EXECUTION COPY
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into by and between
W. ▇▇▇▇ ▇▇▇▇▇ (the "Executive") and Pinnacle Holdings, Inc., a Delaware
corporation (the "Company") on November 25, 2002.
WHEREAS, the Company desires to provide for the service and employment
of the Executive with the Company and the Executive wishes to perform services
for the Company, all in accordance with the terms and conditions provided
herein.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth, the Executive and the Company hereby agree as follows:
Section 1. EMPLOYMENT. The Company does hereby employ the Executive and
the Executive does hereby accept employment as Executive Vice President, Sales
and Marketing ("EVP") of the Company. The Executive shall have all the duties,
responsibilities and authority normally performed by an executive vice president
and shall render services consistent with such position on the terms set forth
herein and shall report to the Board of Directors of the Company (the "Board").
The Executive agrees to devote all of his working time and efforts to the
business and affairs of the Company and its subsidiaries, subject to periods of
vacation and sick leave, to which he is entitled, and shall not engage in
activities that substantially interfere with such performance.
Section 2. TERM OF AGREEMENT. The term of this Agreement (the "Term")
shall commence on December 2, 2002 (the "Commencement Date") and shall continue,
unless terminated pursuant to Section 5 below, through the first (lst)
anniversary of the Commencement Date. Thereafter on each anniversary of the
Commencement Date, this Agreement shall be automatically extended by an
additional year, unless the Executive or the Company shall provide to the other
a notice of nonrenewal prior to sixty (60) days before such anniversary of the
Commencement Date.
Section 3. LOCATION. In connection with the Executive's employment by
the Company, the Executive shall be based at the Company's offices located in
the Sarasota, Florida, except for required travel for the Company's business.
Section 4. COMPENSATION.
(a) BASE SALARY. Effective as of the Commencement Date, for
all services rendered by the Executive hereunder, the Company shall pay the
Executive a base salary ("Base Salary") at an initial rate of $200,000 per year,
payable on a bi-weekly basis, less all applicable holdings and deductions
required under applicable law.
(b) BONUS.
(i) ANNUAL BONUS. The Executive shall have the
opportunity to earn a bonus ("Annual Bonus") for each calendar year in
which the Executive is employed by the Company. The target Annual Bonus
shall be fifty percent (50%) of Base Salary with an opportunity to earn
up to one hundred percent (100%) of annual salary. Fifty percent (50%)
of the Annual Bonus shall be based on revenue generation objective, the
goals of which are to be determined by mutual agreement of the Company
and the Executive within thirty (30) days of the Commencement Date. The
remaining fifty percent (50%) will be based on general management and
operational goals to be determined by mutual agreement of the Company
and the Executive within thirty (30) days of the Commencement Date.
Notwithstanding the foregoing, $50,000 of the Annual Bonus shall be
guaranteed and payable by the Company to the Executive regardless of
whether any goals are attained.
(ii) SIGNING BONUS. The Company shall pay the Executive
an additional one-time signing bonus in the amount of $50,000 if the
Executive commences employment pursuant to the terms of this Agreement
on or prior to December 2, 2002. Such signing bonus shall be payable to
the Executive upon his commencement of employment on December 2, 2002,
provided, however, that in the event that the Executive's employment is
terminated at any time prior to December 2, 2003 for any reason other
than a termination by the Company for any reason other than Cause (as
defined below), then the Executive shall be obligated to repay to the
Company such $50,000 signing bonus.
(c) EQUITY PARTICIPATION. Executive shall be granted an
option to purchase that number of shares of common stock of the Company (the
"Shares") representing one percent (1%) of the total equity capitalization of
the Company as of the date hereof (the "Option") with one half of the Shares
underlying the Option having an Exercise Price per Share of $10 (the "$10
Shares") and one half of the Shares underlying the Option having an Exercise
Price of $20 (the "$20 Shares, and together with the $10 Shares, the "Option
Shares"). The Option shall become vested and exercisable over a three-year
period with one-third of the $10 Shares and one-third of the $20 Shares vesting
on the 1st anniversary of the Commencement Date and the remaining Shares
becoming vested ratably and equally with respect to the $10 Shares and the $20
Shares each month over the following twenty-four months. The Option shall be
governed by the terms of the option agreement to be entered into by and between
the Executive and the Company, a copy of which is attached as Annex A hereto. In
the event the Company consummates an underwritten public offering of Company
common stock, pursuant to an effective registration statement filed under the
Securities Act of 1933, as amended, at any time during the Executive's
employment with the Company, the Executive shall be entitled to have his Shares
treated the same as shares of Company common stock held by other senior
executive officers of the Company with respect to registration rights relating
to the Shares.
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(d) FRINGE BENEFITS. The Executive shall be entitled to
participate in each fringe, welfare and pension benefit and incentive program
adopted from time to time by the Company for the benefit of, and which generally
apply to, its senior executive officers from time to time, including medical and
dental plans, disability insurance, 401(k) plans or other retirement benefits
provided to executive employees.
Section 5. TERMINATION.
(a) DEATH. Should employment terminate because of the death
of the Executive, this Agreement shall terminate and the Company shall have no
further obligations to the Executive or his estate under this Agreement except
for the payment of any accrued and owing Base Salary and pro rata Annual Bonus.
(b) DISABILITY. If, during the Term, the Executive should
become Disabled (as hereinafter defined), the Company shall have the right to
terminate this Agreement and the Executive's employment with the Company and
thereafter the Company shall have no further obligations to the Executive or his
estate under this Agreement. For purposes hereof, Executive shall be considered
"Disabled" if: (i) the Executive is entitled to benefits under any long-term
disability income plan applicable to the Executive; or (ii) the Executive's
physical and/or mental condition is such that the Executive is unable, with
reasonable accommodation, to perform those duties the Executive would otherwise
be expected to continue to perform as an executive of the Company, and the
Executive's non-performance of such duties can reasonably be expected to
continue or does continue for not less than four (4) months. Upon termination
under this section, the Executive shall be entitled to COBRA continuation of
medical benefits at his expense and/or, to the extent permitted, conversion of
any life and disability insurance policies at his own expense.
(c) BY THE COMPANY FOR CAUSE. The Company may terminate the
Executive's employment and this Agreement for Cause (as defined below) at any
time upon written notice to Executive. In the event the Executive is terminated
for Cause, the Company shall pay the Executive his Base Salary through the date
of such notice and thereafter the Company's obligations under this Agreement
shall terminate. "Cause" shall mean: (i) the Executive's willful breach or
habitual neglect of the Executive's obligations under this Agreement; (ii) the
Executive's willful failure or refusal to comply with lawful directives of the
Company's Board of Directors; (iii) the Executive's conviction of a felony or
other crime involving moral turpitude; (iv) fraud or embezzlement involving
assets of the Company or other material misappropriation of the Company's assets
or funds; or (v) the Executive's breach of any of the representations,
warranties and covenants contained in this Agreement or a final order from a
court of competent jurisdiction precluding the Executive from performing his
duties hereunder pursuant to Section 7(b) of this Agreement.
(d) SEVERANCE. Upon termination of this Agreement by the
Company for any reason other than for Cause, (a "Termination"), then (i) the
Executive shall be entitled to receive payment of any accrued and owing Base
Salary for the applicable period, (ii) a lump sum payment equal to one year's
Base Salary at its then
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current rate and (iii) all outstanding Options, (a) if a Termination occurs
prior to the first (1st) anniversary of the Commencement Date, then all
outstanding Options shall be exercisable only to the extent such Options are
vested and exercisable on the date of Termination; and (b) a Termination occurs
at any time after the first (1st) anniversary of the Commencement Date, then
fifty percent (50%) of all outstanding options that remain unvested as of the
date of Termination shall become automatically vested and exercisable and may be
exercised pursuant to the terms of the Option Agreement governing such
outstanding options.
Section 6. CONFIDENTIALITY; NON-SOLICITATION.
(a) CONFIDENTIALITY. "Confidential Information" shall mean
non-public information about the Company and its parents, subsidiaries or
affiliates, and their respective clients and customers that is not disclosed by
the Company or its parents, subsidiaries or affiliates for financial reporting
purposes and that was learned by the Executive in the course of his employment
with the Company, including, without limitation, any proprietary knowledge,
trade secrets, data, formulae, information and client and customer lists and all
papers, resumes and records (including computer records) of the documents
containing such Confidential Information.
(i) The Executive acknowledges that in his employment
with the Company, he will occupy a position of trust and confidence.
The Executive shall not, except as may be required to perform his
duties hereunder or as required by applicable law, without limitation
in time or until such information shall have become public other than
by the Executive's unauthorized disclosure, disclose to others or use,
whether directly or indirectly, any Confidential Information.
(ii) The Executive acknowledges that all Confidential
Information is specialized, unique in nature and of great value to the
Company and its parents, subsidiaries or affiliates, and that such
Confidential Information gives the Company and its parents,
subsidiaries or affiliates a competitive advantage. The Executive
agrees to deliver or return to the Company, at the Company's request at
any time or upon termination or expiration of his employment or as soon
thereafter as possible, all documents, computer tapes and disks,
records, lists, data, drawings, prints, notes and written information
(and all copies thereof) furnished by or on behalf of or for the
benefit of the Company and its parents, subsidiaries or affiliates or
prepared by the Executive during the term of his employment by the
Company, but excluding documents relating to the Executive's own
compensation and benefits.
(b) NON-SOLICITATION OF CUSTOMERS AND SUPPLIERS. During the
Executive's employment with the Company and during the one (1) year period
commencing on the Date of Termination, the Executive shall not, directly or
indirectly, influence or attempt to influence customers or suppliers of the
Company or any of its parents, subsidiaries or affiliates to divert their
business to any business,
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individual, partner, firm, corporation or other entity that is then a direct
competitor of the Company or its parents, subsidiaries or affiliates (each such
competitor, a "Competitor of the Company").
(c) NON-SOLICITATION OF EMPLOYEES.
(i) The Executive recognizes that he will possess
confidential information about other employees of the Company and its
parents, subsidiaries or affiliates relating to their education,
experience, skills, abilities, compensation and benefits, and
interpersonal relationships with customers of the Company and its
subsidiaries or their affiliates.
(ii) The Executive recognizes that the information he
will possess about these other employees is not generally known, is of
substantial value to the Company and its subsidiaries in developing
their business and in securing and retaining customers, and will be
acquired by him because of his business position with the Company.
(iii) The Executive agrees that, during the Executive's
employment with the Company and during the one (1) year period
commencing on the Date of Termination he will not, directly or
indirectly, solicit or recruit any employee of the Company or its
parents, subsidiaries or affiliates for the purpose of being employed
by him or by any Competitor of the Company on whose behalf he is acting
as an agent, representative or employee and that he will not convey any
such confidential information or trade secrets about other employees of
the Company and its parents, subsidiaries or affiliates to any other
person.
(d) SURVIVAL OF PROVISIONS. The obligations contained in
this Section shall survive the termination or expiration of the Executive's
employment or this Agreement with the Company to the extent necessary for their
enforcement and, as applicable, shall be fully enforceable thereafter in
accordance with the terms of this Agreement. If it is determined by a court of
competent jurisdiction in any state that any restriction in this Section 6 is
excessive in duration or scope or is unreasonable or unenforceable under the
laws of the state, it is the intention of the Parties that such restriction may
be modified or amended by the court to render it enforceable to the maximum
extent permitted by the law of the state.
Section 7. NO VIOLATION OF THIRD-PARTY RIGHTS.
(a) The Executive hereby represents, warrants and covenants
to the Company that the Executive:
(i) is not a party to any agreements with third parties
that prevent him from fulfilling the terms of employment and the
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obligations of this Agreement or which would be breached as a result of
his execution of this Agreement; and
(ii) is in compliance with any and all valid obligations
which he may now have to prior employers or to others relating to
confidential information, inventions or discoveries which are the
property of those prior employers or others, as the case may be.
(b) If the Executive is in breach of any of the foregoing
representations, warranties and covenants or a court of competent jurisdiction
issues a final order (not including a temporary restraining order or other order
subject to interlocutory appeal) precluding the Executive from performing his
duties hereunder, the Company shall be entitled to terminate this Agreement for
Cause.
Section 8. RELOCATION EXPENSES. The Company shall reimburse Executive
for all reasonable expenses incurred as a result of relocating from Cary, North
Carolina to the Sarasota, Florida area, in an amount not to exceed Ten Thousand
dollars ($10,000).
Section 9. TEMPORARY HOUSING AND TRAVEL. The Company shall reimburse
Executive for all reasonable temporary living expenses incurred during the first
six (6) months of the Term of this Agreement and agrees to reimburse Executive
for expenses incurred while visiting his family on alternating weekends during
such six (6) months. Upon expiration of the six (6) month period, this policy
may be extended upon mutual agreement of the Company and the Executive.
Section 10. WITHHOLDING. The Company shall make such deductions and
withhold such amounts from each payment made to the Executive hereunder as may
be required from time to time by law, governmental regulation or order.
Section 11. OTC. All notices and offer communications under this
Agreement shall be in writing and shall be given by hand, facsimile or
first-class mail, certified or registered with return receipt requested, and
shall be deemed to have been duly given upon delivery or three (3) days after
mailing or twenty-four (24) hours after transmission of a facsimile to the
respective persons named below:
(a) If to the Company:
Pinnacle Holdings, Inc.
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Facsimile; (▇▇▇) ▇▇▇-▇▇▇▇
Attn: General Counsel
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If to the Executive:
Mr. W. ▇▇▇▇ ▇▇▇▇▇
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Either party may change such party's address for notices by notice duly given
pursuant hereto.
Section 12. DISPUTE RESOLUTION; ATTORNEYS' FEES. The parties agree that
any and all disputes arising out of the terms of this Agreement, their
interpretation, or the Executive's employment or termination by the Company
shall be subject to binding arbitration before the American Arbitration
Association under its National Rules for the Resolution of Employment Disputes.
The Company agrees to pay all costs associated with arbitration, except that the
parties shall pay for their own attorneys' fees and costs. The arbitrator shall
permit the parties to engage in reasonable discovery measures, including
depositions, document production, interrogatories, and any other discovery
measures that the arbitrator may order. The arbitrator shall issue a written
decision and shall have authority to award any and all damages to which the
party would otherwise be entitled to under applicable law. Such decision shall
be subject to limited review by a court of competent jurisdiction. The parties
agree that the prevailing party in any arbitration shall be entitled to
injunctive relief in any court or competent jurisdiction to enforce the
arbitration award. The parties agree that the prevailing party in any
arbitration shall be awarded its reasonable attorneys' fees and costs to the
extent not prohibited by law.
Section 13. GOVERNING LAW. This Agreement and the legal relations thus
created between the parties hereto shall be governed by and construed under and
in accordance with the laws of the State of Florida, without regard to its
conflicts of law principles.
Section 14. ENTIRE AGREEMENT. This Agreement is complete and embraces
the entire understanding of and between the Parties. All prior understandings of
or in connection with the subject matter contained herein, either oral or
written, having been merged herein or canceled. The Executive acknowledges and
agrees that no representations have been made by the Company except those
expressly set forth herein.
Section 15. WAIVER; MODIFICATION. Failure to insist upon strict
compliance with any of the terms, covenants or conditions hereof shall not be
deemed a waiver of such term, covenant or condition, nor shall any waiver or
relinquishment of, or failure to insist upon strict compliance with, any right
or power hereunder at any one or more times be deemed a waiver or relinquishment
of such right or power at any other time or times. This Agreement shall not be
modified in any respect except by a writing executed by each party hereto.
Section 16. ASSIGNMENT; SUCCESSORS. This Agreement is personal in its
nature and neither of the parties hereto shall, without the consent of the
other, assign
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or transfer this Agreement or any rights or obligations hereunder; provided
that, in the event of the merger, consolidation, transfer or sale of all or
substantially all of the assets of the Company with or to any other individual
or entity or any similar event, this Agreement shall, subject to the provisions
hereof, be binding upon and inure to the benefit of such successor and such
successor shall discharge and perform all the promises, covenants, duties and
obligations of the Company hereunder.
Section 17. SEVERABILITY. Except as provided in Section 5(d) hereof, in
the event that a court of competent jurisdiction determines that any portion of
this Agreement is in violation of any statute or public policy, only the
portions of this Agreement that violate such statute or public policy shall be
stricken. All portions of this Agreement that do not violate any statute or
public policy shall continue in full force and effect. Furthermore, any court
order striking any portion of this Agreement shall modify the stricken terms as
little as possible to give as much effect as possible to the intentions of the
parties under this Agreement.
Section 18. HEADINGS; INCONSISTENCY. Section headings in this Agreement
are included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose. In the event of any inconsistency
between the terms of this Agreement and any form, award, plan or policy of the
Company, the terms of this Agreement shall control.
Section 19. COUNTERPARTS. This Agreement may be executed in
counterparts (including counterparts delivered by facsimile), each of which
shall be deemed an original, but all of which taken together shall constitute
one and the same instrument.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer and the Executive has hereunto signed
this Agreement on the date first above written.
COMPANY
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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By: ▇▇▇▇▇. ▇▇▇▇▇▇▇
Title: Member, Board of Directors of the Company
EXECUTIVE
/s/ W. ▇▇▇▇▇ ▇▇▇▇▇
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W. ▇▇▇▇ ▇▇▇▇▇
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