ADDENDUM TO SECOND AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT
ADDENDUM
TO SECOND AMENDED AND RESTATED EXECUTIVE EMPLOYMENT
AGREEMENT
This
Addendum to Second Amended and Restated Executive Employment Agreement (this
“Addendum”) is made as of the 27th day of August, 2007 by and between Mobilepro
Corp., a Delaware corporation (the “Company”), and Xxx X. Xxxxxx
(“Executive”).
WHEREAS,
the Company and the Executive are parties to that certain Second Amended and
Restated Executive Employment Agreement dated as of June 6, 2005 (“Original
Agreement”), 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 certain provisions of the Original
Agreement, primarily various compensation provisions, in light of the Company’s
sale of its various businesses and focus on a new direction for the
Company.
NOW,
THEREFORE, in consideration of the foregoing recitals and the representations,
covenants and terms, the parties hereto hereby agree to amend the Original
Agreement as follows:
Section
1. Amendment
to Section 1.
Section 1
of the
Original Agreement is hereby amended to extend the term of the Agreement through
June 30, 2008.
Section
2. Amendment
to Section 2.
Section 2 of
the
Original Agreement is hereby amended as follows:
2. |
Compensation and
Benefits
|
(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), during 2007, Two Hundred Seventy Thousand Dollars
($270,000) and during 2008 Two Hundred Forty Thousand Dollars ($240,000).
The base salary may be increased at the discretion of the Board but
shall
not be reduced during the term hereof without the consent of
Executive.
|
(b)
|
Bonus.
During the Employment Period, Executive shall be entitled to a bonus
during fiscal 2008 and the first quarter of fiscal 2009 for achieving
three, four or five of the following goals (the “New Direction Goals”) for
the Company: (i) closing of the sale of the CLEC subsidiaries to
USA
Telephone; (ii) eliminating the Company’s existing debt to Yorkville
Advisors, LLC (f/k/a Cornell Capital Partners, LP); (iii) closing
of the
sale(s) of at least 80% of the telephones of Davel Communications;
(iv)
elimination of the debt of Kite Broadband, LLC and Kite Networks,
Inc.
from the Company’s balance sheet, including any guaranties related
thereto; and (v) completing an acquisition into a new line of business,
which acquisition shall have received board approval. Executive shall
receive a cash bonus of $20,000 for achieving three of the above
five New
Direction Goals, $50,000 for achieving four of the above five goals
and
$100,000 for achieving all five goals, such bonus to be paid upon
achievement of such goals provided that the Company’s cash position allows
such payment. The Board shall have the discretion to award an additional
bonus of up to $100,000 to Executive based on the Board’s judgment in its
sole discretion. This bonus shall not affect any bonus previously
earned.
|
(c)
|
Equity.
As partial consideration for entering into the Original 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 (the “Warrant Shares”) at an exercise price of $0.22
per share to vest ratably over thirty-two (32) months between April
2005
and December 2007 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. In addition, Executive shall
be
entitled to the following Warrant Shares for achieving the New Direction
Goals: three million (3,000,000) Warrant Shares of the Company’s common
stock at an exercise price of $.0075 per share to vest immediately
upon
the closing of the sale of the CLEC subsidiaries to USA Telephone;
two
million (2,000,000) Warrant Shares of the Company’s common stock at an
exercise price of $.0075 per share to vest immediately upon eliminating
the Company’s debt to Yorkville Advisors, LLC (f/k/a Cornell Capital
Partners, LP); two million (2,000,000) Warrant Shares of the Company’s
common stock at an exercise price of $.0075 per share to vest immediately
upon the closing of the sale of at least 80% of the telephones of
Davel
Communications; one million (1,000,000) Warrant Shares of the Company’s
common stock at an exercise price of $.0075 per share to vest immediately
upon elimination of the debt of Kite Broadband, LLC and Kite Networks,
Inc. from the Company’s balance sheet, including any guaranties related
thereto; and two million (2,000,000) Warrant Shares of the Company’s
common stock at an exercise price of $.0075 per share to vest immediately
upon completing an acquisition into a new line of business, which
acquisition shall have received Board approval . These warrants are
in
addition to the
warrant(s) to acquire fifteen million one hundred eighty two thousand
five
hundred (15,182,500) 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,
stock dividend or other distribution declared and paid by the Company
as
if Executive had already exercised all of his Warrant Shares, including
unvested Warrant Shares.
|
Section
3. Amendment
to Section 5.
Section 5 of
the
Original Agreement is hereby amended as follows:
5.
|
Consequences
of Termination
|
(a)
|
Without
Cause, due to a Change of Control or for Good Reason.
In the event of a termination of Executive’s employment during the
Employment Period by the Company other than for Cause pursuant to
Section
4(f) or by Executive 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 amended) 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
Executive (or his estate) and provide him with the
following:
|
(i)
|
Lump-Sum
Payment.
A lump-sum cash payment, payable ten (10) days after Executive’s
termination of employment, equal to the sum of the
following:
|
(A)
|
Salary.
The equivalent of the remaining term of this Agreement as amended
by this
Addendum (the “Severance Period”) of Executive’s then-current base salary;
plus
|
(B)
|
Earned
but Unpaid Amounts.
Any previously earned but unpaid salary through Executive’s final date of
employment with the Company, and any previously earned but unpaid
bonus
amounts prior to the date of Executive’s termination of employment.
Additionally, if, by June 30, 2008, at least 3 of the 5 New Direction
Goals have been met, then on June 30, 2008, an additional bonus equal
to
that which Executive would have been entitled if still employed shall
be
paid.
|
(C)
|
Equity.
All Warrant Shares vested at time of termination shall be retained
by
Executive. All unvested Warrant Shares shall immediately vest and
be
retained by Executive. Executive shall have the benefit of the full
ten
year option period to exercise such Warrant
Shares.
|
Section
4. Effect
of Addendum.
Except
as amended hereby, the Original Agreement shall continue in full force and
effect.
Section
5. Governing Law.
This
Amendment shall be governed by and construed under the laws of the State of
Delaware.
Section
6. Titles and Subtitles.
The
titles of the sections and subsections of this Addendum are for convenience
of
reference only and are not to be considered in construing this
Addendum.
Section
7. Counterparts.
This
Addendum may be executed in counterparts, each of which shall be deemed an
original, and all of which shall constitute one and the same
instrument.
IN
WITNESS WHEREOF, the parties have executed this Addendum to Employment Agreement
as of the date written above.
XXX X. XXXXXX | MOBILEPRO CORP. | |||
/s/
Xxx X. Xxxxxx
|
/s/ Xxxxxx Xxxxxx | |||
By: Xxxxxx Xxxxxx | ||||
Its: Board Member |
Exhibit
1
WARRANT