EXHIBIT 10.1
EXECUTIVE SEVERANCE BENEFIT AGREEMENT
BETWEEN GLENAYRE TECHNOLOGIES, INC. AND
XXXXX XXXXX
THIS EXECUTIVE SEVERANCE BENEFIT AGREEMENT (this "Agreement") is made and
entered into as of the 28TH DAY OF APRIL 2004 by and between GLENAYRE
TECHNOLOGIES, INC., a Delaware corporation (the "Company"), and XXXXX XXXXX (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;
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(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
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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 (1)
250% 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), plus (2) a pro rata share of any bonus in which the
Executive participates for the fiscal year of the Company in which such
termination occurs, calculated under the assumption that all objectives and
goals for the payment of such bonus are met. 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.
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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. Xxxxx Xxxxx
00 Xxxxxxx Xxx
Xxxxxxxxx, 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.
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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: _______________________________
Title: Chairman and Chief Executive
Officer
________________________________
Secretary
_____________________________[SEAL]
Xxxxx Xxxxx
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