ex10-1.htm


     

    Exhibit 10.1

     

    
      August
25, 2008

      


      Mr.
Matthew K. Behrent

      Entertainment
Distribution Company, Inc.

      825 8th
Avenue, 29th Floor

      New York,
NY 10019

      


      Dear
Matt,

      


      This
letter amends and restates your employment letter dated December 27, 2007
to confirm certain terms and conditions of your continued employment in the
position of Executive Vice President, Corporate Development of Entertainment
Distribution Company, Inc. (the “Company”).  This position is located
in New York, New York and reports directly to the Chairman of the Board of
Directors of the Company.  In this position, you are responsible
for:

      


      
        	
                ·  

              	
                The
      development of the Company’s business
strategy,

              


      

      
        	
                ·  

              	
                The
      identification, pursuit and project management of new opportunities on a
      global basis, including, without limitation, divestitures, mergers,
      acquisitions, investments, strategic partnerships, alliances and joint
      ventures, relating to both the current operating business of the Company
      as well as future opportunities to maximize the Company’s other
      assets,

              


      

      
        	
                ·  

              	
                Review
      and approval of all key business development and customer development
      activities and

              


      

      
        	
                ·  

              	
                such
      duties and services as normally are associated with such position, which
      may be assigned to you from time to
time.

              


      

      


      Your base
compensation is $260,000 per annum (the “Base Salary”), which shall be paid in
bi-weekly installments for 26 pay periods per year in accordance with the
Company’s normal payroll practices.  Your Base Salary and performance
will be reviewed on an annual basis each year and your Base Salary may be
increased (but not decreased) in the manner determined by the Company in
consultation with the Company’s Board of Directors (the “Board”) or the
Compensation Committee of the Board.

      


      You will
be eligible to participate in the Company’s Incentive Bonus Plan and other bonus
plans or programs as shall be established by the Board upon recommendations from
management of the Company from time to time for senior executives of the
Company.  In addition, you will be eligible to receive discretionary
bonus awards as the Board may determine in its sole discretion from time to
time.

      


      During
the term of your employment, you will be entitled to four (4) weeks of vacation
in each calendar year at such times as shall be mutually convenient to you and
the Company.  Your vacation will be prorated for each partial calendar
year during the term of your employment.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      During
the term of your employment, you will receive a monthly car allowance of $700,
which will cover local driving and parking expenses incurred in connection with
the performance of your duties hereunder.

      


      During
the term of your employment, you may participate in all retirement plans, life,
medical/dental insurance plans and disability insurance plans of the Company, as
in effect from time to time, to the extent that you qualify under the
eligibility requirements of each plan or program.  Details of our
current benefits plan have previously been provided to you.

      


      In
addition, you will be entitled to a “stay bonus” in an amount equal to your Base
Salary payable in a lump sum if you remain employed by the Company through
September 1, 2008 or, in the event a Change in Control (as defined below) occurs
prior to September 1, 2008, you remain employed by the Company or any successor
to the Company following a Change in Control, through the 90 day anniversary of
any such Change in Control.  If earned, the Company will pay you the
stay bonus within two days after September 1, 2008.

      


      In the
event your employment is terminated by the Company without Cause (as defined
below) or by you with Good Reason (as defined below) before you receive payment
of the “stay bonus” pursuant to the foregoing paragraph, the Company will pay
you, subject to the limitations set forth below, a lump sum severance payment
equal to the amount of your Base Salary in effect on such termination
date.  You also shall be entitled to receive the sum of (1) your
accrued but unpaid Base Salary through the date of
such termination, plus (2) your accrued but unpaid vacation pay
through such date of termination, plus (3) if you are then participating in
the Company’s annual bonus plan, a pro-rated annual bonus for the bonus year in
which you are terminated, which shall be calculated and paid in accordance with
the Company’s normal practices at the end of such bonus year, provided that you
have been employed by the Company for at least six months of such bonus year,
plus (4) any other compensation payments or benefits which have accrued and
are payable in connection with such termination. In addition, the
Company shall continue to provide medical and dental benefits to you and your
dependents for a period of 12 months following such date of termination at the
same levels of coverage and in the same manner as such benefits are
available to you and your dependents immediately prior to such Change in
Control.  Your right to continue medical and dental coverage under
the Consolidated Omnibus Budget Reconciliation Act of 1995 (“COBRA”) shall
begin after the expiration of the one-year period described in the foregoing
sentence.

      


      Following
payment of the “stay bonus” set forth above, your employment may be terminated
by the Company or by you at any time for any reason, including with or without
Cause.  In the event your employment is terminated by the Company or
by you for any reason after payment of the “stay bonus”, you will not be
entitled to receive any of the payments and benefits set forth in the
immediately preceding paragraph, but you shall be entitled to receive the sum of
(1) your accrued but unpaid Base Salary through the date of
such termination, plus (2) your accrued but unpaid vacation pay
through such date of termination, plus (3) any other compensation payments
or benefits which have

       

      
        
          
          

        

        
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      accrued
and are payable in connection with such termination.  Upon
payment of such amounts, the Company shall have no further payment obligation to
you.  You will also have the right to continue medical and dental
coverage as required by the Consolidated Omnibus Budget Reconciliation Act
of 1995 (“COBRA”).

      


      If a
Change in Control (as defined below) occurs and if your employment is terminated
within three years after such Change in Control for any reason other than
Cause (as defined below), the Company shall pay you, within 10 days
after such termination, in cash or equivalent, a lump sum severance
benefit equal to 250% of your Base Salary in effect on such termination date (or
if the base salary was greater prior to such Change in Control, 250%
of your Base Salary in effect on the date immediately preceding such Change in
Control), provided that, in the event you have received the “stay bonus” payment
above in the calendar year in which such severance benefit becomes payable, the
amount of the severance benefit paid to you shall be reduced by the amount of
such “stay bonus”.  You also shall be entitled to receive the sum of
(1) your accrued but unpaid Base Salary through the date of
such termination, plus (2) your accrued but unpaid vacation pay
through such date of termination, plus (3) if you are then participating in
the Company’s annual bonus plan, a pro-rated annual bonus for the bonus year in
which you are terminated, which shall be calculated and paid in accordance with
the Company’s normal practices at the end of such bonus year, provided that you
have been employed by the Company for at least six months of such bonus year,
plus (4) any other compensation payments or benefits which have accrued and
are payable in connection with such termination.  In addition, the
Company shall continue to provide medical and dental benefits to you and your
dependents for a period of 12 months following such date of termination at the
same levels of coverage and in the same manner as such benefits are
available to you and your dependents immediately prior to such Change in
Control.  Your right to continue medical and dental coverage under
COBRA shall begin after the expiration of the one-year period described in the
foregoing sentence.

      


      Notwithstanding
any terms to the contrary contained in the Company’s Stock Option
Agreement and the Glenayre Long Term Incentive Plan or any successor plan, upon
termination of your employment for any reason other than Cause or by you for
Good Reason within three years after a Change in Control, all options granted to
you under such option plans shall become immediately vested and immediately
exercisable and shall remain exercisable for a period equal to the lesser
of 12 months following such date of termination or the remaining maximum term of
the option.  Further, upon termination of your employment by reason of
your voluntary resignation, all options granted to you by the Company pursuant
to such option plans which have vested as of the date of such voluntary
resignation shall remain exercisable for a period equal to the lesser of six
months following such date of termination or the remaining maximum term of the
option.

      


      Notwithstanding
the foregoing, if any benefit or amount payable to you under this letter on
account of your termination of employment constitutes “nonqualified deferred
compensation” (“Deferred Compensation”) within the meaning of Section 409A of
the Internal Revenue Code (“409A”), payment of such Deferred Compensation shall
commence when you incur a “separation from service” within the meaning of
Treasury

       

      
        
          
          

        

        
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      Regulation
Section 1.409A-1(h) (“Separation from Service”).  However, if you are
a “specified employee” within the meaning of 409A at the time of your Separation
from Service, any Deferred Compensation payable to you under this letter on
account of your termination of employment shall be delayed until the first day
of the seventh month following your Separation from Service (the “409A
Suspension Period”).  Within 14 calendar days after the end of the
409A Suspension Period, the Company shall pay to you a lump sum payment in cash
equal to any payments (including interest on any such payments, at an interest
rate of not less than the average prime interest rate, as published in the Wall
Street Journal, over the 409A Suspension Period) that the Company would
otherwise have been required to provide under this letter but for the imposition
of the 409A Suspension Period.  Thereafter, you shall receive any
remaining payments due under this letter in accordance with its terms as if
there had not been any suspension period beforehand.

      


      For
purposes of this letter agreement:

      


      (1)           “Cause”
means (1) your resignation, except for Good Reason, from the office of Executive
Vice President, Corporate Development of the Company; (2) dishonesty or fraud on
the part of the employee which is intended to result in the employee’s
substantial personal enrichment at the expense of the Company or its
affiliates; (3) a material violation of the employee’s responsibilities as an
executive of the Company or its subsidiaries which is willful and
deliberate; or (4) the conviction (after the exhaustion of all
appeals) of the employee of a felony involving moral turpitude or
the entry of a plea of nolo contendere for such a felony; provided, that in no
event shall “Cause” include (i) any personal or policy disagreement between the
employee and the Company or any member of the board of directors of
the Company or (ii) any action taken by the employee in connection with the
employee’s duties if the employee acted in good faith and in a manner
the employee reasonably believed to be in the best interest
of the Company and had no reasonable cause to believe the employee’s
conduct was unlawful.

      


      (2)           “Change
in Control” means any of the following: (a) the acquisition, directly or
indirectly after the date of this letter 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 Securities Exchange Act of
1934, as amended; (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 immediately prior to such merger,
consolidation, share exchange or similar transaction, 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 operating assets of the Company; (d) individuals who, as of the date
hereof, constitute the Board (the “Incumbent Board”) cease for any reason to
constitute at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the date hereof whose election, or
nomination for election by the Company’s stockholders, was approved by a vote of
at least a majority of the directors then comprising the Incumbent Board shall
be considered as though such

       

      
        
          
          

        

        
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      individual
were a member of the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of directors
or other actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board or pursuant to a negotiated settlement
with any such Person to avoid the threat of any such contest or
solicitation.

      


      (3)           “Good
Reason” means the occurrence of any of the following events provided you (A)
notify the Board in writing within 90 days following the initial occurrence of
the events that are alleged to constitute good reason and specifying the events
that are alleged to constitute good reason and (B) terminate your employment
within 90 days of the date of your notice if the Company does not cure said
events within 30 days after the date of your notice: (i) any material breach by
the Company of the terms of this letter agreement or any material diminution by
the Company of your authority, duties or responsibilities with the Company as
specified in the first paragraph of this letter agreement;; (ii) any relocation
of your principal office to a location which is more than 25 miles outside of
New York, New York; or (iii) any request by the Company for you to report to
someone other than the Chairman of the Company’s Board of Directors, except
where such request is specifically approved by you.  For the avoidance
of doubt, the parties hereto confirm that a sale of the assets or equity of
Entertainment Distribution Company, LLC, a wholly-owned subsidiary of the
Company, shall constitute a sale of substantially all the operating assets, but
shall not alone constitute a material diminution by the Company of your duties
or responsibilities.

      


      The
Company agrees to refrain from making and agrees to cause its subsidiaries and
its and their respective officers, directors, agents and employees to refrain
from making any disparaging, derogatory or negative statements to the public or
any third party about you, your employment with the Company or your reputation,
standing in the business community or business practices, during and after
termination of your employment with the Company.  You agree to refrain
from making any such disparaging, derogatory or negative statements about the
Company or any of its affiliates, or any of their past or present officers,
directors, agents or employees.

      


      This
letter agreement may not be modified or amended in any way unless in a writing
signed by each of the parties hereto.

      


      Please
confirm the terms and conditions set forth herein by countersigning this letter
in the space provided below.

      


      Sincerely,

      /s/
Clarke Bailey

      Clarke
Bailey

      Chairman
of the Board

      


      Accepted
by:   /s/
Matthew K.
Behrent                                                                                                                    Date:    August 25,
2008              


       Matthew K. Behrent

       

       

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