Exhibit 10.5
MANAGEMENT EMPLOYMENT AGREEMENT
This Agreement is made as of July 1, 2002, between WIDEPOINT CORPORATION, a
Delaware corporation (the "Company"), and James T. McCubbin ("Employee"). The
Company and Employee agree as follows:
1. Employment. The Company agrees to employ Employee in the respective
positions set forth herein and Employee accepts such employment by the Company
upon the terms and conditions set forth in this Agreement, for the period
beginning on the date of this Agreement and ending upon termination pursuant to
paragraph 4 (the "Employment Period"). This Agreement supercedes and replaces
all other employment agreements that have existed, or may presently exist,
between the Company and Employee. Employee understands and agrees that the
execution of this Agreement constitutes a complete and irrevocable waiver and
termination of any and all rights or obligations of the parties regarding any
prior employment agreements between the Company and the Employee.
2. Compensation and Benefits. In consideration for the valuable services
to be rendered by Employee on behalf of the Company and its subsidiaries, the
Company hereby agrees that during the period of July 1, 2002 through June 30,
2003, the Company will provide Employee with (1) a bi-monthly gross salary at
the annual rate of $119,000 per annum (the "Base Salary"), or as otherwise
agreed by the parties with the provision that the Employee's Base Salary may be
adjusted upward annually each year beginning in January 2003 based on an annual
performance salary review as determined in the reasonable discretion of the
Company; (2) a home office/automobile expense allowance of $500 per month to
cover such expenses incurred in the pursuit of Company business; (3)
reimbursement for additional actual business expenses consistent with the
Company's existing policies that have been incurred for the benefit of the
Company; (4) paid medical and other benefits consistent with the Company's
existing policies with respect to key executives of the Company, as such
policies may be amended from time to time in the future; and (5) performance
incentive bonuses as may be granted annually at the discretion of the
Compensation Committee of the Board of Directors. Employee shall also be
entitled to receive stock options from the Company's stock option plans. The
Company agrees that during the Employment Period, Employee shall not be required
to relocate from his current residence.
3. Services. During the Employment Period, Employee agrees to devote
Employee's best efforts and attention to the business affairs of the Company, as
its Chief Financial Officer or comparable position, as well as such other duties
consistent with such position as determined by the Board of Directors of the
Company (except for reasonable vacation periods subject to the reasonable
approval of the Board of Directors or reasonable periods of illness or other
incapacity). During the Employment Period, Employee agrees to render such other
services as the Board of Directors may reasonably request from time to time.
4. Termination.
(A) The Employment Period will continue from the date of this Agreement for
one (1) calendar year and for five (5) annually renewable additional calendar
years upon the mutual agreement and option of the parties to this Agreement,
unless terminated earlier by (a) Employee's death or permanent disability which
renders the Employee unable to perform Employee's duties hereunder (as
determined by the Company in its good faith judgment), (b) by Employee's
resignation upon the expiration of the Employment Period, provided that the
Employee gives at least ninety (90) days prior written notice to the Company,
(c) at the convenience of the Board of Directors of the Company by unanimous
consent (excluding the consent of Employee if Employee is also a director of the
Company at that time) with at least ninety (90) days notice to be provided by
the Company to the Employee prior to the expiration of the Employment Period,
(d) as a result of a change in control of more than 50% of the outstanding
shares of the Company, (e) as a result of a sale or other disposition of a
majority of the Company's base IT Staff Augmentation business, (f) as the result
of the insolvency of the Company, or (g) by the Company for Cause (as defined
below). This Agreement will automatically renew for the successive one (1) year
periods set forth in the first sentence of this Section 4(A) unless written
notice is provided by one party to the other at least ninety (90) days prior to
the termination of the then current term of this Agreement.
(B) In the event Employee is not in breach of this Agreement and the
Employment Period is terminated prior to the expiration of the then current
term, then in certain events as described below, termination payments may become
payable by the Company. In the event of the death or permanent disability of the
Employee, $50,000 shall be paid to the Employee or his estate and all granted
but unvested stock options shall be immediately vested and the period of
exercise extended for an additional two (2) years. In the event of the
Employee's resignation, no termination payments or accelerated vesting of stock
options shall occur. In the event of termination at the election of the Company,
then $125,000 will be due and payable by the Company to the Employee as a
severance payment, which payment will be paid in twelve (12) equal installment
payments of $10,416.66 each over the immediately subsequent 12 months following
such date of termination and all awarded but unvested stock options shall be
immediately vested and the period of exercise extended for the then remaining
term of the option as provided under the option agreement. In the event of a
termination occurring as a result of a change in control of more than 50% of the
outstanding shares of the Company, then $250,000 will be payable by the Company
to the Employee as a severance payment, which payment will be paid in one
lump-sum payment within thirty (30) days of the date of such termination and all
awarded but unvested stock options shall be immediately vested and the period of
exercise extended for the then remaining term of the option as provided under
the option agreement. In the event of termination as a result of a sale or other
disposition of a majority of the Company's base of IT Staff Augmentation
business, then $250,000 will be payable by the Company to the Employee as a
severance payment, which payment will be paid in one lump-sum payment within
thirty (30) days of the date of such termination and all awarded but unvested
stock options shall be immediately vested and the period of exercise extended
for the then remaining term of the option as provided under the option
agreement. In the event of a change of control of more than 50% of the
outstanding shares of the Company that allows for the continuance of
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employment under this agreement, than a $100,000 lump sum payment is immediately
due to the Employee, and any future payments under this agreement for
termination as a result of a change of control greater than 50% of the
outstanding shares of the Company or in the event of termination as a result of
a sale or other disposition of a majority of the Company's base of IT Staff
Augmentation business, shall result in the reduction of the $250,000 payment to
a $150,000. In the event of the insolvency of the Company while Employee is
employed by Company as Chief Financial Officer or similar position of control,
then all obligations under this Agreement will immediately terminate except that
the Company shall pay to the Employee a termination payment of $50,000 on such
date of termination of employment and no further compensation or other payments
beyond the insolvency date will be due or payable to the Employee by the
Company. In the event of a termination for Cause, no payments will be due or
payable by the Company to the Employee.
(C) For purpose of this paragraph 4, "Cause" shall mean (i) the repeated
failure or refusal of Employee to follow the lawful directives of the Company or
its designee (except due to sickness, injury or disabilities), (ii) gross
inattention to duty or any other willful, reckless or grossly negligent act (or
omission to act) by Employee, which, in the good faith judgment of the Company,
materially injures the Company, including the repeated failure to follow the
policies and procedures of the Company, (iii) a material breach of this
Agreement by Employee which is not cured by Employee within a 60 day period
following formal notification by the Company, or (iv) the commission by the
Employee of an act of financial dishonesty against the Company that results in
the conviction of a felony.
5. Notices. Any notice provided for in this Agreement shall be in writing
and shall be either personally delivered, sent by overnight courier (e.g.,
Federal Express) or mailed by first class certified mail, return receipt
requested, to the recipient at the address below indicated:
To the Company: Mr. Steve L. Komar
Chief Executive Officer
Widepoint Corporation
One Lincoln Centre
18W140 Butterfield Road
Suite 1100
Oakbrook Terrace, IL 60181
To Employee: James T. McCubbin
38 Maybaugh Lane
Annapolis, Maryland 21403
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement will be deemed to have been given when so delivered,
sent or mailed.
6. Miscellaneous. Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable law.
The parties
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agree that (i) the provisions of this Agreement shall be severable in the event
that any of the provisions hereof are for any reason whatsoever invalid, void or
otherwise unenforceable, (ii) such invalid, void or otherwise unenforceable
provisions shall be automatically replaced by other provisions which are as
similar as possible in terms to such invalid, void or otherwise unenforceable
provisions but are valid and enforceable and (iii) the remaining provisions
shall remain enforceable to the fullest extent permitted by law. This Agreement
embodies the complete agreement and understanding among the parties and
supersedes and preempts any prior understandings, agreements or representations
by or among the parties, written or oral, which may have related to the subject
matter hereof in any way. This Agreement may be executed on separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement. This Agreement is intended to
bind and inure to the benefit of and be enforceable by Employee, the Company and
their respective successors and assigns. Employee may not assign Employee's
rights or delegate Employee's obligations hereunder without the prior written
consent of the Company. The Company may not assign its respective rights and
delegate its duties hereunder without the consent of Employee to any subsidiary
or affiliate of the Company or any person or entity acquiring voting control of
the Company. All questions concerning the construction, validity and
interpretation of the Agreement will be governed by the internal law, and not
the law of conflicts, of the State of Maryland. All parties hereby consent to
subject matter jurisdiction, personal jurisdiction and venue in the appropriate
state court located in Maryland for disputes under this Agreement. Any provision
of this Agreement may be amended or waived only with the prior written consent
of both the Company and Employee.
[signatures appear on the following page]
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IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first above written.
EMPLOYEE:
/s/ James T. McCubbin
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James T. McCubbin
Attest (Seal): WIDEPOINT CORPORATION
/s/ James R. Ritter By: /s/ Steve L. Komar
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James R. Ritter Steve L. Komar
Assistant Secretary C.E.O.
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