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Amended And Restated Employment Agreement

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ARRIS INTERNATIONAL PLC | ARRIS GROUP, INC

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Title: AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Governing Law: Georgia     Date: 8/24/2016
Industry: Communications Equipment     Sector: Technology

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Exhibit 10.1

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”), dated as of August 23, 2016, and effective as of September 1, 2016, is by and between ARRIS GROUP, INC. , a Delaware corporation (the “Company”), and Bruce McClelland (“Executive”).

WHEREAS , the parties hereto previously entered into that certain Employment Agreement dated as of November 26, 2008, as subsequently amended by that certain Waiver dated as of December 31, 2015 (as so amended, the “Original Agreement”); and

WHEREAS , the parties now desire to further amend and restate in full the Original Agreement to reflect, among other things, changes in Executive’s title, responsibilities and compensation as reflected in this Agreement.

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

1. Employment . Executive agrees to continue his employment with the Company, and the Company agrees to continue to employ Executive, on the terms and conditions set forth in this Agreement. Executive agrees during the term of this Agreement to use his best efforts, skills and abilities to promote the interests of the Company, and to faithfully and diligently perform his duties and responsibilities as stated in this Agreement. During the term of this Agreement, Executive shall not serve as a director or principal of any other company or charitable, religious or civic organization without the prior written consent of the Chairman of the Board of Directors of the parent corporation of the Company, ARRIS International plc (“Parent”).

Executive’s job title will be Chief Executive Officer and his duties and responsibilities will be those customarily performed by persons acting in such capacity and/or as are designated from time to time by the Chairman of the Board of Directors of the Parent. Executive will report directly to the Chairman of the Board of Directors of the Parent. Executive further agrees to serve, without additional compensation, as an officer or director, or both, of any subsidiary, division or affiliate of the Company, including Parent, or any other entity in which the Company holds an equity interest, provided, however, that (a) the Company shall indemnify Executive from liabilities in connection with serving in any such position to the fullest extent applicable to any other officer or director of the Parent or the Company and (b) such other position shall not materially detract from the duties and responsibilities of Executive pursuant to this Section 1 or his ability to perform such duties and responsibilities.

 

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2. Compensation .

(a) Base Salary . During the term of Executive’s employment with the Company pursuant to this Agreement, the Company shall pay to Executive as compensation for his services an annual base salary of not less than $750,000 (“Base Salary”). Executive’s Base Salary will be payable in arrears (no less frequently than monthly) in accordance with the Company’s normal payroll procedures and will be reviewed annually and subject to upward adjustment at the discretion of the Board of Directors of Parent and/or the Compensation Committee thereof, but will not be lowered except in connection with reductions applied to all executive officers on an equal percentage basis and other than in contemplation of or on or after a Change in Control.

(b) Incentive Bonus . During the term of Executive’s employment with the Company pursuant to this Agreement, Executive will be eligible to participate in an annual incentive compensation program (the “Incentive Bonus”) as shall be determined by the Board of Directors of Parent and/or the Compensation Committee thereof at their discretion with an annual target bonus opportunity equal to 100% of Base Salary, and allowing for payment of up to 200% of Base Salary. For avoidance of doubt, with respect to any Incentive Bonus payable for 2016, the target bonus opportunity set forth in this Section 2(b) and the Base Salary set forth in Section 2(a) used to calculate the amount shall only apply for the portion of the year from September 1 st through December 31 st . Executive’s Incentive Bonus, if any, shall be payable as soon after the end of each calendar year to which it relates as it can be determined, but in any event within two and one-half (2-1/2) months after the end of calendar year to which the Incentive Bonus relates.

(c) Equity Compensation . During the term of Executive’s employment with the Company pursuant to this Agreement, Executive will be eligible to receive stock options, restricted stock, restricted stock units and/or other equity awards under the Parent’s applicable equity plans on such basis as the Board of Directors of Parent and/or the Compensation Committee thereof, as the case may be, may determine on a basis not less favorable than that provided to employees in comparable positions. However, nothing herein shall require the Parent to make any equity grants or other awards to Executive in any specific year

(d) Executive Perquisites . During the term of Executive’s employment with the Company pursuant to this Agreement, Executive shall be entitled to receive such executive perquisites and fringe benefits as are provided to the executives in comparable positions and their families under any of the Company’s plans and/or programs in effect from time to time and such other benefits as are customarily available to executives of the Company and their families, including without limitation vacations and life, medical and disability insurance, in accordance with the terms and conditions of such executive perquisites, fringe benefits and plans and/or programs.

(e) Tax Withholding . The Company has the right to deduct from any compensation payable to Executive under this Agreement social security (FICA) taxes and all federal, state, municipal or other such taxes or charges as may now be in effect or that may hereafter be enacted or required.

 

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(f) Expense Reimbursements . The Company shall pay or reimburse Executive for all reasonable business expenses incurred or paid by Executive in the course of performing his duties hereunder, including but not limited to (i) reasonable travel expenses for Executive and (ii) reasonable attorney’s fees and costs associated with the review of this Agreement by counsel to Executive in an amount not to exceed $5,500. As a condition to such payment or reimbursement, however, Executive shall maintain and provide to the Company reasonable documentation and receipts for such expenses. Such payments and reimbursements shall be made as soon as administratively practicable following submission of reasonable documentation and receipts for such expenses but all such payments and reimbursements shall be made no later than the last day of the calendar year following the calendar year in which Executive incurs the reimbursable expense.

3. Term . Unless sooner terminated pursuant to Section 4 of this Agreement, and subject to the provisions of Section 5 hereof, the term of employment under this Agreement shall commence as of the date hereof and shall continue for a period of one year. The term automatically shall be extended by one day for each day of employment hereunder. Notwithstanding the foregoing, the term of employment under this agreement shall terminate, if it has not terminated earlier, without further action on the part of the Company or Executive, upon Executive’s 65th birthday. The date on which Executive’s employment with the Company terminates shall be the “Termination Date.”

4. Termination . Notwithstanding the provisions of Section 3 hereof, but subject to the provisions of Section 5 hereof, Executive’s employment under this Agreement shall terminate as follows:

(a) Death . Executive’s employment shall terminate upon the death of Executive, provided, however, that the Company shall continue to pay no less frequently than monthly (in accordance with its normal payroll procedures) the Base Salary to Executive’s estate for a period of three months after the date of Executive’s death.

(b) Termination for Cause . The Company may terminate Executive’s employment at any time for “Cause” (as hereinafter defined) by delivering a written termination notice to Executive, such notice to include in reasonable specificity the conduct justifying termination for Cause. For purposes of this Agreement, “Cause” shall mean, as reasonably determined in good faith by the Board of Directors of Parent and/or the Compensation Committee thereof, any of: (i) Executive’s indictment for (or its procedural equivalent), or entering of a guilty plea or plea of no contest with respect to, or conviction of a felony or a crime involving moral turpitude; (ii) Executive’s commission of an act constituting fraud, deceit or material misrepresentation with respect to the Company or any subsidiary, division or affiliate of the Company, including Parent, or any other entity in which the Company holds an equity interest; (iii) Executive’s embezzlement of funds or assets from the Company or any subsidiary, division or affiliate of the Company, including Parent, or any other entity in which the Company

 

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holds an equity interest; (iv) Executive’s engagement in habitual insobriety or the use of illegal drugs or substances; (v) Executive’s commission of any act or omission in connection with his duties for the Company which constitutes a material breach of applicable law or causes the Company materially to breach applicable law and with respect to which the Company would have the right, obligation or reasonable desire to terminate Executive’s employment; or (vi) Executive’s failure to correct or cure any material breach of or default under this Agreement within ten days after receiving written notice of such breach or default from the Company.

(c) Termination Without Cause . The Company may terminate Executive’s employment without Cause by delivering thirty days prior written notice to Executive.

(d) Termination by Executive . Executive may terminate his employment by delivering prior written notice as specified below to the Company, such notice to include in reasonable specificity the conduct by Company justifying termination by Executive if such termination occurs in connection with Company’s breach of this Agreement; provided, however, that the terms, conditions and benefits specified in Section 5 hereof (but not the continued vesting under Section 4(f) below) shall apply or be payable to Executive only if such termination occurs as a result of a material breach by the Company of any provision of this Agreement (which the Company fails to cure within thirty days after written notice of such breach from Executive delivered to the Company within thirty days of such material breach). In case of Executive’s termination as the result of a material breach by the Company, the Executive’s Termination Date shall be the day immediately following the end of such thirty-day period (upon the Company’s failure to cure such breach), unless the Company provides for an earlier Termination Date. In all other cases of termination by Executive pursuant to this Section 4(d), Executive shall give the Company ninety days prior written notice.

(e) Termination Following Disability . In the event Executive becomes Disabled (as hereinafter defined) and is unable to perform his material duties and responsibilities hereunder for a period of at least ninety days in the aggregate during any one hundred twenty consecutive day period, the Company may terminate Executive’s employment at any time thereafter (provided Executive continues to be Disabled) by delivering a written termination notice to Executive. In the event of termination following Executive becoming Disabled, Executive shall only be entitled to receive his Base Salary and benefits under this Agreement for a period of six months after the effective date of such termination with his Base Salary payable in arrears no less frequently than monthly in accordance with the Company’s normal payroll procedures and continued benefits on a monthly basis through such time; provided however, in the event the Company temporarily replaces the Executive, or transfers the Executive’s duties or responsibilities to another individual on account of the Executive’s inability to perform such duties due to a mental or physical incapacity which is, or is reasonably expected to become, a Disability, then the Executive’s employment shall not be deemed terminated by the Company on account of Executive being Disabled until Executive then is considered Disabled as described above, and Executive shall not be able to resign pursuant to Section 4(d) on the basis of a material breach of this Agreement by the Company, or pursuant to Section 6(a) on the basis of Good Reason, as a result of any such actions by the Company.

 

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For purposes of this Agreement, “Disabled” means any time that Executive is entitled to receive long term disability benefits under the Company’s long term disability plan, or if there is no such plan, Executive’s inability, due to physical or mental incapacity to substantially perform, with or without reasonable accommodation, his duties and responsibilities under this Agreement for a period of at least ninety days in the aggregate during any one hundred twenty consecutive day period. Any question as to the existence of Executive’s Disability as to which Executive and the Company cannot agree shall be determined in writing by a qualified independent physician mutually acceptable to Executive and the Company. If Executive and the Company cannot agree as to a qualified independent physician, each shall appoint such a physician and those two physicians shall select a third who shall make such determination in writing. The determination that Executive is Disabled will be made in writing to the Company and Executive, and such determination shall be final and conclusive for all purposes of this Agreement.

(f) Payments . Following any expiration or termination of this Agreement and Executive’s employment hereunder, in addition to any amounts owed pursuant to Section 5 hereof, the Company shall pay to Executive all amounts earned by Executive hereunder prior to the date of such expiration and termination, as soon as administratively practicable following the date of termination of Executive’s employment, in the normal course consistent with the provisions of this Agreement. Additionally, subject to Executive’s continued compliance with Sections 7 and 8 of this Agreement, if (i) the Company terminates Executive’s employment without Cause pursuant to Section 4(c) or (ii) Executive terminates his employment with the Company pursuant to Section 4(d) (whether or not in connection with any material breach by the Company), in either event on or after Executive attains age 62 (provided Executive has no less than 10 years of continuous service with Company and/or any subsidiary, division or affiliate of the Company, including Parent, as of such termination), all of Executive’s stock options and other equity awards outstanding at termination of Executive’s employment shall continue to vest for four (4) years after the termination as if Executive remained employed through such time, and such stock options shall remain outstanding through the original expiration date of the stock options (disregarding any earlier expiration date based on Executive’s termination of employment).

5. Certain Termination Benefits . Subject to Section 6(a) hereof, in the event (i) the Company terminates Executive’s employment without Cause pursuant to Section 4(c) or (ii) Executive terminates his employment pursuant to Section 4(d) after a material breach by the Company (which the Company fails to cure within ten days after written notice of such breach from Executive delivered to the Company within thirty days of such material breach):

(a) Base Salary and Incentive Bonus . The Company shall continue to pay to Executive his Base Salary (as in effect as of the date of such termination) and Incentive Bonus based upon the assumption that Executive would have fulfilled the requirements to earn his Incentive Bonus at target that would have been payable hereunder to Executive from the date of such termination for a period of twenty-four (24) months following the termination (and a prorated portion for any partial year). The Company shall continue to pay to Executive his Base Salary (as in effect as of the date of such termination) no less frequently than monthly in

 

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accordance with the Company’s normal payroll procedures, beginning with the first payroll date after the date of termination of Executive’s employment and continuing for twenty-four (24) months immediately following the termination. The Company also shall pay to Executive an Incentive Bonus for each Company fiscal year (and a pro rata amount for each partial Company fiscal year) during the twenty-four (24) months immediately following Executive’s termination of employment in an amount equal to the target bonus Executive would have received had he fulfilled the requirements to earn his Incentive Bonus that would have been payable during such time (or pro rata amount of such bonus for any partial Company fiscal year) with the Incentive Bonus for any fiscal year or partial year to be paid after the end of such fiscal or partial year and within two and one-half (2-1/2) months thereafter. Notwithstanding the foregoing, all payments to be made or benefits to be provided under this Section are subject to the provisions of Section 5(f) and (h) below.

(b) Stock . Subject to Section 9 hereof, on and as of the effective date of the termination of employment, all of Executive’s outstanding time-based stock options, restricted stock unit and other equity award grants under the Company’s stock option and other benefit plans shall immediately vest, and all performance-based stock options, restricted stock units and other equity award grants shall continue to vest as if Executive remained employed through the applicable vesting date(s) set forth therein, if the termination of Executive’s employment under this Section 5 occurs before Executive attains age 62 or older with ten or more years of continuous service with Company and/or any subsidiary, division or affiliate of the Company, including Parent. Additionally, all of Executive’s outstanding stock options shall remain outstanding until the original expiration date of the stock options (disregarding any earlier expiration date based on Executive’s termination of employment).

(c) Life Insurance . For a period of twenty-four (24) months immediately following termination of employment (the “Life Insurance Premium Payment Period”), the Company shall pay to Executive an amount in cash equal to the Company’s cost of providing Executive with group and additional life insurance coverage if he had remained employed during the Life Insurance Premium Payment Period. Such cash payment shall be paid no less frequently than monthly in accordance with the Company’s normal payroll procedures and subject to applicable withholding, beginning with the first payroll date after the date of termination of Executive’s employment and continuing for the Life Insurance Premium Payment Period.

(d) Medical Insurance . For a period of the earlier of (i) twenty-four (24) months immediately following termination of employment, and (ii) Executive becoming eligible for group medical insurance coverage under another employer’s plan (the “Health Benefits Continuation Period”), the Company shall pay to Executive an amount in cash equal to the excess of (x) the cost to continue participation in any group medical, dental, vision and/or prescription drug plan benefits to which Executive and/or Executive’s eligible dependents would be entitled under Section 4980B of the Code (“COBRA”), over (y) the amount that Executive would have had to pay for such coverage if he had remained employed during the Health Benefits Continuation Period and paid the active employee rate for such coverage; provided, however, the Company’s payment of such costs shall be deemed to be taxable income to Executive in accordance with applicable rules and regulations. Such cash payment shall be paid

 

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no less frequently than monthly in accordance with the Company’s normal payroll procedures and subject to applicable withholding, beginning with the first payroll date after the date of termination of Executive’s employment and continuing for the Health Benefits Continuation Period.

(e) Group Disability . For a period of twenty-four (24) months immediately following termination of employment (subject in the case of long-term disability to the availability of such coverage under Company’s insurance policy) (the “Disability Premium Payment Period”), the Company shall pay to Executive an amount in cash equal to the Company’s cost of providing Executive with coverage under the Company’s group disability plan if he had remained employed during the Disability Premium Payment Period. Such cash payment shall be paid no less frequently than monthly in accordance with the Company’s normal payroll procedures and subject to applicable withholding, beginning with the first payroll date after the date of termination of Executive’s employment and continuing for the Disability Premium Payment Period.

(f) Section 409A . Notwithstanding any other provisions of this Agreement, it is intended that any payment or benefit which is provided pursuant to or in connection with this Agreement and which is considered to be nonqualified deferred compensation subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), will be provided and paid in a manner, and at such time, as complies with Section 409A of the Code. For purposes of this Agreement, all rights to payments and benefits hereunder shall be treated as rights to receive a series of separate payments and benefits to the fullest extent allowed by Section 409A of the Code. If Executive is a key employee (as defined in Section 416(i) of the Code without regard to paragraph (5) thereof) and any of Company’s stock is publicly traded on an established securities market or otherwise, then the payment of any amount or provision of any benefit under this Agreement which is considered to be nonqualified deferred compensation subject to Section 409A of the Code shall be deferred for six (6) months after the Termination Date or, if earlier, Executive’s death (the “409A Deferral Period”), as required by Section 409A(a)(2)(B)(i) of the Code. In the event payments are otherwise due to be made in installments or periodically during such 409A Deferral Period, the payments which would otherwise have been made in the 409A Deferral Period shall be accumulated and paid in a lump sum as soon as the 409A Deferral Period ends, and the balance of the payments shall be made as otherwise scheduled. In the event, benefits are otherwise to be provided hereunder during such 409A Deferral Period, any such benefits may be provided during the 409A Deferral Period at Executive’s expense, with Executive having a right to reimbursement for such expense from the Company as soon as the 409A Deferral Period ends, and the balance of the benefits shall be provided as otherwise scheduled. For purposes of this Agreement, Executive’s termination of employment shall be construed to mean a “separation from service” within the meaning of Section 409A of the Code where it is reasonably anticipated that no further services will be performed after such date or that the level of bona fide services Executive would perform after that date (whether as an employee or independent contractor) would permanently decrease to less than fifty percent (50%) of the average level of bona fide services performed over the immediately preceding thirty-six (36)-month period. Without limitation, if any payment or benefit which is provided pursuant to or in connection with this Agreement and which is considered to be nonqualified

 

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deferred compensation subject to Section 409A of the Code fails to comply with Section 409A of the Code, and Executive incurs any additional tax, interest and penalties under Section 409A of the Code, Company will pay Executive an additional amount so that, after paying all taxes, interest and penalties on such additional amount, Executive has an amount remaining equal to such additional tax, interest and penalties. All payments to be made to Executive pursuant to the immediately preceding sentence shall be payable no later than when the related taxes, interest and penalties are to be remitted. Any right to reimbursement incurred due to a tax audit or litigation addressing the existence or amount of any tax liability addressed in the immediately preceding sentence must be made no later than when the related taxes, interest and penalties that are the subject of the audit or litigation are to be remitted to the taxing authorities or, where no such taxes, interest and penalties are remitted, within thirty (30) days of when the audit is completed or there is a final non-appealable settlement or resolution of the litigation.

(g) Offset . Any benefits received by Executive in connection with any other employment that are reasonably comparable, but not necessarily as beneficial, to Executive as the benefits set forth in clauses (c), (d) and (e) above then being provided by the Company pursuant to this Section 5, shall be deemed to be the equivalent of, and shall terminate the Company’s responsibility to continue providing, the benefits set forth in clauses (c), (d) and (e) above then being provided by the Company pursuant to this Section 5. The Company acknowledges that if Executive’s employment with the Company is terminated, Executive shall have no duty to mitigate damages. For the avoidance of doubt, the offset provided by this Section 5(g) shall not apply to the benefits provided to Executive under clauses (a) or (b) of this Section 5.

(h) General Release . Acceptance by Executive of any amounts pursuant to this Section 5 shall, to the fullest extent permitted by applicable law, constitute a full and complete release by Executive of any and all claims Executive may have against the Company, its officers, directors and affiliates, including, but not limited to, claims he might have relating to Executive’s cessation of employment with the Company; provided, however, that there may properly be excluded from the scope of such general release the following:

(i) claims that Executive may have against the Company for reimbursement of ordinary and necessary business expenses incurred by him during the course of his employment;

(ii) claims that may be made by the Executive for payment of Base Salary, fringe benefits or stock options properly due to him; or

(iii) claims respecting matters for which the Executive is entitled to be indemnified under the Company’s Certificate of Incorporation or Bylaws, respecting third party claims asserted or third party litigation pending or threatened against the Executive.

Notwithstanding the foregoing, as a condition to the payment to Executive of any amounts pursuant to this Section 5, Executive shall execute and deliver to the Company a release in the

 

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customary form then being used by the Company, which may include non-disparagement and confidentiality agreements. In exchange for such release, the Company shall, if Executive’s employment is terminated without Cause, or as the result of a material breach by the Company (which the Company fails to cure within thirty days after written notice of such breach from Executive delivered to the Company within thirty days of such material breach), provide a release to Executive, but only with respect to claims against Executive which are actually known to the Company as of the time of such termination. Executive will be required to execute and not revoke the Company’s standard written release of any and all claims against the Company and all related parties with respect to all matters arising out of Executive’s employment by the Company (other than as described above) no later than thirty (30) days following Executive’s termination of employment (or such later time as the Company may permit). I


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