EMPLOYMENT AGREEMENT
--------------------
This
Employment
Agreement ("Agreement") is made as of the 15th day of
August, 2006 (the
"Commencement Date") by and among Mitchell Site Acq., Inc., a
Louisiana corporation
("Company")
and Lori H. Mitchell (hereinafter, the
"Executive"). All
capitalized terms not otherwise defined herein shall have the
meaning given to them in that certain Stock Purchase Agreement,
dated as of June
20, 2006, by and among
Complete Tower Sources, Inc., Ayin Holding Company Inc.,
and Sellers
(the "Stock Purchase Agreement").
R E C I T A L S
A.
Ayin
Holding Company Inc. acquired all of the issued and outstanding
stock of the Company on August 15, 2006.
B.
The
Board of Directors of
the Company (the "Board") recognizes
the Executive's potential contribution to the growth and success of
the Company,
and desires to assure
the Company of the Executive's employment in an executive
capacity and
to compensate her therefore, has
approved the provisions of this
Agreement and
has authorized the officers of the Company to execute the
Agreement on
behalf of the Company.
C.
The
Executive is willing to make her services available
to the
Company on the
terms and conditions hereinafter set forth.
AGREEMENT
NOW,
THEREFORE,
in consideration of
the premises and mutual covenants set
forth herein,
the parties agree as follows:
1.
Employment.
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1.1
Employment and
Terms. The Company hereby agrees to
employ
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the Executive and the
Executive hereby agrees to serve the Company on the terms
and conditions
set forth herein.
1.2
Duties of Executive. During the Term of Employment under
----------------------
this Agreement
(as hereinafter defined), the Executive shall serve as the
Company's Vice- President. The Executive shall be accountable to
the Board, and,
subject to
the authority of the Board and the President,
shall supervise and
manage the operations
of the Company. She also shall have such other powers and
duties as may from time to time be
prescribed by the Board, provided that such
duties are
consistent
with the Executive's position as Vice-President of
a
company the
size and type of the Company. The Executive shall devote the
necessary time and
attention to the business and affairs of the Company, render
such services to the best of her ability, and use her reasonable
best efforts to
promote the
interests of the Company. Notwithstanding the foregoing or
any
other provision in this Agreement, it shall not be a breach or
violation of this
Agreement for
the Executive to (i) serve on
corporate (subject to approval of
the Board),
civic or charitable boards or
committees; or (ii) manage personal
investments, so
long as such
<PAGE>
activities do not significantly interfere with or significantly
detract from the
performance of
the Executive's responsibilities to the Company in
accordance
with this Agreement.
2.
Term. The term of employment under this Agreement (the "Term
of
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Employment") shall
commence as of the Commencement Date and end
on April 30,
2009 ("Initial Term"),
or such earlier date on which the Executive's employment
is terminated
pursuant to Section 5 of this Agreement.
Upon the expiration of
the Initial
Term, if all parties hereto consent, the
Executive's employment
under this
Agreement may be renewed for a successive three (3) year
period
("Renewal Term", and
together with the Initial Term, the "Term"). The date upon
which the Term expires shall be referred to as the
"Expiration Date," If the
Company continues
to employ the Executive beyond the
Expiration Date without
entering into
a written employment agreement between the Company and the
Executive, all
obligations and rights
under this Agreement shall prospectively
lapse as of the Expiration Date, except the
Company's ongoing indemnification
obligation under
Section 4 and the Executive's obligations under Sections 6 and
7.
3.
Place of Performance. The Executive shall be based in
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Lafayette, Louisiana,
except for required travel on the Company's
business.
4.
Compensation and
Related Matters.
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4.1
Base Salary. The
Executive shall not be entitled to any base
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salary or base compensation.
4.2
Bonuses. During
the Term of
Employment, the Executive shall
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be entitled
to participate in the bonus program described on EXHIBIT A,
in
---------
accordance with
the terms and conditions set forth on EXHIBIT A.
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4.3
Automobile Allowance.
During
the Term of Employment, the
----------------------
Executive shall
be entitled to a monthly automobile allowance of
$750.00.
4.4
Reimbursement of
Expenses. Upon the submission of proper
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substantiation by the Executive, and subject to such rules and
guidelines as the
Company may
from time to time adopt with respect to the reimbursement
of
expenses of
executive personnel,
the Company shall reimburse the Executive for
all reasonable and customary expenses actually paid or incurred by
the Executive
during the
Term of Employment in
the course of and pursuant to the business of
the Company.
The Executive shall account to the Company in writing for
all
expenses for
which reimbursement is sought and shall supply to the
Company
copies of all relevant invoices, receipts or other evidence
reasonably requested
by the Company.
4.5
Standard Benefits.
During
the Term of Employment, the
-------------------
Executive shall
be entitled to participate in the Ayin Holding
Company Inc.
BlueCross BlueShield
Health Care Plan (the "Ayin Health
Plan"), in accordance
with the terms of that plan and applicable law.
<PAGE>
4.6
Stock Options.
During
the Term of Employment, the
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Executive shall be entitled to receive certain stock options, in
accordance with
the terms and conditions set forth on EXHIBIT B.
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4.7
Indemnification.
he Company
shall extend to the
----------------
Executive the
same indemnification arrangements as are generally
provided to
other similarly
situated Company executives, including after the termination of
the Executive's
employment
hereunder.
4.8
Other Benefits.
The Executive shall be entitled to four
---------------
(4) weeks of paid
vacation each calendar year during the Term of Employment, to
be taken at such times as the Executive and the Company shall
mutually determine
and provided that no vacation time shall significantly interfere
with the duties
required to be rendered by the Executive hereunder, and further
provided that in
no event shall
Executive take more than two (2) successive weeks of vacation
at
any time.
5.
Termination.
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5.1
Termination for
Cause. The Company shall at all
times have
------------------------
the right,
immediately
upon written notice to
the Executive, to terminate the
Term of Employment,
for Cause as defined below. For purposes of this Agreement,
the term "Cause" shall mean (i) an action or omission of
the Executive which
constitutes a willful
and material breach of, or a willful and material failure
or refusal (other than by reason of her disability or incapacity)
to perform her
duties under, this
Agreement and other than a breach of Section 7 hereof, which
is not cured within
fifteen (15) days after receipt by the Executive of written
notice of same, (ii) engaging in any action on behalf
of an enterprise which
competes or
plans to compete with the Company or any of its
subsidiaries or
affiliates, (iii)
fraud, embezzlement, misappropriation of funds or
material
breach of trust in connection with her services hereunder, (iv) an
indictment or
conviction of
any crime which
involves dishonesty or a breach of trust, or (v)
any breach
of Section 7 hereof. Any termination for Cause shall be
made in
writing by
notice to the
Executive, which notice shall set forth in reasonable
detail all
acts or omissions upon which the Company is relying for such
termination. The
Executive (and her
legal representative) shall have the right
to address the Board
regarding the acts set forth in the notice of termination.
Upon any termination
pursuant to this Section 5.1, the Company shall (i) pay to
the Executive
any accrued but unpaid
consideration due under the bonus program
for the preceding year described on EXHIBIT A, if any, in
accordance with the
---------
terms and condition set forth on EXHIBIT A, and (ii) pay to the
Executive
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accrued but
unpaid expense reimbursements and benefits, if any. Upon any
termination effected
and compensated
pursuant to this Section 5.1, the Company
shall have
no further
liability hereunder.
5.2
Disability. The
Company shall at all times have the
right,
-----------
upon written
notice to the Executive, to terminate the
Term of Employment, if
the Executive
shall as the result of
mental or physical incapacity, illness or
disability, become
unable to perform her
obligations hereunder for a period of
90 days in any 12-month period. The
<PAGE>
determination of
whether the Executive
is or continues to be disabled shall be
made in writing by a physician selected by
the Board and reasonably acceptable
to the Executive. Upon any termination pursuant to this Section
5,2, the Company
shall (i) pay to the Executive any accrued but
unpaid consideration due under
the bonus program on a pro rata basis measured until the date of
termination, in
accordance with
the terms and conditions set forth on EXHIBIT A
and due only
---------
after the completion of the then current Performance Year as
provided in EXHIBIT
-------
A, and (ii) pay any premiums for a period of
18 months in connection with the
--
temporary continuation
of the disability benefits under the Ayin Health Plan in
accordance with
the terms and conditions of the Consolidated
Omnibus Budget
Reconciliation Act
of 1986 ("COBRA"). Upon any termination effected and
compensated pursuant
to this Section 5.2, the Company shall have no
further
liability
hereunder.
5.3
Death. Upon
the death of the Executive during the Term
of
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Employment, the
Company shall (i) pay to the estate of the
deceased Executive
any accrued
but unpaid
consideration due under the bonus program on a pro rata
basis measured
until the date of
termination, in accordance with the terms and
conditions set forth
on EXHIBIT A and due only after the completion of the then
---------
current Performance Year as provided in EXHIBIT A, and (ii) pay any
premiums for
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a period of 18 months in connection with the temporary
continuation of the
benefits accruing
to the deceased Executive's spouse and dependent
children
under the Ayin Health Plan in accordance with the terms and
conditions of COBRA,
if such persons had been qualified beneficiaries under the
Ayin Health Plan
prior to the Executive's death. Upon any
termination effected and compensated
pursuant to
this Section 5.3, the Company shall have no further
liability
hereunder.
5.4
Termination Without
Cause. The
Company shall have the right
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to terminate
the Term of Employment at any time by written notice to the
Executive not less than thirty (30) days prior to the intended
termination date.
Upon any termination pursuant to this Section 5.4 (that is not a
termination
under any of Sections 5.1, 5.2, 5.3 or 5.5),
the Company shall (i) pay to the
Executive an amount
equal to $375,000, payable in twelve (12) equal consecutive
monthly installments
of $31,250, commencing on the date of termination of
Executive's employment (the "Severance Payment"). The Severance
Payment shall be
paid in cash; and (ii) continue to provide the Executive with the
benefits under
Sections 4.3
and 4.5 (the "Benefits") for a period of three (3) months
immediately following
the date of her termination in the manner and
at such
times as the Benefits
otherwise would have been provided to the Executive, Upon
any termination
effected and compensated pursuant to this Section 5.4, the
Company shall
have no further liability hereunder.
5.5
Termination by
Executive.
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a.
Upon
termination
of the Term of Employment pursuant to
this Section
5.5 by the Executive without Good
Reason (as defined below), the
Company shall (i) pay
to the Executive any accrued but unpaid consideration due
under the bonus program for the preceding
year described on EXHIBIT A, if any,
----------
in accordance
with the
<PAGE>
terms and condition set forth on EXHIBIT A, and (ii) pay to the Executive
----------
accrued but
unpaid expense reimbursements and benefits, if any, Upon any
termination effected
and compensated
pursuant to this Section 5.1, the Company
shall have
no further liability hereunder.
b.
Upon termination
of the Term of Employment pursuant to
this Section 5.5 by
the Executive for Good Reason, the Company shall pay to the
Executive the
same amounts, and
shall continue to provide Benefits in the same
amounts, that
would have been payable or provided by the Company to the
Executive under Section 5,4 of this Agreement if the Term of
Employment had been
terminated by
the Company without Cause.
c.
For purposes
of this Agreement,
"Good Reason" shall mean
the termination
of this Agreement by Executive not less than 60 days
notice
following: (i) the assignment to the Executive of any duties
inconsistent in any
respect with
the Executive's position (including status,
offices, titles and
reporting
requirements),
authority, duties or responsibilities as contemplated
by Section
1.2 of this Agreement, or any other action by the Company
which
results in a diminution in such position, authority, duties or
responsibilities;
(ii) any failure by
the Company to comply with any of the provisions of Article
4 of this Agreement, other than an isolated, insubstantial and
inadvertent
failure not occurring in bad faith and which is remedied by the
Company promptly
after receipt
of notice thereof given by the Executive; (iii) the
Company's
requiring the
Executive to be based at any office or location, that is
not
within 50 miles of the place of performance denoted under
Article 3 of this
Agreement, excluding
required travel on the Company's business; (iv) failure to
make payment
under the Promissory Note (as that term is
defined in the Stock
Purchase Agreement)
where such payment is not prohibited by applicable
loan
agreements to which
either Ayin Holding Company Inc. or Charys Holding Company,
Inc. ("Charys")
is a party; or (v) the
occurrence of a Change in Control. The
Company shall
have the right to cure the problem(s) noted by
the Executive,
before the
Executive may terminate her employment for Good Reason.
5.6
Termination upon
Change in Control.
---------------------------------------
a.
Either the
Company or the Executive may terminate
this
Agreement at
any time upon not less
than thirty (30) days prior written notice
to the other party given within six (6) months after
a Change in Control (as
hereinafter defined).
In such event, the Company shall pay to the Executive the
same amounts,
and shall continue to
provide Benefits in the same amounts, that
would have
been payable or provided by the Company to the Executive
under
Section 5,4
of this Agreement if
the Term of Employment had been terminated by
the Company without Cause, In addition, if as a result of the
Change in Control,
the Executive
would be entitled to any cash payments
from the Company, (other
than those
provided under this
Agreement) under any plan or program maintained
by the Company ("Additional Benefits"), then the Company shall provide the
Executive with
those Additional Benefits, if and only
to the extent that such
Additional Benefits, when added to the amounts payable and the
Benefits provided
by the Company to the
Executive hereunder, will not constitute excess parachute
payments with
<PAGE>
the meaning
of Section 280G of Internal Revenue
Code of 1986, as amended, and
the regulations
thereunder
(the "Code"). Upon any termination effected and
compensated pursuant
to this Section 5.6, the Company shall have no
further
liability hereunder
to Executive.
b.
For purposes
of this Agreement, the term "Change in
Control" shall
mean:
(i)
Consummation by
Charys of (x) a reorganization,
merger, consolidation
or other form of corporate transaction or series of
transactions, in
each case, with respect to which persons who were the
shareholders of
Charys immediately prior to such reorganization, merger or
consolidation or other transaction do not, immediately thereafter,
own more than
Fifty Percent
(50%) of the combined
voting power entitled to vote generally in
the election
of directors of the
reorganized, merged or consolidated company's
then outstanding
voting securities, in substantially the same
proportions as
their ownership
immediately prior to such reorganization, merger, consolidation
or other transaction, or (y) a liquidation
or dissolution of Charys or (z) the
sale of all or substantially all of the assets of Charys (unless such
reorganization,
merger, consolidation
or other corporate transaction,
liquidation,
dissolution or
sale is subsequently abandoned);
(ii)
the acquisition
(other than from Charys) by any
person, entity or "group", within the meaning of Section 13(d)(3)
or 14(d)(2) of
the Securities
Exchange Act, of beneficial ownership within the meaning of
Rule
13-d promulgated
under the Securities Exchange Act of
more than Fifty Percent
(50%) of either the then outstanding shares of Charys's
Common Stock or the
combined voting power of Charys's then outstanding voting
securities entitled to
vote generally
in the election of directors (hereinafter referred
to as the
ownership of
a "Controlling Interest") excluding, for this purpose, any
acquisitions by
(1) Charys or its Subsidiaries, (2) any person, entity or
"group" that
as of the Commencement Date of this Agreement owns
beneficial
ownership (within
the meaning of Rule 13d-3 promulgated under
the Securities
Exchange Act)
of a Controlling Interest or (3) any employee
benefit plan of
Charys or its Subsidiaries;
(iii) provided
that, with respect to this Section
5.6(b), a Change in Control shall not be
deemed to have occurred should any of
the contingencies
referred to in this Section involve (i) any of those
companies, persons or other legal entities with whom Charys is
negotiating on or
before the
Commencement Date and
which are communicated, in writing, by Charys
to the Executive upon or prior to execution of this
Agreement; or (ii) as a
result of any internal corporate reorganization
or reclassification of voting
securities among
Charys' existing shareholders resulting in reallocation of
voting interests
among such persons.
5.7
Resignation. Upon
any termination of employment pursuant
------------
to this Article 5, the Executive shall be deemed to have resigned
as an officer,
and if he or she was then serving as a
director of the Company, as a director,
and if required by the
<PAGE>
Board, the
Executive hereby
agrees to immediately execute a resignation letter
to the Board.
5.8
Survival. The
provisions
of this Article 5 shall survive
--------
the termination
of this Agreement, as applicable.
6.
Non-Competition. In
order to fully protect the Company's
----------------
proprietary
information, and in
connection with the valuable consideration and
benefits the Executive
is receiving from both (a) the transactions contemplated
by the execution of the Stock Purchase Agreement, and (b)
the terms of this
Agreement going
forward, the Executive expressly agrees to the terms of
the
Company's Non-Competition Agreement (the "Non- Competition
Agreement"), attached
hereto as SCHEDULE 1,
which Executive shall execute contemporaneously with this
-----------
Agreement.
7.
Confidentiality. The
Executive recognizes and acknowledges that
----------------
as an integral part of the Company's business,
the Company has developed, and
will develop,
at a considerable investment of time
and expense, marketing and
business plans
and strategies,
procedures, methods of operation and marketing,
financial data,
lists of actual and potential customers and suppliers,
and
independent sales
representatives
and related data, technical procedures,
engineering and product specifications, plans for development and
expansion, and
other confidential
and sensitive information, and the Executive
acknowledges
that the Company has a legitimate business interest in protecting the
confidentiality of such information. The Executive further
acknowledges that she
will be entrusted with such information as well as
confidential information
belonging to
customers,
suppliers, and other
third parties.
For purposes of
this Section 7, "Trade
Secrets" are defined as information, regardless of form,
belonging to
the Company, licensed
by it, or disclosed to it on a confidential
basis by its customers, suppliers, or other
third parties, including, but not
limited to,
technical or nontechnical data, formulae,
patterns, compilations,
programs, devices,
methods, techniques, drawings, processes, financial
data,
product plans, or
lists of actual or potential customers or suppliers which are
not commonly
known by or available to the public and which
information: (i)
derives economic
value, actual or potential, from not being generally known to,
and not being readily ascertainable by proper
means by, other persons who can
obtain economic
value from its disclosure or use; and (ii) is
the subject of
efforts that
are reasonable under the circumstances to
maintain its secrecy.
For purposes
of this Section 7, "Confidential Information" is defined as
information,
regardless of
form, belonging to the
Company, licensed by it, or
disclosed to
it on a confidential basis by its
customers, suppliers, or other
third parties,
other than Trade
Secrets, which is material and valuable to the
Company and
not generally known by the public.
7.1
Promise Not
to Disclose.
The
Executive promises never to
--------------------------
use or disclose any Trade Secret before it has become generally
known within the
relevant industry
through no fault of
the Executive. The Executive agrees that
this promise
shall never expire, and further promises and
acknowledges that,
while this
Agreement is in effect
and for two (2) years after its termination,
the Executive
will not, without the prior
<PAGE>
written approval of the Company, disclose any Confidential
Information before it
has become generally
known within the relevant industry through no fault of the
Executive.
7.2
Promise Not
to Solicit. At all times during the Term of
--------------------------
Employment, and
for 24 months after its termination,
the Executive shall not,
directly or
indirectly, for himself or for any other person, firm,
corporation,
partnership,
association or
other entity (a) solicit, recruit or attempt
to
solicit or recruit (or assist others to recruit) any officer,
manager, employee,
or consultant
of the Company and its subsidiaries and
affiliates, and their
predecessors and
successors
(collectively, the "Group") to leave the Group, or
(b) solicit
or attempt to solicit any of the actual or
targeted prospective
customers or
clients of the Group
with whom the Executive had contact or about
whom the Executive learned Confidential Information or other proprietary
information on
behalf of any person or entity in
connection with any business
unit that competes with the Company's Business.
7.3
Promise Not to Engage in Certain Employment. The Executive
--------------------------------------------
agrees that,
while this Agreement is in effect and for 24 months after
its
termination, the
Executive shall not accept any employment or engage in
any
activity, without
the prior written consent of the Board if the loyal and
complete fulfillment
of the Executive's duties would inevitably require
the
Executive to
reveal or utilize Trade Secrets or Confidential Information.
Notwithstanding the
foregoing,
the restrictions set
forth in this Section 7.3
shall terminate
and be of no further force and effect
upon the occurrence of
Ayin Holding
Company Inc.'s failure to make payment
under the Promissory Note
(as that term is
defined under the Stock Purchase Agreement) where such payment
is not prohibited by applicable loan agreements to
which Ayin Holding Company
Inc. or Charys is a party.
7.4
Return of Information.
Upon the expiration of the Executive's
----------------------
employment with the Company, the Executive will promptly deliver to
the Company,
or, at its written instruction, destroy, all documents, data,
drawings, manuals,
letters, notes,
reports, electronic mail, recordings, and copies thereof, of or
pertaining to
the Company or any other Group member in the Executive's
possession or
control. The Executive further agrees that,
during the term of
Executive's employment
with the Company or the Group and thereafter, the
Executive shall meet with Company personnel, and, based on
knowledge or insights
the Executive gained
during the Executive's employment with the Company and the
Group, answer any question such personnel may have related to the
Company or the
Group.
7.5
Intellectual Property.
Intellectual property
(including such
-----------------------
things as all ideas,
concepts, inventions, plans, developments, software, data,
configurations,
materials (whether
written or machine-readable), designs,
drawings,
illustrations, and
photographs, that may be protectable, in whole or
in part, under any patent, copyright, trademark, trade secret, or other
intellectual property
law), developed,
created, conceived, made, or reduced to
practice during
the Executive's employment (except
intellectual property that
has no relation to the Group or any Group customer that the
Executive developed,
purely on the Executive's own time and at the Executive's own expense),
<PAGE>
shall be the sole and exclusive property of the Company, and the
Executive
hereby assigns
all of Executive's rights, title, and interest in any such
intellectual property
to the Company.
7.6
Execution of Innovation Agreement. The Executive agrees to
----------------------------------
the terms of the Company's Assignment of Inventions agreement,
which is attached
hereto as SCHEDULE 2, and shall execute it contemporaneously with this
----------
Agreement.
7.7
Enforcement of
This Article.
Article 7 of this Agreement
------------------------------
shall survive
the termination of this Agreement for
any reason. The Executive
acknowledges that
(a) the Executive's services are of a
special, unique, and
extraordinary
character and it would be very difficult or impossible to
replace
them, (b) this Article's terms are reasonable and necessary to
protect the
Company's legitimate interests, (c) this Article's restrictions
will not prevent
the Executive
from earning or seeking a livelihood, (d) this Article's
restrictions shall
apply wherever permitted by law, and (e) the
Executive's
violation of
any of this Article's terms would irreparably harm the
Company. Accordingly,
the Executive acknowledges and agrees that, if the
Executive violates any of the provisions of this Article VII, the
Company or any
Group member
shall be entitled to, in addition to
other remedies available to
it, an injunction to be issued by any court of competent jurisdiction
restraining the
Executive from committing or continuing any such
violation,
without the
need to prove the inadequacy of money
damages or post any bond or
for any other undertaking.
8.
Notice. Any
notice, request, instruction or other document to
be
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