EXECUTIVE EMPLOYMENT AGREEMENT
This
Executive Employment Agreement (this “Agreement”) is made as of the 1st day of
September 2005 by and among Mobilepro Corp., a Delaware corporation (the
“Company”) and Xxxxx X. Xxxxxxxx, Xx., a natural person, residing in Florida
(“Xx. Xxxxxxxx”).
WHEREAS,
the
Company wishes to employ Xx. Xxxxxxxx as its Executive Vice President -
Integration of the Company and Xx. Xxxxxxxx wishes to accept such
employment;
WHEREAS,
the
Company and Xx. Xxxxxxxx wish to set forth the terms of Xx. Xxxxxxxx’x
employment and certain additional agreements between Xx. Xxxxxxxx and the
Company.
NOW,
THEREFORE,
in
consideration of the foregoing recitals and the representations, covenants
and
terms contained herein, the parties hereto agree as follows:
(1) Employment
Period
The
Company will employ Xx. Xxxxxxxx, and Xx. Xxxxxxxx will serve the Company,
under
the terms of this Agreement commencing September 1, 2005 (the “Commencement
Date”) for a term of twelve (12) months unless earlier terminated under Section
4 hereof. The period of time between the commencement and the termination
of Xx.
Xxxxxxxx’x employment hereunder shall be referred to herein as the “Employment
Period.” This Agreement shall automatically renew for successive twelve (12)
month periods unless (i) earlier terminated under Section 4 hereof or (ii)
either party delivers a written non-renewal notice within sixty (60) days
of the
expiration of an Employment Period.
(2) Duties
and Status
The
Company hereby engages Xx. Xxxxxxxx as its Executive Vice President -
Integration on the terms and conditions set forth in this Agreement. During
the
term of the Employment Period, Xx. Xxxxxxxx shall report directly to the
Chief
Executive Officer of the Company and shall exercise such authority, perform
such
executive functions and discharge such responsibilities as are reasonably
associated with Xx. Xxxxxxxx’x position, commensurate with the authority vested
in Xx. Xxxxxxxx pursuant to this Agreement and consistent with the governing
documents of the Company.
(3) Compensation
and Benefits
| (a) |
Salary.
During the Employment Period the Company shall pay to Xx. Xxxxxxxx,
as
compensation for the performance of his duties and obligations under
this
Agreement, a base salary of Fifteen Thousand Dollars ($15,000) per
month,
payable semi-monthly, beginning September 15, 2005.
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(b)
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Insurance.
The
Company shall reimburse Xx. Xxxxxxxx for all health, dental, vision,
life,
AD&D, and disability insurance policies (not to exceed $800 per month)
until such time as Company establishes like type insurance coverage.
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(c)
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Vacation:
The Company will provide Xx. Xxxxxxxx with three (3) weeks paid
vacation
per annum.
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(d)
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Bonus.
During the Employment Period, Xx. Xxxxxxxx shall be entitled to
the
following bonuses:
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(i)
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$10,000
to compensate Xx. Xxxxxxxx for services rendered in June 2005.
Such
payment shall be made no later than September 1st, 2005.
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| (ii) |
a
MBO bonus as mutually agreed between Xx. Xxxxxxxx and the Company’s CEO on
or before September 16, 2005.
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(e)
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Equity.
As partial consideration for entering into this Agreement, the
Company
hereby grants Xx. Xxxxxxxx an option under the Company’s 2001 Equity
Performance Plan to acquire two million (2,000,000) shares of the
Company’s common stock at an exercise price or $0.27 per share (the
“Option”). All two million (2,000,000) shares of the Option shall vest
on
March 31, 2006 or immediately if Xx. Xxxxxxxx’x 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.
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(f)
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Business
Expenses.
During the Employment Period, Company shall promptly reimburse
Xx.
Xxxxxxxx for all appropriately documented and reasonable business
and
travel expenses incurred by Xx. Xxxxxxxx in the performance of
his duties
under this Agreement. Air travel is by coach
class.
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(4) Termination
of Employment
| (a) |
Termination
for Cause.
The Company may terminate Xx. Xxxxxxxx’x employment hereunder for Cause
(defined below). For purposes of this Agreement and subject to Xx.
Xxxxxxxx’x opportunity to cure as provided in Section 4(c) hereof, the
Company shall have Cause to terminate Xx. Xxxxxxxx’x employment hereunder
if such termination shall be the result
of:
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(i)
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a
material breach
of fiduciary duty or material breach
of the terms of this Agreement or any other agreement between Xx.
Xxxxxxxx
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)
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the
commission by Xx. Xxxxxxxx of any act of embezzlement, fraud, larceny
or
theft on or from the Company;
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(iii)
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Substantial
and continuing neglect or inattention by Xx. Xxxxxxxx of the duties
of his
employment or the willful misconduct or gross negligence of Xx.
Xxxxxxxx
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;
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(iv)
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The
commission by Xx. Xxxxxxxx of any crime involving moral turpitude
or a
felony;
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(v)
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Xx.
Xxxxxxxx’x performance or omission of any act which, in the judgment of
the Board, if known to the customers, clients, stockholders or
any
regulators of the Company, would have a material and adverse impact
on the
business of the Company; and
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| (b) |
Termination
for Good Reason.
Xx. Xxxxxxxx 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, Xx. Xxxxxxxx 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 any
stock option or warrant agreement; or
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| (ii) |
A
requirement by the Company that Xx. Xxxxxxxx perform any act or refrain
from performing any act that would be in violation of any applicable
law.
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| (c) |
Notice
and Opportunity to Cure.
Notwithstanding the foregoing, it shall be a condition precedent
to the
Company’s right to terminate Xx. Xxxxxxxx’x employment for Cause and Xx.
Xxxxxxxx’x right to terminate for Good Reason that (i) the party seeking
termination shall first have given the other party written notice
stating
with specificity the reason for the termination (“breach”) and (ii) if
such breach is susceptible of cure or remedy, a period of fifteen
(15)
days from and after the giving of such notice shall have elapsed
without
the breaching party having effectively cured or remedied such breach
during such 15-day period, unless such breach cannot be cured or
remedied
within fifteen (15) days, in which case the period for remedy or
cure
shall be extended for a reasonable time (not to exceed an additional
thirty (30) days) provided the breaching party has made and continues
to
make a diligent effort to effect such remedy or
cure.
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| (d) |
Voluntary
Termination.
At the election of Xx. Xxxxxxxx, upon not less than sixty (60) days
prior
written notice of termination other than for Good
Reason.
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| (e) |
Termination
Upon Death or Permanent and Total Disability.
The Employment Period shall be terminated by the death of Xx. Xxxxxxxx.
The Employment Period may be terminated by the Board of Directors
of the
Company if Xx. Xxxxxxxx shall be rendered incapable of performing
his
duties to the Company by reason of any medically determined physical
or
mental impairment that can be reasonably expected to result in death
or
that can be reasonably be expected to last for a period of either
(i) six
(6) or more consecutive months from the first date of Xx. Xxxxxxxx’x
absence due to the disability or (ii) nine (9) months during any
twelve-month period (a “Permanent and Total Disability”). If the
Employment Period is terminated by reason of a Permanent and Total
Disability of Xx. Xxxxxxxx, the Company shall give thirty (30) days’
advance written notice to that effect to Xx.
Xxxxxxxx.
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| (f) |
Termination
Without Cause.
At the election of the Company, otherwise than for Cause, upon not
less
than sixty (60) days written notice of
termination.
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| (g) |
Termination
for Business Failure.
Anything contained herein to the contrary notwithstanding, in the
event
the Company’s business is discontinued because continuation is rendered
impracticable by substantial financial losses, lack of funding, legal
decisions, administrative rulings, declaration of war, dissolution,
national or local economic depression or crisis or any reasons beyond
the
control of the Company, then this Agreement shall terminate as of
the day
the Company determines to cease operation with the same force and
effect
as if such day of the month were originally set as the termination
date
hereof. In the event this Agreement is terminated pursuant to this
Section
4(g), the Executive will be entitled to severance
pay.
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(5)
Consequences
of Termination
| (a) |
Without
Cause or for Good Reason.
In the event of a termination of Xx. Xxxxxxxx’x employment during the
Employment Period by the Company other than for Cause pursuant to
Section
4(f) or by Xx. Xxxxxxxx for Good Reason pursuant to Section 4(b)
(e.g.,
due to a Change of Control of the Company, where Change of Control
means:
(i) the acquisition (other than from the Company) in one or
more
transactions by any Person, as defined in this Section 5(a), of the
beneficial ownership (within the meaning of Rule 13d-3 promulgated
under
the Securities Exchange Act of 1934, as Magrudered) of 50% or more
of
(A) the then outstanding shares of the securities of the Company,
or
(B) the combined voting power of the then outstanding securities
of
the Company entitled to vote generally in the election of directors
(the
“Company Voting Stock”); (ii) the closing of a sale or other
conveyance of all or substantially all of the assets of the Company;
or
(iii) the effective time of any merger, share exchange,
consolidation, or other business combination of the Company if immediately
after such transaction persons who hold a majority of the outstanding
voting securities entitled to vote generally in the election of directors
of the surviving entity (or the entity owning 100% of such surviving
entity) are not persons who, immediately prior to such transaction,
held
the Company Voting Stock; provided,
however,
that a Change of Control shall not include a public offering of capital
stock of the Company. For purposes of this Section 5(a), a
“Person”
means any individual, entity or group within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended,
other than: employee benefit plans sponsored or maintained by the
Company
and corporations controlled by the Company, the Company shall pay
Xx.
Xxxxxxxx (or his estate) and provide him with the
following:
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(i)
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Lump-Sum
Payment.
A
lump-sum cash payment, payable thirty (30) days after Xx. Xxxxxxxx’x
termination of employment, equal to the sum of the
following:
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1) Salary.
The
lesser of six months salary or equivalent of the remaining months on the
Employment Agreement (the “Severance Period”); plus
2) Earned
but Unpaid Amounts.
Any
previously earned but unpaid salary through Xx. Xxxxxxxx’x final date of
employment with the Company, and any previously earned but unpaid bonus amounts
prior to the date of Xx. Xxxxxxxx’x termination of employment.
3) Equity.
Xx.
Xxxxxxxx shall retain all Option Shares vested at time of termination. All
unvested Option Shares shall immediately vest and be retained by Xx. Xxxxxxxx.
Xx. Xxxxxxxx shall have the benefit of the full ten-year option period to
exercise such Option Shares.
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(b)
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Other
Benefits.
The Company shall provide continued coverage for the Severance
Period
under all health, life, disability and similar employee benefit
plans and
programs of the Company on the same basis as Xx. Xxxxxxxx was entitled
to
participate immediately prior to such termination, provided that
Xx.
Xxxxxxxx’x continued participation is possible under the general terms and
provisions of such plans and programs. In the event that Xx. Xxxxxxxx’x
participation in any such plan or program is barred, the Company
shall use
its commercially reasonable efforts to provide Xx. Xxxxxxxx with
benefits
substantially similar (including all tax effects) to those which
Xx.
Xxxxxxxx would otherwise have been entitled to receive under such
plans
and programs from which his continued participation is barred.
In the
event that Xx. Xxxxxxxx is covered under substitute benefit plans
of
another employer prior to the expiration of the Severance Period,
the
Company will no longer be obligated to continue the coverage’s provided
for in this Section 5(a)(ii).
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(c)
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Other
Termination of Employment.
In the event that Xx. Xxxxxxxx’x employment with the Company is terminated
during the Employment Period by the Company for Cause (as provided
for in
Section 4(a) hereof) or by Xx. Xxxxxxxx other than for Good Reason
(as
provided for in Section 4(b) hereof), the Company shall pay or
grant Xx.
Xxxxxxxx any earned but unpaid salary, bonus, and Option Shares
through
Xx. Xxxxxxxx’x final date of employment with the Company, and the Company
shall have no further obligations to Xx.
Xxxxxxxx.
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(d)
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Withholding
of Taxes.
All payments required to be made by the Company to Xx. Xxxxxxxx
under this
Agreement shall be subject only to the withholding of such amounts,
if
any, relating to tax, excise tax and other payroll deductions as
may be
required by law or regulation.
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(e)
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No
Other Obligations.
The benefits payable to Xx. Xxxxxxxx under this Agreement are not
in lieu
of any benefits payable under any employee benefit plan, program
or
arrangement of the Company, except as specifically provided herein,
and
Xx. Xxxxxxxx will receive such benefits or payments, if any, as
he may be
entitled to receive pursuant to the terms of such plans, programs
and
arrangements. Except for the obligations of the Company provided
by the
foregoing and this Section 5, the Company shall have no further
obligations to Xx. Xxxxxxxx upon his termination of
employment.
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(f)
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No
Mitigation or Offset.
Xx. Xxxxxxxx shall have no obligation to mitigate the damages provided
by
this Section 5 by seeking substitute employment or otherwise and
there
shall be no offset of the payments or benefits set forth in this
Section 5
except as provided in Section
5(a)(ii).
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(6) Governing
Law
This
Agreement and the rights and obligations of the parties hereto shall be
construed in accordance with the laws of the State of Maryland, without giving
effect to the principles of conflict of laws.
(7) Indemnity
and Insurance
The
Company shall indemnify and save harmless Xx. Xxxxxxxx for any liability
incurred by reason of any act or omission performed by Xx. Xxxxxxxx while
acting
in good faith on behalf of the Company and within the scope of the authority
of
Xx. Xxxxxxxx pursuant to this Agreement and to the fullest extent provided
under
the Bylaws, the Certificate of Incorporation and the General Corporation
Law of
the State of Delaware, except that Xx. Xxxxxxxx must have in good faith believed
that such action was in, or not opposed to, the best interests of the Company,
and, with respect to any criminal action or proceeding, had no reasonable
cause
to believe that such conduct was unlawful
The
Company shall provide that Xx. Xxxxxxxx is covered by any Directors and Officers
insurance that the Company provides to other senior executives and/or board
members.
(8) Non-Disparagement
At
all
times during the Employment Period and for a period of five (5) years thereafter
(regardless of how Xx. Xxxxxxxx’x employment was terminated), Xx. Xxxxxxxx shall
not, directly or indirectly, make (or cause to be made) to any person any
disparaging, derogatory or other negative or false statement about the Company
(including its products, services, policies, practices, operations, employees,
sales representatives, agents, officers, members, managers, partners or
directors).
(9) Cooperation
with the Company After Termination of Employment
Following
termination of Xx. Xxxxxxxx’x employment for any reason, Xx. Xxxxxxxx shall
fully cooperate with the Company in all matters relating to the winding up
of
Xx. Xxxxxxxx’x pending work on behalf of the Company including, but not limited
to, any litigation in which the Company is involved, and the orderly transfer
of
any such pending work to other employees of the Company as may be designated
by
the Company. Following any notice of termination of employment by either
the
Company or Xx. Xxxxxxxx, the Company shall be entitled to such full time
or part
time services of Xx. Xxxxxxxx as the Company may reasonably require during
all
or any part of the sixty (60)-day period following any notice of termination,
provided that Xx. Xxxxxxxx shall be compensated for such services at the
same
rate as in effect immediately before the notice of termination.
(10) Lock-up
Period and Volume Limitation.
Xx.
Xxxxxxxx agrees that he will not sell or otherwise transfer or dispose of
any
shares of the Company’s common stock that he owns or is entitled to receive
following the exercise of any Option Shares or convertible securities that
he
may receive following the Commencement Date until September 1, 2006.
(11) Notice
All
notices, requests and other communications pursuant to this Agreement shall
be
sent by overnight mail to the following addresses:
If
to Xx.
Xxxxxxxx:
Xxxxx
X.
Xxxxxxxx, Xx.
00
Xxxxxxx Xxxx
Xxxxxxxxx,
XX 00000
If
to the
Company:
Attn:
Chief Executive Officer
0000
Xxxxxxxxx Xxxx.
Xxxxx
000
Xxxxxxxxx,
Xxxxxxxx 00000
Phone:
000.000.0000
(12) Waiver
of Breach
Any
waiver of any breach of this Agreement shall not be construed to be a continuing
waiver or consent to any subsequent breach on the part of either Xx. Xxxxxxxx
or
of the Company.
(13) Non-Assignment
/ Successors
Neither
party hereto may assign his or its rights or delegate his or its duties under
this Agreement without the prior written consent of the other party; provided,
however, that (i) this Agreement shall inure to the benefit of and be binding
upon the successors and assigns of the Company upon any sale or all or
substantially all of the Company’s assets, or upon any merger, consolidation or
reorganization of the Company with or into any other corporation, all as
though
such successors and assigns of the Company and their respective successors
and
assigns were the Company; and (ii) this Agreement shall inure to the benefit
of
and be binding upon the heirs, assigns or designees of Xx. Xxxxxxxx to the
extent of any payments due to them hereunder. As used in this Agreement,
the
term “Company” shall be deemed to refer to any such successor or assign of the
Company referred to in the preceding sentence.
(14) Severability
To
the
extent any provision of this Agreement or portion thereof shall be invalid
or
unenforceable, it shall be considered deleted there from and the remainder
of
such provision and of this Agreement shall be unaffected and shall continue
in
full force and effect.
(15) Counterparts
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed to be an original but all of which together will constitute one and
the
same instrument.
(16) Arbitration
Xx.
Xxxxxxxx and the Company shall submit to mandatory and exclusive binding
arbitration, any controversy or claim arising out of, or relating to, this
Agreement or any breach hereof where the amount in dispute is greater than
or
equal to Fifty Thousand Dollars ($50,000), provided,
however,
that
the parties retain their right to, and shall not be prohibited, limited or
in
any other way restricted from, seeking or obtaining equitable relief from
a
court having jurisdiction over the parties. In the event the amount of any
controversy or claim arising out of, or relating to, this Agreement, or any
breach hereof, is less than Fifty Thousand Dollars ($50,000), the parties
hereby
agree to submit such claim to mediation. Such arbitration shall be governed
by
the Federal Arbitration Act and conducted through the American Arbitration
Association (“AAA”) in the state of Maryland, before a single neutral
arbitrator, in accordance with the National Rules for the Resolution of
Employment Disputes of the American Arbitration Association in effect at
that
time. The parties may conduct only essential discovery prior to the hearing,
as
defined by the AAA arbitrator. The arbitrator shall issue a written decision,
which contains the essential findings and conclusions on which the decision
is
based. Mediation shall be governed by, and conducted through, the AAA. Judgment
upon the determination or award rendered by the arbitrator may be entered
in any
court having jurisdiction thereof.
(17) Entire
Agreement
This
Agreement and all schedules and other attachments hereto constitute the entire
agreement by the Company and Xx. Xxxxxxxx with respect to the subject matter
hereof and, except as specifically provided herein, supersedes any and all
prior
agreements or understandings between Xx. Xxxxxxxx and the Company with respect
to the subject matter hereof, whether written or oral (including that certain
consulting arrangement between Xx. Xxxxxxxx and the Company). This Agreement
may
be amended or modified only by a written instrument executed by Xx. Xxxxxxxx
and
the Company.
IN
WITNESS WHEREOF, the parties have executed this Agreement as of August 26,
2005.
| MOBILEPRO CORP. | |||
| /s/ Xxxxx X. Xxxxxxxx, Xx. | /s/ Xxx X. Xxxxxx | ||
|
XXXXX X. XXXXXXXX, XX. |
Xxx X. Xxxxxx, CEO |
||
