Exhibit 10.1
EXECUTIVE SEVERANCE BENEFIT AGREEMENT
BETWEEN GLENAYRE TECHNOLOGIES, INC. AND
XXXXXXX X. XXXXXXX
THIS EXECUTIVE SEVERANCE BENEFIT AGREEMENT (this "Agreement") is made
and entered into as of the 26TH DAY OF AUGUST 2005 by and between GLENAYRE
TECHNOLOGIES, INC., a Delaware corporation (the "Company"), and XXXXXXX X.
XXXXXXX (the "Executive").
Statement of Purpose
It is important to the success of the Company that it continues to have
the benefit of the services of experienced management personnel such as the
Executive. It is therefore desirable and in the best interest of the Company
that, in the event of any prospective change in control of the Company, the
Executive can exercise independent judgment for the best interests of the
Company and its shareholders, without concern for the security of the
Executive's own continued employment with the Company. For such purpose, the
Company and the Executive are entering into this Agreement to provide
compensation to the Executive in certain events in accordance with the terms
hereof.
NOW, THEREFORE, in consideration of the Statement of Purpose and the
mutual covenants and agreements hereinafter set forth, the Company and the
Executive do hereby agree as follows:
1. Definitions and Construction.
(a) Definitions. As used herein, the following terms shall have
the following meanings:
"Board" means the Board of Directors of the Company.
"Cause" means (1) dishonesty or fraud on the part of the Executive
which is intended to result in the Executive's substantial personal enrichment
at the expense of the Company or its affiliates; (2) a material violation of the
Executive's responsibilities as an executive of the Company or its subsidiaries
which is willful and deliberate; or (3) the conviction (after the exhaustion of
all appeals) of the Executive of a felony involving moral turpitude or the entry
of a plea of nolo contendere for such a felony. However, "Cause" shall not
include (i) any personal or policy disagreement between the Executive and the
Company or any member of the Board or (ii) any action taken by the Executive in
connection with the Executive's duties if the Executive acted in good faith and
in a manner the Executive reasonably believed to be in the best interest of the
Company and had no reasonable cause to believe the Executive's conduct was
unlawful.
"Change in Control" means 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 Company's common stock by any "person" as that term is defined in
Section 13(d)(3) of the Exchange Act;
(B) the consummation of a merger, consolidation, share
exchange or similar transaction of the Company with any other
corporation, entity or group, as a result of which the holders of the
voting capital stock of the Company 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 a security for obligations of the Company) of
substantially all the assets of the Company;
(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
Company'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).
"Disability" means the inability of the Executive, due to the condition
of the Executive's physical, mental or emotional health, to regularly and
satisfactorily perform the duties of the Executive's responsibilities as an
executive of the Company or its subsidiaries for a continuous period in excess
of three months. If the existence of the Executive's Disability shall be
disputed by either party, the determination by a physician duly licensed to
practice medicine that such Disability exists shall be necessary to establish
such Disability, unless the Executive refuses to submit to appropriate
examinations at the request of the Board, in which case the determination of the
Board in good faith and after the requisite period of Disability shall be
conclusive as to whether such Disability exists.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Good Reason" means the occurrence of any of the following without the
Executive's express written consent: (1) a significant change in the nature or
the scope of the Executive's authority as in effect immediately prior to a
Change in Control; (2) an assignment to the Executive of duties (or a change in
the Executive's title resulting in duties) which are materially inconsistent
with the Executive's status, duties or responsibilities immediately prior to a
Change in Control; (3) a reduction in the Executive's rate of base salary or
level of participation in the Company's Management by Objectives Plan; or (4) a
change (or the requirement by the Company of a change) of more than 30 miles in
the principal location where the Executive is required to perform services;
provided, however, that the Executive must first (i) provide the Board with
written notice specifying the particular failure of the Company under clauses
(1), (2), (3) or (4) above and (ii) allow the Board 60 days from receipt of
written notice to cure such failure.
"Retirement" means the termination of the Executive's employment with
the Company on or after the Executive attains 65 years of age.
"Termination of Employment" means the termination of the Executive's
employment with the Company and its subsidiaries for any reason other than (1)
the Executive's death, (2) the Executive's Disability, (3) the Executive's
Retirement, (4) the termination by the Company of the Executive's employment for
Cause or (5) the Executive's voluntary termination of employment other than for
Good Reason.
(b) Construction. Paragraph headings and subheadings have been inserted
herein for convenience of reference only and shall not be deemed to have any
legal effect whatsoever in the interpretation of this Agreement. As used herein,
the singular shall include the plural and the plural the singular, the word
"any" means one or more or all, and the conjunction "or" includes both the
conjunctive and the disjunctive.
2. Severance Benefits. If a Change in Control occurs and if the
Executive's Termination of Employment occurs within three years after the Change
in Control, the Company shall pay to the Executive, within 10 days after such
termination, in cash or equivalent a lump sum severance benefit equal to 150% of
the Executive's base salary in effect on such termination date (or if the base
salary was then greater, on the date immediately preceding the date of the
Change in Control. The Executive shall also be entitled to the sum of (1) the
Executive's accrued but unpaid base salary through the date of such termination,
plus (2) the Executive's accrued but unpaid vacation pay through such date, plus
(3) any other compensation payments or benefits which have accrued and are
payable in connection with such termination. In addition, the Company 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
(after a Change in Control) at the Company's full expense and at the same levels
of coverage as such benefits are provided to active employees of the Company.
The Executive's right to continue medical and dental coverage under the
Consolidated Omnibus Budget Reconciliation Act of 1995 ("COBRA") shall begin at
the expiration of the one-year period described in the foregoing sentence. The
Executive has been awarded options to purchase shares of the Company's common
stock under the Company's stock option plans (including the Glenayre
Technologies, Inc. 1996 Incentive Stock Plan) and may in the future be awarded
additional options to purchase shares of the Company'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 Company (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" after a Change in
Control, (i) all Options shall become immediately 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 Executive's
termination of employment.
3. Legal Expenses. The Company agrees to pay any reasonable legal
expenses incurred by the Executive in connection with the enforcement of this
Agreement or any determination of the validity of this Agreement.
4. Effect of Agreement on Other Rights. This Agreement shall not be
construed to provide the Executive with any right of continued employment by the
Company or its subsidiaries. This Agreement shall not diminish or increase other
rights the Executive (or the Executive's heirs or legal representatives) may
have under any other contract, employee benefit plan or policy of the Company
except as expressly provided in this Agreement.
5. Assignment. Neither this Agreement nor any rights or benefits
hereunder shall be assignable, either voluntarily or involuntarily, by the
Executive, except that all rights of the Executive under this Agreement shall
inure to the benefit of and be enforceable by the Executive's legal
representatives and heirs.
6. Notices. All notices and other communications hereunder to a party
hereto shall be in writing and, except as otherwise expressly provided herein,
shall be deemed to have been duly given when placed in the United States mail by
registered or certified mail, return receipt requested, postage prepaid,
addressed to such party as follows:
As to the Company: Glenayre Technologies, Inc.
00000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
As to the Executive: Xx. Xxxxxxx X. Xxxxxxx
00 Xxxxxxxxxx Xx., #0
Xxxxxxxx, XX 00000
Either party hereto may change such party's address (and in the case of the
Company the title of the person to whose attention communications hereunder
shall be directed) from time to time by serving notice thereof upon the other
party hereto as provided herein.
7. Survival. The provisions of the Agreement shall survive the
termination of the Executive's employment with the Company and its subsidiaries
regardless of the date, cause or manner of such termination, and such
termination shall not impair or otherwise affect the Executive's rights to the
severance benefits to the extent set forth in Paragraph 2.
8. Entire Agreement. This Agreement and the employment letter agreement
of even date herewith contain the entire agreement between the parties hereto
with respect to the subject matter hereof and all prior or contemporaneous oral
or written agreements or instruments are merged herein. No amendment to or
modification of this Agreement shall be effective unless in writing and signed
by both parties hereto.
9. Severability. If any provision of this Agreement is declared invalid
or unenforceable as a matter of law, such invalidity or unenforceability shall
not affect or impair the validity or enforceability of any other provision of
this Agreement or the remainder of this Agreement as a whole.
10. Law Applicable. The construction, interpretation and validity of
this Agreement shall be determined in accordance with and governed by the laws
of the State of Georgia.
11. Freedom of the Company to Act. No provision of Agreement shall be
deemed to restrict the absolute right of the Company at any time to sell or
dispose of all or any part of its business or assets, or to reconstitute the
same into any one or more subsidiaries or to merge, consolidate, sell or
otherwise dispose of said subsidiaries or any of the assets thereof.
12. Execution. This Agreement is hereby executed in multiple originals,
one of which is being retained by each of the parties hereto and each of which
shall be deemed an original hereof.
IN WITNESS WHEREOF, the Company has caused this Agreement to be signed
by its duly authorized officers and its corporate seal to be hereunto affixed
and the Executive has hereunto set the Executive's hand and seal, all as of the
day and year first above written.
GLENAYRE TECHNOLOGIES, INC.
[CORPORATE SEAL]
ATTEST: By: /s/ Xxxxxx X. Xxxxxx
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Title: Chairman and Chief Executive
Officer
/s/ Xxxxxx Xxxxx
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Secretary
/s/ Xxxxxxx X. Xxxxxxx [SEAL]
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Xxxxxxx X. Xxxxxxx
