EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into
as of June 19, 2003 by and between GLENAYRE TECHNOLOGIES, INC., a Delaware
corporation (the "Corporation"), and XXXX X. XXXXXXX (the "Executive").
STATEMENT OF PURPOSE
The Corporation desires to continue to retain the services of the
Executive, and the Executive desires to continue to provide services to the
Corporation, on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing Statement of Purpose
and the terms and provisions of this Agreement, the parties hereto agree as
follows:
1. Employment and Duties.
(a) Employment. The Corporation hereby employs the Executive, and
the Executive hereby agrees to serve, as the President and Chief Executive
Officer of the Corporation pursuant to the terms of this Agreement.
(b) Duties. The Executive shall have the duties and authority and
exercise such powers as are customary for his office and such other duties
commensurate with his position as may from time to time be reasonably requested
of him by the Board of Directors of the Corporation (the "Board"), the Chairman
of the Board or vested in him by the bylaws of the Corporation. The Executive
shall report to the Board, any applicable Committee of the Board and the
Chairman of the Board. During the Term, the Executive shall:
(1) devote substantially all of his business time,
attention and abilities to the businesses of the Corporation (including
its subsidiaries or affiliates, when so required), provided, that the
Executive may engage in personal investment, charitable or community
activities and, with the consent of the Board (which will not
unreasonably be withheld) serve on the boards of directors of
for-profit entities so long as such activities do not materially
interfere with the performance of the Executive's duties hereunder;
(2) faithfully serve the Corporation and use his best
efforts to promote and develop the interests of the Corporation; and
(3) not acquire, directly or indirectly, any interest in
any firm, partnership, association or corporation, the business
operations of which may in any material manner, directly or indirectly,
compete with the trade or businesses conducted by the Corporation or
any of its subsidiaries, or affiliates, provided that (i) the Executive
may beneficially own, directly or indirectly, or exercise control or
direction over, the voting securities or publicly traded debt of a
publicly traded company which is engaged in any of the foregoing trade
or businesses, on the condition that the percentage of such securities
owned, controlled or directed by the Executive shall not exceed 5% of
the voting
securities or 5% of the principal amount of publicly traded debt (as
the case may be) of the publicly traded company and (ii) the Executive
may own less than 5% of investment partnerships or similar entities so
long as they are blind pools.
2. Term of Employment.
(a) Term. The initial term of the Executive's employment hereunder
shall commence on the date of this Agreement and extend through October 31, 2003
(the "Initial Term"). The term of the Executive's employment hereunder may, in
the Corporation's sole discretion, be extended by the Corporation for up to 90
additional days (if and to the extent extended by the Corporation, the "Extended
Term") by written notice to the Executive at least 30 days prior to the
expiration of the Initial Term. The written notice shall specify the number of
days in the Extended Term. The Initial Term and the Extended Term are referred
to collectively in this Agreement as the "Term."
(b) Earlier Termination. Notwithstanding the provisions of
Paragraph 2(a) above, the Executive's employment hereunder may be terminated
prior to the expiration of the Term as follows:
(1) The Corporation may terminate the Executive's
employment hereunder for Cause, provided that the Corporation complies
with the provisions of Paragraph 3(a)(1) below;
(2) The Executive may terminate his employment at any
time with or without Good Reason upon at least 30 days written notice;
(3) The Executive's employment hereunder shall terminate
automatically upon his death;
(4) The Corporation may terminate the Executive's
employment hereunder at any time without Cause, provided that the
Corporation complies with the provisions of Paragraphs 3(a)(1),
3(a)(2), 3(a)(3), 3(b) and 3(c) below.
(c) Definition of "Cause". As used herein, "Cause" shall mean the
occurrence of any of the following:
(1) acts of dishonesty or fraud on the part of the
Executive with regard to the Corporation which are intended to result
in his substantial personal enrichment at the expense of the
Corporation or its affiliates, provided, however, that this Paragraph
2(c)(1) shall not apply to good faith disputes over the Executive's
expense reimbursements;
(2) the conviction after the exhaustion of all appeals by
the Executive of a felony involving moral turpitude or the entry of a
plea of nolo contendere for such a felony; or
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(3) the failure of the Executive to comply with Paragraph
6 below or any other material violation of the Executive's
responsibilities as set forth herein which are willful and deliberate;
provided, however, that prior to the determination by the Board that
Cause under this Paragraph 2(c)(3) has occurred, the Board shall (A)
provide to the Executive in writing, in reasonable detail, the reasons
for the Board's determination that such Cause exists, (B) afford the
Executive a reasonable opportunity to remedy any such breach, (C)
provide the Executive an opportunity to be heard at the Board meeting
where the final decision to terminate the Executive's employment
hereunder for such Cause is to be considered, and (D) make any decision
that such Cause exists in good faith.
(d) Definition of "Good Reason." As used herein, "Good Reason"
shall mean the occurrence of any of the following:
(1) except where such change is specifically approved by
the Executive in writing, any change in the Executive's title as
President and Chief Executive Officer of the Corporation;
(2) any failure by the Corporation to pay to the
Executive the Base Salary or other compensation and benefits provided
for herein; provided, however, that the Executive must first (i)
provide the Board with written notice specifying the particular failure
of the Corporation under this Paragraph 2(d)(2) and (ii) allow the
Board 15 days from receipt of notice to cure such failure; or
(3) any change in the principal office of the Corporation
to a location which is more than 30 miles from its current principal
office at 00000 Xxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxx 00000.
3. Payments to the Executive Upon Termination of Employment.
(a) Compensation. Upon the termination of the Executive's
employment with the Corporation, whether upon the expiration of the Term or upon
the earlier termination of the Term as provided in Paragraph 2(b) above, the
Corporation shall pay to the Executive the following amounts and provide to the
Executive the following benefits, as applicable:
(1) In the event that the Executive's employment
hereunder is terminated for any reason whatsoever, the Corporation
shall pay to the Executive an amount equal to the sum of (i) his
accrued but unpaid Base Salary, plus (ii) his accrued but unpaid
vacation pay, plus (iii) any other compensation payments or benefits
which have accrued and are payable in connection with such termination
under any plan, program or practice then in effect.
(2) In the event that the Executive's employment
hereunder is terminated during the Initial Term or the Extended Term
(i) by the Corporation without Cause pursuant to Paragraph 2(b)(4)
above or (ii) by the Executive for Good Reason pursuant to Paragraph
2(b)(2) above, the Corporation shall continue to pay to the Executive
the compensation and provide to the Executive the benefits for the
remainder of the Initial
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Term or the Extended Term (as applicable), plus pay the severance
benefit described in Paragraph 3(a)(3) below at the expiration of the
Initial Term or the Extended Term (as applicable).
(3) In the event that the Executive's employment
hereunder is terminated (i) by the Corporation without Cause pursuant
to Paragraph 2(b)(4) above, (ii) by the Executive with or without Good
Reason pursuant to Paragraph 2(b)(2) above during the Extended Term,
(iii) by the Executive with Good Reason pursuant to Paragraph 2(b)(2)
above during the Initial Term or (iv) upon the expiration of the Term,
the Corporation shall pay to the Executive a lump sum severance benefit
of $266,250 at the expiration of the Term. The Corporation shall not be
obligated to pay this severance benefit to the Executive if his
employment is terminated for any other reason, including without
limitation the termination of the Executive's employment hereunder by
the Executive without Good Reason pursuant to Paragraph 2(b)(2) above
during the Initial Term.
(b) Stock Options. The Executive has been awarded options to
purchase shares of the Corporation's common stock under the Glenayre
Technologies, Inc. 1996 Incentive Stock Plan (collectively, the "Options"), such
Options having been granted for the number of shares and at a price per share
specified in the agreements between the Corporation and the Executive granting
the Options. Notwithstanding any terms to the contrary contained in such stock
option agreements, upon the Executive's termination of employment for any reason
other than Cause pursuant to Section 2(b)(1) above or by the Executive without
Good Reason pursuant to Paragraph 2(b)(2) above, (i) all Options shall become
fully vested in the Executive and (ii) all Options shall become immediately
exercisable and shall remain exercisable for a period of 12 months following the
date of the Executive's termination of employment.
(c) Welfare Benefits. In the event that the Executive's employment
hereunder is terminated (i) because of the Executive's death pursuant to
Paragraph 2(b)(3) above, (ii) by the Corporation without Cause under Paragraph
2(b)(4) above, (iii) by the Executive for Good Reason pursuant to Paragraph
2(b)(2) above or (iv) upon expiration of the Term, then and in any such event,
the Corporation shall provide medical and dental benefits to the Executive (and
the Executive's dependents), and the Corporation shall pay the Consolidated
Omnibus Budget Reconciliation Act ("COBRA") premium, for a period of 12 months
following such termination of employment at the same levels of coverage for the
Executive as such benefits are provided to active employees of the Corporation.
The Executive's right to continued medical and dental coverage required under
COBRA shall begin upon the termination of his employment hereunder and continue
for the full period required by COBRA, with the Executive to pay the COBRA
premium (if he elects COBRA coverage) beyond the 12-month period described in
the preceding sentence.
(d) Resignation as a Director. The Executive agrees that,
contemporaneously with the termination of his employment with the Corporation
for any reason, he will be deemed to have resigned automatically as a member of
the Board of Directors of the Corporation and from all other offices,
directorships and positions he holds with the Corporation or its affiliates.
This resignation by the Executive is a condition to the receipt of the payment
and benefits described in
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this Paragraph 3. The Executive further agrees, at the Board's request, to
execute any and all documents to confirm such resignation.
4. Compensation and Benefits. Subject to the terms of this
Agreement and until the termination of the Term as provided in Paragraph 2
above, the Corporation shall pay compensation and provide benefits to the
Executive as follows:
(a) Base Salary. The Corporation shall pay to the Executive a
salary of $355,000 per annum (the "Base Salary"). The Base Salary shall be
payable in approximately equal monthly installments on the last business day of
each month, or in such other installments and at such other times as the parties
hereto may mutually agree upon.
(b) Relocation Payment. As full and final payment to the Executive
for any relocation expenses which may be incurred by the Executive in connection
with or arising from his potential relocation from the Duluth, Georgia area
following the Term and in lieu of any other relocation benefits that might be
payable to the Executive under the Corporation's Relocation Policy or otherwise,
the Corporation shall pay to the Executive, contemporaneously with the execution
of this Agreement, the sum of $25,000.
(c) 401(k) Plan. During the Term, the Executive shall be eligible
to participate in the Corporation's 401(k) voluntary deferred compensation
program (the "401(k) Plan") up to the maximum amount permitted by the terms of
the 401(k) Plan, and the Corporation agrees to match the amounts of compensation
deferred up to the maximum amount permitted under the provisions of the 401(k)
Plan.
(d) Automobile or Automobile Allowance. The Corporation shall pay
an automobile allowance of $900 per month to the Executive.
(e) Other Benefits. The Executive shall be entitled to participate
in such other retirement plans, life, medical/dental insurance plans and short
and long-term disability insurance plans of the Corporation, as determined by
the Corporation, generally available to senior executives of the Corporation at
a level commensurate with his position, subject to the eligibility requirements
of the respective plan or program.
(f) Reimbursement of Expenses. In addition to automobile expenses,
the Corporation shall reimburse the Executive for all reasonable expenses
incurred personally by him in performing his duties, including travel and
entertainment.
5. Location of Office and Principal Residence. The Executive's
principal place of employment shall be in Duluth, Georgia.
6. Confidential Information.
(a) Covenant. The Executive shall not divulge, during the Term or
at any time thereafter, to any person not employed by the Corporation or its
subsidiaries or affiliates or otherwise engaged to render services to the
Corporation, its subsidiaries or affiliates, any
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material Confidential Information except, during the Term only, as he in good
faith believes desirable and in the best interest of the Corporation.
(b) Definition of "Confidential Information." As used herein,
"Confidential Information" means:
(1) except to the extent generally known in the industry,
the name, address or requirements of any customer of the Corporation;
or
(2) any other secret or confidential information relating
to any activity, invention or discovery of the Corporation not already
in the public domain that the Executive has or shall have acquired
during his employment by the Corporation or its subsidiaries or
affiliates,
Provided, however, that this provision shall not preclude the Executive from
disclosing such Confidential Information as may be required by any applicable
law, regulation or directive or any governmental agency, court or other
authority having jurisdiction in the matter, or in the proper course of conduct
of the Corporation's business. In the event that any person seeks legally to
compel the Executive to disclose Confidential Information, the Executive shall
promptly provide the Corporation with notice so that the Corporation may have
opportunity to seek a protective order or other appropriate remedy.
7. Indemnification. The Corporation agrees (i) to indemnify,
defend and hold harmless the Executive from and against any and all liabilities
to which he may be subject as a result of his employment by the Corporation
(either before or during the term of this Agreement) (as a result of his service
as an officer or director of the Corporation or as an officer or director of any
of the Corporation's subsidiaries or affiliates or as a fiduciary of any benefit
plan sponsored by the Corporation or any of its subsidiaries or affiliates) to
the fullest extent permitted by law, and (ii) to indemnify the Executive for all
costs, including attorney's fees and other professional fees and disbursements,
of (A) any legal action brought or threatened against him as a result of such
employment, or (B) any legal action in which the Executive is compelled to give
testimony as a result of his employment hereunder, to the fullest extent
permitted by, and subject to the limitations of, the laws of the State of
Delaware. The obligation of the Corporation under this Paragraph 7 shall survive
the termination of the Executive's employment hereunder for any reason, and upon
such termination the Executive shall continue to be covered by the Corporation's
directors and officers insurance policies on the same basis as other directors
and officers.
8. Assignment. Neither the Executive nor the Corporation may
assign this Agreement or any of the rights, benefits, obligations or duties
hereunder to any other person, firm, corporation or other entity.
9. Notices. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given when personally delivered or on the fourth business day after being placed
in the United States mail by certified mail, return
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receipt requested, postage prepaid, addressed to the parties hereto as follows
(provided that notice of change of address shall be deemed given only when
actually received):
As to the Corporation: Glenayre Technologies, Inc.
00000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxx 00000
Attention: Chairman of the Board
As to the Executive: Xxxx X. Xxxxxxx
c/o Glenayre Technologies, Inc.
00000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxx 00000
The address of any of the parties may be changed from time to time by such party
serving notice upon the other parties.
10. Law Applicable. This Agreement is made and executed with the
intention that the construction, interpretation and validity hereof shall be
determined in accordance with and governed by the laws of the State of Georgia.
11. Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the Corporation, its successors and assigns. This Agreement
shall be binding upon and inure to the benefit of the Executive, his heirs and
personal representatives.
12. Entire Agreement; Modification. The Corporation and the
Executive hereby agree that the Amended Employment Agreement dated as of July
31, 2001 between the Corporation and the Executive (the "Old Employment
Agreement") is hereby terminated, that the Old Employment Agreement is of no
further force or effect and that neither party has any rights, obligations or
liabilities under the Old Employment Agreement, except that the Executive shall
continue to be entitled to the indemnification provided to the Executive under
Paragraph 7 of the Old Employment Agreement, and any coverage under the
Corporation's directors and officers insurance policies, for the period of
employment covered by the Old Employment Agreement. This Agreement constitutes
the entire agreement between the parties with respect to the subject matter
hereof and supersedes and cancels all prior or contemporaneous oral or written
agreements and understandings between them with respect to the subject matter
hereof, including without limitation the Old Employment Agreement, except as
expressly provided herein. This Agreement may not be changed or modified orally
but only by an instrument in writing signed by the parties hereto, which
instrument states that it is an amendment to this Agreement.
13. Severability. Should any provision of this Agreement or any
part thereof be held invalid or unenforceable, the same shall not affect or
impair any other provision of this Agreement and shall not have any effect on or
impair the obligation of the Corporation or the Executive.
14. Acknowledgments. The Executive acknowledges and agrees that no
event constituting "Good Reason" under the Old Employment Agreement or this
Agreement has occurred, or that if such an event has occurred the Executive
hereby irrevocably waives any
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rights he may have with respect to such occurrence. The Corporation acknowledges
and agrees that no event constituting "Cause" under Paragraph 2(c)(2) or (3) of
the Old Employment Agreement or this Agreement has occurred, or if such event
has occurred the Corporation hereby irrevocably waives any rights it may have
with respect with such occurrence. In addition, the Corporation acknowledges and
agrees that, to its knowledge, no event constituting "Cause" under Paragraph
2(c)(1) of the Old Employment Agreement or this Agreement has occurred.
15. Execution. This Agreement is hereby executed in multiple
counterparts, each of which shall be deemed an original hereof.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
signed by its officers and its corporate seal to be hereunto affixed, and the
Executive has hereunto set his hand and seal, all as of the day and year first
above written.
GLENAYRE TECHNOLOGIES, INC.
[CORPORATE SEAL]
By /s/ X. X. Xxxxxx
---------------------------------------
ATTEST: Chairman of the Board
-------------------------------
Secretary
/s/ Xxxx X. Xxxxxxx SEAL)
----------------------------------
Xxxx X. Xxxxxxx
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