SECOND AMENDED AND
RESTATED EXECUTIVE EMPLOYMENT AGREEMENT
This Second
Amended and Restated Executive Employment Agreement (this
“Agreement”) is made as of the 16th day of June, 2005
by and between Mobilepro Corp., a Delaware corporation (the
“Company”), and Jay O. Wright
(“Executive”).
WHEREAS, the
Company and the Executive are parties to that certain Executive
Employment Agreement dated as of June 9, 2004 (“Original
Agreement”), amending Executive’s prior Executive
Employment Agreement dated as of April 15, 2004, which states the
terms and conditions of the Executive’s employment as
President and Chief Executive Officer of the Company;
and
WHEREAS, the
Company and Executive wish to amend the Original Agreement
primarily to amend various compensation provisions in light of the
Company’s achievement of certain acquisition milestones and
increasing focus on earnings.
NOW, THEREFORE,
in consideration of the foregoing recitals and the representations,
covenants and terms, the parties hereto hereby agree to amend and
restate the Original Agreement in its entirety as
follows:
The Company will employ Executive, and Executive
will serve the Company, under the terms of this Agreement
commencing April 1, 2005 (the “Commencement Date”)
through December 31, 2007 unless earlier terminated under Section 4
hereof. On November 1, 2007, the term of this Agreement shall
automatically be extended for an additional period of twelve (12)
months; provided, however, that either party hereto may elect not
to so extend this Agreement by giving written notice to the other
party at least sixty (60) days prior to such anniversary date. The
period of time between the commencement and the termination of
Executive’s employment hereunder shall be referred to herein
as the “Employment Period.”
The Company hereby engages Executive as its
President and Chief Executive Officer on the terms and conditions
set forth in this Agreement. During the Employment Period,
Executive shall report directly to the Board of Directors of the
Company (the “Board”) and shall exercise such
authority, perform such executive functions and discharge such
responsibilities as are reasonably associated with
Executive’s position, commensurate with the authority vested
in Executive pursuant to this Agreement and consistent with the
governing documents of the Company. These duties include, but are
not limited to: (i) increasing the revenue, earnings and financial
strength of the Company; (ii) working with the CFO to build the
Company’s presence on “Wall Street” and serving
as the Company’s “face” to the capital markets;
(iii) identifying and recruiting additional personnel to build the
Company; (iv) seeking and closing acquisitions for the Company to
increase the Company’s revenue and earnings per share; (v)
working to shape and determine the strategic direction of the
Company; and (v) handling such other leadership, administrative and
managerial roles as is customary and appropriate for a
company’s President and Chief Executive Officer.
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3.
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Compensation and Benefits
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(a)
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Salary . During the Employment Period, the Company
shall pay to Executive, as compensation for the performance of his
duties and obligations under this Agreement, a base salary during
the remainder of 2005 of Two Hundred Ten Thousand Dollars
($210,000), during 2006 Two Hundred Forty Thousand Dollars
($240,000) and during 2007 Two Hundred Seventy Thousand Dollars
($270,000). The base salary may be increased at the discretion of
the Board.
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(b)
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Bonus . During the Employment Period, Executive shall
be entitled to a bonus during 2005 of $90,000 for refinancing the
Company’s debt with Airlie Opportunity Master Fund, Ltd. and
up to $150,000 according to the following percentages: 35% for
achieving the profit projected in the Company’s 2006 budget;
20% for obtaining a listing of the Company on NASDAQ (SmallCap or
National Market) or AMEX (at the Board’s discretion);15% for
achieving the Company’s 2006 projected revenue as set forth
in its budget; and 30% at the discretion of the Board. During 2006
and 2007 the bonus shall be determined upon criteria mutually
agreed to between the Board and Executive, provided ,
however , that the total cash compensation for Executive
(base salary and bonus) shall not exceed $450,000 unless otherwise
mutually agreed between the Board and Executive.
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(c)
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Equity . As partial consideration for entering into
this Agreement, the Company hereby grants Executive a warrant in
the form attached hereto as Exhibit 1 to acquire five
million (5,000,000) shares of the Company’s common stock, par
value $.001 per share at an exercise price of $0.22 per share (the
“Warrant Shares”) to vest ratably over thirty-two (32)
months between April 2005 and December 2008 or immediately if
Executive’s employment is terminated without cause or for
good reason (as described in Section 4 hereof) or due to a change
in control, sale of a majority of the common stock or substantially
all of the assets of the Company or merger of the Company into or
with another company (unless such company is less than ninety
percent (90%) of the size (measured by market value) of the
Company) or reverse merger with another company. This warrant is in
addition to (i) the warrant to acquire seven million two hundred
thousand (7,200,000) shares of the Company’s common stock
pursuant to Executive’s prior Employment Agreement dated
April 15, 2004 at an exercise price of $0.018 per share (the
“Warrant Shares”) to vest three hundred thousand
(300,000) Warrant Shares each month commencing April 15, 2004 or
immediately if Executive’s employment is terminated without
cause or for good reason (as described in Section 4 hereof) or due
to a change in control, sale of a majority of the common stock or
substantially all of the assets of the Company or merger of the
Company into or with another company (unless such company is less
than fifty percent (50%) of the size (measured by market value) of
the Company) or reverse merger with another company; and (ii) the
warrant(s) to acquire seven million nine hundred eighty two
thousand five hundred (7,982,500) Warrant Shares which have already
vested. The Warrant Shares granted hereunder must be exercised by
the tenth anniversary of the date of vesting or shall be forfeited
by Executive. All Warrant Shares granted hereunder shall have a
“cashless” exercise provision which enables Executive
to give up a portion of his Warrant Shares in order to exercise
others without paying cash for them. Further, the number, kind and
strike price of the stock Warrant Shares granted hereunder shall be
appropriately and equitably adjusted to reflect any stock dividend,
stock split, spin-off, split-off, extraordinary cash dividend,
recapitalization, reclassification or other major corporate action
affecting the stock of the Company to the end that after such event
Executive’s proportionate interest in the Company shall be
maintained as before the occurrence of such event. Executive shall
also receive payment of any cash dividend or stock dividend
declared and paid by the Company as if Executive had already
exercised all of his Warrant Shares, including unvested Warrant
Shares.
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(d)
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Appointment
to the Board . The
Company shall nominate Executive to be a member of the Board during
the Employment Period.
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(e)
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Other
Benefits . During the
Employment Period, Executive shall be entitled to participate in
all of the employee benefit plans, programs and arrangements of the
Company in effect during the Employment Period which are generally
available to senior executives of the Company, subject to and on a
basis consistent with the terms, conditions and overall
administration of such plans, programs and arrangements. In
addition, during the Employment Period, Executive shall be entitled
to fringe benefits and perquisites comparable to those of other
senior executives of the Company including, but not limited to,
twenty (20) days of vacation pay plus five (5) sick/personal days,
to be used in accordance with the Company’s vacation pay
policy for senior executives.
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(f)
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Business
Expenses . During the
Employment Period, the Company shall promptly reimburse Executive
for all appropriately documented, reasonable business expenses
incurred by Executive in the performance of his duties under this
Agreement, including, but not limited to, telecommunications
expenses and travel expenses.
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(g)
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Office . During the Employment Period, the Company
shall provide an office at a place mutually agreeable to Executive
and the Company and, to the extent that the Company’s budget
allows, secretarial assistance to Executive suitable to
Executive’s position as the Company’s Chief Executive
Officer. Executive agrees that the Company’s existing offices
at 6701 Democracy Boulevard, Bethesda, Maryland 20817 are
sufficient to satisfy this covenant.
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4.
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Termination of Employment
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(a)
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Termination
for Cause. The Company
may terminate Executive’s employment hereunder for Cause
(defined below). For purposes of this Agreement and subject to
Executive’s opportunity to cure as provided in Section 4(c)
hereof, the Company shall have Cause to terminate Executive’s
employment hereunder if such termination shall be the result
of:
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a willful or
grossly negligent material breach of
fiduciary duty or material breach of the
terms of this Agreement or any other agreement between Executive
and the Company (including without limitation any agreements
regarding confidentiality, inventions assignment and
non-competition), which, in the case of a material
breach of the terms of this Agreement or any other agreement,
remains uncured for a period of thirty (30) days following receipt
of written notice from the Board specifying the nature of such
breach;
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the commission
by Executive of any act of embezzlement, fraud, larceny or theft on
or from the Company;
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substantial and
continuing gross neglect or inattention by Executive of the duties
of his employment or the willful misconduct or gross negligence of
Executive in connection with the performance of such duties which
remains uncured for a period of thirty (30) days following receipt
of written notice from the Board specifying the nature of such
breach; and
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the commission
by and indictment of Executive of any crime involving moral
turpitude or a felony.
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(b)
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Termination
for Good Reason .
Executive shall have the right at any time to terminate his
employment with the Company upon not less than thirty (30) days
prior written notice of termination for Good Reason (defined
below). For purp
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