Document:

EXHIBIT 10.1

 

2006 NAMED EXECUTIVE OFFICER COMPENSATION AGREEMENTS

 

On May 4, 2006, after
consideration of presentations and recommendations of management and the
Compensation Committee of the Board of Director (the “Committee”) of Cornell
Companies, Inc. (the “Company”) and such other matters and
information as deemed appropriate, the Board of Directors (the “Board”)
approved resolutions with respect to the following matters:

 

Fiscal 2006 Base Salaries.  The base salary levels, effective July 3,
2006, of the Company’s anticipated named executive officers for 2006 were
established as follows: 

	
  Name

  	
   

  	
  Title

  	
   

  	
  2006 Base Salary

  
	
  James
  Hyman

  	
   

  	
  Chairman
  and Chief Executive Officer

  	
   

  	
  $

  	
  482,125

  
	
  John
  Nieser

  	
   

  	
  Chief
  Financial Officer and Treasurer

  	
   

  	
  $

  	
  215,000

  
	
  Mark
  Croft

  	
   

  	
  General
  Counsel and Corporate Secretary

  	
   

  	
  $

  	
  205,000

  
	
  Patrick
  Perrin

  	
   

  	
  Senior
  Vice President and Chief Administrative Officer

  	
   

  	
  $

  	
  186,000

  

 

 

Fiscal 2006 Incentive
Compensation Plan.  The Company’s
incentive compensation plan is intended to provide incentives to the Company’s
management, including its named executive officers, in the form of cash bonus
payments for achieving certain performance goals established by the
Committee.  The individualized
performance goals for each named executive officer include (i) one or more
quantitative measures based on improvements to the Company’s earning per share,
cash flow, return on capital or adjusted earnings and (ii) qualitative criteria
and objectives.   The Committee will
administer and make all determinations under the incentive compensation plan
for the Company’s names executive officers. 
The target awards, as a percentage of base salary, for the Company’s
anticipated named executive officers for 2006 were established as follows: 

	
  Name

  	
   

  	
  Title

  	
   

  	
  Target Percentage

  
	
  James Hyman

  	
   

  	
  Chairman and Chief Executive Officer

  	
   

  	
  80%

  	
  (1)

  
	
  John Nieser

  	
   

  	
  Chief Financial Officer and Treasurer

  	
   

  	
  50%

  	
   

  
	
  Mark Croft

  	
   

  	
  General Counsel and Corporate Secretary

  	
   

  	
  30%

  	
   

  
	
  Patrick Perrin

  	
   

  	
  Senior Vice President and Chief Administrative Officer

  	
   

  	
  25%

  	
   

  

 

(1) Mr. Hyman is also entitled to a $25,000 cash
bonus.

 

1Exhibit 10.3

AMENDMENT NO. 1

TO

EMPLOYMENT AGREEMENT

This
AMENDMENT NO. 1 (“Amendment”) to
that certain Employment Agreement, dated July 7, 1999 (“Agreement”), by and between Aether
Holdings Inc. (the “Company”), as
the assignee of Aether Systems, Inc. (f/k/a Aether Technologies
International. L.L.C.), and David Oros (“Executive”
or “you”), is made on May 5,
2006 (the “Effective Date”).

WHEREAS,
the Company and the Executive desire to amend the Agreement in certain
respects, in light of changes to the Company’s business that have occurred
since the Agreement was originally entered into; and

WHEREAS,
the Compensation Committee of the Company’s Board of Directors has reviewed and
approved this Amendment and the changes to the Agreement that it will effect.

NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the undersigned
agree as follows:

Section 1.               Amendments.

A.            The section of the
Agreement entitled “Employment and Duties” shall be amended to add the
following additional paragraph after the current paragraph:

If, subsequent to the occurrence of a Trigger
Event (as defined in that certain Restricted Stock Agreement by and between you
and the Company, dated May 5, 2006), the Board of Directors of the Company
(the “Board”) determines that
Executive shall no longer serve as Chief Executive Officer, the Board shall
give Executive notice that he shall, from the date on which he ceases to hold
such position, continue as an employee of the Company, having such title as
shall be agreed by the Executive and the Board, and providing such services and
having such responsibilities as shall be determined by the Board; provided,
that in such position the Executive shall not be required to devote more than
250 hours per year to the business of the Company. The date on which the
Executive ceases to serve as Chief Executive Officer and commences the role
contemplated by the foregoing sentence shall be the “Transition Date.”

B.            The section of the
Agreement entitled “Term of Employment” shall be amended to add the following
additional paragraph after the current paragraph:

Notwithstanding anything herein to the
contrary, if the Transition Date shall occur, the Term shall be automatically
extended without any further action of either party so that it shall end on the
third anniversary of the Transition Date.

 

 

C.            The Agreement shall
be amended to add the following new section immediately following the section
entitled “Vacation”:

	
  Arrangements From and After the Transition Date

  	
   

  	
  From and after the Transition Date, the Company shall pay you a
  Salary of $200,000 annually. You shall remain entitled to receive benefits in
  accordance with the section entitled “Employee Benefits,” subject to your
  eligibility under the terms and conditions of applicable plans and programs. The
  balance of the compensation, benefits and perquisites set forth in this “COMPENSATION”
  section shall cease to be applicable from and after the Transition Date.

  

 

D.            The sections the
Agreement entitled “Payments on Termination - By the Company Without Cause,” “Payments
on Termination - Upon Death,” and “Payments on Termination - By the Company
Because of Disability” shall be deleted in their entirety, and the following
shall be added:

	
  By the Company Without Cause, Upon Death, and By the Company Because
  of Disability

  	
   

  	
  If, during the Term, the Company terminates your employment without
  Cause or because of your Disability, or if your employment terminates because
  of your death, the Company will (i) pay the then current
  premium cost payable by the Company for you to receive any group health or
  medical benefit you were receiving on the date of your termination for a
  period equal to three (3) years from the date of your termination, minus
  the number of complete months, if any, that such termination occurs after the
  Transition Date, and (y) pay you severance in an
  amount equal to the Termination Payment (as such term is defined below). The
  Termination Payment shall be paid to you in a lump sum on the date that is
  the first regular payroll date (based on the Company’s current payroll
  practices in effect as of the
  Effective Date) that is
  subsequent to seven (7) months after the date of termination (but in any
  event in accordance with the terms of Section 409A of the Internal
  Revenue Code of 1986, as amended (the “Code”)). Unless the Company, determines, in good faith, that any
  payments described in this paragraph would not violate the provisions of Section 409A(a)(2)(B) of
  the Code and the Treasury Regulations thereunder (prohibiting certain
  distributions to “key employees” before six (6) months after the date of
  separation from service), then such payments shall not be made during such
  six (6) month period, but rather the cumulative amount of such payments
  otherwise due and not paid during such six (6) month period shall be
  made on the first regular payroll date (based on the Company’s current
  payroll practices in effect as of the Effective Date) that is subsequent to
  seven (7) months after the date of termination, and the remainder of
  such payments (if any) shall be made as set forth in this paragraph. The term “Termination Payment” shall mean
  $600,000, minus the aggregate amount of Salary that the Company has paid to
  you (if any) from and after the Transition Date through the date of
  termination of the Term. 

  

 

E.             The Agreement shall
be amended to add the following new section immediately following the section
entitled “No Solicitation”:

 

 

	
  No Competition

  	
   

  	
  While the Company employs you and to the end of the Restricted
  Period, you agree that you will not, directly or indirectly, be employed by,
  lend money to, or engage in an Competing Business within the Market Area. That
  prohibition includes, but is not limited to, acting, either singly or jointly
  or as agent for, or as an employee of or consultant to, any one or more
  persons, firms, entities, or corporations directly or indirectly (as a
  director, independent contractor, representative, consultant, member or
  otherwise) that constitutes such a Competing Business. You will not invest or
  hold equity or options in any Competing Business, provided that you may own
  up to 3% of the outstanding capital stock of any corporation that is actively
  public traded without violating this covenant, so long as you have no
  involvement beyond passive investing in such business. You will not use,
  incorporate or otherwise create any business organization or domain name
  using any name confusingly similar to “Aether Holdings Inc.” or any other
  name under which the Company does business.

  If during the Restricted Period, you are offered and want to accept
  employment with a business that engages in activities similar to the Company’s,
  you will inform the Board in writing of the identity of the business, your
  proposed duties with that business and the proposed starting date of that
  employment. You will also inform that business of the terms of this No
  Compete covenant. The Company will analyze the proposed employment and make a
  good faith determination as to whether it would threaten the Company’s
  legitimate competitive interests. If the Company determines that the proposed
  employment would not pose an unacceptable threat to its interests, the
  Company will notify you that it does not object to the employment

  You acknowledge that, during the portion of the Restricted Period
  that follows your employment, you may engage in any business activity or
  gainful employment of any type and in any place except as described above. You
  acknowledge that you will be able reasonably to earn a livelihood without
  violating the terms of this Agreement.

  You understand that the rights and obligations set forth in this “No
  Compete” section will continue and will survive through the Restricted
  Period.

  “Competing Business”
  shall mean any service or product of any person or organization other than
  the Company and its successors and assigns or subsidiaries (collectively, the
  “Company Group”) that competes
  with any service or product of the Company Group during your employment or
  upon which or with which you acquire knowledge while working for the Company
  or the Company Group.

  “Market Area” consists
  of the United States, and you agree that the Company provides goods and
  services both at its facilities and at the locations of its customers or
  clients and that, by nature if its business, it operates globally.

  

 

 

 

F.             The phrase “SECRECY, EXCLUSIVE PROPERTY, OR
COPYRIGHTS, DISCOVERIES, INVENTIONS AND PATENTS” in the sections of the
Agreement entitled “Maximum Limits” and “Injunctive Relief” shall be amended in
each instance to read “NO SOLICITATION, NON COMPETITION, SECRECY, EXCLUSIVE
PROPERTY, OR COPYRIGHTS, DISCOVERIES, INVENTIONS AND PATENTS”. Accordingly, the
provisions of the “Maximum Limits” and “Injunctive Relief” sections shall be
applicable to the “No Solicitation” and “No Compete” sections of the Agreement.

G.            The Agreement shall be amended to add the following new
section immediately following the section entitled “Withholding”:

	
  Compliance with Sections 409A of the Code

  	
   

  	
  This Agreement is intended to comply and be construed in accordance with
  Section 409A of the Code and any rulings or regulations thereunder. In
  the event that (a) the Company determines that there is an ambiguity
  with respect to any provision of this Agreement that could cause such
  provision to be subject to Section 409A of the Code, such ambiguity
  shall be interpreted and resolved in the manner that the Company deems
  necessary to avoid the imposition of a tax pursuant to Section 409A and (b) the
  Company reasonably determines that any amendment to the Agreement is
  necessary or appropriate in order to avoid the imposition of a tax pursuant
  to Section 409A of the Code, the Company shall have the right to make
  such amendment, on a prospective or retroactive basis, in its sole
  discretion, provided that in any event the Company shall act in good faith to
  minimize the amount of any reduction in any benefits or compensation paid to
  or received by you (including either the delay or acceleration in the payment
  thereof) in order to prevent the imposition of Section 409A from
  applying to such provision. Assuming the Company concludes that a waiver by
  the executive of any right to receive a portion of the payments or benefits
  contemplated by the Agreement would not result in the application of the
  penalty tax under Section 409A to the Executive (or would permit
  payments to be made to the Executive more quickly without imposition of any
  such tax), if the Executive has advised the Company that it desires to waive
  such right, the Company shall in good faith work with the Executive to
  implement a waiver in form and substance acceptable to the parties.

  

 

Section 2.               Effect of Amendment. Except as set forth
in Section 1 of this Amendment, the provisions of the Agreement shall not
be amended or altered by this Amendment and shall continue in full force and
effect.

 

 

Section 3.               Miscellaneous.
This Amendment shall be governed by the internal laws of the State of Maryland.
This Amendment may be executed in one or more counterparts, each of which when
executed and delivered shall be deemed to be an original and all counterparts
taken together shall constitute one and the same instrument. This Amendment and
the Agreement (as amended hereby) constitute the entire understanding of the
parties hereto with respect to the subject matter hereof, and any and all prior
agreements and understandings between the parties regarding the subject matter
hereof, whether written or oral, except for the Agreement (as amended hereby),
are superceded by this Amendment. Any provision of this Amendment which is
invalid or unenforceable in any jurisdiction shall be ineffective to the extent
of such invalidity or unenforceability without invalidating or rendering
unenforceable the remaining provisions hereof, and any invalidity or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

End of Page.

Signature Page Follows

 

 

IN WITNESS WHEREOF, this Amendment has been duly
executed and delivered by the undersigned parties on the Effective Date.

	
  

  	
   

  	
  COMPANY:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  AETHER HOLDINGS
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ David
  Reymann

  
	
   

  	
   

  	
  David Reymann,
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ David Oros

  
	
   

  	
   

  	
  David Oros

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