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EXHIBIT 10.2
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of August 28, 2006, between SHAWN
KRELOFF, an individual residing at 90 East End Avenue, Apt. 10A,
New York, New York 10028 (the
‘‘Executive’’) and SONA MOBILE HOLDINGS
CORP., a Delaware corporation having an office at 825 Third Avenue,
New York, New York 10022 (the
‘‘Company’’).
WHEREAS, the Company desires to employ the Executive and the
Executive desires to be employed by the Company under the terms and
conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties
hereby agree as follows:
1. Retention as Executive; Duties
. The Company agrees to employ the Executive
as President and the Chief Executive Officer of the Company, at its
offices located in New York, New York, commencing as of July 1,
2006 (the ‘‘Effective Date’’) subject to
the supervision and reporting only to the Board of Directors (the
‘‘Board’’) of the Company. The Executive
shall have such senior executive powers, duties, authorities and
responsibilities as are consistent with Executive’s position
and title, including supervising financing, acquisitions and
similar major strategic transactions and strategic planning for the
Company consistent with his title and position, and managing all
non-operating activities of the Company, including corporate
governance, organizational structure, acquisitions and financing,
senior executive compensation, stock and stock option issuances and
stock option plan management. The Executive hereby accepts such
employment and agrees to devote his full business time, attention
and energies to the performance of his duties hereunder.
2. Employment Period
. Subject to all other provisions of this
Agreement, the employment of the Executive under the terms of this
Agreement shall become effective as of the Effective Date and
terminate on December 31, 2009 (the
‘‘Term’’). Unless otherwise agreed by both
parties hereto in writing, if the Executive’s employment with
the Company shall continue after the expiration or other
termination of this Agreement, such continued employment (a) shall
not be pursuant to the provisions of this Agreement, and (b) shall
be ‘‘at-will’’ and may be terminated by
either party at any time, for any reason or no reason. If the
Executive’s employment under this Agreement ceases for any
reason prior to December 31, 2009, this Agreement will terminate,
except for the provisions that contain and/or apply to the
Executive’s obligations hereunder which expressly survive and
continue after the expiration and/or termination of this
Agreement.
3. Compensation
. For all services rendered hereunder by the
Executive, the Company shall pay the Executive, commencing on the
date that the Executive begins employment with the Company (the
‘‘Employment Date’’), the amounts set forth
below (collectively, ‘‘Compensation’’):
(a) Base Salary
. The Company shall pay to the Executive a
base salary (‘‘Base Salary’’) at an annual
rate of $170,000.00, payable in periodic installments in accordance
with the Company’s regular payroll practices as in effect
from time to time, but in no event less frequently than monthly.
The Company may withhold from any amounts payable under this
Agreement all applicable tax, Social Security and other legally
required withholding pursuant to any law or regulation
(‘‘Withholding’’). The Board shall conduct
an annual performance appraisal and salary review on behalf of the
Executive and may determine to increase the Base Salary from time
to time, but the Base Salary may not be decreased.
(b) Annual Bonus
. The Executive shall be entitled to receive
an annual bonus for each fiscal year of the Company (the
‘‘Annual Bonus’’), beginning with the
fiscal year ending on December 31, 2007 based upon the Company
achieving certain financial and business objectives for the fiscal
year with respect to which the Annual Bonus accrues. Such financial
and business objectives for each fiscal year shall be determined by
the Board based upon the Board’s approved budget for such
fiscal year and shall be agreed to by the Board not later than
fifteen (15) days prior to the beginning of each fiscal year. The
established potential Annual Bonus payable to the Executive on
account of each fiscal year shall operate as both a threshold and a
base, such that Company
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performance in excess of the set financial and business objectives
for a fiscal year shall result in a proportionate increase to the
actual Annual Bonus due to the Executive for such fiscal year,
without limitation. For the avoidance of doubt, if the Board
approved target is ‘‘X’’ and the actual
Company performance is less than ‘‘X’’, the
Executive shall not be entitled to the Annual Bonus. If the Board
approved target is ‘‘X’’ and the actual
Company performance is ‘‘1.5X’’, the Annual
Bonus for the Executive shall then be 150% of the bonus set by the
Board for such fiscal year. Any period of less than a full fiscal
year which the Annual Bonus is calculated shall be pro rata.
(c) Stock Options
. On July 13, 2006, the Company granted the
Executive options to purchase 500,000 shares of common stock of the
Company at the market price as of the close of business on such
date pursuant to the Company's Amended and Restated Stock Option
Plan of 2000. As soon as practicable following the
Company’s 2006 Annual Meeting of Stockholders, the Company
shall grant the Executive additional options to purchase 3,000,000
shares of common stock of the Company. All options granted to the
Executive under this Section 3(c), including those granted on July
13, 2006, shall expire on the earlier of (i) the tenth
anniversary of the date of the grant and (ii) sixty (60) days after
the earlier termination (other than for Cause) of the term of the
Executive’s employment. Such options shall vest and be
exercisable in equal one-third increments on the first through
third anniversaries of the date of the grant, respectively.
Notwithstanding the foregoing, all such options shall vest and be
immediately exercisable in full upon a Change of Control (as
defined below).
(d) For the purposes of this Agreement, a
‘‘Change in Control’’ shall mean the
occurrence of any of the following: (i) there shall have occurred a
change in control of the Company of a nature that would be required
to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Securities Exchange Act
of 1934, as amended, as in effect on the date hereof, whether or
not the Company is then subject to such reporting requirement, (ii)
any merger or consolidation of the Company in which the Company is
not the continuing or surviving corporation or pursuant to which
shares of the Company’s common stock would be converted into
cash, securities or other property, other than a merger of the
Company in which the holders of the Company’s common stock
immediately prior to the merger have the same proportionate
ownership of common stock of the surviving corporation immediately
after the merger, (iii) any sale, lease, exchange or other transfer
(in one transaction or a series of related transactions) of all, or
substantially all, the assets of the Company, or the liquidation or
dissolution of the Company, or (iv) a change in the composition of
the Company’s Board, as a result of which fewer than a
majority of the directors are Incumbent Directors. An
‘‘Incumbent Director’’ is defined as a
director who either (A) is a director of the Company as of the date
hereof, or (B) is elected, or nominated for election, to the Board
with the affirmative votes of at least a majority of the Incumbent
Directors at the time of such election or nomination. For purposes
of the preceding, individuals who are elected pursuant to clause
(B) also shall be considered Incumbent Directors.
4. Benefits and Reimbursement
. During the term of this Agreement, the
Executive shall be entitled to the following benefits and
reimbursements (collectively,
‘‘Benefits’’):
(a) The Executive shall be entitled to 20
paid vacation days during each calendar year, provided that the
number of paid vacation days shall be pro-rated for any year in
which the Executive is employed for less than the full year, to be
taken at the mutual convenience of the Executive and the Company,
in addition to regular paid holidays based on bank holidays in New
York City. The Executive may carry-over vacation days in accordance
with the Company’s Paid Time Off (PTO) Policy.
(b) The Executive shall be entitled to
participate in the Company’s employee benefit plans
maintained for senior executives generally on terms generally
applicable to senior executives of the Company. Such plans will
include, at a minimum, a 401K plan, disability coverage and a
health insurance plan providing for medical, dental and vision
coverage.
(c) The Executive shall be reimbursed by the
Company for all reasonable business expenses incurred by the
Executive in connection with the performance of his services under
this Agreement, subject to the Company’s policies in effect
from time to time with respect to such expenses, including the
requirements with respect to reporting and documentation of such
expenses.
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5. Other Executive Obligations .
(a) The Executive shall not, during the
period he is employed by the Company, be engaged in any other
business activity without the prior written consent of the Company,
except that the foregoing shall not be deemed to prevent the
Executive from making and supervising passive investments in other
and different businesses, provided that the same (i) are not in
competition with the business of the Company and (ii) do not
interfere with the performance of the Executive’s duties
hereunder; provided, however, that notwithstanding the foregoing,
the Executive may own, directly or indirectly, solely as an
investment, securities of any such person which are traded on any
national securities exchange or NASDAQ if the Executive (A) is
not a controlling person of, or a member of a group which controls,
such person and (B) does not, directly or indirectly, own 5%
or more of any class of securities of such person. Nothing
contained herein shall preclude the Executive from engaging in
charitable or community activities or participating in industry or
trade organization activities provided such activities do not
materially interfere with the regular performance of his duties and
responsibilities under this Agreement.
(b) The Executive acknowledges that the
Company may seek to obtain, and pay the premium costs for, an
insurance policy on the life of the Executive (the
‘‘Life Insurance Policy’’) which provides
for payment of the proceeds of that policy solely to the Company.
The Executive agrees to cooperate fully with the Company in
obtaining and maintaining the Life Insurance Policy, including
without limitation, completing application forms, providing
information requested by the insurer, and participating in physical
examinations and providing blood and urine samples as requested by
the insurer.
6. Company Policies
. The Executive will be subject to all rules
and policies applicable to employees of the Company generally or at
Executive’s level.
7. Representations
. The Executive represents and warrants to
the Company that the Executive is not party to any agreement or any
other contractual or other binding obligations or subject to any
applicable policy that would prevent or restrict the Executive from
performing his duties and responsibilities for the Company,
including, without limitation, any agreements or other obligations
or documents relating to non-competition, non-solicitation,
confidentiality, trade secrets or proprietary information, other
than the Executive’s obligations to maintain the
confidentiality of confidential information he received in
connection with his prior employment.
8. Confidentiality .
(a) The Executive acknowledges that he has
been informed by the Company that as a result of his employment by
the Company, the Executive will obtain proprietary, trade secret
and confidential information concerning the business of the
Company, the owners of the Company, employees of the Company, and
the family members of such owners and employees, including, without
limitation: (i) discoveries, ideas, concepts, software, plans,
techniques, models, data, or documentation relating to strategic
and business plans, investment strategies and plans, and potential
investment opportunities; (ii) the Executive’s Compensation
and other terms of this Agreement; (iii) financial information
relating to the Company; (iv) financial and personal information
relating to the owners of the Company, employees of the Company,
and the family members of such owners and employees; and (v)
information that is provided to the Company in confidence, or
subject to confidentiality agreements, in connection with
investments or potential investments (collectively,
‘‘Confidential Information’’). The
Executive agrees that: (x) the Company, the owners of the Company,
employees of the Company, and the family members of such owners and
employees, will suffer substantial damage which will be difficult
to compute if the Executive breaches
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