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                                  EXHIBIT 10.1

                              EMPLOYMENT AGREEMENT


         This EMPLOYMENT AGREEMENT (the "Agreement"), made as of the 30th day of
June, 2000, by and between SANDERS MORRIS HARRIS, INC., a Texas corporation (the
"Company"), and ARNOLD J. BARTON (the "Employee").

                               W I T N E S S E T H
         WHEREAS, the Company desires to employ the Employee and the Employee
desires to be so employed on the terms and conditions contained herein;

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties agree as follows:

         1. TERMS AND DUTIES

         The Company shall employ the Employee under the terms and conditions of
this Agreement, unless earlier terminated in accordance with the terms of this
Agreement, for a term of three (3) years. The Employee accepts such full time
employment and agrees to serve the Company as Executive Vice President and a
member of the Board of Directors of the Company, which is a wholly-owned
subsidiary of Pinnacle Global Group, Inc. ("Pinnacle"), and Employee shall have
such other duties and responsibilities as the Board of Directors of the Company
shall assign to him for its affiliated entities during such period.

         2. COMPENSATION

         During the term of this Agreement, the Company shall pay the Employee
the following compensation:


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         (a) In consideration of the services to be rendered by the Employee to
the Company, the Company will pay to Employee a base salary at the rate of
$200,000 per annum. Employee's salary shall be payable on a semi-monthly basis
or as the Company's pay practices shall be established or modified from time to
time, but no less than once per month. Salary payments shall be subject to all
applicable federal and state withholding, payroll and other taxes.

         (b) Employee shall be eligible for inclusion in Pinnacle's
option/restricted stock program. Employee shall be eligible for any bonuses the
Company may determine to pay to its key employees, provided, however, that any
such bonus, if paid, shall be at the sole and absolute discretion of the
Company; the Company may, in its discretion, pay bonuses to some employees and
not other employees (including Employee); and, if the Company pays any such
bonuses, such bonuses shall be paid (if applicable) after the end of the year in
which they are earned.

         (c) The Company agrees that it will reimburse Employee for all
reasonable business expenses incurred by him during the term of Employee's
employment hereunder in connection with the performance of services hereunder,
provided Employee provides reasonable documentation supporting the expenses
according to the Company's policies relating to reimbursed expenses for its
employees.

         (d) Employee will also be entitled to participate on the same basis
with all other employees of the Company, subject to the same qualifications, in
the Company's standard employee benefits package generally available for all
other employees of the Company, including health, disability and life insurance
programs.

         (e) During such times as Employee is employed by the Company, Employee
shall be elected to the board of directors of Sanders Morris Harris, Inc.


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         3. SCOPE

         (a) While the Employee is employed hereunder, he shall use his best
efforts to promote the interests of the Company consistent with his normal
duties.

         (b) This Agreement is entered into as part of the acquisition
("Transaction") by Pinnacle of the stock of Blackford Securities Corporation
("BSC") pursuant to a merger transaction, which stock of BSC was owned in part
by Employee. Employee and the other former owners of BSC received monetary and
other consideration from Pinnacle in the Transaction, and part of the valuable
consideration received by Pinnacle in the Transaction consisted of the goodwill,
customer relations, vendor relations, employee relations and confidential
business information and trade secrets of BSC . Thus, without Employee's
commitments to comply with the requirements of this Agreement, including the
non-compete covenants in this Paragraph 3, Pinnacle would not have entered into
the Transaction, and Employee acknowledges this.

         (c) Therefore, the Employee hereby agrees that during Employee's
employment hereunder, and if the Employee (i) voluntarily resigns; (ii) is
terminated pursuant to Paragraph 4 (c) below; or (iii) elects not to renew this
Agreement upon the expiration of the three (3) year term of this Agreement (or
any renewal thereof) upon the terms and conditions stated below in this
paragraph 3(c), then also for a period of two (2) years after the Effective Date
of Termination (as that term is defined below), Employee covenants that he shall
not in any manner, directly or indirectly, either through any form of ownership,
or as a director, officer, principal, agent, employee, employer, advisor,
consultant, partner or in any individual or representative capacity whatsoever,
either for his own benefit or for the benefit of any other person, without first
getting the written consent of the


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Board of Directors of Pinnacle, compete with the Company, Pinnacle, or any of
Pinnacle's subsidiaries and other affiliated entities, subject to the exceptions
stated below (the Company, Pinnacle, and Pinnacle's subsidiaries and other
affiliated entities being deemed to constitute the "Company" for purposes of
this paragraph 3). The geographical area of these non-compete covenants shall be
limited to an area which shall be New York City (including the five (5) boroughs
of New York City), Westchester, Rockland, Suffolk, and Nassau Counties, New York
(including Long Island, New York), and the states of New Jersey and Connecticut.
The following is a list (but is not intended to be an exhaustive list) of acts
which shall be considered violations of this Agreement: (i) engage in the
business of securities brokerage, prime brokerage, asset management, or
investment banking; (ii) canvas, solicit, accept or perform any type of work
performed by the Company for any of its customers; (iii) request or advise any
customer of the Company to withdraw, cut back, or cancel any of its business
with the Company; (iv) induce or attempt to influence any employee of the
Company to terminate his or her employment with the Company; (v) disclose or
communicate to any other person, firm, or corporation the names of any customers
of the Company or other knowledge of the operations and business of the Company;
(vi) employ or cause to be employed any individual employed by the Company at
any time during the term of this Agreement; (vii) request, advise or attempt to
influence any person which is a source of materials, supplies, personnel,
services, funds or information for the Company to withdraw, cancel or cut back
the sale or furnishing of such items to the Company; or (viii) use for his own
benefit or otherwise, or communicate to, divulge to, or use for the benefit of,
any other person confidential information and/or trade secrets disclosed to,
discovered by or otherwise known by the Employee through his employment and/or
association with the Company, it being the intent of the parties that Employee


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will honor such confidential information and will not, directly or indirectly,
use the confidential information in such a way as to adversely affect the
Company or the Company's business relations. Notwithstanding the foregoing,
after Employee's termination (for whatever reason) or the expiration of this
Agreement and during the period Employee is bound by the terms of this paragraph
3(c), Employee shall be permitted to operate a hedge fund without being deemed
in violation of this paragraph 3(c), provided such hedge fund maintains a
relationship as a client of the Company, provided the Company is able to provide
rates and service that are competitive in the industry. Upon the expiration of
the three (3) year term of this Agreement (or any renewal thereof), if the
Employee desires to renew this Agreement upon the Renewal Terms (as hereinafter
defined) but the Company does not want to renew this Agreement upon the Renewal
Terms,, then the Employee shall not be bound by the terms of this Paragraph 3
(c); provided, however, that if the Company elects to pay Employee a severance
payment equal to one (1) year of Employee's salary as of the date of the
expiration of this Agreement, then in such event the Employee shall be bound by
the covenants set forth in this Paragraph 3 (c) for a period of one (1) year
from and after the expiration of this Agreement (or any renewal thereof). Such
severance payment shall be made in the form of regularly scheduled salary
payments over the one (1) year severance period. As used herein, the term
"Renewal Terms" shall mean the same terms and conditions as set forth in this
Agreement, provided, however, that Employee's base salary shall be increased by
an amount equal to the greater of (i) the percentage increase, if any, in the
Consumer Price Index, All Urban Consumers, U.S. City Average, all items (as
determined by the United States Bureau of Labor Statistics) for the calendar
year immediately preceding the expiration of this Agreement (or any renewal
terms) as compared with the Consumer Price Index for the year 2000 (or the
initial year of any renewal term if this Agreement


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is renewed); and (ii) the percentage increase, if any, in the average of the
base salaries of the top five (5) executive officers of the Company at the time
of the expiration of this Agreement (or any renewal term).

         (d) Employee acknowledges that these covenants, including the time
duration and geographical area of the covenants, are reasonable and necessary to
protect the goodwill and the operations and business of the Company. Employee
also acknowledges that he is agreeing to these covenants as part of the
Transaction, for which he received monetary and other consideration from the
Company and Pinnacle.

         (e) If the Employee violates any of these covenants the damage to the
Company shall be irreparable. Thus, in such case the Employee agrees that the
Company can obtain an immediate injunction without having to show its damages,
and that this right of the Company is in addition to any other remedies the
Company might have. The Company shall also have the right to require the
Employee to specifically perform these covenants. If either party files a
lawsuit seeking specific performance, injunctive relief or damages for any
breach of this Agreement, the party substantially prevailing in such lawsuit
shall be entitled to recover from the other party all court costs and reasonable
attorneys' fees incurred by the prevailing party in connection with such
lawsuit.

         (f) It is the express intention of the Company and the Employee to
comply with all laws which may be applicable to the covenants contained in this
Agreement. Therefore, in the event that any covenant contained in this Agreement
shall be determined by any court to be effective in any particular area or
jurisdiction only if such covenant is modified to limit its duration or scope,
such covenant may be reformed or modified by the judgment or order of such court
to reflect a lawful and enforceable duration or scope, and shall automatically
be deemed to be amended and modified with


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respect to that particular area or jurisdiction so as to comply with the
judgment or order of such court. All other terms and provisions of this
Agreement shall remain in full force and effect as originally written.

         (g) During any period following the termination of his employment
hereunder (by either party for any reason) ) during which Employee is bound by
the terms of this paragraph 3 not to compete with the Company, if the Employee
intends to accept employment with or to provide consultation, services or other
assistance, as an owner, director, agent, consultant or contractor, to any
business entity, which might otherwise violate the covenants set forth in this
paragraph 3, the Employee shall provide written notice to the Company at least
14 calendar days in advance of commencement of the intended relationship, which
notice shall provide the name and address of, and the Employee's principal
contact with, the entity, the position to be held and nature of the
consultation, services or assistance to be provided by the Employee. During the
14-day period following receipt of such notice, the Employee and representatives
of the Company shall meet and discuss whether (i) performance of the intended
relationship would violate paragraph 3 and (ii) under the circumstances then
existing, whether the time, geographic and activities restrictions imposed by
paragraph 3 are necessary to protect the Company's protectable interests. If an
agreement is reached between the parties to reduce such time, geographic or
activities restrictions, such agreement shall be reduced to writing and signed
by the parties. If no such agreement can be reached, the Company may, if
determined by the Company in its sole discretion to be appropriate, unilaterally
reduce such time, geographic or activities restrictions and will provide to the
Employee written notice of any such reduced restrictions. In either such case,
the reduced restrictions shall become operative with respect to the covenants
contained in paragraph 3 as if specifically set forth therein in writing. The


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parties agree that during the respective times that the covenants contained in
paragraph 3 are in effect, the Company may provide to any employer or
prospective employer of the Employee a copy of paragraph 3 and may request
assurances from any such employer that the covenants are being complied with.

         4. TERMINATION

         The Employee's employment hereunder:

         (a) shall terminate upon the death of the Employee;

         (b) may be terminated at the end of six months by the Company if the
Employee becomes ill or is injured or otherwise incapacitated and such illness,
injury or incapacity shall be of such nature as to prevent him from performing
the services to be performed by him hereunder and continues for a period of six
consecutive months;

         (c) may be terminated by the Chief Executive Officer or by vote of a
majority of the Board of Directors of the Company for (i) conduct on the part of
the Employee that would materially and adversely affect the interests of the
Company if he were retained as an employee of the Company (including, but not
limited to, the Employee's violation of the provisions of paragraph 3 of this
Agreement and the Employee's conviction of a felony or any crime involving moral
turpitude), and such action is not cured within five (5) days after Company
notifies Employee of the same; (ii) engaging in any act which constitutes (1) a
felony under the laws of the United States or any state or territory thereof,
(2) gross, willful or wanton negligence or misconduct or (3) a breach of any
fiduciary duty owed to the Company which materially and adversely affects the
Company; (iii) misappropriation of funds or property of the Company by Employee;
(iv) drug or alcohol abuse by Employee in violation of Company policy or that
impedes Employee's job performance or brings


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Employee into disrepute in the community; or (v) acts by Employee attempting to
secure or securing any personal profit not fully disclosed to and approved by
the Board of Directors in connection with any transaction entered into on behalf
of the Company;

         (d) may be terminated without cause by the vote of a majority of the
Board of Directors of the Company at any time.

         5. RIGHTS UPON TERMINATION

         If the Company elects to terminate the Employee's employment hereunder
as provided in paragraphs 4(b), (c), or (d), such termination shall be evidenced
by a written notice from the Company to the Employee which shall specify the
date on which such termination shall become effective, which for such purposes
shall be deemed to be the "Effective Date of Termination". The Effective Date of
Termination shall be the date of death for purposes of paragraph 4(a). In the
event of the termination of the Employee's employment hereunder pursuant to
either paragraph 4(a), (b), or (c), the Employee shall only be entitled to any
compensation earned or benefits accrued up through the Effective Date of
Termination, except for those benefits provided by federal, state, or local
laws. In the event of termination without cause pursuant to paragraph 4(d),
then: (i) the Company shall pay to Employee the base salary then being paid
through the three (3) year term of this Agreement; (ii) the Company shall pay
Employee the portion of any bonus or incentive plan earned by Employee, prorated
through the date of his termination; and (iii) the Company shall continue to
provide to Employee health, disability, and life insurance, and such other
benefits as Employee was receiving as an Employee, through the
 three (3) year term of this Agreement on the same basis as provided prior to
the termination of Employee. Notwithstanding anything herein to the contrary, if
Employee's employment ceases


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pursuant to any provision of this Agreement, the Employee shall not be entitled
to any additional amounts on account of any unused or accrued vacation, except
for those benefits provided by federal, state, or local laws.

         6. NOTICE

         Any notice or other communication provided for in this Agreement or
contemplated hereby shall be sufficiently given if in writing and delivered by
certified mail, return receipt requested, to the party at its or his address set
forth opposite such party's signature below, or to a new address specified by
notice given as provided in this paragraph.

         7. ENTIRE AGREEMENT

         This Agreement embodies the entire agreement and understanding between
the Company and the Employee and supersedes all prior agreements and
understandings relating to the employment and compensation of the Employee and
may only be amended by a written agreement signed by all parties hereto.

         8. BINDING EFFECT

         This Agreement shall be binding upon and inure to the benefit of the
Company and the Employee and their respective heirs, legal representatives,
successors and assigns. This Agreement shall not be assignable in whole or in
part by the Employee.

         9. PARTIAL INVALIDITY

         If any provision of this Agreement shall be declared to be invalid or
unenforceable, in whole or in part, such invalidity and unenforceability shall
not affect the remaining provisions hereof which shall remain in full force and
effect.


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         IN WITNESS WHEREOF, this Agreement has been duly executed by each of
the parties hereto as of the date first above written.


                                          THE COMPANY

                                          SANDERS MORRIS HARRIS, INC.



                                          By: /s/ BEN T. MORRIS
                                          ----------------------------------
                                             Ben T. Morris, President



                                          EMPLOYEE


                                              /s/ ARNOLD J. BARTON
                                          ----------------------------------
                                             Arnold J. Barton


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