EXHIBIT 10
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into
as of the 27th day of August, 1996 by and between GLENAYRE TECHNOLOGIES, INC., a
Delaware corporation (the "Corporation"), and XXXX X. XXXXX (the "Executive").
Statement of Purpose
The Corporation desires to secure the Executive's continued
participation in the manner hereinafter specified in the business of the
Corporation and to make provision for payment of reasonable compensation to the
Executive for such services. The Executive is willing to be employed by the
Corporation to perform the duties incident to such employment upon the terms and
conditions hereinafter set forth.
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. Effective as of June 26, 1996, the Corporation hereby
employs the Executive, and the Executive hereby agrees to serve, as the
President and Chief Operating Officer of the Corporation.
(b) Duties. In such capacity, the Executive agrees to perform such
duties and exercise such powers commensurate with his office as may from time to
time be reasonably requested of him by the Chief Executive Officer of the
Corporation or the Board of Directors of the Corporation (the "Board") or vested
in him by the bylaws of the Corporation, subject to the control and direction of
the Chief Executive Officer of the Corporation and 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), and in any case as much
thereof as the Chief Executive Officer of the Corporation or the Board
may reasonably deem to be necessary for such businesses;
(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 manner, directly or indirectly, compete with the
trade or businesses of the Corporation or any of its subsidiaries or
affiliates, provided that the Executive may beneficially own, directly
or indirectly, or exercise control or direction over, the voting
securities of a publicly traded company, on the condition that the
percentage of such securities owned, controlled or directed by the
Executive shall not exceed 5% of the voting securities of the publicly
traded company.
2. Term of Employment.
(a) Term. The initial term of the Executive's employment hereunder
shall be for a period of two years, commencing on June 26, 1996. The term of the
Executive's employment hereunder shall be automatically renewed for successive
two-year renewal terms thereafter unless written notice is given by either party
to the other party not later than 180 days prior to the expiration of the
initial term or any renewal term. The initial term and each renewal 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" (as defined in Paragraph 2(c) below), provided
that the Corporation complies with the provisions of Paragraph 2(f)(1)
below;
(2) The Corporation may terminate the Executive's employment
hereunder upon the Executive's "Total and Permanent Disability" (as
defined in Paragraph 2(d) below), provided that the Corporation
complies with the provisions of Paragraph 2(f)(1) and (2) below;
(3) The Executive may terminate his employment hereunder for
"Good Reason" (as defined in Paragraph 2(e) below);
(4) The Executive's employment hereunder shall terminate
automatically upon his death.
(c) Definition of "Cause". As used herein, "Cause" shall mean the
occurrence of any of the following:
(1) the Executive's resignation from the office of President
and Chief Operating Officer of the Corporation without its prior
consent;
(2) acts of dishonesty or fraud on the part of the Executive
which are intended to result in his substantial personal enrichment at
the expense of the Corporation or its affiliates;
(3) 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
(4) 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 (acting on the
recommendation of the Chief Executive Officer of the Corporation) that
"Cause" under this Paragraph 2(c)(4) 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 "Total and Permanent Disability". The Executive shall
be considered to have a "Total and Permanent Disability" if he qualifies for
disability benefits under a long-term disability plan sponsored by the
Corporation or its affiliates.
(e) Definition of "Good Reason". As used herein, "Good Reason" shall
mean the occurrence of any of the following:
(1) except where such failure or change is specifically
approved by the Executive (whether as a member of the Board or
individually), failure to elect or reelect or to appoint or reappoint
the Executive to the office of President and Chief Operating Officer of
the Corporation, or to a senior executive office of the Corporation or
of any of its subsidiaries or affiliates at least equal in dignity,
responsibility, importance and scope thereto, or any other material
change by the Corporation of the Executive's functions, duties or
responsibilities which would cause the ranking or level, dignity,
responsibility, importance or scope of the Executive's position with
the Corporation to become of less dignity, responsibility, importance
or scope from the position and attributes thereof described in
Paragraph 1
above; 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(e)(1), and (ii) allow the
Board 60 days from receipt of notice to cure such failure;
(2) the liquidation, dissolution, consolidation or merger of
the Corporation, or the transfer of all or substantially all of its
assets, other than a transaction in which a successor corporation with
a net worth at least equal to that of the Corporation assumes this
Agreement and all obligations and undertakings of the Corporation
hereunder;
(3) any failure by the Corporation to pay to the Executive the
Base Salary or other compensation and benefits provided for herein;
(4) any other material breach of this Agreement by the
Corporation; or
(5) any "Change in Control", which shall mean any of the
following:
(A) the acquisition, after the date of this
Agreement, of 25% or more of the Corporation's common stock by
any person, entity or united group, which acquisition is not
supported by the Executive and the Chief Executive Officer of
the Corporation; or
(B) a material change in the composition or character
of the Board which shall include, but not be limited to, (i)
the replacement of a majority of incumbent directors by
directors not supported by the Executive and the Chief
Executive Officer of the Corporation or (ii) at any meeting of
the Corporation's shareholders, the election of a majority of
directors standing for election who have not been supported by
the Executive and the Chief Executive Officer of the
Corporation.
(6) Any change in the principal office of the Corporation to a
location which is more than 30 miles from its current principal office
at 0000 Xxxxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000.
(f) Payments to the Executive Upon Termination of Employment. In the
event that the Executive's employment with the Corporation is terminated,
whether upon the expiration of the Term or upon the earlier termination of the
Term as provided in Paragraph 2(b) above, then the Corporation shall pay to the
Executive the following amounts on the date of such termination and shall
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.
(2) In the event that the Executive's employment hereunder is
terminated (i) by the Corporation because of the Executive's "Total and
Permanent Disability" pursuant to Paragraph 2(b)(2) above, (ii) because
of the Executive's death pursuant to Paragraph 2(b)(4) above or (iii)
by the Executive for "Good Reason" pursuant to Paragraph 2(b)(3) above,
then and in any such event, the Corporation shall also pay to the
Executive a pro rata share of his bonus under the Management by
Objectives Bonus Plan described in Paragraph 3(b) below for the fiscal
year of the Corporation in which such termination occurs, calculated,
for purposes of determining whether the targets contained therein have
been met, under the assumption that the results of operations and
financial condition of the Corporation (or any applicable subsidiary)
as of the termination date shall continue on the same basis through the
end of such fiscal year.
(3) In the event that the Executive's employment hereunder is
terminated (i) by the Corporation without "Cause" or (ii) by the
Executive for "Good Reason" pursuant to Paragraph 2(b)(3) above, then
and in any such event, the Corporation shall also pay to the Executive
an amount equal to two times the annual rate of Base Salary being paid
to the Executive at the time of such termination.
(4) In the event that the Executive's employment hereunder is
terminated upon expiration of the Term (unless the Executive refused to
negotiate with the Corporation for an employment agreement with terms
substantially similar to this Agreement), then the Corporation shall
also pay to the Executive an amount equal to 50% of the annual rate of
Base Salary being paid to the Executive at the time of such
termination.
3. Compensation. 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 an initial
base salary of $250,000 per annum, which shall be automatically increased to
$275,000 per annum, effective as of January 1, 1997. Such base salary, as
increased at least annually on each January 1 during the Term as provided in
this Paragraph, is referred to herein as the "Base Salary". The Base Salary
shall be payable in 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. The Base Salary shall be increased (but not
decreased) effective on January 1, 1997 as provided in this Paragraph and on
each anniversary date thereafter in the manner determined by the Board or its
Compensation Committee in its absolute discretion.
(b) Management by Objectives Bonus Plan. The Executive shall
participate in the Management by Objectives Bonus Plan, as in effect from time
to time.
(c) Stock Options. As of June 26, 1996, the Executive has been awarded
options to purchase 50,000 shares of the Corporation's common stock, $.02 par
value per share.
(d) 401(K) Plan. 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.
(e) Automobile or Automobile Allowance. The Corporation shall furnish
an automobile or, at the Corporation's election, an automobile allowance to the
Executive. Such automobile or automobile allowance shall be commensurate with
the Executive's senior position, and, if the Executive is furnished an
automobile, the Corporation shall pay all reasonable expenses for the operation,
insurance and maintenance of such automobile.
(f) Vacation. The Executive shall be entitled to take four weeks of
vacation (or, if more, the vacation provided under the Corporation's standard
vacation policy for senior executives) in each successive 12-month period during
the Term at such times as shall be mutually convenient to the Executive and the
Corporation.
(g) Other Benefits. In addition to participation in all of the
compensation and incentive programs as described in this Agreement, the
Executive shall be entitled to participate in all bonus, compensation, savings,
stock option, and other incentive plans and programs and in all retirement,
life, medical/dental and disability insurance and benefit plans of the
Corporation, to the extent that he qualifies under the eligibility requirements
of the respective plan or program.
(h) Reimbursement of Expenses. In addition to automobile expenses, the
Corporation shall reimburse the Executive for all reasonable expenses incurred
personally by him on behalf of the Corporation.
4. Location of Office. The Executive's principal place of employment
shall be in Charlotte, North Carolina and he shall not be required to change
such principal place of employment.
5. 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 or its subsidiaries or affiliates, any material Confidential
Information.
(b) Definition of "Confidential Information". As used herein,
"Confidential Information" means:
(1) 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.
6. Benefit of Designs.
(a) Familiarity with Inventions, Etc. In this Paragraph 6, the term
"Corporation" includes any of its subsidiaries or affiliates thereof. The
Executive acknowledges that the Corporation is engaged in the research, design
and manufacture of various products and desires to acquire inventions and
improvements relating thereto. The Executive, in connection with his duties
hereunder, will become familiar with the Corporation's businesses and is
expected, to the extent consistent with his senior position, to utilize the
Corporation's time, materials, facilities and information in making inventions
and improvements relating to such products.
(b) Records and Disclosure. The Executive shall keep, maintain and make
available to the Corporation complete and up-to-date written records, including
photographs and drawings, of his inventions and improvements relating to the
Corporation's products that the Executive may solely or jointly make during the
period of employment under this Agreement, which records shall be the property
of the Corporation. The Executive shall promptly and fully disclose in writing
to the Corporation all such inventions and improvements, whether patentable or
not, which relate to the Corporation's products that the Executive may solely or
jointly make during the period of his employment under this Agreement which
relate directly to any circuit, circuit design concept or program developed or
being developed by the Corporation during the period of the Executive's
employment of which he was aware, and all such inventions and improvements shall
be the sole and exclusive property of the Corporation.
(c) Rights to Inventions, Etc. The Executive further agrees to assign
and does hereby assign and transfer to the Corporation all his right, title and
interest in and to all such inventions and improvements and in and to any letter
patent or application for letters patent thereon in and for all countries. The
Executive further agrees, at the expense of the Corporation, to do all things
and to execute and deliver all documents necessary therefor whenever so
requested by the Corporation.
7. Non-Competition. The Executive agrees that following the termination
of his employment by the Corporation, he will not at any time during the period
of six months from the date of such termination (without the prior written
consent of the Corporation, which consent will not be unreasonably withheld),
either individually or in partnership, or in conjunction with any person or
persons, firm, association, syndicate, company or corporation as principal,
agent, director, officer, employee, consultant, investor or in any other manner
whatsoever, carry on or be engaged in or be
concerned with or interested in, or advise, lend money to, guarantee the debts
or obligations of or permit his name or any part thereof to be used or employed
by any such person or persons, firm, association, syndicate, company, or
corporation engaged in or concerned with any interests in any business in
competition with the business of the Corporation (or any of its subsidiaries or
affiliates) carried on by them during the term or terms of this Agreement within
North America; provided that the Executive may beneficially own, directly or
indirectly, or exercise control or direction over the voting securities of a
publicly traded company, but the number of voting securities so owned,
controlled or directed by the Executive shall not exceed 5% of the voting
securities of such publicly traded company; and further provided that where the
Executive's employment under this Agreement is terminated without "Cause" or by
the Executive for "Good Reason" and in either case the Corporation makes the
payment described in Paragraph 2(f)(3) hereof, the period of non-competition
described in this Paragraph 7 shall be one year from the date of termination of
the Executive's employment under this Agreement.
8. Indemnification. The Corporation agrees 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 hereunder (as a result of his
service as an officer or director of the Corporation or as an officer or
director of any of its subsidiaries or affiliates), as well as the costs,
including attorney's and other professional fees and disbursements, of any legal
action brought or threatened against him as a result of such employment, to the
fullest extent permitted by, and subject to the limitations of, Delaware law.
9. Reimbursement of Legal and Related Expenses. In the event that any
dispute shall arise between the Executive and the Corporation relating to his
rights under this Agreement, and it is determined by agreement between the
parties, or by a final judgment of a court of competent jurisdiction that is no
longer subject to appeal, that the Executive has been substantially successful
in his claims, then reasonable legal fees and disbursements of the Executive in
connection with such dispute shall be paid by the Corporation.
10. Assignment. The Executive may not assign this Agreement or any of
his rights, benefits, obligations or duties hereunder to any other person, firm,
corporation or other entity.
11. 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 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.
0000 Xxxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Chief Executive Officer
As to the Executive: Xxxx X. Xxxxx
c/o Glenayre Technologies, Inc.
0000 Xxxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
The address of any of the parties may be changed from time to time by such party
serving notice upon the other parties.
12. 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 North
Carolina.
13. 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.
14. Entire Agreement; Modification. 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. 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.
15. 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 or any part thereof and the invalidity or
unenforceability of any provision of this Agreement shall not have any effect on
or impair the obligation of the Corporation or the Executive.
16. 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/ Xxxxx X. Xxxxxxxxx
ATTEST: Chairman of the Board and Chief Executive Officer
/s/ Xxxxx X. Xxxxxx
Assistant Secretary
/s/ Xxxx X. Xxxxx [SEAL]
Xxxx X. Xxxxx
