Exhibit 10.1
 
EMPLOYMENT AGREEMENT
 
This Employment Agreement (the “Agreement”), is dated as of August 13, 2010, and
effective as of date hereinafter provided,  by and between WidePoint
Corporation, a corporation organized under the laws of the State of Delaware
(the “Company”), and Steve L. Komar (“Executive”).
 
WITNESETH:
 
WHEREAS, the Company and Executive desire to provide for the employment of the
Executive as the Chief Executive Officer of the Company, to engage in such
activities and to render such services under the terms and conditions hereof;
 
WHEREAS, the Company has authorized and approved the execution of this
Agreement, and Executive desires to be employed by the Company under the terms
and conditions hereinafter provided; and
 
WHEREAS, this Agreement constitutes the entire understanding and agreement
between the Company and Executive regarding its subject matter and supersedes
all prior or contemporaneous negotiations and agreements, whether oral or
written, between them with respect to such subject matter.
 
NOW, THEREFORE, in consideration of the mutual covenants and undertakings herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto intending to be
legally bound do hereby agree as follows:
 
1. Effective Date, Appointment, Title and Duties. The effective date of this
Agreement is July 1, 2010 (“Effective Date”).  As of the Effective Date, the
Company employs Executive to serve as its Chief Executive Officer.  In such
capacity, Executive shall report to the Board of Directors of the Company, and
shall have such duties, powers and responsibilities as are customarily assigned
to a Chief Executive Officer of a publicly held corporation, but shall also be
responsible to the Board of Directors and to any committee thereof.  In
addition, Executive shall have such other duties and responsibilities as the
Board of Directors may reasonably assign him, with his consent, including
serving with the consent or at the request of the Board of Directors as an
officer or on the board of directors of affiliated corporations, provided that
such duties are commensurate with and customary for a senior executive officer
bearing Executive’s experience, qualifications, title and position.
 

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2. Term of Agreement. The term of the Executive’s employment under this
Agreement shall commence on the Effective Date and shall terminate after a
period of twenty four (24) months, on June 30, 2012, except that by mutual
consent of the Executive and the Company, the Agreement may be optionally
extended for an additional twelve (12) month period, through and including June
30, 2013.
 
3. Acceptance of Position. Executive accepts the position of Chief Executive
Officer, and agrees that during the term of this Agreement he will faithfully
perform his duties and, except as expressly approved by the Board of Directors,
will devote substantially all of his business time to the business and affairs
of the Company.  It is acknowledged and agreed that Executive may serve as an
officer and/or director of companies in which the Company owns voting or
non-voting stock.  In addition, it is acknowledged that Executive may, from time
to time, serve as a member of the Board of Directors of other for-profit
companies, but not without prior approval by the Board of Directors of the
Company.  In the event the Executive, prior to the execution of this Agreement,
is holding positions as a member of a Board of Directors of a public company,
prior approval by the Board of Directors of the Company will not be
required.  The Executive may, from time to time, serve as a member of the Board
of Directors of other non-profit associations, community associations, and not
for profit groups without the approval of the Board of Directors of the
Company.  Any compensation or remuneration which Executive receives in
consideration of his service on the Board of Directors of other companies shall
be the sole and exclusive property of Executive, and the Company shall have no
right or entitlement at any time to any such compensation or remuneration.
 
4. Salary and Benefits. During the term of this Agreement:
 
(a) The Company shall pay to Executive a base salary at an annual rate of not
less than (i) Two Hundred Five Thousand Dollars ($205,000) per annum for the
initial twelve (12) month period of this Agreement; (ii) Two Hundred Thirty
Thousand Dollars ($230,000) per annum for the second twelve (12) month period of
this Agreement; and (iii) Two Hundred Fifty Five Thousand Dollars ($255,000) per
annum for the optional third twelve (12) month period of this Agreement in the
event the parties jointly exercise that contractual option.  The foregoing
amounts are hereafter collectively referred to as the “Base Salary” and shall be
paid in approximately equal monthly installments at intervals based on any
reasonable Company policy which is consistently applied to all other executives
of the Company.  Any increase in the Base Salary above the aforementioned
amounts, once granted by the Company to the Executive, shall automatically amend
this Agreement to provide that thereafter Executive’s Base Salary shall not be
less than the annual amount to which such Base Salary has been increased.
 
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(b) During the term hereof, Executive shall be eligible to participate in all
health, retirement, Company-paid insurance, sick leave, vacation, disability,
expense reimbursement and other benefit programs which the Company or its
subsidiaries makes available to any of its senior executives.
 
(c) Executive may be awarded an annual bonus (in cash or stock of the Company)
in the sole discretion of the Board of Directors.  Executive also shall be
eligible to participate in any Company incentive stock, option or bonus plan
offered by the Company to its senior executives, subject to the terms thereof
and at the sole discretion of the Board of Directors.
 
(d) The Company will provide Executive with (i) a home office/automobile expense
allowance of $500.00 per month to cover such expenses incurred in the pursuit of
Company business and; (ii) a phone allowance of $100.00 per month to cover such
expenses incurred in the pursuit of Company business.
 
5. Certain Terms Defined. For purposes of this Agreement:
 
(a) Executive shall be deemed to be “disabled” if a physical or mental condition
shall occur and persist which, in the written opinion of a licensed physician
selected by the Board of Directors in good faith, has rendered Executive unable
to perform the duties set forth in Section 1 hereof for a period of sixty (60)
days or more and, in the written opinion of such physician, the condition will
continue for an indefinite period of time, rendering Executive unable to return
to his duties.
 
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(b) A termination of Executive’s employment by the Company shall be deemed for
“Cause” if, and only if, it is based upon (i) conviction of a felony by a
federal or state court of competent jurisdiction; (ii) material disloyalty to
the Company such as embezzlement or misappropriation of corporate assets; or
(iii) engaging in unethical or illegal behavior which is of a public nature,
brings the Company into disrepute, and results in material damage to the
Company.  The Company shall have the right to suspend Executive with pay, for a
reasonable period to investigate allegations of conduct which, if proven, would
establish a right to terminate this Agreement for Cause, or to permit a felony
charge to be tried.  Immediately upon the conclusion of such temporary period,
unless Cause to terminate this Agreement has been established, Executive shall
be restored to all duties and responsibilities as if such suspension had never
occurred.
 
(c) A resignation by Executive shall not be deemed to be voluntary and shall be
deemed to be a resignation with “Good Reason” if it is based upon (i) a
diminution in Executive’s title, duties, or salary; (ii) a material reduction in
benefits; (iii) a direction by the Board of Directors that Executive report to
any person or group other than the Board of Directors, or (iv) a geographic
relocation of the Company’s primary business operations outside of the
Washington Metropolitan Area (with the Washington Metropolitan Area being deemed
to not include the Winchester, VA-WV Metropolitan Statistical Area and/or the
Culpepper, VA Micropolitan area).
 
(d) “Affiliate” means with respect to any Person, a Person who, directly or
indirectly, through one or more intermediaries, controls, is controlled by or is
under common control, with the Person specified.
 
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(e) “Base Salary” means, as of any date of termination of employment, the
highest base salary of Executive in the then current fiscal year or in any of
the last four fiscal years immediately preceding such date of termination of
employment.
 
(f) “Beneficial Owner” shall have the meaning given to such term in Rule 13d-3
under the Exchange Act.
 
(g) A “Change in Control” occurs if:
 
(i) Any Person or related group of Persons (other than Executive and his Related
Persons, the Company or a Person that directly or indirectly controls, is
controlled by, or is under common control with, the Company) is or becomes the
Beneficial Owner, directly or indirectly, of securities of the Company
representing 50% or more of the combined voting power of the Company’s then
outstanding securities;
 
(ii) The stockholders of the Company approve a merger or consolidation of the
Company with any other corporation (or other entity), other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 50% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation; provided, however, that a merger or consolidation
effected to implement a recapitalization of the Company (or similar transaction)
in which no Person acquires 33 1/3% or more of the combined voting power of the
Company’s then outstanding securities shall not constitute a Change in Control;
 
(iii) The stockholders of the Company approve a plan of complete liquidation of
the Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company’s assets; or
 
(iv) A majority of the members of the Board of Directors of the Company cease to
be Continuing Directors;
 
(h) “Code” means the Internal Revenue Code of 1986, as amended.
 
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(i) “Continuing Directors” means, as of any date of determination, any member of
the Board of Directors who (i) was a member of such Board of Directors on the
date of this Agreement or (ii) was nominated for election or elected to such
Board of Directors with the approval of a majority of the Continuing Directors
who were members of such Board of Directors at the time of such nomination or
election.
 
(j) “Exchange Act” means the Exchange Act of 1934, as amended.
 
(k) “Person” means any individual, control group as defined in the Exchange Act,
corporation, partnership, limited liability company, trust, association or other
entity.
 
(l) “Related Person” means any immediate family member (spouse, partner, parent,
sibling or child, whether by birth or adoption) of the Executive and any trust,
estate or foundation, the beneficiary of which is the Executive and/or an
immediate family member of the Executive.
 
6. Certain Benefits Upon Termination. Executive’s employment shall be terminated
upon the earlier of (i) the voluntary resignation of Executive with or without
Good Reason; (ii) Executive’s death or permanent disability; or (iii) upon the
termination of Executive’s employment by the Company for any reason at any
time.  In the event of such termination, the provisions of Section 6(a) shall
apply, and in the event of a Change of Control, the provisions of Section 6(b)
shall apply.
 
(a) If Executive’s employment by the Company terminates for any reason other
than as a result of a termination for Cause, or a voluntary resignation by
Executive without a Good Reason, then the Company shall pay Executive a lump sum
severance payment in cash equal to the greater of (A) the amount equal to twelve
(12) months of the Executive’s Base Salary at the time of such termination, or
(B) the amount equal to the Executive’s Base Salary for the remainder of the
term as if this Agreement had not been terminated; provided that if employment
terminates by reason of Executive’s death or disability, then Executive (or
Executive’s estate, if applicable) shall receive a one time payment equal to the
amount of Base Salary owed for the remainder of the term as if this Agreement
had not been terminated.
 
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(b) If the Executive’s employment is terminated by the Company for any reason
within twenty four (24) months of a Change in Control of the Company other than
as a result of a termination for Cause, or a voluntary resignation by Executive
without a Good Reason,  then the Company shall pay Executive a one time
severance payment in cash equal to the greater of (A) the amount equal to
eighteen (18) months Base Salary, or (B) the amount equal to the Executive’s
Base Salary for the remainder of the term as if this Agreement had not been
terminated; provided that if employment terminates by reason of Executive’s
death or disability, then Executive (or Executive’s estate, if applicable) shall
receive a one time payment equal to the amount of Base Salary owed for the
remainder of the term as if this Agreement had not been terminated.  If the
Executive is paid under this Section 6(b), then the Executive shall not receive
payments under Section 6(a).
 
(c) If Executive’s employment by the Company terminates for any reason, except
for the Company’s termination of Executive’s employment for Cause or a voluntary
resignation by Executive without a Good Reason, the Company shall offer to
Executive the opportunity to participate at Company expense in all medical and
dental plans provided by the Company to its executive officers to the extent
Executive elects for the remainder of the term of this Agreement.  To the extent
that the Company cannot provide, for a legal reason or any other matter,
Executive with the opportunity to participate in such medical and dental plans
(at Company expense) for the remainder of the term of this Agreement, then in
such event the Company shall pay to Executive in cash an amount equal to the
fair market value of the benefits to be provided pursuant to this Section 6(c).
 
(d) The Company shall make all payments pursuant to the foregoing subsections
(a) through (c) concurrently with the date of termination of Executive’s
employment or consummation of a Change in Control of the Company, as
applicable.  Any such termination payments payable hereunder shall be considered
as part-consideration for the non-compete covenant provided by Executive in
Section 7 below.
 
(e) The Company shall have no liability under this Section 6 if Executive’s
employment pursuant to this Agreement is terminated by the Company for Cause or
by Executive without a Good Reason.
 
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(f) Gross-Up.
 
(i) If it shall be determined that any payment, distribution or benefit received
or to be received by Executive from the Company (whether payable pursuant to the
terms of this Agreement or any other plan, arrangements or agreement with the
Company or an Affiliate (“Payments”)) would be subject to the excise tax imposed
by Section 4999 of the Code (the “Excise Tax”), then Executive shall be entitled
to receive an additional payment (the “Excise Tax Gross-Up Payment”) in an
amount such that the net amount retained by Executive, after the calculation and
deduction of any Excise Tax on the Payments and any federal, state and local
income taxes and Excise Tax on the Excise Tax Gross-Up Payment provided for in
this Section 6(f), shall be equal to the Payments.  In determining this amount,
the amount of the Excise Tax Gross-Up Payment attributable to federal income
taxes shall be reduced by the maximum reduction in federal income taxes that
could be obtained by the deduction of the portion of the Excise Tax Gross-Up
Payment attributable to state and local income taxes.  Finally, the Excise Tax
Gross-Up Payment shall be reduced by income or Excise Tax withholding payment
made by the Company or any Affiliate to any federal, state or local taxing
authority with respect to the Excise Tax Gross-Up Payment that was not deducted
from compensation payable to Executive.
 
(ii) All determinations required to be made under this Section 6(f), including
whether and when an Excise Tax Gross-Up Payment is required and the amount of
such Excise Tax Gross-Up Payment and the assumptions to be utilized in arriving
at such determination, except as specified in Section 6(f)(i) above, shall be
made by the Company’s independent auditors (the “Accounting Firm”), which shall
provide detailed supporting calculations both to the Company and
Executive.  Such determination of tax liability made by the Accounting Firm
shall be subject to review by Executive’s tax advisor and, if Executive’s tax
advisor does not agree with such determination reached by the Accounting Firm,
then the Accounting Firm and Executive’s tax advisor shall jointly designate a
nationally recognized public accounting firm, which shall make such
determination.  All reasonable fees and expenses of the accountants and tax
advisors retained by either Executive or the Company shall be borne by the
Company.  Any Excise Tax Gross-Up Payment, as determined pursuant to this
Section 6(f), shall be paid by the Company to Executive within five days after
the receipt of such final determination in writing.  Any determination by a
jointly designated public accounting firm shall be binding upon the Company and
Executive.
 
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(iii) As a result of the uncertainty in the application of Section 4999 of the
Code at the time of the initial determination thereunder, it is possible that
Excise Tax Gross-Up Payments will not have been made by the Company in an amount
that should have been made consistent with the calculations required to be made
hereunder (“Underpayment”).  In the event that Executive thereafter is required
to make a payment of any Excise Tax, any such Underpayment calculated in
accordance with and in the same manner as the Excise Tax Gross-Up Payment in
Section 6(f)(i) above shall be promptly paid by the Company to or for the
benefit of Executive.  In the event that the Excise Tax Gross-Up Payment exceeds
the amount subsequently determined to be due, such excess shall be repaid by the
Executive to the Company (together with interest at the rate provided in Section
1274(b)(2)(B) of the Code) within one hundred eighty (180) days from the date
that Executive receives written notice of the final determination of such excess
payment.
 
7. Non-competition. Executive agrees that at all times while he is employed by
the Company and for a period of twelve (12) months thereafter if Executive’s
employment is terminated by Executive with Good Reason or by the Company without
Cause (or if Executive’s employment is terminated under the provisions of
Section 6(b) of this Agreement or by the Executive without Good Reason or by the
Company for Cause, then Executive’s non-competition period shall be eighteen
(18) months from the date of termination), he will not, as a principal, agent,
employee, employer, consultant, stockholder, investor, director or co-partner of
any person, firm, corporation or business entity other than the Company, or in
any individual or representative capacity whatsoever, directly or indirectly,
without the express prior written consent of the Company:
 
(i) engage or participate in any business whose products or services are
directly competitive with that of the Company and which conducts or solicits
business, or transacts with suppliers or customers located within the United
States or Puerto Rico;
 
(ii) aid or counsel any other person, firm, corporation or business entity to do
any of the above;
 
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(iii) become employed by a firm, corporation, partnership or joint venture which
competes with the business of the Company within the United States or Puerto
Rico; or
 
(iv) approach, solicit business from, or otherwise do business or deal with any
customer of the Company in connection with any product or service competitive to
any provided by the Company.
 
For purposes of the definition of stockholder or investor used in this Section
7, the Executive may hold a non-control position as stockholder or investor in
the securities of publicly traded companies without the prior written consent of
the Company.
 
8. Indemnification. The Company shall indemnify Executive and hold him harmless
from and against all claims, losses, damages, expense or liabilities (including
expenses of defense and settlement) based upon or in any way arising from or
connected with his employment by the Company, to the maximum extent permitted by
law.  To the fullest extent permitted by law, the Company shall advance to
Executive all expenses necessary in connection with the defense of any action or
claim which is brought if indemnification cannot be determined to be available
prior to the conclusion of such action or the investigation of such claim.  The
Company shall investigate in good faith the availability and cost of directors’
and officers’ insurance and shall include Executive as an insured in any
directors’ and officers’ insurance policy it maintains.  The provisions of this
Section 8 shall survive any termination or expiration of this Agreement.
 
9. Attorney Fees and Costs. In the event that any action or proceeding is
brought to enforce the terms and provisions of this Agreement, the prevailing
party shall be entitled to recover reasonable attorney fees and costs.
 
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10. Notices. All notices and other communications provided to either party
hereto under this Agreement shall be in writing and delivered by certified or
registered mail, postage prepaid, or by national overnight delivery service
(such as Federal Express), to such party at its/his address set forth below
its/his signature hereto, or at such other address as may be designated by
either party in conformity with the provisions of this Section 10, with any such
notices being deemed given when actually received by the recipient.
 
11. Construction. In construing this Agreement, if any portion of this Agreement
shall be found to be invalid or unenforceable, the remaining terms and
provisions of this Agreement shall be given effect to the maximum extent
permitted without considering the void, invalid or unenforceable provisions.  In
construing this Agreement, the singular shall include the plural, the masculine
shall include the feminine and neuter genders as appropriate.  Without
limitation to the foregoing, nothing in this Agreement is intended to violate
the Sarbanes-Oxley Act of 2002, and to the extent that any provision of this
Agreement would constitute such a violation, such provision shall be modified to
the extent required by such Act, or, to the extent that such provision cannot be
so modified and is found to be invalid or unenforceable, the remaining terms and
provisions shall be given effect to the maximum extent permitted without
considering the void, invalid or unenforceable provision.
 
12. Headings. The section headings hereof have been inserted for convenience of
reference only and shall not be construed to affect the meaning, construction or
effect of this Agreement.
 
13. Governing Law. This Agreement, and any statements, conduct, claims, causes
of action, liabilities or other matters relating to or arising out of or in
connection with this Agreement, shall be governed by, and construed in
accordance with, the laws of the State of Delaware, without regard to choice of
law or conflict of law principles. The federal or state courts sitting in the
State of Maryland, County of Anne Arundel, shall have exclusive jurisdiction to
adjudicate any disputes arising out of or in connection with this Agreement and
the parties hereby waive any objection based with respect thereto.  Any rights
to trial by jury with respect to any claim, action or proceeding, directly or
indirectly, arising out of, or relating to, this Agreement are waived by the
parties.
 
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14. Entire Agreement. This Agreement constitutes the entire agreement and
supersedes all other prior agreements and undertakings, both written and oral,
among Executive and the Company, with respect to the subject matter hereof.
 
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IN WITNESS WHEREOF, this Agreement shall be effective as of the date specified
in the first paragraph of this Agreement.
 

   
WIDEPOINT CORPORATION:
         
Signed August 13, 2010
 
/s/ James T. McCubbin
     
Name: James T. McCubbin,
     
Title:  Chief Financial Officer
 

 
 

   
EXECUTIVE:
         
Signed August 13, 2010
 
/s/ Steve L. Komar
     
Name: Steve L. Komar
     
Title:  Chief Executive Officer
 

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