12) month period, in which case, such participation shall end on the date of his new
        Employment. All of these stock options will vest immediately.

        

        (c)Restricted Stock Grants and Options. Except for termination due to Cause, or when the Executive Employee resigns, except for reasons detailed under Voluntary Termination, all outstanding restricted stock grants and options under any Company stock plan that the Executive Employee holds on the date of his termination shall continue to vest in accordance with the
        vesting schedule of the applicable plan during the twelve (12) month period following the Executive Employee’s date of termination unless the Executive Employee commences Employment prior to the end of the twelve (12) month period, in which case, such continued vesting shall end on the date of his new Employment.

         

        Termination for Cause

         

         Cause shall mean:

         (i) the Executive Employee’s material fraud, malfeasance, gross negligence, or wilful misconduct 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, or

         

        (ii) Executive Employee’s conviction of or failure to contest prosecution for a felony or a crime involving moral turpitude.

         

        A termination of Executive Employee for “Cause” based on clause (i) or (ii) of the preceding sentences shall take effect thirty (30) days after the Company gives written notice of such termination to Executive Employee specifying the conduct deemed to qualify as Cause, unless Executive Employee shall, during such 30-day period, remedy the events or circumstances constituting cause to the reasonable satisfaction of the Company.

         

        Voluntary Termination shall mean termination of employment that is voluntary on the part of the Executive Employee but is due to:

         

        
            ACTIONS OF THE BOARD OF DIRECTORS OF CASPIAN SERVICES, INC.

            BY UNANIMOUS WRITTEN CONSENT OF NOVEMBER 11, 2008

            Page 14 of 16

        

        

        
            

        

        

        (i) a significant reduction of the Executive Employee’s responsibilities, title or status resulting from a formal change in such title or status, or from the assignment to the Executive Employee of any duties inconsistent with his title, duties, or responsibilities;

         

        (ii) a reduction in the Executive Employee’s compensation, remuneration or benefits; or

         

        (iii) a Company-required involuntary relocation of Executive Employee’s place of residence or a significant increase in the Executive Employee’s travel requirements.

         

        A termination shall not be considered voluntary within the meaning of this Agreement if such termination is the result of Cause, Disability, or death of the Executive Employee.

         

        Involuntary Termination shall mean termination of employment that is the decision of the Company for reasons other than Cause.

         

        Change in Control shall mean:

         

        (i) An acquisition by any Person or Group wherein that Person or Group end up beneficially owning fifty percent (50%) or more of the Company Shares Outstanding or fifty percent (50%) or more of the combined voting power of the Company. or

         

        (ii) The approval of the shareholders of the Company of a reorganization, merger, consolidation, complete liquidation, or dissolution of the Company, the sale or disposition of all or substantially all of the assets of the Company or any similar corporate transaction.

        

        Change in Control

        

        Notwithstanding anything to the contrary under this Executive Employee Employment Agreement in the event of a Change in Control, Executive Employee shall receive a cash payment, net of taxes, in the amount of one year’s net salary ($288,000 USD). Payment shall be received in Executive Employees nominated bank within 30-days of the date of such Change in Control.

         

        Stock Option Grant

        

        The number of mandatory stock options to be issued annually (on December 31 of each year following the first full year of employment) to Executive Employee shall be equal to the amount of the Executive Employee’s annual base salary divided by the closing market price of the Company’s common stock on the date of the grant. The exercise (or grant) price of the options shall be equal to the closing market
        price of the Company’s common stock on the date of such grant.

        

        Unless provided otherwise in the Notice of Stock Option Grant or other award grant, and accepted by the Executive Employee, options or other equity awards vest over three years, exercisable within five years of full vesting.

        

        
            ACTIONS OF THE BOARD OF DIRECTORS OF CASPIAN SERVICES, INC.

            BY UNANIMOUS WRITTEN CONSENT OF NOVEMBER 11, 2008

            Page 15 of 16

        

        
            

        

                                                                Percentage of Shares

                      Number of Full Years      That May be Purchased

                      Less than     1 year                            0%

                                         1 year                            33

                                         2 years                           67%

                                         3 years                          100%

        

        In lieu of any mandatory stock option grant to which the Executive Employee may become entitled under the provisions of the Employment Agreement, the Company may issue, in full or in part, a restricted stock grant, or cash payment or combination thereof as may be from time to time determined by the Compensation Committee or in the absence of a Compensation Committee by the Board of Directors.

         

        If the Company, in its sole discretion, determines to issue a restricted stock grant in lieu of stock options, the Executive Employee shall be entitled to one share of restricted common stock for three stock options Executive Employee was entitled to receive in accordance with the formula described above. All restricted stock awards shall be subject to the vesting schedule described above.

         

        Should the Company, in its sole discretion, determine to make a partial or full cash payment to Executive Employee in lieu of granting stock options and/or a restricted stock grant, such cash payment shall be made on the basis of the closing market price of the Company’s common stock on the date of grant multiplied by the total number of restricted common stock determined in accordance with this Agreement.

             

        At the Company’s sole discretion Executive Employee may also be considered for additional discretionary stock option grants, restricted stock grants or discretionary cash bonus or combination thereof as may, from time to time, be determined by the Compensation Committee or in the absence of a Compensation Committee by the Board of Directors.

        

        Any and all grants in accordance with this Employment Agreement shall be issued on the annual basis once a year on December 31 of each year following the first full year of Executive’s employment with the Company or any of its subsidiary.

        

        In witness hereof the parties hereto have executed this Agreement the day and year above first written.

        

        For Executive Employee

         

         

         

         

        For Company

        

        
            ACTIONS OF THE BOARD OF DIRECTORS OF CASPIAN SERVICES, INC.

            BY UNANIMOUS WRITTEN CONSENT OF NOVEMBER 11, 2008

            Page 16 of 16

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00149-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00149-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00149-of-00352.parquet"}]]