Document:

Exhibit 10.1

 

	 	 	 	 	 

	 	 	 
	Thomas E. Helfrich

Chief Human Resources Officer

Executive Vice President

	 	
 

127
Public Square

Cleveland, OH 44114-1306

August 9, 2005

	 	 	 	 	 
	 

	 	 
	 	Tel: 216 689-0220
	 

	 	 	 	Fax: 216 689-7827
	 

	 	 	 	thomas_helfrich@keybank.com

Personal and Confidential

Via Hand Delivery

Mr. Jack Kopnisky

156 Brandywine Drive

Hudson, Ohio 44236

Dear Jack:

This letter agreement (the “Letter Agreement”) confirms the discussions you have had with Tom
Helfrich and others concerning your separation from KeyCorp (“KeyCorp”), KeyBank National
Association (“KeyBank”), and their affiliates (collectively “Key”). The salary and benefits to be
paid to you hereunder are in lieu of all rights and interests you may have relating to your
employment and the termination thereof.

	1.	 	Effective on August 12, 2005, and by operation of this Letter Agreement without any further
act on your part, you voluntarily resign from your employment with KeyCorp and all officer and
other positions you hold at Key. As a former employee you are not entitled to any
employee benefits, including, without limitation, continued participation in your pension and
401(k) plans, after your termination date set forth in this paragraph 1, except for the
employee rate on your Medical and Dental Plan (as applicable) as specified in paragraph 2
hereof.

	2.	 	In consideration of the non-competition and confidentiality covenants in paragraph 3 and 4
hereof, and as separation pay under this Letter Agreement, you will receive in the aggregate,
fifteen (15) months of base salary, less applicable withholding, payable in equal bi-weekly
installments under Key’s payroll system, for the period of on or about August 13, 2005 through
on or about March 10, 2006. In the case of your new employment outside of Key prior to March
10, 2006, Medical and Dental Plan participation at the employee premium rate will cease, and,
if elected, your continued coverage will be at the COBRA Rate for the balance of eighteen (18)
months beginning as of August 13, 2005. You will receive COBRA election information from
North American Benefits Network at or about the time of your termination of employment. You
hereby agree to advise Tom Helfrich or the Chief Human Resources Officer of KeyCorp, in
writing, of any new employment opportunity outside of Key at least two (2) weeks prior to your
commencement of such new employment. For purposes of this paragraph, other employment outside of Key shall not include

 

 

Jack Kopnisky

August 9, 2005

Page 2

	 	 	consulting assignments on your own behalf (i.e., as an individual or
for a company of which you are the principal owner, but not including consulting assignments
for an established consulting firm) as long as such consulting assignments do not provide you
with any employer-provided benefits, including, without limitation, a pension, 401(k), or
other retirement plan or stock options as a result of any such assignment. For purposes of
this Letter Agreement, Key’s determination that you have secured employment outside of Key
shall be final and conclusive. Notwithstanding anything to the contrary in this Letter
Agreement, KeyCorp’s obligations to pay you separation pay and other payments and benefits
under this Letter Agreement shall cease and you shall forfeit all rights thereto upon the
occurrence of any material breach by you of any of your obligations under this Letter
Agreement or that you otherwise have to Key during or following your employment, including,
without limitation, (i) your obligation to cooperate with Key in connection with any
reasonable review of your previous assignments and
responsibilities and (ii) your obligations regarding preservation of Key’s trade secrets,
non-public information, and intellectual property, non-contact and non-hiring, respectively,
of Key’s customers and employees, and the restrictive covenants set forth in paragraphs 3, 4
and 5 hereof.

	3.	 	You agree that you shall not at any time, directly or indirectly, without written
authorization from Key, make use of or disclose to any person or entity any confidential
business-related, proprietary, or secret information, confidential knowledge, trade secrets,
or other confidential data not in the public domain related to the business, products,
services, employees, or practices of Key that you have acquired during your employment with
Key, whether prepared by you or another. You further agree that the confidential character
and proprietary nature of any of the foregoing information does not become any less
confidential or proprietary to Key because you may commit some of the information to your
memory or because you may maintain some of this information outside of Key’s offices. You
further agree to promptly return to Key all I.D. Cards, company credit cards, computers,
BlackBerry, files, disks, workpapers, customer, vendor, and employee records, and any other
property belonging to Key that is in your possession or control as of your termination date.

	4.	 	(a) From the date hereof through November 12, 2006, you will not, directly or indirectly,
engage in any Competitive Activity, as defined in this subparagraph (a), in the State of Ohio,
except on behalf of Key, without the written consent of Key, which consent Key may grant or
withhold in its absolute discretion. As used herein, “Competitive Activity” means (i)
commencing or engaging in any business or business activity for a Financial Services Company
as defined below; (ii) serving as a director, advisory director, officer, member, partner, or
employee of a Financial Services Company as defined below; or (iii) serving as a consultant or
advisor, or otherwise rendering services of a consultative or advisory nature to a Financial
Services Company as defined below. As used herein, “Financial Services Company” means a bank,
bank holding company, financial holding

 

 

Jack Kopnisky

August 9, 2005

Page 3

	 	 	company, trust company, savings and loan association,
building and loan association, credit union, leasing company, real estate company, investment
company, insurance company or agency, investment banking company, investment advisor company,
securities or brokerage company, or any other similar financial services companies; provided,
however, that this restriction on Competitive Activity shall not prevent you from
serving as a director or trustee of a non-profit corporation that is not affiliated with a
Financial Services Company.

	 	 	(b)  In the event a court of competent jurisdiction determines that any of the limitations
contained in subparagraph (a) above are excessive because of duration or scope, the
provisions thereof shall not be void but, with respect to such limitations on duration or
scope held to be excessive, they shall be modified to incorporate the maximum limitations
such court will permit, not exceeding the limitations contained therein. In the event you
engage in any activity in violation of subparagraph (a) above, you agree that Key shall be
entitled to injunctive, equitable, and/or other relief. If Key commences an action to
enforce any of such provisions against you, Key and you agree that the prevailing party in
any such action shall be entitled to its or his reasonable attorneys’ fees.

	5.	 	You hereby acknowledge the enforceability of the restrictions set forth in the (i) Acceptance
of Grant Agreement in the KeyCorp Award of Restricted Stock and Cash Performance Shares dated
February 19, 2004, and signed by you on May 17, 2004 (the “2004 Restricted Stock Grant”) and
the (ii) Acceptance of Restricted Stock Award in the KeyCorp Award of Restricted Stock dated
January 16, 2003, and signed by you on February 6, 2003 (the “2003 Restricted Stock Grant”),
copies of which are in Attachments A and B hereof.

	6.	 	As of August 12, 2005, you shall forfeit all right, title, and interest you may have in an
Agreement, dated September 16, 2004, by and between you and KeyCorp respecting a Change of
Control of KeyCorp (the “COC Agreement”), rendering the COC Agreement terminated and null and
void. You further acknowledge that all previous agreements, between you and KeyCorp
or its predecessors, if applicable, respecting a Change of Control of KeyCorp or its
predecessors prior to the COC Agreement are, as of the date hereof, terminated and null and
void.
	 
	7.	 	As incentive compensation for the period January 1, 2005 — August 12, 2005, you will be
awarded one-half (1/2) of your target award under the KeyCorp Annual Incentive Plan (the “STIC
Plan”), payable on or about March 10, 2006. Thereafter, you will receive no further award
under the STIC Plan.

	8.	 	For purposes of the KeyCorp Automatic Deferral Plan (“ADP”) only, Key will deem your
termination of employment as a “Termination Under Limited Circumstances” under ADP, thereby
vesting you in all Participant Deferrals and Corporate Contributions credited to your Plan
Account with all earnings, gains, and losses thereon as of your date of termination. Any
amount in your ADP account that is subject to a holdback period under Section 409A of the
Internal

 

 

Jack Kopnisky

August 9, 2005

Page 4

	 	 	Revenue Code (see paragraph 13 hereof) will be distributed to you under Key’s normal
ADP distribution schedule in April 2006, April 2007, and April 2008.

	9.	 	In respect of the Time Lapse Restricted Shares of your 2003 Restricted Stock Grant, Key will
pay to you on or about August 12, 2005 the value of such Time Lapse Restricted Shares based on
an average of the high and low prices for KeyCorp stock on July 29, 2005, less applicable
withholding. All your restricted stock grants, including your 2003 Restricted Stock Grant,
the Performance Accelerated Restricted Shares, and your entire 2004 Restricted Stock Grant
will not vest and, therefore, are hereby forfeited.
	 
	10.	 	You may exercise your vested and exercisable stock options in conformity with the plans under
which they were issued; note that for purposes of such plans your termination date is August
12, 2005. A listing of your options that will be vested as of July 31, 2005 has been provided
to you previously. You will have six (6) months from your termination date to exercise your
vested and exercisable stock options. You will not be granted any stock options or restricted
stock in 2005.
	 
	11.	 	For your unvested balances under Key’s pension plans, Key agrees to pay you the value of such
unvested amounts as of your termination date, less applicable withholding, within 30 days of
your date of termination. You will be vested in the KeyCorp Deferred Compensation Plan, with
the lump sum component paid and the 60 quarterly installments commencing in October 2005.
Further, on your termination date, you will be vested in the KeyCorp 401(k) Savings Plan,
Excess 401(k) Savings Plan and Second Excess 401(k) Savings Plan. Any amounts under those
plans that are subject to a holdback period under Section 409A of the Internal Revenue Code
(see paragraph 13 hereof) will be distributed to you under applicable Plan requirements in or
about mid-February 2006.
	 
	12.	 	You will be eligible to receive executive outplacement services from a KeyCorp preferred
provider, at Key’s expense, for up to six (6) months. For particulars, please contact Tom
Helfrich.
	 
	13.	 	The compensation and benefits provided to you hereunder reflect Key’s good faith compliance
with the recently enacted Section 409A of the Internal Revenue Code (the “Code”) and IRS
Notice 2005-1. To the extent applicable, this Letter Agreement is intended to comply with the
provisions of Section 409A of the Code. Accordingly, this Letter Agreement shall be
administered in a manner consistent with this intent, and any provision that would cause the
Letter Agreement to fail to satisfy Section 409A of the Code shall have no force and effect
until amended to comply with Section 409A of the Code (which amendment may be retroactive to
the extent permitted by Section 409A of the Code and may be made by Key without your
consent). In particular, to the extent that you become entitled to receive payment subject to
Section 409A upon an event that does not constitute a permitted distribution event under

 

 

Jack Kopnisky

August 9, 2005

Page 5

	 	 	Section 409A(a)(2) of the Code, then notwithstanding anything to the contrary in this Letter
Agreement, payment will be made to you on the earlier of (i) your “separation from service”
with Key (determined in accordance with Section 409A); provided, however, that if you are a
“specified employee” (within
the meaning of Section 409A), your date of payment shall be made on the date which is 6
months after the date of your separation from service with Key or (ii) your death.

	14.	 	For the tax year 2005, Key will reimburse you for your income tax preparation services upon
the same basis as is available to similar Key executives at that time.
	 
	15.	 	In consideration of KeyCorp entering into this Letter Agreement and providing the payments
and benefits enumerated above, and except for (i) the arrangements specified herein and (ii)
any insurance or indemnification rights you possess, you, for yourself and your heirs, legal
representatives, and assigns, release, acquit, and forever discharge KeyCorp and its
affiliates and subsidiaries and their former and current representatives, employees, officers,
directors, predecessors-in-interest, successors, and assigns, jointly and severally, from any
and all liabilities, attorneys’ fees, obligations, duties, undertakings, agreements,
contracts, compensation, incentive compensation, separation pay, severance, employee benefits,
plans, policies, practices, claims, demands, damages, proceedings, actions, and causes of
action of every kind, nature, and character, which you have had, now have, or may have in the
future for events occurring to the date hereof, whether known or unknown, suspected or
unsuspected, that are by reason of, or in any manner whatsoever connected with, or growing out
of, your employment relationship with KeyCorp or its affiliates, subsidiaries, or
predecessors-in-interest, or the termination of those employment relationships, including,
without limitation, any alleged tortious, wrongful, unlawful, or improper act or conduct or
any discriminatory events, acts, patterns, or practices based on age (including the Age
Discrimination in Employment Act, 29 U.S.C. 621, et seq.), religion,
creed, sex, sexual orientation, national origin, ancestry, disability, handicap, veteran
status, marital status, race, or color, or the continuing or future effects thereof, or the
KeyCorp Separation Pay Plan, or any alleged violation or breach of any express, implied, or
implied-in-law contract, agreement, promise, or duty. Notwithstanding anything to the
contrary in this paragraph, nothing herein shall prohibit you from filing a charge or
complaint with or from participation in any investigation or proceeding of the U.S. Equal
Employment Opportunity Commission or the applicable State or Local Fair Employment Practices
Agency; however, you agree that you will not be entitled to any further monetary compensation
from Key in addition to that which is provided for under this Letter Agreement.
	 
	16.	 	This Letter Agreement represents the complete agreement between the parties hereto and
supersedes all prior or contemporaneous oral or written understandings on the subjects
contained herein. No one relies on any

 

 

Jack Kopnisky

August 9, 2005

Page 6

	 	 	representations, oral or written, on the effect,
enforceability, or meaning of this Letter Agreement, except as is specifically set forth in
this Letter Agreement. This Letter Agreement can only be modified or waived, in whole or in
part, by a writing signed by all of the parties hereto. A facsimile or electronic
communication of this Letter Agreement and a facsimile or electronic signature of a party
shall be treated in all respects as an original document and counterparts of this Letter
Agreement may be executed separately and taken together will be treated as one complete
original document. This Letter Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective heirs, legal representatives, affiliates, successors,
and assigns.

If the foregoing is acceptable, please sign and date this Letter Agreement and the OWPA Statement
which is incorporated herein.

We are sorry we had to make this letter so “legalistic” sounding. We truly wish you and your
family all the best and we thank you for your many contributions to Key.

	 	 	 	 	 
	 	Sincerely,

KEYCORP

 	 
	 	By:  	/s/ Thomas E. Helfrich
 	 
	 	 	Thomas E. Helfrich 	 
	 	 	Executive Vice President 	 
	 

AGREED TO this 9th day of August, 2005

     /s/ Jack Kopnisky     

Jack Kopnisky

 

 

Jack Kopnisky

August 9, 2005

Page 7

Statement

Your Rights Under the Older Workers Benefit Protection Act

This Letter Agreement contains a waiver of your rights and claims under the Age Discrimination in
Employment Act of 1967 (“ADEA”). Your waiver must be knowing and voluntary, which means, as a
minimum, that you understand that:

	a)	 	the waiver is part of an agreement between you and your employer which is written so that you
understand it;
	 
	b)	 	the waiver specifically refers to rights or claims under ADEA;

	c)	 	you do not waive any rights or claims that may arise after this Letter Agreement is executed
by you;

	d)	 	your waiver is in exchange for consideration that is more valuable than what you are already
entitled to;
	 
	e)	 	you are advised to consult with an attorney prior to executing this Letter Agreement;

	f)	 	you have at least 21 days after receipt of this Letter Agreement to decide whether to execute
it; and

	g)	 	you have 7 days after you execute this Letter Agreement to revoke it, and this Letter
Agreement will not be effective or enforceable until this 7-day period has expired.

You acknowledge that you have been given at least 21 days to review and consider the Letter
Agreement and, if you sign it before 21 days has passed, you do so of your own free choice. You
understand that any changes made to this document will not restart this 21-day period.

You further acknowledge that (1) you understand the above points, and therefore, your waiver is
knowing and voluntary and (2) if you receive any sum under this Letter Agreement and later revoke
it, that you must repay Key for all sums received by you under this Letter Agreement.

	 	 	 	 	 
	 	 	 
	Date  August 9, 2005 	/s/ Jack Kopnisky
 	 
	 	Jack KopniskyCERTIFICATE OF AMENDMENT
                 TO THE CERTIFICATE OF DESIGNATION, PREFERENCES
                       AND RIGHTS OF SERIES B CONVERTIBLE
                 PREFERRED STOCK OF CHARYS HOLDING COMPANY, INC.

     I,  Billy  V.  Ray, Jr., Chief Executive Officer of Charys Holding Company,
Inc.,  a  corporation  organized  and  existing  under  the laws of the State of
Delaware  (the  "Company"),  in accordance with the provisions of Section 151 of
the  Delaware  General  Corporation  Law,  DO  HEREBY  CERTIFY:

     FIRST:  That  at  a  meeting  of  the  Board of Directors of Charys Holding
Company,  Inc.  resolutions were duly adopted setting forth a proposed amendment
of  the  Certificate  of  Designation,  Preferences  and  Rights of the Series B
Preferred  Stock  of said corporation, declaring said amendment to be advisable,
and that, pursuant to the authority conferred upon the Board of Directors of the
Company  (the  "Board")  by the Certificate of Incorporation of the Company, the
Board  on  July  22,  2005,  adopted  the  following  resolution:

     RESOLVED, that pursuant to the authority granted to and vested in the Board
in  accordance  with  the  provisions of the Certificate of Incorporation of the
Company,  the  terms,  rights and preferences of the Series B Preferred Stock of
the  Company  ("Series  B  Convertible Preferred Stock,"), consisting of 400,000
shares  be,  and  they hereby are, amended in their entirety to read as follows:

     1.   Dividends.  Notwithstanding  anything  herein  to  the  contrary,  and
          ---------
except  as  may  otherwise  be  provided  in  Paragraph 7 hereof, the holders of
outstanding  shares  of  the  Series  B Convertible Preferred Stock shall not be
entitled  to  receive  any  dividends,  whether in form of cash, stock, or other
property.

     2.   Redemption  Rights.  Notwithstanding  anything herein to the contrary,
          ------------------
the  Company  shall  not  be  entitled  to  redeem  the whole or any part of the
outstanding  Series  B  Convertible  Preferred  Stock.

     3.   Liquidation  Rights.  Upon  the dissolution, liquidation or winding up
          -------------------
of  the  Company,  whether  voluntary  or  involuntary,  the holders of the then
outstanding  shares of Series B Convertible Preferred Stock shall be entitled to
receive  out  of  the  assets  of  the  Company the sum of $0.001 per share (the
"Liquidation  Rate")  before any payment or distribution shall be made on shares
of  the  common  stock  of  the Company, par value $0.001 per share (the "Common
Stock"),  or  any  other class of capital stock of the Company ranking junior to
the  Series  B  Convertible  Preferred  Stock.

          (a)  The  sale,  conveyance, exchange or transfer (for cash, shares of
stock,  securities  or  other  consideration)  of  all  or substantially all the
property and assets of the Company shall be deemed a dissolution, liquidation or
winding  up  of  the Company for purposes of this Paragraph 3, but the merger or
consolidation  of  the Company into or with any other corporation, or the merger
or consolidation of any other corporation into or with the Company, shall not be
deemed  a  dissolution, liquidation or winding up, voluntary or involuntary, for
purposes  of  this  Paragraph  3.

          (b)  After  the  payment  to  the  holders  of  shares of the Series B
Convertible  Preferred  Stock  of  the  full  preferential amounts fixed by this
Paragraph  3 for shares of the Series B Convertible Preferred Stock, the holders
of the Series B Convertible Preferred Stock as such shall have no right or claim
to  any  of  the  remaining  assets  of  the  Company.

          (c)  In the event the assets of the Company available for distribution
to  the  holders  of  the Series B Convertible Preferred Stock upon dissolution,
liquidation  or  winding  up of the Company shall be insufficient to pay in full
all  amounts to which such holders are entitled pursuant to this Paragraph 3, no
distribution  shall  be  made  on  account of any shares of a class or series of
capital stock of the Company ranking on a parity with the shares of the Series B
Convertible  Preferred  Stock,  if  any,  upon  such dissolution, liquidation or
winding up unless proportionate distributive amounts shall be paid on account of
the  shares  of the Series B Convertible Preferred Stock, ratably, in proportion
to the full distributive amounts for which holders of all such parity shares are
respectively  entitled  upon  such  dissolution,  liquidation  or  winding  up.

                                        1
<PAGE>
     4.   Conversion  of Series B Convertible Preferred Stock.  At any time, the
          ---------------------------------------------------
holder  of  shares  of  the  Series B Convertible Preferred Stock shall have the
right,  at such holder's option, to convert any number of shares of the Series B
Convertible  Preferred  Stock  into  shares  of the Common Stock.  Such right to
convert  shall  commence  as  of the date the shares of the Series B Convertible
Preferred  Stock are issued to such holder (the "Issue Date") and shall continue
thereafter for a period of 10 years, such period ending on the tenth anniversary
of  the  Issue  Date.  In  the event that the holder of the Series B Convertible
Preferred  Stock  elects  to  convert  such shares into Common Stock, the holder
shall deliver to the Company a Conversion Notice in the form of Attachment A and
shall have 60 days from the date of such notice in which to tender the shares of
Series  B  Convertible Preferred Stock being converted to the Company.  Any such
conversion  shall  be  upon  the  other  following  terms  and  conditions:

          (a)  Conversion  Rate.  Subject to adjustment as provided herein, each
               ----------------
share  of the Series B Convertible Preferred Stock shall be convertible into one
fully  paid and nonassessable share of the Common Stock (the "Conversion Rate").

          (b)  Adjustment  of Conversion Rate for Dilution and Other Events.  In
               ------------------------------------------------------------
order  to prevent dilution of the rights granted to the holders of shares of the
Series  B  Convertible  Preferred  Stock, the Conversion Rate will be subject to
adjustment  from  time  to  time  as  follows:

               (i)     Adjustment  of  Conversion  Rate  upon  Subdivision  or
                       -------------------------------------------------------
Combination  of the Common Stock.  If the Company at any time subdivides (by any
--------------------------------
stock  split,  stock  dividend,  recapitalization  or  otherwise) the issued and
outstanding  or  authorized  Common  Stock  into a greater number of shares, the
Conversion  Rate  in  effect  immediately  prior  to  such  subdivision  will be
proportionately increased.  If the Company at any time combines (by combination,
reverse  stock  split  or  otherwise)  the  issued and outstanding or authorized
Common  Stock  into  a  smaller  number of shares, the Conversion Rate in effect
immediately  prior  to  such  combination  will  be  proportionately  decreased.

               (ii)     Reorganization, Reclassification, Consolidation, Merger,
                        --------------------------------------------------------
or  Sale.  Any dividend or distribution payable or to be made in Common Stock or
--------
other  shares  of  stock of the Company or any recapitalization, reorganization,
reclassification,  consolidation,  merger, or other similar transaction which is
effected  in such a way that holders of the Common Stock are entitled to receive
(either  directly  or  upon  subsequent liquidation) stock, securities or assets
with  respect to or in exchange for the Common Stock is referred to herein as an
"Organic  Change."  Prior to the consummation of any Organic Change, the Company
will  make  appropriate  provision,  in  form  and substance satisfactory to the
holders  of  a  majority  of  the outstanding shares of the Series B Convertible
Preferred  Stock,  to  ensure that each of the holders of shares of the Series B
Convertible  Preferred  Stock  will  thereafter  have  the  right to acquire and
receive  in  lieu  of  or  in addition to, as the case may be, the shares of the
Common  Stock  immediately  theretofore  acquirable  and  receivable  upon  the
conversion of such holder's Series B Convertible Preferred Stock, such shares of
stock,  securities  or  assets as may be issued or payable with respect to or in
exchange  for  the  number of shares of the Common Stock immediately theretofore
acquirable  and  receivable  upon  the conversion of such holder's shares of the
Series  B  Convertible  Preferred Stock had such Organic Change not taken place.
In  any  such  case,  the  Company  will make appropriate provision, in form and
substance satisfactory to the holders of a majority of the outstanding shares of
the  Series  B Convertible Preferred Stock, with respect to such holders' rights
and interests to ensure that the provisions of this paragraph and paragraph 4(c)
below will thereafter be applicable to the Series B Convertible Preferred Stock.
The  Company  will not effect any such consolidation or  merger or other similar
transaction,  unless  prior  to  the  consummation  thereof the successor entity
resulting  from  such  consolidation  or merger or other similar transaction, if
other  than  the  Company, assumes, by written instrument, in form and substance
satisfactory  to  the  holders  of  a  majority of the outstanding shares of the
Series  B  Convertible Preferred Stock, the obligation to deliver to each holder
of  shares  of  the  Series  B Convertible Preferred Stock such shares of stock,
securities  or assets as, in accordance with the foregoing provisions, that such
holder  may  be  entitled  to  acquire.

               (iii)     Notices.  Immediately  upon  any  adjustment  of  the
                         -------
Conversion Rate, the Company will give written notice of such adjustment to each
holder  of  shares of the Series B Convertible Preferred Stock, setting forth in
reasonable  detail  and  certifying  the  calculation  of  such adjustment.  The
Company  will  give  written  notice  to  each  holder of shares of the Series B
Convertible  Preferred  Stock  at  least  20 days prior to the date on which the
Company  closes  its  books  or  takes  a record with respect to any dividend or
distribution  upon  the

                                        2
<PAGE>
Common  Stock,  or with respect to any pro rata subscription offer to holders of
the  Common  Stock.  The Company will also give written notice to each holder of
shares of the Series B Convertible Preferred Stock at least 20 days prior to the
date  on  which  any Organic Change, dissolution or liquidation will take place.

          (c)  Purchase  Rights.  If  at  any time the Company grants, issues or
               ----------------
sells any options, convertible securities or rights to purchase stock, warrants,
securities  or other property pro rata to the record holders of the Common Stock
(the  "Purchase Rights"), then each holder of shares of the Series B Convertible
Preferred  Stock  will be entitled to acquire, upon the terms applicable to such
Purchase  Rights,  the  aggregate  Purchase  Rights which such holder could have
acquired  if  such  holder  had  held  the  number of shares of the Common Stock
acquirable  upon  complete  conversion  of  the  holder's shares of the Series B
Convertible  Preferred  Stock  immediately  before the date on which a record is
taken  for  the  grant, issuance or sale of such Purchase Rights, or, if no such
record is taken, the date as of which the record holders of the Common Stock are
to  be  determined  for  the  grant,  issue  or  sale  of  such Purchase Rights.

          (d)  Mechanics  of  Conversion.  To  convert  shares  of  the Series B
               -------------------------
Convertible  Preferred  Stock  into  full shares of the Common Stock on any date
(the  "Conversion  Date"),  the  holder thereof shall (i) deliver or transmit by
facsimile  to  the Company, for receipt on or prior to 11:59 p.m., Eastern Time,
on  the  Conversion Date, a copy of a fully executed notice of conversion in the
form  attached  hereto  as  Attachment  A  (the  "Conversion  Notice"), and (ii)
                            -------------
surrender to a common carrier for delivery to the Company as soon as practicable
following  such  date,  the  certificates (each a "Preferred Stock Certificate")
representing  the  shares  of  the  Series  B  Convertible Preferred Stock being
converted,  or an indemnification undertaking with respect to such shares in the
case  of  the  loss,  theft  or destruction thereof, and the originally executed
Conversion  Notice.  Upon  receipt  by  the  Company  of  a  facsimile copy of a
Conversion  Notice,  the  Company  shall  immediately  send,  via  facsimile,  a
confirmation  of  receipt of such Conversion Notice to such holder.  Within five
business  days  of  the  Company's receipt of the originally executed Conversion
Notice  and the holder's Preferred Stock Certificate(s), the Company shall issue
and  surrender  to  a  common  carrier  for overnight delivery to the address as
specified in the Conversion Notice, a certificate, registered in the name of the
holder  or  its  designee, for the number of shares of the Common Stock to which
the  holder  is  entitled.

          (e)  Record  Holder.  The person or persons entitled to receive shares
               --------------
of  the  Common  Stock  issuable  upon  conversion  of  shares  of  the Series B
Convertible  Preferred  Stock  shall  be  treated for all purposes as the record
holder  or  holders  of  such shares of the Common Stock on the Conversion Date.

          (f)  Fractional  Shares.  The  Company  shall not be required to issue
               ------------------
any  fraction of a share of the Common Stock upon any conversion.  All shares of
the  Common Stock, including fractions thereof, issuable upon conversion of more
than  one  share of the Series B Convertible Preferred Stock shall be aggregated
for  purposes of determining whether the conversion would result in the issuance
of  a  fraction of a share of the Common Stock.  If, after such aggregation, the
issuance  would  result  in the issuance of a fraction of it share of the Common
Stock,  the  Company shall round such fraction of a share of the Common Stock up
or  down  to  the  nearest  whole  share.

          (g)  Reissuance of Certificates.  In the event of a conversion of less
               --------------------------
than  all  of the shares of the Series B Convertible Preferred Stock represented
by a particular Preferred Stock Certificate, the Company shall promptly cause to
be  issued  and  delivered  to the holder of such Series B Convertible Preferred
Stock  a  new  Series B Convertible Preferred Stock Certificate representing the
remaining  shares  of  the  Series  B Convertible Preferred Stock which were not
corrected.

     5.   Reservation  of  Shares.  The  Company  shall,  so  long as any of the
          -----------------------
shares  of the Series B Convertible Preferred Stock are outstanding, reserve and
keep  available  out  of its authorized and unissued shares of the Common Stock,
solely for the purpose of effecting the conversion of the shares of the Series B
Convertible  Preferred  Stock, the number of shares of the Common Stock as shall
from  time  to  time  be  sufficient  to  effect  the  conversion  of all of the
outstanding  shares  of  the  Series  B  Convertible  Preferred  Stock.

     6.   Seniority.  The  shares  of  the  Series B Convertible Preferred Stock
          ---------
shall  rank  superior  to  the  shares of the Company's Common Stock, and to the
shares  of all other series of the Company's preferred stock.  The rights of the
shares of the Common Stock and all other series of the Company's preferred stock
shall  be  subject  to

                                        3
<PAGE>
the  preferences  and  relative rights of the shares of the Series B Convertible
Preferred  Stock.  Without  the prior written consent of the holders of not less
than  two-thirds  (2/3)  of  the  outstanding shares of the Series B Convertible
Preferred  Stock,  the Company shall not hereafter authorize or issue additional
or  other  capital  stock  that  is of senior or equal rank to the shares of the
Series  B  Convertible  Preferred  Stock  in  respect  of  the preferences as to
distributions  and  payments upon the liquidation, dissolution and winding up of
the  Company  described  in  Paragraph  3  above.

     7.   Restriction  on  Dividends.  The  Company  shall  not declare or pay a
          --------------------------
dividend or other distribution with respect to the shares of the Common Stock or
any  other  series  of  the  Company's  preferred  stock  unless  the  Company
simultaneously  pays  or  distributes  to  each holder of shares of the Series B
Convertible  Preferred  Stock  an  equal  to  the  amount such holder would have
received  had  all of such holder's shares of the Series B Convertible Preferred
Stock  been converted to shares of the Common Stock on the business day prior to
the  record  date  for  any  such  dividend  or  distribution.

     8.   Vote  to Change the Terms of the Series B Convertible Preferred Stock.
          ---------------------------------------------------------------------
Without  the  prior  written  consent of the holders of not less than two-thirds
(2/3) of the outstanding shares of the Series B Convertible Preferred Stock, the
Company  shall not amend, alter, change or repeal in any way, whether by merger,
consolidation  or  otherwise,  any  of the powers, designations, preferences and
rights  of  the  Series  B  Convertible  Preferred  Stock.

     9.   Lost  or Stolen Certificates.  Upon receipt by the Company of evidence
          ----------------------------
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Preferred  Stock  Certificates  representing  shares of the Series B Convertible
Preferred  Stock,  and,  in  the  case  of  loss,  theft  or destruction, of any
indemnification  undertaking or bond, in the Company's discretion, by the holder
to  the  Company and, in the case of mutilation, upon surrender and cancellation
of the Preferred Stock certificate(s), the Company shall execute and deliver new
Series  B  Convertible  Preferred  Stock  certificate(s) of like tenor and date;
provided,  however,  the  Company  shall  not  be obligated to re-issue Series B
Convertible Preferred Stock certificates if the holder thereof contemporaneously
requests  the  Company  to  convert  such  shares  of  the  Series B Convertible
Preferred  Stock  into  the  Common  Stock.

     10.  Voting.  The holders of the Series B Convertible Preferred Stock shall
          ------
have no voting rights on any matter submitted to the stockholders of the Company
for  their vote, waiver, release or other action, or be considered in connection
with  the  establishment  of  a  quorum,  except  as  may otherwise be expressly
provided  herein  or  required by law or by the applicable stock exchange rules.

     The  Resolution  was duly adopted by all of the directors of the Company as
required  by  Section  151  of  the  Delaware  General  Corporation  Law.

     IN  WITNESS  WHEREOF,  the  undersigned  has  executed  this Certificate of
Designation,  Preferences  and  Rights on behalf of the Company this 22nd day of
July,  2005.

                                    CHARYS HOLDING COMPANY, INC.

                                    By /s/ Billy V. Ray, Jr.
                                      ------------------------------------------
                                      Billy V. Ray, Jr., Chief Executive Officer

                                        4
<PAGE>
                                  ATTACHMENT A
                          CHARYS HOLDING COMPANY, INC.
                                CONVERSION NOTICE

     In  accordance  with  and  pursuant to the provisions of the Certificate of
Designation  Establishing Series B Convertible Preferred Stock of Charys Holding
Company,  Inc.,  as amended, the undersigned hereby elects to convert the number
of  shares  of Series B Convertible Preferred Stock, par value $0.001 per share,
of  Charys  Holding Company, Inc. (the "Company") indicated below into shares of
the  common  stock,  par  value  $0.001  per  share (the "Common Stock"), of the
Company,  by tendering the stock certificate(s) representing the share(s) of the
Series  B  Convertible  Preferred  Stock  hereinafter  described  as of the date
specified  below.

     The  undersigned  acknowledges  that  the  securities  issuable  to  the
undersigned  upon  conversion  of  shares  of the Series B Convertible Preferred
Stock  may  not  be  sold, pledged, hypothecated or otherwise transferred unless
such securities are registered under the Securities Act of 1933, as amended, and
any  other  applicable securities law, or the Company has received an opinion of
counsel  satisfactory  to  it  that  registration  is not required.  A legend in
substantially  the  following  form  will be placed on any certificates or other
documents  evidencing  the  securities  to  be issued upon any conversion of the
shares  of  the  Series  B  Convertible  Preferred  Stock:

          THE  SECURITIES  REPRESENTED  BY THIS INSTRUMENT OR DOCUMENT
          HAVE  BEEN  ACQUIRED  FOR  INVESTMENT  AND  HAVE  NOT  BEEN
          REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
          THE  SECURITIES LAW OF ANY STATE. WITHOUT SUCH REGISTRATION,
          SUCH  SECURITIES  MAY  NOT BE SOLD, PLEDGED, HYPOTHECATED OR
          OTHERWISE TRANSFERRED EXCEPT UPON DELIVERY TO THE COMPANY OF
          AN  OPINION  OF  COUNSEL  SATISFACTORY  TO  THE COMPANY THAT
          REGISTRATION  IS  NOT  REQUIRED  FOR  SUCH  TRANSFER  OR THE
          SUBMISSION  TO  THE COMPANY OF SUCH OTHER EVIDENCE AS MAY BE
          SATISFACTORY  TO  THE  COMPANY  TO  THE EFFECT THAT ANY SUCH
          TRANSFER  SHALL NOT BE IN VIOLATION OF THE SECURITIES ACT OF
          1933,  AS  AMENDED,  THE SECURITIES LAW OF ANY STATE, OR ANY
          RULE  OR  REGULATION  PROMULGATED  THEREUNDER.

Date of Conversion:
                   ---------------------

Number of shares of the Series B Convertible Preferred Stock to be converted:

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

Stock  certificate  no(s).  of  the shares of the Series B Convertible Preferred
Stock to be converted:

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

Conversion Rate:
                ------------------------

Number of shares of the Common Stock to be issued:

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

Name in which shares of the Common Stock are to be issued:

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

-----------------------------------
Signature

-----------------------------------
Printed Name and Address

<PAGE>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00089-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00089-of-00352.parquet"}]]