EXHIBIT 10.3
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Make-Whole Award
COMVERSE TECHNOLOGY, INC.
2005 STOCK INCENTIVE COMPENSATION PLAN
DEFERRED STOCK AWARD AGREEMENT
SECTION 1. GRANT OF DEFERRED STOCK UNITS.
(a) AWARD. On the terms and conditions set forth in this Agreement, and
consistent with the commitments made in the Grantee's Employment Agreement, the
Company grants to Xxxxxxx X. Xxxxxxx (the "Grantee") a total of 25,000 Deferred
Stock Units (the "Granted Units") on October 15, 2007 (the "Grant Date").
(b) SHAREHOLDER RIGHTS. The Grantee (or any successor in interest) shall not
have any of the rights of a shareholder (including, without limitation, voting,
dividend and liquidation rights) with respect to the Granted Units until such
time as the Company delivers to the Grantee the shares of Common Stock in
settlement of the Granted Units, as described in Section 4(a).
(c) PLAN AND DEFINED TERMS. This award is granted under and subject to the
terms of the 2005 Stock Incentive Compensation Plan (the "Plan"), which is
incorporated herein by reference. Capitalized terms used herein and not defined
in the Agreement (including Section 7 hereof) shall have the meaning set forth
in the Plan. To the extent any conflict between the terms of this Agreement
(other than Section 7 hereof) and the Plan, the terms of the Plan shall control.
(d) GRANTEE UNDERTAKING. The Grantee agrees to execute such further
instruments and to take such action as may reasonably be necessary to carry out
the intent of this Agreement.
SECTION 2. NO TRANSFER OR ASSIGNMENT OF AWARD.
This Award and the rights and privileges conferred hereby shall not
be sold, pledged or otherwise transferred (whether by operation of law or
otherwise) and shall not be subject to sale under execution, attachment, levy or
similar process; provided, however, that the Grantee shall be permitted to
transfer this award, in connection with his or her estate plan, to the Grantee's
spouse, siblings, parents, children and grandchildren or a charitable
organization that is exempt under Section 501(c)(3) of the Code or to trusts for
the benefit of such persons or partnerships, corporations, limited liability
companies or other entities owned solely by such persons, including trusts for
such persons or to the Grantee's former spouse in accordance with a domestic
relations order.
SECTION 3. VESTING; TERMINATION OF SERVICE.
(a) VESTING. This award shall vest with respect to one-third of the Granted
Units on each of the first, second and third anniversaries of the Grant Date or
such earlier date as may be determined under Section 3(c) hereof (each, a
"Vesting Date").
Make-Whole Award
(b) TERMINATION OF CONTINUOUS SERVICE. Except as otherwise provided in this
Section 3, the unvested portion of the award shall be forfeited as of the date
(the "Termination Date") that the Grantee actually ceases to provide services to
the Company or an Affiliate in any capacity as an Employee, Director or
Consultant (irrespective of whether the Grantee continues to receive severance
or any other continuation payments or benefits after such date) for any reason
(such cessation of the provision of services by Grantee being referred to as
"Service Termination"). A Service Termination shall not occur and Continuous
Service shall not be considered interrupted in the case of (i) any vacation,
sick leave or approved leave of absence, (ii) transfers among the Company, any
Subsidiary or Affiliate, or any successor, in any capacity as an Employee,
Director or Consultant, or (iii) any change in status as long as the individual
remains in the service of the Company or a Subsidiary or Affiliate in any
capacity as an Employee, Director or Consultant.
(c) CERTAIN TERMINATIONs. In the event of Service Termination by the Company
or an Affiliate without Cause or by the Grantee for Good Reason or resulting
from the Grantee's Disability, the Granted Units shall vest on the Termination
Date and the shares of Common Stock to be issued under the vested Granted Units
in accordance with Section 4 of hereof shall be delivered to the Grantee on the
applicable Vesting Date.
SECTION 4. SETTLEMENT OF GRANTED UNITS.
(a) SETTLEMENT AMOUNT. Subject to Section 4(b) hereof, the Company shall
deliver to the Grantee on each Vesting Date a number of shares of Common Stock
equal to the aggregate number of Granted Units that vest as of such date;
provided, however, that no shares of Common Stock will be issued in settlement
of this award unless the issuance of shares complies with all relevant
provisions of law and the requirements of any stock exchange upon which the
shares of Common Stock may then be listed. No fractional shares of Common Stock
will be issued. The Company will pay cash in respect of fractional shares of
Common Stock.
(b) TAX WITHHOLDING REQUIREMENTS. Unless the Grantee has made arrangements
satisfactory to the Company to enable it to satisfy all such withholding
requirements, the Company shall withhold from the settlement amount a sufficient
number of shares of Common Stock to enable the Company to satisfy its
withholding requirements with respect to the settlement of the Granted Units.
SECTION 5. ADJUSTMENT OF GRANTED UNITS.
If there shall be any change in the Common Stock of the Company,
through merger, consolidation, reorganization, recapitalization, stock dividend,
stock split, reverse stock split, split up, spinoff, combination of shares,
exchange of shares, dividend in kind or other like change in capital structure
or distribution (other than normal cash dividends), any extraordinary dividend
or distribution of cash or other assets to shareholders of the Company, in order
to prevent dilution or enlargement of participants' rights under the Plan, the
Committee shall adjust, in an equitable manner, the number and kind of shares
that will be paid to the Grantee upon settlement of the Granted Units.
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Make-Whole Award
SECTION 6. MISCELLANEOUS PROVISIONS.
(a) NO RETENTION RIGHTS, NO FUTURE AWARDS. Nothing in this award or in the
Plan shall confer upon the Grantee any right to any future Awards and to
continue in Continuous Service for any period of specific duration or interfere
with or otherwise restrict in any way the rights of the Company (or any Parent
or Subsidiary employing or retaining the Grantee) or of the Grantee, which
rights are hereby expressly reserved by each, to terminate his or her Continuous
Service at any time and for any reason, with or without cause.
(b) AWARD UNFUNDED. The Granted Units represent an unfunded promise. The
Grantee's rights with respect to the Granted Units are no greater than the
rights of a general unsecured creditor of the Company.
(c) NOTICE. Whenever under this Agreement it becomes necessary to give notice,
such notice shall be in writing, signed by the party or parties giving or making
the same, and shall be served on the person or persons for whom it is intended
or who should be advised or notified, by Federal Express (or other similar
overnight service) or by registered or certified mail, with postage and fees
prepaid. Notice shall be addressed to the Company at its principal executive
office and to the Grantee at the address that he or she most recently provided
in writing to the Company.
(d) ENTIRE AGREEMENT. This Agreement, the Grantee's Employment Agreement and
the Plan constitute the entire contract between the parties hereto with regard
to the subject matter hereof. They supersede any other agreements,
representations or understandings (whether oral or written and whether express
or implied) which relate to the subject matter hereof.
(e) WAIVER. No waiver of any breach or condition of this Agreement shall be
deemed to be a waiver of any other or subsequent breach or condition whether of
like or different nature.
(f) SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall inure to
the benefit of, and be binding upon, the Company and its successors and assigns
and upon the Grantee, the Grantee's assigns and the legal representatives, heirs
and legatees of the Grantee's estate, whether or not any such person shall have
become a party to this Agreement and have agreed in writing to be joined herein
and be bound by the terms hereof.
(g) CHOICE OF LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York (regardless of the law that
might otherwise govern under applicable New York principles of conflict of
laws).
(h) SECTION 409A. Anything to the contrary herein notwithstanding, the Granted
Units are not intended to be "nonqualified deferred compensation" within the
meaning of Section 409A and are intended to comply with the "short term
deferral" rules under Section 409A. If, however, the Granted Units or any
payment in lieu thereof is deemed to not comply with Section 409A, the Company
and the Executive agree to renegotiate in good faith any such benefit or payment
(including, without limitation, as to the timing of any settlement of Granted
Units or any payment in lieu thereof) so that either (i) Section 409A will not
apply or (ii) compliance with Section 409A will be achieved; provided, however,
that any resulting renegotiated terms shall provide to the Executive the
after-tax economic equivalent of what otherwise has been provided to the
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Make-Whole Award
Executive pursuant to the terms of this Agreement, and provided further, that
any deferral of payments or other benefits shall be only for such time period as
may be required to comply with Section 409A.
SECTION 7. DEFINITIONS.
(a) "AFFILIATE" shall mean (i) any entity other than the Subsidiaries in which
the Company has a substantial direct or indirect equity interest, as determined
by the Board, and (ii) any Subsidiary.
(b) "AGREEMENT" shall mean this Deferred Stock Unit Award Agreement.
(c) "CAUSE" shall have the meaning ascribed to it in the Grantee's written
employment agreement then in effect.
(d) "CODE" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and the regulations promulgated thereunder.
(e) "DISABILITY" shall have the meaning ascribed to it in the Grantee's
written employment agreement then in effect.
(f) "GOOD REASON" shall have the meaning set forth in the Grantee's written
employment agreement then in effect.
(g) "GRANT DATE" shall have the meaning described in Section 1(a) of this
Agreement.
(h) "GRANTED UNITS" shall have the meaning described in Section 1(a) of this
Agreement.
(i) "GRANTEE" shall have the meaning described in Section 1(a) of this
Agreement.
(j) "PLAN" shall have the meaning described in Section 1(c) of this Agreement.
(k) "SERVICE TERMINATION" shall have the meaning described in Section 3(b) of
this Agreement.
(l) "TERMINATION DATE" shall have the meaning described in Section 3(b) of
this Agreement.
(m) "VESTING DATE" shall have the meaning described in Section 3(a) of this
Agreement.
(Signature Page Follows)
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Make-Whole Award
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of the Company by its duly authorized officer, on September 4, 2007.
GRANTEE: COMVERSE TECHNOLOGY, INC.
/s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxx Xxxxx
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Xxxxxxx X. Xxxxxxx Xxxxx Xxxxx
Chief Executive Officer and
President
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