EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and
entered into as of this 21 st day of December, 2007, by
and between TOWERSTREAM CORPORATION, a Delaware corporation with
offices at 55 Hammarlund Way, Middletown, Rhode Island 02842 (the
“ Corporation ”), and Jeffrey M. Thompson, an individual
residing at 375 Compton View Dr., Middletown, RI 02842 (the
“ Executive
”), under the following
circumstances:
RECITALS:
A. The Corporation desires to secure
the services of the Executive upon the terms and conditions
hereinafter set forth; and
B. The Executive desires to render
services to the Corporation upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, the parties mutually
agree as follows:
1. Employment. The Corporation hereby employs the Executive and
the Executive hereby accepts employment as an executive of the
Corporation, subject to the terms and conditions set forth in this
Agreement.
2. Duties. The Executive shall serve as the Chief Executive
Officer and President of the Corporation with such duties,
responsibilities and authority as are commensurate and consistent
with his position, as may be, from time to time, assigned to him by
the Board of Directors of the Corporation. The Executive shall
report directly to the Board of Directors of the Corporation.
During the term of this Agreement, the Executive shall devote his
full business time and efforts to the performance of his duties
hereunder unless otherwise authorized by the Board of Directors.
Notwithstanding the foregoing, the expenditure of reasonable
amounts of time by the Executive for the making of passive personal
investments, the conduct of private business affairs and charitable
and professional activities shall be allowed, provided such
activities do not materially interfere with the services required
to be rendered to the Corporation hereunder and do not violate the
restrictive covenants set forth in Section 10 below.
3. Term of Employment. The term of the Executive’s employment
hereunder, unless sooner terminated as provided herein (the
“ Initial
Term ”), shall be for
a period of two (2) years commencing on the date hereof (the
“ Commencement
Date ”). The term of
this Agreement shall automatically be extended for additional terms
of one (1) year each (each a “ Renewal Term ”) unless either party gives prior written
notice of non-renewal to the other party no later than sixty (60)
days prior to the expiration of the Initial Term (“
Non-Renewal Notice
”), or the then current Renewal
Term, as the case may be. For purposes of this Agreement, the
Initial Term and any Renewal Term are hereinafter collectively
referred to as the “ Term .”
4. Compensation of Executive .
(a) The Corporation shall pay the
Executive as compensation for his services hereunder, in equal
semi-monthly or bi-weekly installments during the Term, the sum of
$225,000 per annum (the “Base Salary”), less such
deductions as shall be required to be withheld by applicable law
and regulations. The Corporation shall review the Base Salary on an
annual basis and shall increase such Base Salary in its discretion,
but by not less than the greater of (i) the annual increase (if
any) in the Consumer Price Index as published by the United States
Bureau of Labor Statics for the immediately preceding year and (ii)
five (5) percent. The Corporation has no right to decrease the Base
Salary.
(b) In addition to the Base Salary set
forth in Section 4(a) above, the Executive shall be entitled to
such bonus compensation (in cash, capital stock or other property)
as a majority of the members of the Board of Directors of the
Corporation may determine from time to time in their sole
discretion, but not to exceed 75% of the Executive’s Base
Salary.
(c) The Corporation shall pay or
reimburse the Executive for all reasonable out-of-pocket expenses
actually incurred or paid by the Executive in the course of his
employment, consistent with the Corporation’s policy for
reimbursement of expenses from time to time.
(d) The Executive shall be entitled to
participate in such pension, profit sharing, group insurance,
hospitalization, and group health and benefit plans, dental plans
and all other benefits and plans as the Corporation provides to its
senior executives (the “ Benefit Plans ”). The Corporation will pay 100% of all
costs associated with the Executive’s Benefit
Plans.
(e) Executive shall be eligible for
such grants of stock options (“ Options ”) or awards of restricted stock
(“ Restricted
Stock ”) under the
corporation’s equity compensation plans as the Board of
Directors shall determine.
5. Termination.
(a) This Agreement and the
Executive’s employment hereunder shall terminate upon the
happening of any of the following events:
(i) upon the Executive’s
death;
(ii) upon the Executive’s
“Total Disability” (as herein defined);
(iii) upon the expiration of the
Initial Term of this Agreement or any Renewal Term thereof, if
either party has provided a timely notice of non-renewal in
accordance with Section 3, above;
(iv) at the Executive’s option,
upon thirty (30) days prior written notice to the
Corporation;
2
(v) at the Executive’s option,
in the event of an act by the Corporation, defined in Section 5(c),
below, as constituting “Good Reason” for termination by
the Executive; and
(vi) at the Corporation’s
option, in the event of an act by the Executive, defined in Section
5(d), below, as constituting “Cause” for termination by
the Corporation.
(b) For purposes of this Agreement,
the Executive shall be deemed to be suffering from a “
Total Disability
” if the Executive has failed to
perform his regular and customary duties to the Corporation for a
period of 180 days out of any 360-day period and if before the
Executive has become “Rehabilitated” (as herein
defined) a majority of the members of the Board of Directors of the
Corporation, exclusive of the Executive, vote to determine that the
Executive is mentally or physically incapable or unable to continue
to perform such regular and customary duties of employment. As used
herein, the term “ Rehabilitated ” shall mean such time as the Executive is
willing, able and commences to devote his time and energies to the
affairs of the Corporation to the extent and in the manner that he
did so prior to his Disability.
(c) For purposes of this Agreement,
the term “ Good
Reason ” shall mean
that the Executive has resigned due to (i) any diminution of duties
inconsistent with Executive’s title, authority, duties and
responsibilities; (ii) any reduction of or failure to pay Executive
compensation provided for herein, except to the extent Executive
consents in writing to any reduction, deferral or waiver of
compensation, which non-payment continues for a period of fifteen
(15) days following written notice to the Corporation by Executive
of such non-payment; (iii) any relocation of the principal location
of Executive’s employment more than 50 miles from the
Corporation’s current headquarters without Executive’s
prior written consent; (iv) any material change in the
Executive’s title, job description or duties; (v) any Change
of Control (as defined below); or (vi) any material violation by
the Corporation of its obligations under this Agreement that is not
cured within thirty (30) days Agreement after receipt of notice
thereof.
(d) For purposes of this Agreement,
the term “ Cause ” shall mean material, gross and willful
misconduct on the part of the Executive in connection with his
employment duties hereunder or commission of a felony or act of
dishonesty resulting in material harm to the Corporation by the
Executive.
(e) For purposes of this Agreement,
“ Change of
Control ” shall mean
the occurrence of any one or more of the following: (i) the
accumulation, whether directly, indirectly, beneficially or of
record, by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended) of 50% or more of the shares of the outstanding
common stock of the Corporation, (ii) a merger or consolidation of
the Corporation in which the Corporation does not survive as an
independent public corporation or upon the consummation of which
the holders of the Corporation’s outstanding equity
securities prior to such merger or consolidation own less than 50%
of the outstanding equity securities of the Corporation after such
merger or consolidation, or (iii) a sale of all or substantially
all of the assets of the Corporation, provided, however, that the
following acquisitions shall not constitute a Change of Control for
the purposes of this Agreement: (A) any acquisitions of common
stock or securities convertible into common stock directly from
the
3
Corporation, or (B) any acquisition of
Common Stock or securities convertible into Common Stock by any
employee benefit plan (or related trust) sponsored by or maintained
by the Corporation.
6. Effects of Termination .
(a) Upon termination of the
Executive’s employment pursuant to Section 5(a)(i), the
Executive’s estate or beneficiaries shall be entitled to the
following severance benefits: (i) twelve (12) months’ Base
Salary at the then current rate, payable in a lump sum, less
withholding of applicable taxes; and (ii) continued provision for a
period of one (1) year following the Executive’s death of
benefits under Benefit Plans extended from time to time by the
Corporation to its senior executives.
(b) Upon termination of the
Executive’s employment pursuant to Section 5(a)(ii), the
Executive shall be entitled to the following severance benefits:
(i) twelve (12) months’ Base Salary at the then current rate,
to be paid from the date of termination until paid in full in
accordance with the Corporation’s usual payroll practices,
including the withholding of all applicable taxes; (ii) continued
provision for a period of five (5) years following the
Executive’s Total Disability of Benefit Plans extended from
time to time by the Corporation to its senior executives; and (iii)
payment on a prorated basis of any bonus or other payments earned
in connection with the Corporation’s then-existing bonus plan
in place at the time of termination. The Corporation may credit
against such amounts any proceeds paid to Executive with respect to
any disability policy maintained for his benefit.
(c) Upon termination of the
Executive’s employment pursuant to Section 5(a)(iii), where
the Corporation has offered to renew the term of the
Executive’s employment for an additional one (1) year period
and the Executive chooses not to continue in the e
| 
