ex10-1.htm


    Exhibit
      10.1

     

    
      MUTUAL
        SEPARATION AGREEMENT

      


      THIS
        MUTUAL SEPARATION AGREEMENT (this
“Agreement”), is entered into by and among James Caparro (hereinafter, the
“Executive”), Entertainment Distribution Company, Inc. (formerly, Glenayre
        Technologies, Inc.), a Delaware corporation (the “Company”), Glenayre
        Electronics, Inc., a Delaware corporation and subsidiary of the Company (“GEI”),
        and Entertainment Distribution Company, LLC, a Delaware limited liability
        company and subsidiary of the Company (“LLC”).

      


      WHEREAS,
        GEI, LLC and
        Executive are parties to that certain Letter Agreement dated May 9, 2005
        regarding Executive’s employment by LLC, as amended by that certain Letter
        Agreement dated November 6, 2006 among the Company, GEI and Executive
        regarding Executive’s employment by the Company and GEI (as so amended, the
“Employment Agreement”);

      


      WHEREAS,
        the Executive
        is currently employed as (i) President and Chief Executive Officer of the
        Company and serves as a Director on the Company’s board of directors (the
“Board”), (ii) President and Chief Executive Officer of GEI, (iii) President and
        Chief Executive Officer of LLC and serves as a Director on LLC’s board of
        directors (the “LLC Board”), and (iv) serves as a director of Entertainment
        Distribution Holding GMBH and/or Entertainment Distribution Company GMBH
        (collectively, “GMBH”);

      


      WHEREAS,
        the Company,
        GEI and LLC  together with Executive have mutually agreed that it is
        in their respective best interests to bring the employment of the Executive
        to
        an end, in accordance with the term and conditions of this Agreement;
        and

      


      WHEREAS,
        the parties
        wish to set forth their mutual understanding concerning Executive’s
        (i) separation from employment with each of the Company, GEI and the LLC
        and (ii) continuing role as a non-executive member of the LLC
        Board,  including with respect to the continuation of compensation,
        benefits and the other matters set forth herein.

      


      NOW,
        THEREFORE, in
        consideration of the foregoing and of the mutual covenants and agreements
        set
        forth herein, and other good and valuable consideration, the receipt and
        sufficiency of which are hereby acknowledged, the parties agree as
        follows:

      


      1.  Effective
        Date.  The Executive’s last day of
        employment as President and Chief Executive Officer of each of the Company,
        GEI
        and LLC shall be November 5, 2007 (the “Effective Date”).  On the
        Effective Date, Executive shall also cease to serve as a member of the Board
        and
        as a director of GMBH and in any other capacity with the Company’s subsidiaries
        and affiliates, except as set forth in Section 2 of this Agreement.

      


      2.  Role
        at LLC.  From and after the Effective
        Date and until termination of this Agreement pursuant to Section 7 hereof,
        Executive shall continue on the LLC Board serving as non-executive
        Chairman.  During the term hereof, Executive shall devote his business
        attention and ability to the performance of his duties as non-executive
        Chairman, and shall not seek or obtain any other employment or perform any
        services for or on behalf of any other person or entity; provided that Executive
        may continue to serve on the Board of Directors of The TJ Martel
        Foundation.

      


      3.  Consideration.  In
        consideration of the Executive’s agreement to terminate his employment with the
        Company, GEI, LLC and their affiliates and in consideration of his continuing
        role as non-executive Chairman of the LLC Board, the Executive shall receive
        the
        payments and benefits described in this Section 3.  The Executive
        acknowledges and agrees that the payment and benefits provided in this Section
        3
        are in full satisfaction of any amounts provided for in the
        Employment

       

       

      
        
          
          

        

        
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      Agreement,
        and are conditioned upon the Executive’s execution and non-revocation of this
        Agreement.  The Executive acknowledges and agrees that he is not
        entitled to, and will not receive, any wage, commission, bonus, vacation,
        sick,
        personal, severance, expense, or other reimbursement or other payments or
        benefits from the Company, LLC or any of their affiliates, other than those
        provided in this Section 3.  This Agreement supersedes and replaces
        all provisions of the Employment Agreement relating to compensation, benefits
        and severance.

      


      a.           Cash
        Compensation.  In consideration for execution of this
        Agreement and Executive’s continued service as non-executive Chairman of the LLC
        Board, the Company shall make to Executive (i) eight semi-monthly payments
        of
        $31,250 commencing on the regular payroll date on or about November 15, 2007
        and
        continuing on the same and last payroll day of November, 2007 and each of
        the
        succeeding and ensuing three calendar months thereafter, (ii) a single payment
        of $62,500 on or before March 15, 2008, and (iii) a lump sum payment of $687,500
        on the first payroll payment date in January 2008 (collectively the “Installment
        Payments”).  In addition, on or before November 15, 2007, the Company
        shall make a final payment of accrued salary through November 2, 2007, accrued
        but unused vacation up to $40,000 and any related 401(k) matching contribution
        to Executive accrued and owed to Executive in connection with his employment
        for
        any period prior to, through and including November 2, 2007.  Further,
        within ten days after Executive’s submission of supporting evidence of the same,
        the Company shall reimburse Executive for all expenses incurred by Executive
        in
        connection with his employment for any period prior to, through and including
        the Effective Date, so long as such expenses conform to the Company’s
        reimbursement policy described in Section 6 below.  In addition to the
        foregoing, Executive shall remain entitled to receive all accrued and vested
        benefits owed to Executive under each of the Company's 401(k) plan and
        deferred compensation plan, which benefits shall remain payable in accordance
        with the terms of the governing plan under which such benefits are
        provided.

      


      b.           Acceleration
        of Payments.  In the event that there is a sale or disposition of
        all or substantially all of the assets of the Company or LLC, or a sale or
        disposition of a majority of the outstanding equity of LLC, in either case
        prior
        to March 15, 2008, within two (2) weeks following the closing of any such
        event,
        the Company shall pay to Executive all Installment Payments remaining to
        be paid
        under Section 3a. above.

      


      c.           Health
        Insurance Program.  Notwithstanding anything to the contrary
        contained in any of the Company’s health and welfare plans or other health
        insurance programs (collectively, the “Health Insurance Program”), following the
        Effective Date through October 31, 2008, the Executive and his dependent
        family
        members currently participating in such program shall continue to participate
        pursuant to elections made prior to the Effective Date in the Company’s Health
        Insurance Program as though the Executive was employed by the Company, at
        the
        Company’s expense, or if such continued participation is not permitted by the
        Health Insurance Program, the Company shall pay the cost of Executive’s
        continued participation in such program pursuant the Consolidated Omnibus
        Budget
        Reconciliation Act of 1985 (COBRA) through October 31, 2008.  Subject
        to the foregoing, it is the parties’ intent that Executive’s right to elect to
        continue coverage for himself and his dependent family members under the
        Health
        Insurance Program pursuant to COBRA shall occur, commence and continue as
        measured from and after March 15, 2008.

      


      4.  Withholding
        Taxes.  The Company reserves the right to withhold
        applicable taxes from any amounts paid pursuant to this Agreement to the
        extent
        required by law.  The Executive shall be responsible for any and all
        tax liability imposed on amounts paid hereunder.

       

       

      
        
          
          

        

        
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      5.  Provision
        of Office Space and
        Equipment.  During the term of this Agreement, the
        Executive shall be provided with office space in the Company’s New York office
        and office equipment, including, without limitation, a laptop, Blackberry
        and
        email access, in each case, sufficient to enable the Executive to perform
        his
        duties as non-executive Chairman of the LLC Board.  Such office space
        shall be provided for Executive’s use, although Executive may choose to work
        from an alternative location so long as Executive makes himself available
        to the
        Company as required to satisfy his obligations under Section 2
        hereof.

      


      6.  Expense
        Reimbursement.  During the term of this Agreement, LLC
        shall reimburse Executive for entertainment expenses incurred by him in his
        capacity as non-executive Chairman so long as such expenses are incurred
        and
        approved in accordance with the Company’s expense reimbursement policy, as
        modified on September 2, 2007 and any individual expense exceeding $1,000
        has
        been pre-approved by the Chief Executive Officer of the Company.

      


      7.  Term.  This
        Agreement and Executive’s service as non-executive Chairman of the LLC Board
        shall terminate upon the earlier to occur of (i) the five month anniversary
        of
        the date of this Agreement, or (ii) a sale or disposition described in Section
        3b. of this Agreement, subject to satisfaction of any payments required by
        Sections 3 of this Agreement.

      


      8.  Representations
        and Promises:   The Executive
        acknowledges and agrees that:

      


      a.           This
        Agreement is the entire agreement relating to Executive’s service with the
        Company, GEI, and LLC and any claims or future rights that Executive might
        have
        with respect to the Company, GEL and LLC, except as expressly set forth or
        referenced herein.  This Agreement may be amended only by a written
        agreement that is signed by all of the parties hereto.  This Agreement
        is a legally admissible, enforceable agreement governed by Federal law and
        the
        laws of New York.

      


      b.           When
        Executive decided to sign this Agreement, Executive was not relying on any
        representations that were not in this Agreement.

      


      c.           Executive
        has not suffered any job-related wrongs or injuries, such as any type of
        discrimination, for which Executive might still be entitled to compensation
        or
        relief in the future.  Executive has properly reported all hours that
        Executive has worked and Executive has been paid all wages, overtime,
        commissions, compensation, benefits, and other amounts that the Company or
        any
        LLC should have paid Executive in the past.

      


      d.           If
        the Company, LLC or Executive successfully asserts that any provision in
        this
        Agreement is void, the rest of the Agreement shall remain valid and enforceable
        unless the other party to this Agreement elects to cancel it.  If this
        Agreement is cancelled by Executive, Executive will repay the consideration
        and
        other benefits Executive received for signing it.

      


      e.           If
        Executive initially did not think any representation Executive is making
        in this
        Agreement was true or if Executive initially was uncomfortable making it,
        Executive has resolved all of his doubts and concerns before signing this
        Agreement.  Executive has carefully read this Agreement, fully
        understands what it means, is entering into it knowingly and voluntarily,
        and
        all of Executive’s representations in it are true.  The Company would
        not have given Executive the consideration or other benefits Executive is
        getting in exchange for this Agreement but for Executive’s representations and
        promises which Executive is making by signing it.

       

       

      
        
          
          

        

        
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      f.           Executive
        has been given sufficient time to review this Agreement and has read and
        understand the terms of this Agreement and has voluntarily accepted these
        terms.  Executive has consulted with an attorney prior to executing
        this Agreement.

      


      9.  Return
        of Company Property.  On or before the termination date
        set forth pursuant to Section 7 hereof and except as otherwise provided under
        Section 3(d) of this Agreement, the Executive will return to the Company
        (i) all
        files, documents, records, and copies of the foregoing (whether in hard or
        electronic form), (ii) any other any real, intellectual and/or other property
        belonging to the Company or LLC or materials containing the Company’s or LLC’s
        confidential information in the Executive’s possession or control and (iii) any
        other Company or LLC property requested by the Company.

      


      10.  Communication.  Executive
        agrees to refrain from making any disparaging, derogatory or negative statements
        about the Company, GEI, LLC or any of their affiliates, or any of their past
        or
        present officers, directors, agents or employees.  The Company, GEI
        and LLC agree to refrain from making and agree to cause their present officers,
        directors, agents or employees to refrain from making any disparaging,
        derogatory or negative statements about Executive.  In addition, the
        Company shall provide Executive with a copy of any public announcement,
        disclosure, statement or other communication (including the Form 8-K to be
        filed
        by the Company upon execution of this Agreement) concerning Executive’s prior
        relationship with or separation from service from any one or more of Company,
        GEI, LLC or GMBH, prior to its release or filing with the Securities and
        Exchange Commission.

      


      11.  Confidential
        Information.  Executive acknowledges that, in connection
        with his employment, Executive has acquired or had access to non-public
        information that the Company and LLC treat as proprietary or confidential,
        including, without limitation, information relating to the Company’s and LLC’s
        business, operations, assets, investments and strategic plans. Executive
        agrees
        to maintain the confidentiality of such information and not disclose or make
        such information available to any third party, without the prior written
        consent
        of the Company.  All such confidential information shall continue to
        be subject to the restrictions and exceptions set forth in Section 4 of the
        Employment Agreement, which section shall continue in full force and effect
        in
        accordance with the terms thereof following execution of this
        Agreement.

      


      12.  Ownership
        Interests in LLC.  The parties acknowledge that Executive
        owns certain “Class B Units,” “Tier One Profits Interests,” “Tier Two Profits
        Interests” and “Tier Three Profits Interests” (each as identified or defined
        under the Employment Agreement (including in particular Section 3(j) thereof)
        and the LLC Agreement and all being collectively referred to herein as the
        “Subject LLC Interests”) in the LLC which were previously or are currently
        acquired, held or issued in Executive’s name.  The parties
        acknowledged that Executive has met the conditions set forth in Section 3(j)
        of
        the Employment Agreement with respect to the vesting of the Subject LLC
        Interests referenced in such Section 3(j).  Nothing in this Agreement
        shall impair, amend, alter or in any way affect Executive’s continuing ownership
        of the Subject LLC Interests or Executive’s continuing rights under the LLC
        Agreement, the provisions of that certain letter agreement dated May 31,
        2005
        from GEI pertaining to such Subject LLC Interests, any provisions of the
        Employment Agreement relating to such Subject LLC Interests and any other
        written agreements relating thereto.

      


      13.  Continuation
        of Certain Terms of Employment Agreement.  The parties
        acknowledge that the confidential information, non-competition and
        non-solicitation and ownership of intellectual property provisions set forth
        in
        Sections 4, 5 and 6 of the Employment Agreement shall continue in full force
        and
        effect in accordance with the terms thereof.

       

       

      
        
          
          

        

        
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      14.  Effect
        on other Documents and
        Agreements.  Nothing in this Agreement shall impair,
        alter or in any way affect either (i) the provisions of any one or more
        of that certain Limited Liability Company Agreement of Entertainment
        Distribution Company, LLC dated effective March 17, 2005 or the articles
        of
        formation, by-laws or other governing constituent documents for any one or
        more of the Company, GEI, LLC, or GMBH (collectively the "Companies") including,
        without limit, any provisions extending any rights of indemnification or
        defense
        to Executive in his capacity as an employee, officer, director, representative,
        agent or fiduciary of any of the Companies or (ii) Executive's right to
        receive coverage under, and in accordance with the terms of,
        the liability insurance policies, if any, currently maintained by any one
        or more of the Companies for the benefit of their past or present
        employees, officers, directors, representatives, agents or fiduciaries, as
        such
        policies shall be amended, modified or otherwise altered by the Companies
        from
        time to time.

      


      15.  Remedies
        for Early Termination.  If the
        Company terminates Executive’s position as non-executive Chairman on the LLC
        Board prior to the termination of this Agreement pursuant to Section 7 of
        this
        Agreement, the Company shall promptly make all remaining payments required
        to be
        made to Executive pursuant to Section 3 of this Agreement, or if necessary
        to
        continue to qualify for exclusion from the provisions of Rule 409A of the
        Internal Revenue Code, shall continue to make such payments on the schedule
        set
        forth in Section 3 of this Agreement.  If Executive terminates his
        position as non-executive Chairman on the LLC Board prior to the termination
        of
        this Agreement pursuant to Section 7 of this Agreement, the Company shall
        have
        no further obligation to make any payments to Executive pursuant to Section
        3 of
        this Agreement from the date of such termination.

      


      16.  Acknowledgement.  The
        Executive acknowledges that he has read this Agreement, fully understands
        its
        content and effect, and without duress or coercion, knowingly and voluntarily
        assents to its terms.

      


      17.  Miscellaneous.  This
        Agreement shall be subject to and governed by the laws of the State of New
        York.  This Agreement constitutes the entire agreement between the
        parties and supersedes all previous communications between the parties with
        respect to the subject matter of this Agreement.  This Agreement shall
        be binding upon and inure to the benefit of the parties hereto and their
        respective successors and permitted assigns.  No amendment to this
        Agreement shall be binding upon either party unless in writing and signed
        by or
        on behalf of such party.  This Agreement may be executed in
        counterparts, each of which shall be binding on the parties and have the
        full
        legal effect of the original.

      


      


      [Signatures
        contained on the following page.]

       

       

       

       

      
        
          
          

        

        
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      IN
        WITNESS WHEREOF,
        the parties hereto have executed or caused to be executed this Agreement
        on the
        respective dates specified below.

       

       

      
        	 	/s/
                James
                Caparro                                                       	 
	 	JAMES
                CAPARRO	 
	 	 	 
	 	 	 
	 	Date:     
                November 5,
                2007                                        	 


      

      


      


       

       

      
 

      
        
          
          

        

        
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          COUNTERPART
            SIGNATURE PAGE

           

           

          
             

            
              	 	ENTERTAINMENT
                      DISTRIBUTION COMPANY, INC.	 
	 	 	 
	 	 	 
	 	By:
                                /s/ Clarke H.
                      Bailey                      	 
	 	Name:      Clarke
                      H.
                      Bailey                            	 
	 	Title:        Chairman                                       	 
	 	 	 
	 	Date:      
                      November 5,
                      2007                        	 


            

            


            
    

          

        

      

       

       

      
        
        

        
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          COUNTERPART
            SIGNATURE
            PAGE           

           

           

          
             

            
              	 	GLENAYRE
                      ELECTRONICS, INC.	 
	 	 	 
	 	 	 
	 	By:
                                /s/ Clarke H.
                      Bailey                      	 
	 	Name:      Clarke
                      H.
                      Bailey                            	 
	 	Title:        Chairman                                       	 
	 	 	 
	 	Date:      
                      November 5,
                      2007                        	 


            

            


            
                               

               

               

              
                
                

                
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                  COUNTERPART
                    SIGNATURE
                    PAGE           

                   

                   

                  
                     

                    
                      	 	ENTERTAINMENT
                              DISTRIBUTION COMPANY, LLC	 
	 	 	 
	 	 	 
	 	By:
                                        /s/ Clarke H.
                              Bailey                      	 
	 	Name:      Clarke
                              H.
                              Bailey                            	 
	 	Title:        Chairman                                       	 
	 	 	 
	 	Date:      
                              November 5,
                              2007                        	 


                    

                    


                  

                

              

            

          

        

      

      


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