Exhibit 10.3

AMENDMENT NO. 1

TO

EMPLOYMENT AGREEMENT

This AMENDMENT NO. 1 (“Amendment”) to that certain Employment Agreement, dated
July 7, 1999 (“Agreement”), by and between Aether Holdings Inc. (the “Company”),
as the assignee of Aether Systems, Inc. (f/k/a Aether Technologies
International. L.L.C.), and David Oros (“Executive” or “you”), is made on May 5,
2006 (the “Effective Date”).

WHEREAS, the Company and the Executive desire to amend the Agreement in certain
respects, in light of changes to the Company’s business that have occurred since
the Agreement was originally entered into; and

WHEREAS, the Compensation Committee of the Company’s Board of Directors has
reviewed and approved this Amendment and the changes to the Agreement that it
will effect.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the undersigned agree as follows:

Section 1.               Amendments.

A.            The section of the Agreement entitled “Employment and Duties”
shall be amended to add the following additional paragraph after the current
paragraph:

If, subsequent to the occurrence of a Trigger Event (as defined in that certain
Restricted Stock Agreement by and between you and the Company, dated May 5,
2006), the Board of Directors of the Company (the “Board”) determines that
Executive shall no longer serve as Chief Executive Officer, the Board shall give
Executive notice that he shall, from the date on which he ceases to hold such
position, continue as an employee of the Company, having such title as shall be
agreed by the Executive and the Board, and providing such services and having
such responsibilities as shall be determined by the Board; provided, that in
such position the Executive shall not be required to devote more than 250 hours
per year to the business of the Company. The date on which the Executive ceases
to serve as Chief Executive Officer and commences the role contemplated by the
foregoing sentence shall be the “Transition Date.”

B.            The section of the Agreement entitled “Term of Employment” shall
be amended to add the following additional paragraph after the current
paragraph:

Notwithstanding anything herein to the contrary, if the Transition Date shall
occur, the Term shall be automatically extended without any further action of
either party so that it shall end on the third anniversary of the Transition
Date.

--------------------------------------------------------------------------------

 

C.            The Agreement shall be amended to add the following new section
immediately following the section entitled “Vacation”:

Arrangements From and After the Transition Date

 

From and after the Transition Date, the Company shall pay you a Salary of
$200,000 annually. You shall remain entitled to receive benefits in accordance
with the section entitled “Employee Benefits,” subject to your eligibility under
the terms and conditions of applicable plans and programs. The balance of the
compensation, benefits and perquisites set forth in this “COMPENSATION” section
shall cease to be applicable from and after the Transition Date.

 

D.            The sections the Agreement entitled “Payments on Termination - By
the Company Without Cause,” “Payments on Termination - Upon Death,” and
“Payments on Termination - By the Company Because of Disability” shall be
deleted in their entirety, and the following shall be added:

By the Company Without Cause, Upon Death, and By the Company Because of
Disability

 

If, during the Term, the Company terminates your employment without Cause or
because of your Disability, or if your employment terminates because of your
death, the Company will (i) pay the then current premium cost payable by the
Company for you to receive any group health or medical benefit you were
receiving on the date of your termination for a period equal to three (3) years
from the date of your termination, minus the number of complete months, if any,
that such termination occurs after the Transition Date, and (y) pay you
severance in an amount equal to the Termination Payment (as such term is defined
below). The Termination Payment shall be paid to you in a lump sum on the date
that is the first regular payroll date (based on the Company’s current payroll
practices in effect as of the Effective Date) that is subsequent to seven
(7) months after the date of termination (but in any event in accordance with
the terms of Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”)). Unless the Company, determines, in good faith, that any payments
described in this paragraph would not violate the provisions of
Section 409A(a)(2)(B) of the Code and the Treasury Regulations thereunder
(prohibiting certain distributions to “key employees” before six (6) months
after the date of separation from service), then such payments shall not be made
during such six (6) month period, but rather the cumulative amount of such
payments otherwise due and not paid during such six (6) month period shall be
made on the first regular payroll date (based on the Company’s current payroll
practices in effect as of the Effective Date) that is subsequent to seven
(7) months after the date of termination, and the remainder of such payments (if
any) shall be made as set forth in this paragraph. The term “Termination
Payment” shall mean $600,000, minus the aggregate amount of Salary that the
Company has paid to you (if any) from and after the Transition Date through the
date of termination of the Term.

 

E.             The Agreement shall be amended to add the following new section
immediately following the section entitled “No Solicitation”:

--------------------------------------------------------------------------------

 

No Competition

 

While the Company employs you and to the end of the Restricted Period, you agree
that you will not, directly or indirectly, be employed by, lend money to, or
engage in an Competing Business within the Market Area. That prohibition
includes, but is not limited to, acting, either singly or jointly or as agent
for, or as an employee of or consultant to, any one or more persons, firms,
entities, or corporations directly or indirectly (as a director, independent
contractor, representative, consultant, member or otherwise) that constitutes
such a Competing Business. You will not invest or hold equity or options in any
Competing Business, provided that you may own up to 3% of the outstanding
capital stock of any corporation that is actively public traded without
violating this covenant, so long as you have no involvement beyond passive
investing in such business. You will not use, incorporate or otherwise create
any business organization or domain name using any name confusingly similar to
“Aether Holdings Inc.” or any other name under which the Company does business.

If during the Restricted Period, you are offered and want to accept employment
with a business that engages in activities similar to the Company’s, you will
inform the Board in writing of the identity of the business, your proposed
duties with that business and the proposed starting date of that employment. You
will also inform that business of the terms of this No Compete covenant. The
Company will analyze the proposed employment and make a good faith determination
as to whether it would threaten the Company’s legitimate competitive interests.
If the Company determines that the proposed employment would not pose an
unacceptable threat to its interests, the Company will notify you that it does
not object to the employment

You acknowledge that, during the portion of the Restricted Period that follows
your employment, you may engage in any business activity or gainful employment
of any type and in any place except as described above. You acknowledge that you
will be able reasonably to earn a livelihood without violating the terms of this
Agreement.

You understand that the rights and obligations set forth in this “No Compete”
section will continue and will survive through the Restricted Period.

“Competing Business” shall mean any service or product of any person or
organization other than the Company and its successors and assigns or
subsidiaries (collectively, the “Company Group”) that competes with any service
or product of the Company Group during your employment or upon which or with
which you acquire knowledge while working for the Company or the Company Group.

“Market Area” consists of the United States, and you agree that the Company
provides goods and services both at its facilities and at the locations of its
customers or clients and that, by nature if its business, it operates globally.

 

--------------------------------------------------------------------------------

 

F.             The phrase “SECRECY, EXCLUSIVE PROPERTY, OR COPYRIGHTS,
DISCOVERIES, INVENTIONS AND PATENTS” in the sections of the Agreement entitled
“Maximum Limits” and “Injunctive Relief” shall be amended in each instance to
read “NO SOLICITATION, NON COMPETITION, SECRECY, EXCLUSIVE PROPERTY, OR
COPYRIGHTS, DISCOVERIES, INVENTIONS AND PATENTS”. Accordingly, the provisions of
the “Maximum Limits” and “Injunctive Relief” sections shall be applicable to the
“No Solicitation” and “No Compete” sections of the Agreement.

G.            The Agreement shall be amended to add the following new section
immediately following the section entitled “Withholding”:

Compliance with Sections 409A of the Code

 

This Agreement is intended to comply and be construed in accordance with
Section 409A of the Code and any rulings or regulations thereunder. In the event
that (a) the Company determines that there is an ambiguity with respect to any
provision of this Agreement that could cause such provision to be subject to
Section 409A of the Code, such ambiguity shall be interpreted and resolved in
the manner that the Company deems necessary to avoid the imposition of a tax
pursuant to Section 409A and (b) the Company reasonably determines that any
amendment to the Agreement is necessary or appropriate in order to avoid the
imposition of a tax pursuant to Section 409A of the Code, the Company shall have
the right to make such amendment, on a prospective or retroactive basis, in its
sole discretion, provided that in any event the Company shall act in good faith
to minimize the amount of any reduction in any benefits or compensation paid to
or received by you (including either the delay or acceleration in the payment
thereof) in order to prevent the imposition of Section 409A from applying to
such provision. Assuming the Company concludes that a waiver by the executive of
any right to receive a portion of the payments or benefits contemplated by the
Agreement would not result in the application of the penalty tax under
Section 409A to the Executive (or would permit payments to be made to the
Executive more quickly without imposition of any such tax), if the Executive has
advised the Company that it desires to waive such right, the Company shall in
good faith work with the Executive to implement a waiver in form and substance
acceptable to the parties.

 

Section 2.               Effect of Amendment. Except as set forth in Section 1
of this Amendment, the provisions of the Agreement shall not be amended or
altered by this Amendment and shall continue in full force and effect.

--------------------------------------------------------------------------------

 

Section 3.               Miscellaneous. This Amendment shall be governed by the
internal laws of the State of Maryland. This Amendment may be executed in one or
more counterparts, each of which when executed and delivered shall be deemed to
be an original and all counterparts taken together shall constitute one and the
same instrument. This Amendment and the Agreement (as amended hereby) constitute
the entire understanding of the parties hereto with respect to the subject
matter hereof, and any and all prior agreements and understandings between the
parties regarding the subject matter hereof, whether written or oral, except for
the Agreement (as amended hereby), are superceded by this Amendment. Any
provision of this Amendment which is invalid or unenforceable in any
jurisdiction shall be ineffective to the extent of such invalidity or
unenforceability without invalidating or rendering unenforceable the remaining
provisions hereof, and any invalidity or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction.

End of Page.

Signature Page Follows

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, this Amendment has been duly executed and delivered by the
undersigned parties on the Effective Date.

 

COMPANY:

 

 

 

 

 

AETHER HOLDINGS INC.

 

 

 

 

 

/s/ David Reymann

 

 

David Reymann, Chief Financial Officer

 

 

 

 

 

 

 

 

EXECUTIVE:

 

 

 

 

 

 

 

 

/s/ David Oros

 

 

David Oros

 

--------------------------------------------------------------------------------