EXHIBIT 10.1
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EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made and entered into as of
the 4th day of September, 2007, by and between Comverse Technology, Inc., a New
York corporation (together with its successors and assigns permitted under this
Agreement, the "Company"), and Xxxxxxx X. Xxxxxxx (the "Executive").
W I T N E S S E T H
WHEREAS, the Company desires to employ the Executive as its Executive Vice
President, General Counsel and Corporate Secretary and to enter into an
employment agreement embodying the terms of such employment; and
WHEREAS, the Executive desires to enter into this Agreement and to accept
such employment, subject to the terms and provisions of this Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which is mutually acknowledged, the Company and the Executive
(individually a "Party" and together the "Parties"), intending to be legally
bound, agree as follows:
1. Definitions.
(a) "Base Salary" shall mean the Executive's base salary as
determined in accordance with Section 4 below, including any applicable
increases and permitted decreases.
(b) "Board" shall mean the Board of Directors of the Company.
(c) "Cause" shall mean:
(i) an indictment or conviction of the Executive of, or a
plea of nolo contendere by the Executive to, any felony;
(ii) a material violation by the Executive of federal or
state securities laws, as determined by a court or other
governmental body of competent jurisdiction;
(iii) willful misconduct or gross negligence by the Executive
with regard to the Company resulting in material and
demonstrable harm to the Company;
(iv) a material violation by the Executive of any material
Company policy or procedure provided to the Executive,
including without limitation a material violation of the
Company's Code of Business Conduct and Ethics, resulting
in material and demonstrable harm to the Company;
(v) the repeated and continued failure by the Executive to
carry out, in all material respects, the reasonable and
lawful directions of the Company's Chief Executive
Officer and President and/or Board that are within the
Executive's individual control and consistent with the
Executive's status as a senior executive of the Company
and her duties and responsibilities hereunder, except
for a failure that is attributable to the Executive's
illness, injury or Disability; or
(vi) fraud, embezzlement, theft or material dishonesty by the
Executive against the Company (other than good faith
immaterial expense account disputes);
provided, however, that no finding of Cause pursuant to subsections (iii) or
(iv) hereof shall be effective unless and until the Company has provided the
Executive with written notice thereof in accordance with Section 25 below
stating with specificity the facts and circumstances underlying the finding of
Cause and, if the basis for such finding of Cause is capable of being cured by
the Executive, providing the Executive with an opportunity to cure the same
within thirty (30) calendar days after receipt of such notice in accordance with
Section 25 below.
For purposes of this Agreement, no act or failure to act, on the part of the
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith and without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon specific direction given pursuant to a
resolution adopted by the Board of Directors or on the advice of Company counsel
shall be conclusively presumed to be done, or omitted to be done, by the
Executive in good faith and in the best interests of the Company.
Notwithstanding the above, any termination of Executive's employment based on
Cause shall not be deemed to be for Cause unless and until Executive has been
provided with (i) written notice specifying in detail the basis for such action
and (ii) on at least (10) days prior notice, an opportunity, together with legal
counsel, to be heard on such proposed determination.
(d) "Change in Control" shall occur upon:
(i) any person, entity or affiliated group becoming the
beneficial owner or owners of more than fifty percent
(50%) of the outstanding equity securities of the
Company, or otherwise becoming entitled to vote shares
representing more than fifty percent (50%) of the total
voting power of the Company's then-outstanding
securities eligible to vote to elect members of the
Board (the "Voting Securities");
(ii) a consolidation or merger (in one transaction or a
series of related transactions) of the Company pursuant
to which the holders of the Company's equity securities
immediately prior to such transaction (or series of
related transactions) would not be the holders
immediately after such transaction (or series of related
transactions) of more than fifty percent (50%) of the
Voting Securities of the entity surviving such
transaction (or series of related transactions);
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(iii) during any period of two consecutive years, individuals
who at the beginning of such period constituted the
entire Board ceased for any reason to constitute a
majority thereof unless the election, or the nomination
for election by the Company's shareholders, of each new
director was approved by a vote of at least two-thirds
of the directors then still in office who were directors
at the beginning of the period; or
(iv) a sale of all or substantially all of the Company's
assets.
(e) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
(f) "Compensation Committee" shall mean the Compensation Committee
of the Board or another committee of the Board that performs the functions
typically associated with a compensation committee.
(g) "Disability" shall mean the Executive's inability to
substantially perform her duties and responsibilities under this Agreement for a
period of six (6) consecutive months or nine (9) out of twelve (12)
nonconsecutive months due to a physical or mental disability, as the term
"physical or mental disability" is defined in the Company's long-term disability
insurance plan then in effect (or would be so found if the Executive applied for
coverage or benefits under such plan).
(h) "Effective Date" shall mean October 15, 2007.
(i) "Good Reason" shall mean, without the Executive's prior
written consent, the occurrence of any of the following events or actions,
provided that no finding of Good Reason shall be effective unless and until the
Executive has provided the Company, within sixty (60) calendar days of becoming
aware of the facts and circumstances underlying the finding of Good Reason, with
written notice thereof in accordance with Section 25 below stating with
specificity the facts and circumstances underlying the finding of Good Reason
and, if the basis for such finding of Good Reason is capable of being cured by
the Company, providing the Company with an opportunity to cure the same within
thirty (30) calendar days after receipt of such notice in accordance with
Section 25 below:
(i) any reduction in the Executive's Base Salary or Target
Bonus, other than as part of an across-the-board
reduction applicable to all senior executives of the
Company that results in a reduction to the Executive
proportional to that of other executives, provided,
however, that an across-the-board reduction of
Executive's compensation in excess of 10% of Base Salary
or 20% of Target Bonus shall constitute Good Reason;
(ii) an actual relocation of the Executive's principal office
to another location more than 35 miles from Manhattan,
New York City, New York;
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(iii) any material diminution in the Executive's title,
position or reporting status, or any material diminution
of the Executive's duties or responsibilities;
(iv) notice to Executive of the Company's intention not to
renew this Agreement pursuant to Section 2 below.
(v) a failure of the Company to obtain the assumption in
writing of its obligations under this Agreement by any
successor to all or substantially all of the assets of
the Company within ten (10) calendar days after
completion of a merger, consolidation, sale or similar
transaction and the failure to deliver a copy of the
document effecting such assumption to the Executive upon
the Executive's written request; or
(vi) a material breach by the Company of any provision of
this Agreement.
(j) "Term of Employment" shall mean the period specified in
Section 2 below, as such period may be extended.
2. Term of Employment.
The Company hereby employs the Executive, and the Executive hereby
accepts such employment, for the period commencing on the Effective Date and
ending 18 months thereafter, subject to earlier termination of the Term of
Employment in accordance with the terms of this Agreement (the "Initial Term").
This Agreement shall be automatically renewed for additional one (1) year
periods at the end of the Initial Term and on each anniversary thereafter,
unless either Party notifies the other Party in writing, in accordance with
Section 25, of her or its intention not to renew this Agreement not less than
sixty (60) calendar days prior to such expiration date or anniversary, as the
case may be. Executive shall be based in the Company's headquarters in New York,
New York with such travel within and outside of the United States as may be
reasonably required in the performance of Executive's duties.
3. Position, Duties and Responsibilities; Reporting.
As of the Effective Date and continuing for the remainder of the
Term of Employment, the Executive shall be employed as the Executive Vice
President, General Counsel and Corporate Secretary of the Company. In this
capacity, the Executive shall be have the duties, responsibilities and authority
commensurate with the position and such other duties and responsibilities as are
appropriate for a person holding the offices set forth in this section and
assigned by the Company's Chief Executive Officer. Unless prevented by illness,
injury or Disability, the Executive shall devote substantially all of the
Executive's time, attention and efforts during normal working hours, and at such
other times as the Executive's duties may reasonably require, to the duties of
the Executive's employment; provided, however, that the Executive may (a) serve
on civic or charitable boards or committees; or (b) with the approval of the
Company's Chief Executive Officer, serve on other corporate boards or
committees; provided, further, in each case of (a) and (b) and in the aggregate,
that such activities do not conflict or interfere with the performance of the
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Executive's duties hereunder or conflict with Section 13. The Executive shall
report to the Company's Chief Executive Officer in carrying out her duties under
this Agreement. If requested, the Executive shall also serve as an executive
officer and/or member of the board of directors of any of the Company's
subsidiaries or affiliates without additional compensation.
4. Base Salary.
As of the Effective Date and for the remainder of fiscal year 2007,
the Executive shall be paid a Base Salary at the rate of not less than four
hundred and thirty-seven thousand ($437,000) per annum, payable in accordance
with the regular payroll practices of the Company. Thereafter, the Base Salary
shall be reviewed no less frequently than annually, including in respect of
fiscal year 2008, and the amount thereof may be increased in the discretion of
the Board or the Compensation Committee. After giving effect to the preceding
two sentences, the Base Salary may not be decreased unless the Executive
provides her prior written consent to such decrease or it is part of an
across-the-board reduction applicable to all senior executive officers of the
Company that results in a reduction to the Executive proportional to that of
other executives (subject to the exception set forth in Section 1(i)(i).
5. Incentive Compensation Arrangements.
The Executive's maximum annual bonus opportunity for each fiscal
year shall be $425,000 (and shall be adjusted based on future increases in Base
Salary) and will be payable based upon the achievement of performance criteria
developed by the Company's Chief Executive Officer; provided, however, that the
Executive's bonus for fiscal year 2007 shall not be less than Two Hundred
Thousand Dollars ($200,000). For purposes of this Agreement, Executive's target
bonus opportunity ("Target Bonus") shall be $300,000 (subject to achievement of
the requisite performance criteria). Any bonuses shall be payable when bonuses
are customarily payable under the Company's regular payroll practices, but in no
event later than 2 and 1/2 months following the end of the applicable fiscal
year.
6. Long-Term Incentive Compensation Programs.
(a) On the Effective Date, there will be a grant to Executive of 25,000
deferred stock units representing the right to receive, upon vesting, shares of
Company common stock ("Common Stock") in accordance with the terms and
conditions of the Company's 2005 Stock Incentive Compensation Plan and the form
of the Company's Deferred Stock Award Agreement that will vest one-third on each
of the first, second and third anniversary of the Effective Date.
(b) During the Term of Employment (including fiscal year 2008), the
Executive will be eligible to receive equity awards under the Company's stock
incentive plans based on the performance of the Company and the performance of
the Executive, as recommended by the Company's Chief Executive Officer and
determined in the good faith discretion of the Board and/or Compensation
Committee, as applicable, and consistent with the Executive's role and
responsibilities as Executive Vice President, General Counsel and Corporate
Secretary of the Company, with such awards to be assessed on an annual basis.
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7. Equity Grant.
On the Effective Date, there will be a one-time grant (in addition to any
grant under Section 6 above) to Executive of 25,000 deferred stock units
representing the right to receive, upon vesting, shares of Common Stock in
accordance with the terms and conditions of the Company's 2005 Stock Incentive
Compensation Plan and the form of the Company's Deferred Stock Award Agreement
in order to offset the loss of existing unvested equity incentive rights that
Executive is or would have been entitled to at Executive's current employer (the
"Special One-Time Equity Grant"). These deferred stock units will vest one-third
on each of the first, second and third anniversary of the Effective Date.
8. Employee Benefit Programs.
During the Term of Employment, the Executive shall be entitled to
participate in all employee welfare and pension benefit plans, programs and/or
arrangements applicable to senior-level executives other than those relating to
cash bonuses or equity awards (as to which Sections 5 and 6 hereof shall
govern).
9. Reimbursement of Business Expenses.
During the Term of Employment, the Executive is authorized to incur
reasonable business expenses in carrying out her duties and responsibilities
under this Agreement, and the Company shall reimburse her for all such
reasonable business expenses, subject to documentation in accordance with the
Company's policies relating thereto.
10. Perquisites.
(a) During the Term of Employment, the Executive shall be entitled to
participate in the Company's executive fringe benefit programs applicable to the
Company's senior-level executives (if any) in accordance with the terms and
conditions of such programs as in effect from time to time.
(b) In addition to any Company provided life insurance coverage
otherwise provided pursuant to Sections 8 or 10(a) above, the Company shall,
during the period that the equity award under Section 7 above remains unvested,
maintain for the benefit of Executive and her beneficiaries a term insurance
policy on the life of Executive with a minimum death benefit equal to the value
of the unvested portion of such equity award.
(c) The Company shall pay for reasonable legal fees and expenses up to
an amount of $15,000 incurred by the Executive in connection with the
negotiation and drafting of this Agreement.
11. Vacation.
The Executive be entitled to four (4) weeks paid vacation in each calendar
year and seven (7) personal days administered in accordance with the Company's
policies in place from time to time.
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12. Termination of Employment.
(a) Termination of Employment Due to Death or Disability. In the event
of the Executive's death or Disability during the Term of Employment, the Term
of Employment shall end as of the date of the Executive's death or Disability
and she or her estate and/or beneficiaries, as the case may be, shall be
entitled to the following, subject to Section 28 below::
(i) Base Salary earned but not paid prior to the date of her death
or Disability, and any annual bonus earned pursuant to Section
5, but unpaid, as of the date of death or Disability for the
immediately preceding fiscal year, payable when bonuses are
paid by the Company to its senior-level executives in respect
of such fiscal year (but not later than 2-1/2 months after the
end of such fiscal year);
(ii) a pro-rata share of the annual bonus the Executive would have
earned pursuant to Section 5 if she had remained employed
through the end of the fiscal year in which her death or
Disability termination occurred, based on the Company's actual
performance against the goals set by the Compensation
Committee for such fiscal year, payable when bonuses are paid
by the Company to its senior-level executives in respect of
such fiscal year (but not later than 2-1/2 months after the
end of such fiscal year);
(iii) any amounts earned, accrued or owing to the Executive prior to
the date of her death but not yet paid under Sections 8, 9, 10
or 11 above in accordance with the terms thereof; and
(iv) such other or additional benefits, if any, as may be provided
under applicable plans, programs and/or arrangements of the
Company.
In addition, in the event of a termination of Executive's employment for
Disability, all unvested deferred stock units pursuant to the Special One Time
Equity Grant under Section 7 above shall become fully vested on the date of such
termination. In no event shall a termination of the Executive's employment for
Disability occur unless the Party terminating the Executive's employment
provides written notice to the other Party in accordance with Section 25 below.
(b) Termination of Employment by the Company for Cause. If the Company
terminates the Executive's employment for Cause during the Term of Employment,
the Term of Employment shall end as of the date of termination and the Executive
shall be entitled to the following:
(i) Base Salary earned but not paid prior to the date of
termination;
(ii) any amounts earned, accrued or owing to the Executive prior to
the date of termination but not yet paid under Sections 8, 9,
10 or 11 above in accordance with the terms thereof; and
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(iii) such other or additional benefits, if any, as may be provided
under applicable plans, programs and/or arrangements of the
Company.
(c) Termination of Employment by the Company without Cause or by the
Executive for Good Reason. If the Executive's employment is terminated by the
Company without Cause (other than due to death or Disability) or by the
Executive for Good Reason, the Term of Employment shall end as of the date of
termination and the Executive shall be entitled to the following, subject to
Section 28:
(i) Base Salary earned but not paid prior to the date of
termination;
(ii) any annual bonus earned pursuant to Section 5, but unpaid, as
of the date of termination for the immediately preceding
fiscal year, payable when bonuses are paid by the Company to
its senior-level executives in respect of such fiscal year
(but not later than 2-1/2 months after the end of such fiscal
year);
(iii) a pro-rata share of the annual bonus the Executive would have
earned pursuant to Section 5 if she had remained employed
through the end of the fiscal year in which her employment
terminated, based on the Company's actual performance against
the goals set by the Compensation Committee for such fiscal
year, payable when bonuses are paid by the Company to its
senior-level executives in respect of such fiscal year (but
not later than 2-1/2 months after the end of such fiscal
year);
(iv) one hundred percent (100%) of the greater of (A) the Base
Salary in effect on the date of termination or (B) the Base
Salary in effect immediately prior to any reduction that would
constitute Good Reason, payable to Executive in a lump sum
less applicable tax withholdings within the later of (i) 30
calendar days after the date of termination or (ii) the
expiration of the revocation period, if applicable, under the
release contemplated by Section 12(g) below, in accordance
with the Company's regular payroll practice;
(v) one hundred percent (100%) of the Target Bonus (regardless of
any performance requirements), payable to Executive in a lump
sum less applicable withholdings within the later of (i) 30
calendar days after the date of termination or (ii) the
expiration of the revocation period, if applicable, under the
release contemplated by Section 12(g) below, in accordance
with the Company's regular payroll practice;
(vi) to have the Company pay the full premiums (employer and
employee portions) for the Executive's and any covered
beneficiary's coverage under COBRA health continuation
benefits over the twelve (12) month period immediately
following the date of termination;
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(vii) any amounts earned, accrued or owing to the Executive prior to
the date of termination but not yet paid under Sections 8, 9,
10 or 11 in accordance with the terms thereof;
(viii) All unvested deferred stock units pursuant to the Special One
Time Equity Grant shall become fully vested on the date of
termination ; and
(ix) such other or additional benefits, if any, as may be provided
under applicable plans, programs and/or arrangements of the
Company.
In no event shall a termination of the Executive's employment without Cause
occur unless the Company gives written notice to the Executive in accordance
with Section 25 below.
(d) Termination of Employment by the Executive Without Good Reason. If
the Executive terminates her employment without Good Reason, other than a
termination of employment due to death or Disability, the Executive shall be
entitled to the same payments and benefits as provided in Section 12(b) above.
In no event shall a termination of the Executive's employment without Good
Reason occur unless the Executive gives at least thirty (30) calendar days
advance written notice to the Company in accordance with Section 25 below.
(e) Termination of Employment Due to a Change in Control. If the
Executive's employment is terminated by the Company without Cause or by the
Executive for Good Reason in connection with or within one (1) year after a
Change in Control, the Executive shall be entitled to the following, subject to
Section 28:
(i) Base Salary earned but not paid prior to the date of
termination;
(ii) any annual bonus earned pursuant to Section 5, but unpaid, as
of the date of termination for the immediately preceding
fiscal year, payable when bonuses are paid by the Company to
its senior-level executives in respect of such fiscal year
(but not later than 2-1/2 months after the end of such fiscal
year);
(iii) a pro-rata share of the annual bonus the Executive would have
earned pursuant to Section 5 if she had remained employed
through the end of the fiscal year in which her employment
terminated, based on the Company's actual performance against
the goals set by the Compensation Committee for such fiscal
year, payable when bonuses are paid by the Company to its
senior-level executives in respect of such fiscal year (but
not later than 2-1/2 months after the end of such fiscal
year);
(iv) one hundred and fifty percent (150%) of the greater of (A) the
Base Salary in effect on the date of termination or (B) the
Base Salary in effect immediately prior to any reduction that
would constitute Good Reason, payable to Executive in a lump
sum less applicable tax withholdings within the later of (i)
30 calendar days after the date of termination or (ii) the
expiration of the revocation period, if applicable, under the
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release contemplated by Section 12(g) below, in accordance
with the Company's regular payroll practice;
(v) one hundred and fifty percent (150%) of the Target Bonus
(regardless of any performance requirements), payable to
Executive in a lump sum less applicable tax withholdings
within the later of (i) 30 calendar days after the date of
termination or (ii) the expiration of the revocation period,
if applicable, under the release contemplated by Section 12(g)
below, in accordance with the Company's regular payroll
practice;
(vi) to have the Company pay the full premiums (employer and
employee portions) for the Executive's and any covered
beneficiary's coverage under COBRA health continuation
benefits over the eighteen (18) month period immediately
following the date of termination;
(vii) any amounts earned, accrued or owing to the Executive prior to
the date of termination but not yet paid under Sections 8, 9,
10 or 11 in accordance with the terms thereof;
(viii) the immediate vesting of all stock options and deferred stock
awarded to the Executive, with any options granted after the
Effective Date having a minimum exercise period of one (1)
year from the date of termination or, if less, the maximum
exercise period permitted by Section 409A, subject to any
option plan provisions relating to a change in control or
similar event and to the initial ten (10) year term of the
options; provided, however, that, if necessary, such exercise
period shall be extended if permitted by Section 409A until
the exercise of the options would cease to violate any federal
or state securities laws subject to the initial ten (10) year
term of the options; and
(ix) such other or additional benefits, if any, as may be provided
under applicable plans, programs and/or arrangements of the
Company.
(f) Termination by Notice of Nonrenewal by the Company. If the Company
terminates the Executive's employment as a result of or following the Company
providing a notice of non-renewal of this Agreement in accordance with Section 2
above, the Executive shall be entitled to the same payments and benefits as
provided in Section 12(c) or 12(e), as applicable. If the Company provides such
nonrenewal notice, but does not terminate Executive's employment, then the
Executive shall have Good Reason under Section 1(i).
(g) No Mitigation; No Offset. In the event of a termination of the
Executive's employment for any reason under this Section 12, the Executive shall
be under no obligation to seek other employment and there shall be no offset
against amounts due to the Executive under this Agreement on account of any
compensation attributable to any subsequent compensation she may receive. The
Company's obligation to make the payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall not be affected by any
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set-off, counterclaim, recoupment, defense or other claim, right or action which
the Company may have against the Executive or others; provided that the
foregoing shall in no way limit the Company's remedies upon a breach or
threatened breach of the restrictive covenants in Section 13.
(h) Additional Payments. If the Executive becomes subject to the excise
tax imposed by Code Section 4999 (the "Parachute Excise Tax") with respect to
any payment(s), benefit(s) or distribution(s) received by, or payable to or for
the benefit of, Executive (or otherwise) in connection with, or by reason of,
any Change in Control or any change in ownership or effective control of the
Company (as determined under IRC Section 280G) that occurs prior to January 1,
2010, the Company and the Executive agree that the Company shall pay to the
Executive a tax gross-up payment so that after payment by the Executive of all
federal, state and local excise, income, employment, Medicare and any other
taxes (including any related penalties and interest) resulting from the payment
of the parachute payments and the tax gross-up payments to the Executive by the
Company, the Executive retains on an after-tax basis an amount equal to the
amount that the Executive would have retained if she had not been subject to the
Parachute Excise Tax.
(i) Waiver and Release. As a condition precedent to receiving the
compensation and benefits provided under Sections 12(c) and 12(e) (but not any
of the amounts described in clauses (i), (vii) and (ix) of Sections 12(c) and
12(e) above), the Executive shall execute a waiver and release substantially in
the form attached to this Agreement as Exhibit A.
13. Restrictive Covenants.
(a) Nondisclosure. During the Term of Employment and thereafter, the
Executive shall not disclose to anyone or make use of any trade secret or
proprietary or confidential information of the Company, including such trade
secret or proprietary or confidential information of any customer or other
entity to which the Company owes an obligation not to disclose such information,
which she acquires during the Term of Employment, including, without limitation,
records kept in the ordinary course of business, except (i) as such disclosure
or use may be required or appropriate in connection with her work as an employee
of the Company, (ii) when required to do so by a court of law, governmental
agency or administrative or legislative body (including a committee thereof)
with apparent jurisdiction to order her to divulge, disclose or make accessible
such information or (iii) as to such confidential information that becomes
generally known to the public or trade without her violation of this Section
13(a). Nothing herein shall preclude Executive from discussing the Agreement
and/or any plan or other agreement referred to herein and/or any aspect of her
compensation and/or benefits with her family and/or her advisors.
(b) Assignment of Rights. The Executive hereby sells, assigns and
transfers to the Company all of her right, title and interest in and to all
inventions, discoveries, improvements and copyrightable subject matter (the
"Rights") that, during the Term of Employment, are made or conceived by her,
alone or with others, and that relate to the Company's present business or arise
out of any work she performs or information she receives regarding the business
of the Company while employed by the Company. The Executive shall fully disclose
to the Company as promptly as possible all information known or possessed by her
concerning the Rights, and upon request by the Company and without any further
compensation in any form to her by the Company, but at the expense of the
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Company, execute all applications for patents and copyright registrations,
assignments thereof and other applicable instruments and do all things that the
Company may reasonably deem necessary to vest and maintain in it the entire
right, title and interest in and to all such Rights.
(c) Nonsolicitation. For and in consideration of the compensation to be
paid by the Company pursuant to the terms hereof, and in recognition of the fact
that the Executive will have access to confidential information and other
valuable rights of the Company, the Executive covenants and agrees that she will
not, at any time during her employment with the Company and for a period of
twelve (12) months thereafter, directly or indirectly, induce, attempt to
induce, or aid others in inducing, an employee of the Company to accept
employment or affiliation with another firm or corporation engaging in such
business or activity of which the Executive is an employee, owner, partner or
consultant. The Executive further agrees that she will not, whether on
Executive's own behalf or on behalf of any other individual, partnership, firm,
corporation or business organization, either directly or indirectly, solicit,
induce, persuade, or entice, or endeavor to solicit, induce, persuade, or
entice, any person who is then a customer, supplier, or vendor of the Company or
any of its affiliates to cease being a customer, supplier, or vendor of the
Company or any of its affiliates or to divert all or any part of such person's
or entity's business from the Company or any of its affiliates.
(d) Duration and Scope. The Company and the Executive agree that the
duration and geographic scope of the restrictive covenants set forth in this
Section 13 are reasonable. In the event that any court of competent jurisdiction
determines that the duration or the geographic scope, or both, are unreasonable
and that such provision is to that extent unenforceable, the Company and the
Executive hereto agree that the provision shall remain in full force and effect
for the greatest lesser time period and in the greatest lesser area that would
not render it unenforceable. The Company and the Executive intend that this
provision shall be deemed to be a series of separate covenants, one for each and
every county of each and every state of the United States of America and each
and every political subdivision of each and every country outside the United
States of America where this provision is intended to be effective. The
Executive acknowledges and agrees that the Company would not have an adequate
remedy at law and would be irreparably harmed in the event that any of the
provisions of this Section 13 were not performed in accordance with their
specific terms or were otherwise breached. Accordingly, the Executive agrees
that the Company shall be entitled to equitable relief, including preliminary
and permanent injunctions and specific performance, in the event Executive
breaches or threatens to breach any of the provisions of such Sections, without
the necessity of posting any bond or proving special damages or irreparable
injury. Such remedies shall not be deemed to be the exclusive remedies for a
breach or threatened breach of the provisions of this Section 13 by Executive,
but shall be in addition to all other remedies available to the Company at law
or equity. Executive acknowledges and agrees that no breach by the Company of
this Agreement or failure to enforce or insist on its rights under this
Agreement shall constitute a waiver or abandonment of any such rights or defense
to enforcement of such rights. If the provisions of this Section 13 are ever
deemed by a court to exceed the limitations permitted by applicable law, the
Executive and the Company agree that such provisions shall be, and are,
automatically reformed to the maximum lesser limitations permitted by such law.
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14. Indemnification.
The Company confirms and acknowledges that the Company is obligated
to indemnify the Executive pursuant to the terms of the Indemnification
Agreement between the Company and the Executive dated as of the date hereof and
the Company's By-laws, and that the Executive shall, in any event, be
indemnified to the fullest extent permitted by law. Executive shall be entitled
to the same Director and Officer Insurance coverages as apply to other executive
officers of the Company.
15. Assignability; Binding Nature.
This Agreement shall be binding upon and inure to the benefit of the
Parties and their respective successors, agents, heirs (in the case of the
Executive) and assigns. No rights or obligations of the Company under this
Agreement may be assigned or transferred by the Company; provided, however, that
such rights or obligations may be assigned or transferred pursuant to a
transaction contemplated by clause (i) of the definition of a Change in Control,
a merger or consolidation in which the Company is not the continuing entity, or
the sale or liquidation of all or substantially all of the assets of the
Company; provided further, however, that the assignee or transferee is the
successor to all or substantially all of the assets of the Company and such
assignee or transferee assumes the liabilities, obligations and duties of the
Company, as contained in this Agreement, either contractually or as a matter of
law.
16. Representation.
The Company represents and warrants that it is fully authorized and
empowered to enter into this Agreement and that the performance of its
obligations under this Agreement will not violate any agreement between it and
any other person, firm or organization. The Executive represents and warrants
that no agreement exists between her and any other person, firm or organization
that would be violated by the performance of her obligations under this
Agreement.
17. Entire Agreement.
This Agreement (including the attached Exhibit A and any plan, other
agreements or attachments referred to herein) contains the entire understanding
and agreement between the Parties concerning the subject matter hereof and
supersedes all prior agreements, understandings, discussions, negotiations and
undertakings, whether written or oral, with respect thereto including, without
limitation, any offer letters or employment agreements and any nondisclosure,
nonsolicitation, inventions and/or noncompetition agreements between the
Parties.
18. Amendment or Waiver.
No provision in this Agreement may be amended unless such amendment
is agreed to in writing and signed by the Executive and an authorized officer of
the Company. No waiver by either Party of any breach by the other Party of any
condition or provision contained in this Agreement to be performed by such other
Party shall be deemed a waiver of a similar or dissimilar condition or provision
at the same or any prior or subsequent time. Any waiver must be in writing and
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signed by the Executive or an authorized officer of the Company, as the case may
be.
19. Withholding.
The Company may withhold from any amounts payable under this
Agreement such federal, state and local taxes as may be required to be withheld
pursuant to any applicable law or regulation.
20. Severability.
In the event that any provision of this Agreement shall be
determined by a court of competent jurisdiction to be invalid or unenforceable
for any reason, in whole or in part, the remaining parts, terms or provisions of
this Agreement shall be unaffected thereby and shall remain in full force and
effect to the fullest extent permitted by law.
21. Survivorship.
The respective rights and obligations of the Parties hereunder shall
survive any termination of the Executive's employment to the extent necessary to
preserve such rights and obligations.
22. Controlling Document.
If any provision of any agreement, plan, program, policy,
arrangement or other written document between or relating to the Company and the
Executive conflicts with any provision of this Agreement, the provision of this
Agreement shall control and prevail.
23. Beneficiaries/References.
The Executive shall be entitled, to the extent permitted under any
applicable law, to select and change a beneficiary or beneficiaries to receive
any compensation or benefit payable hereunder following the Executive's death by
giving the Company written notice thereof. In the event of the Executive's
death, reference in this Agreement to the Executive shall be deemed, where
appropriate, to refer to her beneficiary, estate or other legal representative.
24. Governing Law/Jurisdiction.
This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of New York without reference to
principles of conflicts of law unless superseded by federal law. The Parties
agree that any suit, action or other legal proceeding that is commenced to
resolve any matter arising under or relating to any provision of this Agreement
shall be commenced only in a court of the State of New York (or, if appropriate,
a federal court located within the State of New York), and the Parties consent
to the jurisdiction of such court. Each Party shall be responsible for paying
its own fees and expenses (including reasonable attorney fees) in connection
with any dispute under this Agreement except to the extent (if any) that
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Executive's legal fees and expenses are required to be reimbursed pursuant to
the Indemnification Agreement and/or D&O insurance coverage referred to in
Section 14.
25. Notices.
All notices shall be in writing, shall be hand delivered or sent to
the following addresses listed below using a reputable overnight express
delivery service and shall be deemed to be received when hand delivered or one
(1) calendar day after depositing with such overnight service for next day
delivery.
If to the Company: Comverse Technology, Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Executive Officer
with a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx, Esq.
If to the Executive: Xxxxxxx Xxxxxxx
at the most recent address of Executive
set forth in the personnel records of the Company
with a copy to
Xxxxx X. Xxxxx, Esq.
Xxx Xxxxx Xxxxxxxx - Xxxxx 000
Xxxxx Xxxxxx, X.X. 00000-0000
26. Headings.
The headings of the sections contained in this Agreement are for
convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of this Agreement.
27. Cooperation.
The Executive agrees to cooperate with the Company in the
investigation, defense or prosecution of any claims or actions now in existence
or which may be brought in the future against or on behalf of the Company
related to events occurring during Executive's employment with the Company. Such
cooperation shall include meeting with representatives of the Company upon
reasonable notice at reasonable times and locations to prepare for discovery or
any mediation, arbitration, trial, administrative hearing or other proceeding or
to act as a witness. The Executive shall notify the Company if the Executive is
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asked to assist, testify or provide information by or to any person, entity or
agency in any such proceeding or investigation. The Company shall reimburse the
Executive for expenses reasonably incurred in connection therewith (including
reasonable attorney fees if it is determined that utilization of Company counsel
would create a conflict). The Company shall also compensate Executive for her
time in connection with such cooperation if she is no longer employed by the
Company at a rate of $300 per hour. Any such cooperation occurring after the
termination of Executive's employment shall be subject to Executive's other
business and personal commitments, and shall be scheduled to the extent
reasonably practicable so as not to unreasonably interfere with Executive's
business or personal affairs. Notwithstanding the above, nothing herein shall
require Executive to waive any legal rights she has or may have at any time.
28. Compliance with Code Section 409A.
(a) If any payment, compensation or other benefit provided to the
Executive in connection with her employment termination is determined, in whole
or in part, to constitute "nonqualified deferred compensation" within the
meaning of Section 409A and the Executive is a specified employee as defined in
Section 409A(2)(B)(i), no part of such payments shall be paid before the day
that is six (6) months plus one (1) day after the date of termination (the "New
Payment Date"). The aggregate of any payments that otherwise would have been
paid to the Executive during the period between the date of termination and the
New Payment Date shall be paid to the Executive in a lump sum on such New
Payment Date. Thereafter, any payments that remain outstanding as of the day
immediately following the New Payment Date shall be paid without delay over the
time period originally scheduled, in accordance with the terms of this
Agreement. Notwithstanding the foregoing, to the extent that the foregoing
applies to the provision of any ongoing welfare benefits to the Executive that
would not be required to be delayed if the premiums therefor were paid by the
Executive, the Executive shall pay the full cost of premiums for such welfare
benefits during the six-month period and the Company shall pay the Executive an
amount equal to the amount of such premiums paid by the Executive during such
six-month period promptly after its conclusion.
(b) The Parties acknowledge and agree that the interpretation of Section
409A and its application to the terms of this Agreement is uncertain and may be
subject to change as additional guidance and interpretations become available.
Anything to the contrary herein notwithstanding, all benefits or payments
provided by the Company to the Executive that would be deemed to constitute
"nonqualified deferred compensation" within the meaning of Section 409A are
intended to comply with Section 409A. If, however, any such benefit or payment
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 severance payments payable hereof) 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 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.
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29. Counterparts.
This Agreement may be executed in two or more counterparts, and such
counterparts shall constitute one and the same instrument. Signatures delivered
by facsimile shall be deemed effective for all purposes to the extent permitted
under applicable law.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.
COMVERSE TECHNOLOGY, INC.
By: /s/ Xxxxx Xxxxx
-------------------------------
Name: Xxxxx Xxxxx
Title: Chief Executive Officer and
President
THE EXECUTIVE
/s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxx
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EXHIBIT A
This RELEASE ("Release") dated as of ____________________ between
Comverse Technology, Inc., a New York corporation (the "Company"), and Xxxxxxx
X. Xxxxxxx (the "Executive").
WHEREAS, the Company and the Executive previously entered into an
employment agreement dated ____________ under which the Executive was employed
to serve as the Company's Executive Vice President, General Counsel and
Corporate Secretary (the "Employment Agreement"); and
WHEREAS, the Executive's employment with the Company (has been) (will
be) terminated effective __________________; and
WHEREAS, pursuant to Section 12 of the Employment Agreement, the
Executive is entitled to certain compensation and benefits upon such
termination, contingent upon the execution of this Release;
NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein and in the Employment Agreement, the Company and the Executive
agree as follows:
1. The Executive, on her own behalf and on behalf of her heirs,
estate and beneficiaries, does hereby release the Company, and in such
capacities, any of its subsidiaries or affiliates, and each past or present
officer, director, agent, employee, shareholder, and insurer of any such
entities, from any and all claims made, to be made, or which might have been
made of whatever nature, whether known or unknown, from the beginning of time,
including those that arose as a consequence of her employment with the Company,
or arising out of the severance of such employment relationship, or arising out
of any act committed or omitted during or after the existence of such employment
relationship, all up through and including the date on which this Release is
executed, including, but not limited to, those which were, could have been or
could be the subject of an administrative or judicial proceeding filed by the
Executive or on her behalf under federal, state or local law, whether by
statute, regulation, in contract or tort, and including, but not limited to,
every claim for front pay, back pay, wages, bonus, fringe benefit, any form of
discrimination (including but not limited to, every claim of race, color, sex,
religion, national origin, disability or age discrimination), wrongful
termination, emotional distress, pain and suffering, breach of contract,
compensatory or punitive damages, interest, attorney's fees, reinstatement or
reemployment. If any arbitrator or court rules that such waiver of rights to
file, or have filed on her behalf, any administrative or judicial charges or
complaints is ineffective, the Executive agrees not to seek or accept any money
damages or any other relief upon the filing of any such administrative or
judicial charges or complaints. The Executive relinquishes any right to future
employment with the Company and the Company shall have the right to refuse to
re-employ the Executive, in each case without liability of the Executive or the
Company. The Executive acknowledges and agrees that even though claims and facts
in addition to those now known or believed by her to exist may subsequently be
discovered, it is her intention to fully settle and release all claims she may
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have against the Company and the persons and entities described above, whether
known, unknown or suspected.
2. The Company and the Executive acknowledge and agree that the
release contained in Paragraph 1 does not, and shall not be construed to,
release or limit the scope of, or preclude the Executive from asserting her
rights to enforce any existing obligation of the Company (i) to indemnify the
Executive for her acts as an officer or director of Company in accordance with
the Company's By-laws, the Indemnification Agreement (as defined in Section 15
of the Employment Agreement), and other agreements or the law, as to continued
coverage and rights under director and officer liability insurance policies,
(ii) to the Executive and her eligible, participating dependents or
beneficiaries under any existing group welfare, equity, or retirement plan of
the Company in which the Executive and/or such dependents are participants, or
(iii) to pay any amounts payable under the terms of the Employment Agreement
(including, without limitation, any severance or other items payable following
termination of Executive's employment). In addition, Executive does not waive
his right to file a charge with the EEOC or participate in an investigation
conducted by the EEOC; however, Executive expressly waives his right to monetary
or other relief should any administrative agency, including but not limited to
the EEOC, pursue any claim on Employee's behalf.
3. The Executive acknowledges that she has been provided at least
21 days to review the Release and has been advised to review it with an attorney
of her choice. In the event the Executive elects to sign this Release prior to
this 21 day period, she agrees that it is a knowing and voluntary waiver of her
right to wait the full 21 days. The Executive further understand that she has 7
days after the signing hereof to revoke it by so notifying the Company in
writing, such notice to be received by _____________ within the 7 day period.
The Executive further acknowledge that she has carefully read this Release,
knows and understands its contents and its binding legal effect. The Executive
acknowledge that by signing this Release, she does so of her own free will and
act and that it is her intention that she be legally bound by its terms.
IN WITNESS WHEREOF, the parties have executed this Release on the date
first above written.
COMVERSE TECHNOLOGY, INC.
By:
-------------------------------
Name:
Title:
THE EXECUTIVE
/s/
------------------------------------
Name: Xxxxxxx X. Xxxxxxx
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