SECOND AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENTEmployment Agreement Amendment |
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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:
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1. |
Employment Period |
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.”
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2. |
Duties and Status |
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. |
Compensation and Benefits |
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(a) |
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) |
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) |
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) |
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) |
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) |
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) |
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. |
Termination of Employment |
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(a) |
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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(i) |
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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(ii) |
the commission by Executive of any act of embezzlement, fraud, larceny or theft on or from the Company; |
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(iii) |
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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(iv) |
the commission by and indictment of Executive of any crime involving moral turpitude or a felony. |
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(b) |
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 purposes of this Agreement and subject to the Company’s opportunity to cure as provided in Section 4(c) hereof, Executive shall have Good Reason to terminate his employment hereunder if such termination shall be the result of: |
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(i) |
The breach by the Company of any material provision of this Agreement; or |
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(ii) |
A requirement by the Company that Executive perform any act or refrain from performing any act that would be in violation of any applicable law. |
