EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into
as of the 21st day of May, 1997 by and between GLENAYRE TECHNOLOGIES, INC., a
Delaware corporation (the "Corporation"), and XXXXXXX XXXXXXXXXXXXX (the
"Executive").
Statement of Purpose
The Executive has been a valuable employee of the Corporation and
wishes to continue his role as a member of the management of the Corporation on
the following specific terms and conditions. The Corporation desires to retain
the services of the Executive, and the Executive desires 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 Executive Vice President, Treasurer and
Chief Financial Officer of the Corporation pursuant to the terms of this
Agreement.
(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, provided, that
the Executive may engage in personal investment and charitable or
community activities so long as such activities do not 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 manner, directly or indirectly, compete with the
trade or businesses conducted by 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
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
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 as of the effective date of this
Agreement. 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 3(a)(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 Paragraphs 3(a)(1), 3(a)(2), 3(b) and
3(c) 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;
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(5) The Corporation may terminate the Executive's employment
hereunder at any time without "Cause" (as defined in Paragraph 2(c)
below), provided that the Corporation complies with the provisions of
Paragraphs 3(a)(1), 3(a)(2), 3(a)(3) (if applicable), 3(a)(4) (if
applicable), 3(b) and 3(c) below.
(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 Executive
Vice President, Treasurer and Chief Financial Officer of the Corporation
without the prior consent of the Corporation;
(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 offices of Executive Vice President, Treasurer and
Chief Financial Officer
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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 or dissolution of the Corporation;
(3) 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(e)(3) and (ii) allow the Board 15
days from receipt of notice to cure such failure;
(4) any other material breach of this Agreement by the
Corporation; 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)(4) and (ii) allow the
Board 60 days from receipt of notice to cure such failure;
(5) any "Change in Control," which shall mean any of the
following:
(A) the acquisition, directly or indirectly after the
date of this Agreement, in one or a series of transactions, of
25% or more of the Corporation's common stock by any "person"
as that term is defined in Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended;
(B) the consummation of a merger, consolidation,
share exchange or similar transaction of the Corporation with
any other corporation, entity or group, as a result of which
the holders of the voting capital stock of the Corporation as
a group would receive less than 50% of the voting capital
stock of the surviving or resulting corporation;
(C) the consummation of an agreement providing
for the sale or transfer (other than as security for
obligations of the Corporation) of substantially all the
assets of the Corporation;
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(D) a material change in the composition or character
of the Board as follows: (i) the replacement of a majority of
directors on the effective date of this Agreement by directors
opposed by the Executive and a majority of the members of the
Executive Committee of the Board (or, in the absence of the
existence of an Executive Committee, a majority of the members
of the Board) or (ii) at any meeting of the Corporation's
shareholders, the election of a majority of directors standing
for election who are opposed by the Executive and a majority
of the members of the Executive Committee of the Board (or, in
the absence of the existence of an Executive Committee, a
majority of the members of the Board).
(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.
3. Payments to the Executive Upon Termination of Employment.
(a) Compensation. 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, (iii) by
the Executive for "Good Reason" pursuant to Paragraph 2(b)(3) above or
(iv) by the Corporation pursuant to Paragraph 2(b)(5) above, then and in
any such event, the Corporation shall pay to the Executive, in addition
to the payments described in Paragraph 3(a)(1), a pro rata share of his
bonus under the Management by Objectives Bonus Plan described in
Paragraph 4(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
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subsidiary) as of the Executive's 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" pursuant to Paragraph
2(b)(5) above (except in the event of a "Change in Control") or (ii) by
the Executive for "Good Reason" (except in the event of a "Change in
Control") pursuant to Paragraph 2(b)(3) above, then and in any such
event, the Corporation shall pay to the Executive, in addition to the
payments described in Paragraphs 3(a)(1) and 3(a)(2), 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 (i) by the Executive for "Good Reason" because of a "Change
in Control" pursuant to Paragraph 2(b)(3) above or (ii) by the
Corporation under Paragraph 2(b)(5) above following a "Change in
Control," then the Corporation shall pay to the Executive, in addition
to the payments described in Paragraphs 3(a)(1) and 3(a)(2), an amount
equal to two and one-half times the annual rate of Base Salary being
paid to the Executive at the time of such termination (or if the
Executive's Base Salary was then greater, on the date immediately
preceding the date of the Change in Control).
(5) 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
pay to the Executive an amount equal to the annual rate of Base Salary
being paid to the Executive at the time of such termination.
(b) Stock Options. The Executive has been awarded options to purchase
shares of the Corporation's common stock under the Glenayre Technologies, Inc.
1991 Long-Term Incentive Plan and the Glenayre Technologies, Inc. 1996 Incentive
Stock Plan and may in the future be awarded additional options to purchase
shares of the Corporation's or a successor corporation's common stock under the
Glenayre Technologies, Inc. 1996 Incentive Stock Plan or other option plans
(collectively, the "Options"), such Options having been granted, or to be
granted, for the number of shares and at a price per share specified in the
agreements between the Corporation (or a successor 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" (as that term is defined in
Paragraph 2(c) above), (i) all Options shall become fully vested in the
Executive and (ii) all Options shall become immediately exercisable
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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) 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, (iii) by the
Executive for "Good Reason" pursuant to Paragraph 2(b)(3) above, (iv) by the
Corporation under Paragraph 2(b)(5) above or (v) 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
and in any such event, the Corporation shall provide medical and dental benefits
to the Executive (and the Executive's dependents) for a period of 12 months
following such termination of employment at the Corporation's full expense and
at the same levels of coverage as such benefits are provided to active employees
of the Corporation. The Executive's right to continued medical and dental
coverage required under the Consolidated Omnibus Budget Reconciliation Act of
1985 ("COBRA") shall begin at the expiration of the one year period described in
this Paragraph 3(c).
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 an initial
salary of $210,000 per annum. Such base salary, as increased from time to time,
is referred to herein as 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. The Base Salary shall be increased (but not decreased)
effective on January 1, 1998 and on each January 1 thereafter during the Term 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 at a 70% level in the Glenayre Management by Objectives Bonus Plan,
as in effect from time to time (the "MBO Plan"). The Executive's level of
participation in the MBO Plan may be increased (but not decreased) from time to
time as determined by the Board or its Compensation Committee in its absolute
discretion.
(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
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deferred up to the maximum amount permitted under the provisions of the 401(k)
Plan.
(d) 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.
(e) Vacation and Holidays. 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. The Executive shall be entitled to all paid
holidays in accordance with the Corporation's policies.
(f) 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 qualified and
non-qualified retirement plans, life, medical/dental insurance plans and short
and long-term disability insurance plans of the Corporation, to the extent that
he qualifies under the eligibility requirements of the respective plan or
program.
(g) 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.
5. 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.
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 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
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(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 hereunder (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), 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.
8. 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.
9. 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.
10. 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):
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As to the Corporation: Glenayre Technologies, Inc.
0000 Xxxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Chief Executive Officer
As to the Executive: Xxxxxxx Xxxxxxxxxxxxx
000 Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
The address of any of the parties may be changed from time to time by such party
service notice upon the other parties.
11. 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.
12. 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.
13. 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 (including without limitation the Executive Severance Benefit Agreement
dated as of February 1, 1995 between the Corporation and the Executive). 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.
14. 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 shall not have any effect on or
impair the obligation of the Corporation or the Executive.
15. Execution. This Agreement is hereby executed in multiple
counterparts, each of which shall be deemed an original hereof.
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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/ Xxxx X. Xxxxx
ATTEST: President and Chief Executive Officer
/s/ Xxxxxx X. Xxxxxxx
Secretary
/s/ Xxxxxxx Xxxxxxxxxxxxx ___________[SEAL]
Xxxxxxx Xxxxxxxxxxxxx
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