Employment Agreement (2003)Full Document 

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                              EMPLOYMENT AGREEMENT

      This Employment Agreement, dated as of October 8, 2002 (the "Agreement")
is made by and between Metrocall Holdings, Inc., a Delaware corporation (the
"Company"), Metrocall, Inc., a Delaware corporation ("OPCO") and William L.
Collins, III (the "Executive").

      WHEREAS, the Company filed for chapter 11 of title 11 of the United States
Code, 11 U.S.C. Sections 101 et seq. (the "Bankruptcy Code") on June 3, 2002 and
simultaneously with such filing, filed with the bankruptcy court its proposed
Plan of Reorganization and Disclosure Statement (the "Plan of Reorganization"),
which included, among other provisions, the identification of the Executive as
the Chief Executive Officer of the Company after the confirmation of the Plan of

      WHEREAS, the Executive desires to waive all rights and claims with respect
to any agreements relating to the Executive's employment with the Company as of
the effective date of the Company's Plan of Reorganization;

      WHEREAS, the Executive shall provide services for the Company and OPCO, as
directed by the Board of Directors of the Company (the "Board"); and

      WHEREAS, the term "Company" contained herein shall also include OPCO,
except as otherwise set forth herein so that the obligations under this
Agreement of the Company shall also be obligations of which OPCO is jointly and
severally liable with the Company.

      NOW, THEREFORE, in consideration of the foregoing and the covenants and
agreements set forth in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:

1.    Employment. Effective upon the effective date of the Plan of
      Reorganization (the "Effective Date"), the Company shall employ the
      Executive as the Chief Executive Officer and President of the Company
      based upon the terms and conditions set forth in this Agreement, for the
      period of time specified in Section 3. In such position, the Executive
      shall report directly and exclusively to the Board.

2.    Duties and Authority. During the term of this Agreement, the Chief
      Executive Officer and President of the Company, under the direction and
      subject to the control of the Board (which direction shall be such as is
      customarily exercised over a chief executive officer of a public company),
      the Executive shall be responsible for the business, affairs, properties
      and operations of the Company, and shall have general executive charge,
      management and control of the Company, with all such powers and authority
      with respect to such business, affairs, properties, and operations as may
      be reasonably incident to such duties and responsibilities, and shall
      perform such other duties for the Company as the Board may determine from
      time to time. The Executive shall initially occupy the office of chairman
      of the Board for the Agreement Term, and agrees to continue, if elected,
      to serve as chairman of the Board, for no additional compensation. The
      Executive shall devote the Executive's reasonable best efforts and full
      business time, energies and talents

      to the performance of the Executive's duties and the advancement of the
      business and affairs of the Company.

3.    Term. The term of this Agreement and the period of employment of the
      Executive by the Company hereunder shall commence on the Effective Date
      and shall end on the third anniversary of the Effective Date (the
      "Agreement Term"), unless earlier terminated pursuant to Section 7 herein;
      provided, however, that the Agreement Term shall be automatically extended
      for additional one (1) year periods on each anniversary date of this
      Agreement, unless and until either party provides non-renewal Notice to
      the other party not less than ninety (90) days before such anniversary
      date that such party is terminating this Agreement, which termination
      shall be effective as of the end of such initial Agreement Term or
      extended term, as the case may be (the "Expiration Date"), or until sooner
      terminated as hereinafter set forth.

4.    Compensation and Expenses.

      (a)   In consideration for the Executive's services and subject to the
            terms and conditions of this Agreement, the Company shall pay to the
            Executive an annual base salary (the "Base Salary") equal to Five
            Hundred Thirty Thousand Dollars ($530,000). The Base Salary shall be
            payable biweekly or in such other installments as shall be
            consistent with the Company's payroll procedures. The Company shall
            deduct and withhold all necessary social security and withholding
            taxes and any other similar sums required by law or authorized by
            the Executive with respect to the payment of the Base Salary. The
            Board shall review the Executive's salary annually before December
            31 and may, in its discretion, increase, but not decrease, his Base
            Salary in any renewal, extension or replacement of this Agreement.
            The Board shall also review the appropriateness of creating
            additional forms of nonqualified executive compensation to cover the

      (b)   To the maximum extent permitted by applicable state and federal law,
            the Executive shall be eligible, at no cost to the Executive, to
            participate in all of the Company's benefit plans, including fringe
            benefits, available to the Company's senior executives, as such
            plans or programs are in effect from time to time, and use of an

      (c)   The Executive shall be entitled to (i) time off for all public
            holidays observed by the Company and (ii) vacation days in
            accordance with the applicable policies for the Company's senior
            executives as in effect from time to time.

      (d)   The Company shall reimburse the Executive for all reasonable
            expenses the Executive incurs in accordance with the reasonable
            policies and procedures adopted from time to time by the Company.

      (e)   Until the one-year anniversary of the date on which the redemption
            of the Company's 15% Senior Preferred Voting Stock (the "Preferred
            Stock") occurs, the Executive shall be entitled to receive a cash
            performance bonus in addition to


            his Base Salary for each annual period during the Agreement Term.
            The amount of the cash performance bonus in any annual period will
            depend upon attaining established paydown targets (the "Target
            Paydowns") as contained in (i) that certain Credit Agreement dated
            as of October 8, 2002 by and among OPCO, the Agent and the Lenders
            (both as defined therein)(the "Senior Secured Credit Agreement"),
            and (ii) that certain Senior Secured PIK Credit Agreement dated as
            of October 8, 2002 by and among the Company, the Agent and the
            Lenders (both as defined therein) (the "PIK Credit Agreement"), as

            Percentage of Target             Percentage of Base Salary
             Paydowns Attained               as Cash Performance Bonus
            --------------------        ----------------------------------
                    80%                  80%
                    90%                  90%
                   100%                 100%
                   115%                 115%
                   120%                 120%
                   125%                 125%
                   130%                 150%      (subject to a maximum of
                                                  200%, upon approval of
                                                  the Board)

      The following are the Target Paydowns (Mandatory Prepayments under the
Senior Secured Credit Agreement and the PIK Credit Agreement) ("FYE" means
fiscal year end):

            FYE December 31, 2002            $26,500,000
            FYE December 31, 2003            $24,300,000
            FYE December 31, 2004            $10,000,000

      The cash performance bonus, if any, pursuant to this Section 4(e) shall be
paid to the Executive within ten (10) business days after the determination of
the applicable Target Paydown attained. After the annual period in which the
redemption of the Preferred Stock of the Company occurs, the Executive shall be
entitled to an annual cash bonus, if any, in an amount determined by the Board,
in its sole discretion.

      (f)   On the Effective Date, the Executive shall be granted 100,000 shares
            of Preferred Stock of the Company, representing one and sixty seven
            one hundredths percent (1.67%) of the Preferred Stock shares of the
            Company, subject to restrictions established as of the Effective
            Date ("Restricted Stock") on the transferability of such Restricted
            Stock and the forfeiture of such Restricted Stock upon a termination
            of employment for Cause or without Good Reason as set forth in
            Section 8 of this Agreement. The restrictions shall lapse as to
            one-third (1/3) of the shares of Preferred Stock on the first,
            second and third anniversaries of the Effective Date. The Executive
            may file an election pursuant to Section 83(b) of the Internal
            Revenue Code of 1986, as amended (the "Tax Code") with respect to
            the Restricted Stock within thirty (30) days after the Effective


      (g)   Upon the consummation of a transaction described in the definition
            of "Change of Control" contained in Section 8 of this Agreement, the
            Executive shall be entitled to a payment equal to .20% of the new
            capital invested in the Company in connection with the Change of
            Control (the "New Capital Infusion"), paid in a lump sum cash
            payment within ten (10) days after the consummation date of the

5.    Confidential Information.

      (a)   "Confidential Information" means any and all Company and Company
            subsidiary proprietary information, technical data, patent

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