Document:

Exhibit 10.1

 

	

    	
DIGI INTERNATIONAL

9350 Excelsior Blvd

Hopkins, MN 55343

952-912-3444 tel

952-912-4991   central fax
    

 

May 1, 2019

 

James J. Loch

St. Michael, MN  55376

Jamie.loch@charter.net

 

Dear James,

 

On behalf of Digi International Inc., I am pleased to offer you employment as Sr. Vice President, Chief Financial Officer and Treasurer reporting to Ron Konezny. (Please see Contingent Offer section below.)

 

Compensation

 

Your annualized total compensation target for this position is $450,000.  The annualized base salary is $300,000 with an annualized incentive target of $150,000.

 

You will participate in Digi International’s Executive Incentive Plan.  The FY19 Plan provides an annual incentive payment based on Revenue and Adjusted EBITDA performance provided threshold levels of both Revenue and Adjusted EBITDA performance for the fiscal year are achieved.  The plan also provides for quarterly payment for the first, second and third quarter of the fiscal year if threshold levels of Revenue and Adjusted EBITDA targets are achieved. All payments are pro-rated based on length of service in the fiscal year.

 

Initial Equity Award

 

We will recommend to the Board of Directors an initial grant of 100,000 stock options.  The options will have a per share exercise price equal to the closing sale price of a share of common stock on the Grant Date.  Options will vest over four years at a rate of 25% upon completion of one year, then proportionate monthly vesting thereafter.  The stock option agreement will contain a change in control provision that provides for accelerated vesting if within one year following a change in control, your employment is terminated either by the Company without cause or by you for good reason.   The Grant Date will be the first day that the Digi International trading window reopens in July.

 

In addition, we will recommend to the Board of Directors a Restricted Stock Unit award for 40,000 shares.  This award will vest 25% annually on the anniversary of the Grant Date.  Restricted Stock Unit Award Agreement will contain the same change in control provision.

 

Benefits

 

Digi offers a comprehensive benefit program which includes Medical, Dental, Vision, Life and Disability Insurance, Medical and Dependent Care Reimbursement Plans, 401(K) Savings Plan, and an Employee Stock Purchase Plan and a Tuition Reimbursement Program.

 

You will be eligible for participation in Digi’s health insurance programs on the first day of active employment with the company and will be eligible for participation in the 401(K) Savings Plan on the first day of the month following date of hire. You will be eligible to participate in the Digi International Stock Purchase Plan on the first of any January, April, July or October following your hire date.

 

 

You will be eligible to participate in Digi’s $500,000 Executive Life Insurance program.  If accepted by the carrier, Digi International will pay the full annual premium.  This is in additional to the basic optional life insurance programs offered to all employees.

 

Vacation eligibility begins on the date of hire.  Upon hire, you will receive four weeks of vacation.  You will not accrue above or below this amount regardless of time take.  Should you leave the company at any point in the future, you will be paid for four weeks of accrued vacation.

 

Severance Agreement

 

If Digi International should terminate your employment at any time in the future for reasons other than Cause, you will be provided with the following severance package in exchange for a full release of claims against the Company:

 

1)             Twelve months of base salary in effect at time of termination.  This shall be paid in a lump sum as soon as administratively feasible after the later of the date of termination or the date the release of claims has become irrevocable.

 

2)             A pro-rata bonus based on number of months worked in the fiscal year prior to a qualifying termination and the Company’s actual performance against annual objectives.  This pro-rata bonus shall be paid no later than 2.5 months after the close of fiscal year in which the qualifying termination occurs.

 

For purposes of this agreement, “Cause” shall mean only the following: (i) indictment or conviction of, or a plea of nolo contendere to, (A) any felony (other than any felony arising out of negligence), or any misdemeanor involving moral turpitude with respect to the Company, or (B) any crime or offense involving dishonesty with respect to the Company; (ii) theft or embezzlement of Company property or commission of similar acts involving dishonesty or moral turpitude; (iii) material negligence in the performance of your job duties after notice; (iv)failure to devote substantially all of his working time and efforts during normal business hours to the Company’s business; of (v) knowing engagement in conduct which is materially injurious to the Company.

 

Contingent Offer

 

This offer of employment is contingent upon the following:

 

1.              Approval of the offer by the Compensation Committee of the Board of Directors and your election as an Officer by the Board of Directors.

 

2.              Your signature on the enclosed Digi International Employment, Confidential Information, and Arbitration Agreement.  Your signature constitutes acceptance of the terms and conditions contained in the Agreement, so please read it thoroughly prior to signing.  This agreement must be signed prior to your first day of employment.

 

3.              A finding of “no issue” with your background and reference check.  Digi International has partnered with Verified Credentials, a background screening organization, to administer confidential background checks. Within 48 hours, we ask you to visit Verified Credentials website at http://myvci.com/digiinternationalinc to complete a personal questionnaire using your full legal name

 

 

including middle initial.  If you are unable to access the internet within this timeframe, please contact us directly to further assist you in the process. Delay in completion of the online personal questionnaire could delay in the start date of your employment.

 

4.              Digi’s determination that you are not subject to any agreement with any former employer or any other party that would prohibit you from working in the position of Sr. Vice President, Chief Financial Officer and Treasurer.

 

5.              Your completion of a Director and Officer’s questionnaire and a review of the same to the satisfaction of the company’s legal department.

 

Commencement Date and Offer Acceptance

 

We would like you to start on May 20, 2019.    Please inform me of your acceptance of this offer by May 6, 2019 and acknowledge your acceptance by signing one of the enclosed copies.

 

 

	
Sincerely,
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Digi   International Inc.
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
/s/ Ron Konezny
    	
 
    	
 
    	
 
    	
 
    
	
Ron Konezny
    	
 
    	
 
    	
 
    	
 
    
	
CEO
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Offer   accepted:
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
/s/ James “Jamie” Loch
    	
 
    	
May 2, 2019
    	
 
    	
May 20, 2019
    
	
James “Jamie” Loch
    	
 
    	
Sign Date
    	
 
    	
Start Dateex_143592.htm

Exhibit 10.1

 

 

Hand Delivered 

 

 

April 3, 2019

William (Bill) Bishop

Senior Vice President, Customer & Revenue Management

 

Dear Bill:

 

During your 15 years with Alaska Communications you have demonstrated consistent professional growth and accomplishment of business results. Over the last several years, you have led our growth in Business and Wholesale, while more recently taking on ownership for all revenue in the company in your most recent role as Senior Vice President, Customer and Revenue Management. I’m pleased with your progression and have confidence you will continue to achieve a high level of success. Therefore, it is with excitement that I’m promoting you to the position of Senior Vice President and Chief Operations Officer (SVP and COO) effective April 9, 2019. In this capacity, you will be part of a highly professional team that is dedicated to advancing the company in its position as Alaska’s leading integrated telecommunications company. If you accept this offer, you will continue to report to me.

 

In this role, your annual base salary rate will be $300,000, delivered in bi-weekly payrolls, and a $210,000 (70% of your base salary rate) target annual cash incentive for an annualized target cash compensation total of $510,000. As always, your annual incentive is reliant upon Board of Directors (BOD) approval and governing plan documents.

 

Your actual incentive payment (a) will vary based on your and our Company’s performance, (b) is earned and paid only after completion of the year-end financial audit, (c) is paid only to employees who continue to be regular, full time employees at the time payment is made in the year following the performance year, and (d) is pro-rated your first year based on your actual time in the position.

 

Another substantial component of your total compensation in this job is a target annual long-term incentive compensation award. Your total annual target long-term incentive compensation award as SVP and COO will be 80% of your base salary rate, comprised of retention and performance cash and / or equity compensation. We determine actual awards based on your role and performance of that role, and prorate for your actual time in the position. All awards are contingent upon Board of Directors (BOD) approval, governing plan documents, and your execution of required award documents.

 

Alaska Communications has developed a Corporate Compliance Program (CCP) and Protection of Proprietary Information Policy (PIP) to help employees meet the Company’s expectations. Adherence to all Alaska Communications Policies & Procedures is a condition of employment at Alaska Communications and new hires are expected to confirm their willingness to comply in writing. Copies of the current versions of both the CCP and PIP are attached for your advance review. By accepting our offer, you are agreeing to comply with these policies, as they may be amended from time to time in the future, and certify you are not obligated by any previously signed agreements that will preclude you from working at Alaska Communications.

 

 

 

 

	William Bishop	Page 2 of 2	 
	Offer Letter	April 3, 2019	 

 

 

In your position as an officer of our company, you will become privy to confidential and highly-sensitive competitive and proprietary information concerning our business, including but not limited to our customers, the products and services we offer, our finances, our business strategies, and our future plans. You agree that during your employment with us, and for a period of twelve months after termination of your employment, you will not become an officer, director, employee, contractor, consultant, partner, joint-venture, or otherwise enter a business relationship or service with any competitor of Alaska Communications in the markets we are serving at the time your employment terminates; and for a period of twelve months after termination of your employment you also agree that you will not offer, encourage or solicit any other officer or employee of Alaska Communications to leave the company or enter into an employment or business relationship with you or your subsequent employer. If and when you leave Alaska Communications, you agree that you will not make any disparaging statements, whether oral or written, about the company, its officers, directors, or employees or any aspect of its business. In addition, you agree to always protect all Alaska Communications’ confidential and proprietary information you learned as a result of your employment with us in accordance with the CCP and PIP.

 

As SVP and COO, you will also continue to be covered by the Alaska Communications Officer Severance Policy. It may be modified in the future and, as modified, will apply to you.

 

Business conditions change from time to time and the commitment to provide continuing employment and your total compensation package depends upon the Company’s success and continuing business requirements. As a result, I feel a responsibility to advise you that Alaska Communications is an “at will” employer. This means that either you or the Company can terminate the employment relationship at any time for any reason, with or without cause. While I feel the need to share these cautions, please also know that I feel confident that you are continuing with an organization that will prevail as the premier Alaskan communications service provider.

 

Bill, I’m looking forward to watching teams grow under your leadership. If you have questions about this offer, please do not hesitate to speak with me. I look forward to your accepting this offer by Friday April 5 2019.

 

 

 

Respectfully yours,

 

 

 

Anand Vadapalli

Chief Executive Officer & President

 

 

 

cc: Employee File

 

	Accepted: /s/ William Bishop  	Date: April 5, 2019
	Willaim Bishop

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