EXHIBIT 10.1
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EMPLOYMENT AGREEMENT
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This Employment Agreement (the "Agreement") is made and entered into as
of the 31st day of May, 2007, by and between Comverse, Inc., a Delaware
corporation (together with its successors and assigns permitted under this
Agreement, the "Company"), and Yaron Tchwella (the "Executive").
W I T N E S S E T H
WHEREAS, the Executive is currently serving as President of Comverse,
Inc., a wholly owned subsidiary of Comverse Technology, Inc. (the "Parent"); and
WHEREAS, the Executive desires to enter into this Agreement and to
continue 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 annual base salary as
determined in accordance with Section 4 below, including any applicable
increases.
(b) "Board" shall mean the Board of Directors of the Parent.
(c) "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.
(d) "Disability" shall mean the Executive's inability to
substantially perform his 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.
(e) "Effective Date" shall mean the first date set forth above.
(f) "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, during the Term of Employment, which shall be the
period commencing on the Effective Date and ending on March 31, 2008, subject to
earlier termination of the Term of Employment in accordance with the terms of
this Agreement. This Agreement and the Term of Employment shall be automatically
renewed for additional one (1) year periods commencing on April 1, 2008 and on
each anniversary thereof (each April 1, a "Renewal Date") (unless otherwise
terminated prior thereto), unless either Party notifies the other Party, in
writing, of his or its intention not to renew this Agreement not less than sixty
(60) calendar days prior to any such Renewal Date.
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 President of the Company. In
this capacity, the Executive shall be assigned only such duties and
responsibilities as are appropriate for a person holding such a position as
determined by the Board and the Chief Executive Officer of the Parent. The
Executive shall serve the Company faithfully, conscientiously and to the best of
the Executive's ability and shall promote the interests and reputation of the
Company. Unless prevented by illness, injury or Disability, the Executive shall
devote all of the Executive's time, attention, knowledge, energy and skills
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 Board, serve on corporate boards or
committees. The Executive shall report to the Chief Executive Officer of the
Parent.
4. Base Salary.
As of the Effective Date and through March 31, 2008, the Executive shall
be paid a Base Salary of four hundred thousand dollars ($400,000), payable in
accordance with the regular payroll practices of the Company. Thereafter, the
Base Salary shall be reviewed no less frequently than annually, with such
increase as determined in the sole discretion of the Board or the Compensation
Committee.
5. Incentive Compensation Arrangements.
During the Term of Employment, the Executive will be eligible for a
bonus under the Company's annual bonus plan, as in effect from time to time,
based upon the achievement of performance goals established by the Compensation
Committee in consultation with the Executive. The parties agree that the
criteria applicable to the Executive's on-target bonus for fiscal year 2007
shall be developed by the Chief Executive Officer of the Parent within
forty-five (45) days after the Effective Date, subject to the review and
approval of the Compensation Committee. The on target bonus shall equal 100% of
base salary for the fiscal year 2007. The bonus payout shall not exceed 200% of
the Executive's Base Salary for such year. During the Term of Employment, the
Executive shall be entitled to participate in any other Company incentive
compensation plans, programs and/or arrangements applicable to senior-level
executives as established and modified from time to time by the Board or the
Compensation Committee in its discretion.
6. Long-Term Incentive Compensation Programs.
The Executive shall be granted a deferred stock award for 41,364 shares
of the Parent's common stock ("Common Stock"), which is equal to the quotient
obtained by dividing $900,000 by $21.7584, the average of the closing prices per
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share of the Common Stock on the "Pink Sheets" for the ten consecutive trading
days commencing on March 29, 2007, the fifth trading day following March 22,
2007, the date of the Company's issuance of a press release announcing its
unaudited financial results for the fiscal year ended January 31, 2007. Such
deferred stock award shall be made on the Effective Date and shall vest as to
one-third (1/3rd) of the original number of shares subject thereto on each of
the next three anniversaries of April 13, 2007, the first business day following
April 12, 2007, the end of such ten consecutive trading day period, subject to
accelerated vesting as otherwise provided herein. The Parties shall enter into
the Company's customary documentation to evidence the deferred stock award.
During the Term of Employment, the Executive shall be entitled to participate in
any long-term incentive compensation plans, programs and/or arrangements
applicable to senior-level executives as established and modified from time to
time by the Board or the Compensation Committee in its discretion, including any
equity-based plans, programs or arrangements. During the Term of Employment, the
Executive shall receive equity-based grants at a level commensurate with his
position when such other senior-level executives receive grants.
7. 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 as in effect from time to time and applicable to senior-level
executives.
8. Reimbursement of Business Expenses.
During the Term of Employment, the Executive is authorized to incur
reasonable and necessary business expenses in carrying out his duties and
responsibilities under this Agreement, and the Company shall reimburse him for
all such reasonable and necessary business expenses, in accordance with the
Company's then existing expense reimbursement policies, practices and
procedures.
9. Perquisites.
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. Without limiting the
generality of the foregoing, during the Term of Employment:
(i) the Executive shall be entitled to continued use of a
company car in accordance with past practice;
(ii) the Company shall reimburse the Executive for reasonable
legal fees incurred by the Executive in connection with
the negotiation and execution of this Agreement;
(iii) the Company shall reimburse the Executive each calendar
year during the Term of Employment for up to $15,000 of
reasonable tax planning fees incurred by the Executive;
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(iv) the Executive shall be entitled to travel in business
class, to the extent reasonably available, for
international business travel; and
(v) the Company shall pay or reimburse the Executive for the
cost of tuition for the Executive's attendance during
the Term of Employment at a summer executive Masters of
Business Administration program of his choice.
The reimbursements provided for in clauses (ii), (iii), (iv) and (v) of
this Section 9 shall be payable subject to and following presentation to the
Company of reasonable documentation of any such expense in accordance with any
applicable Company policy, but no such payment shall be made later than December
31 of the year following the year in which the expense was incurred.
10. Vacation.
During the Term of Employment, the Executive shall be entitled to an
amount of paid vacation established by and in accordance with the Company's
vacation policy in effect from time to time. The Executive may carry over any
unused vacation from year to year in accordance with the Company's vacation
policy and will receive payment for any accrued, unused vacation upon
termination of employment for any reason.
11. Termination of Employment.
(a) The Term of Employment and the Executive's employment hereunder
may be terminated by either party at any time and for any reason upon sixty (60)
calendar days advance written notice. If (1) the Executive's employment is
involuntarily terminated by the Company (and all Affiliates (as defined in the
Company's Executive Severance Protection Plan, attached hereto as Exhibit A (the
"Plan")) for any reason other than Cause (as defined in the Plan; provided that
no finding of Cause shall be effective unless and until the Company has provided
the Executive with written notice thereof in accordance with Section 22 hereof
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 22 hereof), (2) the Executive terminates his employment for Good Reason
(as defined below) within 6 months from the date the Executive first becomes
aware of the existence of Good Reason or (3) the Company terminates the
Executive's employment by providing a notice of nonrenewal in accordance with
Section 2 above, the Executive shall be eligible to receive the severance
benefits set forth in Section 2 of the Plan, provided, however, that the
severance pay amount set forth in Section 2(a) of the Plan shall be offset by
any amounts paid to, or for the benefit of, the Executive pursuant to Israeli
Severance Pay Law or voluntarily paid by the Company in accordance with the
formula put forth thereunder (i.e., one month of base salary for each year of
service to the Company in Israel). As a condition precedent to receiving the
compensation provided under this Section 11(a), the Executive shall sign a
release which shall become effective (and shall not be revoked) in such form as
the Company shall determine, which shall, to the extent permitted by law, waive
all claims and actions against the Company and such other related parties and
entities as the Company chooses to include in the release except for claims and
actions for benefits provided under the terms of this Agreement or the Plan. The
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cash severance pay benefits payable to the Executive under this Section 11(a)
shall be paid to the Executive in a single lump sum less applicable withholdings
within the later of (i) seven (7) business days after the Executive's date of
termination or (ii) the expiration of the revocation period, if applicable,
under the above-referenced release. For purposes of this Agreement, "Good
Reason" shall mean, without the Executive's prior written consent, the
occurrence of any of the following events or actions: (i) any reduction in the
Executive's Base Salary or the reduction in Executive's on target bonus formula
for any fiscal year to an amount below 75% of the Executive's base salary in
such fiscal year, other than as part of an across-the-board reduction applicable
to all senior executives of the Parent and its affiliates; (ii) an actual
relocation of the Executive's principal office to another location more than 50
miles from its location as of the Effective Date; (iii) a material and adverse
reduction in the nature or scope of Executive's responsibilities, duties or
authorities; or (iv) a material breach by the Company of any of the payment
obligations under this Agreement; provided, however, that provided that no
finding of a material breach of the payment obligations under this Agreement
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 such material breach, with written notice thereof in accordance with
Section 22 below stating with specificity the facts and circumstances underlying
the finding of such material breach and, if the basis for such finding of a
material breach 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 22 below.
(b) Notwithstanding the above, in the event of a Change of Control
transaction (as defined in the Plan), the Executive's severance benefits will be
determined pursuant to the terms and conditions of the Plan, without regard to
offset of any amounts paid to, or for the benefit of, the Executive pursuant to
Israeli Severance Pay Law or voluntarily paid by the Company in accordance with
the formula put forth thereunder (i.e., one month of base salary for each year
of service to the Company in Israel), as set forth above.
(c) For the avoidance of doubt, all severance benefits for which the
Executive may be eligible will be administered and construed in accordance with
the terms and conditions set forth in the Plan except as expressly modified in
Section 11.
12. Prior Employment Agreement Payments.
(a) This Agreement supersedes the Employment, Non-Disclosure and
Non-Competition Agreement between the Executive and the Company dated August 27,
2003, as amended August 9, 2004 (the "Prior Agreement"). The Company shall have
no further obligations with respect to the Prior Agreement except for the
obligations set forth in this Section 12.
(b) Provided that the Executive remains employed by the Company
through the applicable payment dates and the Executive is not in breach of any
term or condition of this Agreement (provided that Executive shall be in breach
of any term or condition of this Agreement only after the Company has provided
the Executive with written notice thereof in accordance with Section 22 hereof
stating with specificity the facts and circumstances underlying such breach and,
if the basis for such breach 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 22
hereof), the Executive shall be entitled to the following payments (in each
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case, in accordance with the Company's then current payroll practices) in
satisfaction of the remaining obligations under the Prior Agreement:
(i) a lump sum cash bonus in the amount of three hundred
thousand dollars ($300,000) payable on August 31, 2007;
(ii) with respect to the Executive's stock option to purchase
75,000 shares of Common Stock (i.e., one-half of the
stock option granted on August 15, 2003) (the "2003
Options"), 37,500 shares of which vested on August 15,
2006 and 37,500 of which will vest on August 15, 2007, a
lump sum cash amount equal to the difference, if any,
between three-hundred thousand dollars ($300,000) minus
the Spread Value (defined below), payable 25 business
days following the Measurement Date (defined below);
provided that for purposes of this Agreement: (I)
"Spread Value" shall mean 75,000 multiplied by the
difference between (A) "Fair Market Value" of the Common
Stock minus (B) fourteen dollars and sixty-eight cents
($14.68), provided that, in the event the Fair Market
Value is less than $14.68, the Spread Value shall be 0
and, in no event, shall the Executive be required to
make any payment to the Company under this Section
12(b)(ii); (II) "Measurement Date" shall mean the last
day of the five-day period commencing on the first
trading day after the first open trading window after
(a) Parent becomes current with its filing obligations
with the Securities and Exchange Commission ("SEC") and
(b) the plan under which the subject stock options were
granted is registered under a current registration
statement on Form S-8; and (III) "Fair Market Value"
shall mean, as determined by the Compensation Committee,
the average closing price of the Common Stock for the
five-day period commencing on the first trading day
after the first open trading window after (a) Parent
becomes current with its SEC filing obligations with the
Securities and Exchange Commission and (b) the plan
under which the subject stock options were granted is
registered under a current registration statement on
Form S-8.
(iii) a lump sum cash payment equal to the difference, if any,
between one million dollars ($1,000,000) minus the fair
market value of the Common Stock on July 31, 2007 of the
restricted stock award (pursuant to the Restricted Stock
Award Agreement dated August 9, 2004) of 50,000 shares
of Common Stock which will vest on such date. The fair
market value shall be the closing of the Common Stock on
such date if there is a public market for the Common
Stock and shall be determined by the Compensation
Committee if no such public market exists on such date.
(c) Provided that the Executive remains employed by the Company and
the Executive is not in breach of any term or condition of this Agreement
(provided that Executive shall be in breach of any term or condition of this
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Agreement only after the Company has provided the Executive with written notice
thereof in accordance with Section 22 hereof stating with specificity the facts
and circumstances underlying such breach and, if the basis for such breach 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 22 hereof), if the Executive's employment
is terminated upon his death, all 2003 Options shall become fully vested on the
date of such termination.
13. 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
this Agreement may be assigned by the Company to a person or entity which is an
affiliate or a successor in interest to substantially all of the business
operations or assets of the Company. Upon such assignment, the rights and
obligations of the Company hereunder shall become the rights and obligations of
such affiliate or successor person or entity.
14. 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 him and any other person, firm or organization
that would be violated by the performance of his obligations under this
Agreement.
15. Entire Agreement.
This Agreement 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. In the event of
any inconsistency between the terms of this Agreement and the Exhibits hereto,
the terms of this Agreement shall govern.
16. 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
signed by the Executive or an authorized officer of the Company, as the case may
be.
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17. 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.
18. 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.
19. 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.
20. 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 accrued compensation or benefit payable hereunder following the Executive's
death by giving the Company written notice thereof. Subject to Section 13, in
the event of the Executive's death, reference in this Agreement to the Executive
shall be deemed, where appropriate, to refer to his beneficiary, estate or other
legal representative.
21. Governing Law/Jurisdiction.
This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of Israel.
22. Notices.
All notices shall be in writing, shall be sent to the following
addresses listed below using a reputable overnight express delivery service and
shall be deemed to be received one (1) calendar day after mailing for overnight
delivery.
If to the Company: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
General Counsel
with a copy to:
Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
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If to the Executive: Yaron Tchwella
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇
23. 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.
24. 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. 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 asked to
assist, testify or provide information by or to any person, entity or agency in
any such proceeding or investigation. The Executive also agrees to cooperate
with the Company in the transitioning of his responsibilities after the date of
termination of employment.
25. Restrictive Covenants.
(a) For purposes of this Section 25, "Company" shall mean the
Company, and, to the extent that the Executive is directly and substantively
involved in any of their business, the Parent and any of its affiliates.
(b) Confidential Information.
(i) Executive expressly acknowledges that he has received
and will continue to receive Confidential Information
pertaining to the products, services, operations and/or
business affairs of the Company. For the purposes of
this Agreement, "Confidential Information" shall
include, but not be limited to, information concerning
or related to the Company's financial matters, business
methods and practices, the Company's proprietary
computer software, firmware, hardware, documentation,
scientific, technical, economic, or engineering
information including patterns, plans, compilations,
program devices, formulae, designs, prototypes, methods,
techniques, processes, procedures, programs or codes,
whether tangible or intangible, and whether or how
stored, compiled, or memorialized physically,
electronically, graphically or photographically
(including, without limiting the generality of the
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foregoing, any such items created, developed, produced
or made known to Executive during the period of or
arising out of Executive's employment with the Company),
the Company's suppliers, customers and potential
customers, confidential information disclosed to the
Company by a third party on a confidential basis, and
the Company's sales and marketing plans, as well as any
information in addition to the foregoing which is not
generally known to the public. Confidential Information
shall also mean any and all information received by the
Company from customers of the Company or other third
parties subject to an expectation of confidentiality. In
the event that Executive is requested or required (by
oral question or request for information or documents in
any legal proceeding, interrogatory, subpoena, civil
investigative demand, or similar process) to disclose
any Confidential Information, then such Executive will
notify the Company promptly (and in writing, as
prescribed in Section 25(b)(vi) below) of the request or
requirement so that Company may take appropriate action.
If, in the absence of a protective order or the receipt
of a waiver from the Company hereunder, Executive is, on
the advice of counsel, compelled to disclose any
Confidential Information to any tribunal or else stand
liable for contempt, Executive may disclose such
Confidential Information to the tribunal; provided,
however, that Executive shall use his reasonable best
efforts to obtain an order or other assurance that
confidential treatment will be accorded to such
Confidential Information.
(ii) In recognition of the fact that such Confidential
Information contains valuable trade secrets of the
Company, Executive agrees that he shall not, during the
term of Executive's employment with the Company, or at
any time thereafter, use or disclose to any third party
any such Confidential Information for any reason or
purpose whatsoever without the express written consent
of the Company. Executive understands that, pursuant to
the Economic Espionage Act and other applicable law,
violation of this Section 25(b)(ii) could result in a
fine, imprisonment, financial liability and other
sanctions.
(iii) Executive hereby assigns to the Company any and all
rights, title and interest that Executive now has in the
Company's Confidential Information and agrees to assign
to the Company any and all rights, title and interest
that Executive may hereafter acquire in the Company's
Confidential Information. Executive hereby acknowledges
and agrees that all personal property, including,
without limitation, all books, manuals, records,
reports, notes, contact lists, contracts, lists,
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blueprints, and other documents, or materials, or copies
thereof, Confidential Information, and equipment
furnished to, or prepared, edited, or augmented by,
Executive in the course of or incident to his employment
with the Company, including, without limitation, records
and any other materials pertaining to Inventions, belong
to the Company and shall be promptly returned to the
Company upon termination of employment. Following
termination, Executive will not retain any written or
other tangible or electronic material containing any
Confidential Information.
(iv) Upon termination of his employment with the Company for
whatever reason, Executive will promptly surrender to
the Company all copies, in whatever form, of the
Company's Confidential Information in Executive's
possession or control, and Executive will not remove or
transmit by any means from the Company or take with him
any of the Company's Confidential Information that is
embodied in any tangible medium of expression.
(v) Executive agrees, with respect to the terms and
conditions set forth in this Agreement, not to disclose
or cause to be disclosed, directly or indirectly, to any
person the existence of or terms of this Agreement. As
an exception to this provision, it is understood that
Executive may disclose information as required by the
United States Securities and Exchange Commission or
other regulatory agency, and to his legal counsel, tax
preparer and members of his immediate family, providing
those persons are instructed to comply with
non-disclosure terms of this Agreement. Additionally,
should Executive be required by law, legal process or
subpoena to provide information related either to his or
anyone else's employment at the Company related to this
Agreement, Executive shall, in advance of providing any
response to such law, legal process or subpoena, and to
the extent reasonably practicable, provide written
notice by certified mail to the General Counsel and
Assistant Secretary of the Company, at the Company
address set forth in Section 22 of this Agreement, of
such law, legal process or subpoena, such that the
Company may seek to assert its rights and interests in
connection therewith.
(c) Disclosure of Inventions.
(i) For the purposes of this Agreement, "Inventions" shall
have the same meaning as set forth in 35 U.S.C. Sections
100 and 101, and may include without limitation, any of
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the following as applicable: all discoveries,
developments, designs, improvements, inventions,
formulae, processes, techniques, computer programs,
strategies, specific computer-related or
telecommunications-related know-how and data.
(ii) During Executive's employment by the Company and for a
period of twelve (12) months thereafter, Executive will
promptly and fully disclose to the Company (and to any
persons designated by it) any and all Inventions
generated or conceived or reduced to practice or learned
by Executive, either alone or jointly with others, which
result from or relate to tasks assigned by the Company
to Executive, or which result from or relate to tasks,
projects or products being conducted or made within the
Company about which Executive has obtained substantial
knowledge during his employment with the Company.
(d) Ownership Rights and Assignment of Inventions.
(i) Executive and the Company hereby agree that, to the
extent the United States copyright laws or the laws of
any jurisdiction bound to recognize rights of copyright,
author's rights or any similar other rights so permit,
all services rendered by Executive hereunder, and the
work product resulting from same, are and shall be
deemed to be performed by Executive as work for hire or
works made for hire for the Company, and are and shall
be the sole and exclusive property of the Company. To
the extent such laws or any rule of law does not so
permit, then Executive expressly agrees to assign to the
Company any and all rights, title and interest which
Executive has or hereafter acquires in such services and
work product, including without limitation, any and all
rights to copyrights, trademarks and trade secrets
thereto.
(ii) Executive agrees that all Inventions generated or
conceived or reduced to practice or learned by
Executive, either alone or jointly with others, during
the following time periods: (A) during Executive's
employment by the Company; and (B) for a period of
twelve (12) months thereafter, shall be the sole
property of the Company and its assigns, and the Company
and its assigns shall be the sole owner of all patent
applications and all patents issued in connection
therewith, provided however, that such Inventions in any
way result from or relate to tasks assigned to the
Executive during his employment at the Company, or which
result from or relate to tasks, projects or products
being conducted or made within the Company about which
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Executive obtained substantial knowledge during his
employment at the Company. Executive hereby assigns to
the Company any and all rights, title and interest that
Executive has in such Inventions, and agrees to assign
to the Company any and all rights, title and interest
which Executive may hereafter acquire in such
Inventions.
(iii) With respect to all such Inventions described in Section
25(c)(ii) and Section 25(d)(ii) of this Agreement,
Executive further agrees to assist the Company in every
proper way (but at the Company's expense) to apply for,
prosecute, obtain, defend and enforce patents, and other
proprietary rights and protections relating to said
Inventions in any and all countries, including but not
limited to, as the Company may elect: (A) taking all
lawful oaths and doing all lawful acts, including giving
testimony; and (B) executing all documents, including,
but not limited to, all applications, powers,
assignments and other papers deemed by the Company or
persons designated by it to be necessary or advisable.
(iv) Executive's obligations as set forth in Section
25(c)(ii) and Section 25(d)(ii) of this Agreement shall
continue beyond the termination of his employment by the
Company, but the Company shall compensate Executive at a
reasonable rate after Executive's termination for time
actually spent by Executive on such assistance. In the
event the Company is unable, after reasonable effort, to
secure Executive's signature on any document or
documents needed to apply for, prosecute, obtain, defend
or enforce any patent, copyright, trademark, trade
secret, or other proprietary right or protection
relating to an Invention described in Sections 25(c) and
25(d) of this Agreement, whether because of Executive's
physical or mental incapacity or for any other reason
whatsoever, Executive hereby irrevocably designates and
appoints the Company and its duly authorized officers
and agents as Executive's agent coupled with an interest
and attorney-in-fact, to act for and in Executive's
behalf and stead to execute and file any such documents
and to do all other lawfully permitted acts to further
the Company's rights hereunder with the same legal force
and effect as if executed by Executive.
(e) Previous Inventions.
Executive has identified in Schedule A attached hereto all Inventions
generated or conceived or reduced to practice or learned by Executive, either
alone or jointly with others, prior to his employment by the Company, which
Executive desires to remove from the operation of this Agreement. Executive
13
represents and warrants that such list is complete. If there is no such
information listed, Executive represents that he made no such Inventions at the
time of signing this Agreement.
(f) Non-Disparagement.
The Executive shall refrain from making any statements or comments of a
defamatory or disparaging nature to any third party regarding the Company or any
of its directors, officers, personnel, policies or products; provided however,
that it shall not be a violation of this Section 25(f) for Executive to make
truthful statements when required to do so by a court of law, by any
governmental agency having supervisory authority over the Executive, or by any
administrative or legislative body with apparent jurisdiction to order the
Executive to divulge, disclose or make accessible such information or as may
otherwise be required to defend any allegations or statements made by the
Company.
(g) Non-Competition/Nonsolicitation.
(i) 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 has access to
confidential information and other valuable rights of
the Company during the Term of Employment, the Executive
covenants and agrees that he will not, during employment
with the Company or any of its affiliates and for a
period of twelve (12) months from the date of
termination of employment for any reason, directly or
indirectly, engage in any business or in any activity
related to the development, sale, production,
manufacturing, marketing or distribution of products or
services that are in competition with products or
services that the Company produces, sells, manufactures,
markets, distributes or has interest in, in any state or
foreign country in which the Company then conducts
business or reasonably has plans to conduct business. It
is not the intent of this covenant to bar the Executive
from employment in any company whose general business is
the manufacture of communications equipment or delivery
of communications services, only to limit specific and
direct competition with the Company. Notwithstanding the
foregoing, nothing contained in this Agreement shall
prevent the Executive from being an investor in
securities of a competitor listed on a national
securities exchange or actively traded over-the-counter
so long as such investments are in amounts not
significant as compared to his total investments or to
the aggregate of the outstanding securities of the
issuer of the same class or issue of the specific
securities involved.
14
(ii) The Executive agrees that during employment with the
Company or any of its affiliates and for a period of
twelve (12) months from the date of termination of
employment for any reason, he will not, whether on his
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 to cease being a
customer, supplier, or vendor of the Company or to
divert all or any part of such person's or entity's
business from the Company.
(iii) The Executive agrees that during employment with the
Company or any of its affiliates and for a period of
twelve (12) months from the date of termination of
employment for any reason, the Executive shall not,
directly or indirectly, induce, attempt to induce, or
aid others in inducing, any executive, employee or
consultant of the Company to accept employment or
affiliation with another firm or corporation engaging in
such business or activity of the Company.
(iv) The Parties hereby acknowledge that the restrictions in
this Section 25 have been specifically negotiated and
agreed to by the Parties hereto and are limited only to
those restrictions necessary to protect the Company from
the misuse of confidential information and unfair
competition. The Parties hereby agree that if the scope
or enforceability of any provision, paragraph or
subparagraph of this Section 25 is in any way disputed
at any time, and should a court of competent
jurisdiction find that such restrictions are overly
broad, the court may modify and enforce the covenant to
the extent that it believes it to be reasonable under
the circumstances. Each provision, paragraph and
subparagraph of this Section 25 is separable from every
other provision, paragraph, and subparagraph and
constitutes a separate and distinct covenant. The
Executive acknowledges that the Company's business is
not limited by geographical scope, is operating
throughout the world and that the effect of Section
25(g) may be to prevent him from working in a
competitive business after his termination of employment
hereunder.
(v) The Executive acknowledges and agrees that the Company's
remedies at law for a breach or threatened breach of any
of the provisions of Section 25 would be inadequate and
the Company would suffer irreparable damages as a result
of such breach or threatened breach. In recognition of
this fact, the Executive agrees that, in the event of
such a breach or threatened breach, the Company shall be
15
entitled to cease making any payments or providing any
benefit otherwise required by this Agreement.
26. Damages/Injunctive Relief.
Executive acknowledges that his services to the Company are of a unique
character, which gives them a special value to the Company. In the event of a
breach or threatened breach by Executive of any of the provisions of this
Agreement, in addition to any other remedy which the Company may have at law or
in equity, including the right to withhold any payment of compensation, the
Company shall be entitled to have the provisions of this Agreement specifically
enforced by any court of competent jurisdiction or to temporary and/or permanent
injunctions in order to prevent or restrain any such breach by Executive or by
Executive's partners, agents, representatives, servants, employers and
employees. Said remedies shall be in addition to, and not in limitation of, any
other rights or remedies to which the Company is or may be entitled at law, in
equity, or under this Agreement.
27. Set Off, Mitigation.
In the event of a termination of the Executive's employment for any
reason, 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 he 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 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 25.
28. 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
16
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.
COMVERSE, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Director
THE EXECUTIVE
By: /s/ Yaron Tchwella
-------------------------------------
Name: Yaron Tchwella
17
EXHIBIT A
EXECUTIVE SEVERANCE PROTECTION PLAN
COMVERSE TECHNOLOGY, INC.
EXECUTIVE SEVERANCE PROTECTION PLAN
THIS EXECUTIVE SEVERANCE PROTECTION PLAN, made and executed adopted by
Comverse Technology, Inc., a New York corporation, is being established to
provide for the payment of severance benefits to certain of its eligible
employees.
Section 1. Definitions. Unless the context clearly indicates otherwise,
when used in this Plan:
(a) "Affiliate" means, with respect to any entity, any other
corporation, organization, association, partnership, sole proprietorship
or other type of entity, whether incorporated or unincorporated,
directly or indirectly controlling or controlled by or under direct or
indirect common control with such entity.
(b) "Base Salary" means Executive's annual rate of base
salary in effect on the date in question, determined prior to reduction
for any employee-elected salary reduction contributions made to an
Employer-sponsored non-qualified deferred compensation plan or an
Employer-sponsored plan pursuant to Section 401(k) or 125 of the
Internal Revenue Code, and excluding bonuses, overtime, allowances,
commissions, deferred compensation payments and any other extraordinary
remuneration.
(c) "Board" means the board of directors of the Company.
(d) "Bonus" means the amount payable to Executive under the
Company's applicable annual incentive bonus plan with respect to a
fiscal year of the Company.
(e) "Cause" means a good faith finding by the Company of:
(i) commission by 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; (iii) willful misconduct or gross
negligence by the Executive resulting in material and demonstrable harm
to the Company; (iv) a material violation by the Executive of any
Company policy or procedure provided to the Executive resulting in
material and demonstrable harm to the Company including, without
limitation, a material violation of the Company's Code of Business
Conduct and Ethics; (v) the repeated and continued failure by the
Executive to carry out, in all material respects, the reasonable and
lawful directions of the Company that are within the Executive's
individual control and consistent with the Executive's position and
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.
(f) "Change of Control" means, and shall be deemed to have
occurred:
(1) the Board (or if approval of the Board is not
required as a matter of law, the shareholders of the Company)
shall approve (a) any consolidation or merger of the Company
which the Company is not the continuing or surviving corporation
or pursuant to which shares of Common Stock would be converted
to cash, securities or other property, other than a merger of
the Company in which the holders of Common Stock immediately
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prior to the merger have the same proportionate ownership of
common stock of the surviving corporation immediately after the
merger, or (b) any sale, lease, exchange or other transfer (in
one transaction or series of related transactions) of all, or
substantially all, the assets of the Company or (c) the adoption
of any plan or proposal for the liquidation or dissolution of
the Company;
(2) any person (as such term is defined in Section
13(d) of the 1934 Act), corporation or other entity other than
the Company shall make a tender offer or exchange offer to
acquire any Common Stock (or securities convertible into Common
Stock) for cash, securities or any other consideration, provided
that (a) at least a portion of such securities sought pursuant
to the offer in question is acquired and (b) after consummation
of such offer, the person, corporation or other entity in
question is the "beneficial owner" (as such term is defined in
Rule 13d-3 of the 1934 Act), directly or indirectly, of 20% or
more of the outstanding shares of Common Stock (calculated as
provided in paragraph (d) of such rule 13d-3 in the case of
rights to acquire Common Stock;
(3) 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
(4) the occurrence of any other event the Committee
determines shall constitute a "Change of Control" hereunder.
(g) "COBRA" means the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended.
(h) "Code" means the Internal Revenue Code of 1986, as
amended.
(i) "Committee" means the committee designated pursuant to
Section 7 to administer this Plan.
(j) "Company" means Comverse Technology, Inc., a New York
corporation and, after a Change of Control, any successor or successors
thereto.
(k) "Eligible Executive" means an Executive whose employment
with Executive's Employer (i) is involuntarily terminated by the
Employer for any reason other than Cause (A) in connection with or in
anticipation of a Change of Control at the request of, or upon the
initiative of, the buyer in the Change of Control transaction (an
"Anticipatory Termination"), but only if an anticipated Change of
Control actually occurs during the period in which this Plan is
effective (in which case Executive's date of termination shall be deemed
to have occurred immediately following the Change of Control) or (B)
during the two-year period beginning on the effective date of a Change
of Control, or (ii) terminates during the two year period beginning on
the effective date of a Change of Control on account of such Executive's
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resignation for Good Reason within 6 months from the date the Executive
first becomes aware of the existence of Good Reason; provided, however,
that the employment of an Executive shall not be considered to have been
"involuntarily terminated" in any of the following circumstances:
(1) if an Executive's employment with an Employer is
terminated by reason of a transfer to the employ of another
Employer or an Affiliate,
(2) if an Executive's employment with an Employer is
terminated by reason of a transfer to the employ of another
entity into which the Employer is merged or otherwise
consolidated,
(3) if an Executive's employment with an Employer is
terminated upon the expiration of a leave of absence by reason
of his or her failure to return to work at such time or the
absence at such time of an available position for which the
Executive is qualified, or
(4) if an Executive's employment with an Employer is
terminated in connection with the sale of stock or the sale or
lease by such Employer of all or part of its assets if such
Employer determines in its sole discretion that either (A) in
connection with such sale or lease such Executive was offered
employment for a comparable position at a comparable salary with
the purchaser or lessee, as the case may be, of the Employer's
stock or assets or (B) such Executive voluntarily elected not to
participate in the selection process for such employment.
(l) "Employer" means the Company and any other Affiliate of
the Company.
(m) "Executive" means an employee of an Employer as of the
date of a Change of Control who is listed on Schedule A attached hereto.
(n) "Good Reason" shall mean, without the Executive's prior
written consent, the occurrence of any of the following events or
actions on or after a Change in Control: (i) any reduction in the
Executive's Base Salary, other than as part of an across-the-board
reduction applicable to all senior executives of Comverse Technology,
Inc and its Affiliates; (ii) an actual relocation of the Executive's
principal office to another location more than 50 miles from its
location as of the effective date of the Plan; or (iii) a material and
adverse reduction in the nature or scope of Executive's
responsibilities, duties or authorities.
(o) "Plan" means The Comverse Technology, Inc. Executive
Severance Protection Plan, as in effect from time to time.
(p) "Plan Year" means the calendar year.
(q) "Release" means a release to be signed by an Eligible
Executive in such form as the Company shall determine, which shall, to
the extent permitted by law, waive all claims and actions against the
Employers and Affiliates and such other related parties and entities as
the Company chooses to include in the release except for claims and
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actions for benefits provided under the terms of this Plan (which
Release is not revoked by the Eligible Executive).
(r) "Target Bonus" means the greater of (i) Executive's
target Bonus in effect on the date of the Change of Control or (B)
Executive's target Bonus in effect immediately prior to the event set
forth in the notice of termination given in accordance with Section 12.
(s) "Total Disability" means the Executive's inability to
substantially perform his duties and responsibilities at the Company 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).
Section 2. Severance Benefits. Each Eligible Executive who executes a
Release at the time and in the manner prescribed by the Company (and who does
not revoke such Release) shall be entitled to the following:
(a) Severance Pay. An Eligible Executive shall be entitled
to receive severance pay from his or her Employer in a lump sum amount
equal to (i) 1.0 multiplied by the greater of the Eligible Executive's
Base Salary in effect (A) immediately prior to the date of the Change of
Control or (B) immediately prior to the date set forth in the notice of
termination given in accordance with Section 12, (ii) 1.0 multiplied by
the Target Bonus and (iii) the Target Bonus multiplied by a fraction,
the numerator of which shall equal the number of days the Eligible
Executive was employed by the Eligible Executive's Employer in the
Employer fiscal year in which the Eligible Executive's termination
occurs and the denominator of which shall equal 365 (the "Bonus
Fraction").
(b) Medical, Dental and Life Insurance Benefit Continuation.
For 12 months (or the minimum period required by law in the jurisdiction
in which the Eligible Executive is employed and resides outside of the
United States) following the Eligible Executive's termination of
employment (the "Welfare Continuation Period"), the Eligible Executive
and such Eligible Executive's spouse and dependents (each as defined
under the applicable program) shall receive the following benefits: (i)
medical and dental insurance coverages at the same benefit level as
provided to the Eligible Executive immediately prior to the Change of
Control, at the same cost to the Eligible Executive as is generally
provided to active employees of the Company (provided, however, that if
the Eligible Executive becomes employed by a new employer, continuing
medical and dental coverage from the Company will become secondary to
any coverage afforded by the new employer in which the Eligible
Executive becomes enrolled); and (ii) life insurance coverage at the
same benefit level as provided to the Eligible Executive immediately
prior to the Change of Control and at the same cost to the Eligible
Executive as is generally provided to active employees of the Company.
(c) Accrued Benefits. Such Eligible Executive shall be
entitled to receive any unpaid Base Salary through the date of such
Eligible Executive's termination, any Bonus earned but unpaid as of the
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date of such Eligible Executive's termination for any previously
completed fiscal year of the Company. In addition, such Eligible
Executive shall be entitled to prompt reimbursement of any unreimbursed
expenses properly incurred by such Eligible Executive in accordance with
Company policies prior to the date of such Eligible Executive's
termination. Such Eligible Executive shall also receive such other
compensation (including any stock options or other equity-related
payments) and benefits, if any, to which such Eligible Executive may be
entitled from time to time pursuant to the terms and conditions of the
employee compensation, incentive, equity, benefit or fringe benefit
plans, policies or programs of the Company, other than pursuant to any
Company severance policy and as provided in Section 10.
(d) Equity Incentive Awards. Any time periods, conditions or
contingencies relating to the exercise or realization of, or lapse of
restrictions under, any outstanding equity incentive award then held by
such Eligible Executive shall, if not previously accelerated or waived
pursuant to the terms of the equity incentive award, be automatically
accelerated or waived effective as of the effective date of such
Eligible Executive's termination of employment.
(e) Restrictive Covenants. In consideration of the provision
of the foregoing benefits provided in this Section 2 and as otherwise
set forth in the Plan, Executive hereby agrees to be bound by the
restrictive covenants set forth in Exhibit A attached hereto.
Section 3. Form and Time of Payment. The cash severance pay benefits
payable to an Eligible Executive by his or her Employer under Section 2 shall be
paid to such Eligible Executive in a single lump sum less applicable
withholdings within the later of (i) 30 business days after the Eligible
Executive's date of termination or (ii) the expiration of the revocation period,
if applicable, under the Release, except as provided pursuant to Section 5.
Section 4. Tax Withholding, Deferral and Section 409A. Each Employer
shall withhold from any amount payable to an Eligible Executive pursuant to this
Plan, and shall remit to the appropriate governmental authority, any income,
employment or other tax the Employer is required by applicable law to so
withhold from and remit on behalf of such Eligible Executive. Notwithstanding
any other provision of this Plan or certain compensation and benefit plans of
the Employer, it is the intention of the parties to this Agreement that no
payment or entitlement pursuant to this Agreement will give rise to any adverse
tax consequences to the Eligible Executive under Section 409A of the Code and
Department of Treasury regulations and other interpretive guidance issued
thereunder, including that issued after the date hereof (collectively, "Section
409A"). The Agreement shall be interpreted to that end and, consistent with that
objective and notwithstanding any provision herein to the contrary, the Company
may unilaterally take any action it deems necessary or desirable to amend any
provision herein to avoid the application of or excise tax under Section 409A.
Further, no effect shall be given to any provision herein in a manner that
reasonably could be expected to give rise to adverse tax consequences under that
provision. The Company shall from time to time compile a list of "specified
employees" as defined in, and pursuant to, Prop. Reg. Section 1.409A-1(i) or any
successor regulation. Notwithstanding any other provision herein, if the
Eligible Executive is a specified employee on the date of termination, no
payment of compensation under this Agreement (other than a payment that
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qualifies as a "short-term deferral" under Section 409A) shall be made to the
Eligible Executive during the period lasting six months from the date of
termination unless the Company determines that there is no reasonable basis for
believing that making such payment would cause the Eligible Executive to suffer
any adverse tax consequences pursuant to Section 409A of the Code. If any
payment to the Eligible Executive is delayed pursuant to the immediately
preceding sentence, such payment instead shall be made on the first business day
following the expiration of the six-month period referred to in that sentence.
The Company shall consult with the Eligible Executive in good faith regarding
implementation of this section 4; provided that neither the Company nor its
employees or representatives shall have liability to the Eligible Executive with
respect thereto.
Section 5. Limitation of Certain Payments.
(a) In the event the Employer determines, that part or all
of the consideration, compensation or benefits to be paid to Executive
under this Plan constitute "parachute payments" under Section 280G(b)(2)
of the Code, as amended, then, if the aggregate present value of such
parachute payments, singularly or together with the aggregate present
value of any consideration, compensation or benefits to be paid to
Executive under any other plan, arrangement or agreement which
constitute "parachute payments" (collectively, the "Parachute Amount")
exceeds 2.99 times the Executive's "base amount", as defined in Section
280G(b)(3) of the Code (the "Executive Base Amount"), the amounts
constituting "parachute payments" which would otherwise be payable to or
for the benefit of Executive shall be reduced to the extent necessary so
that the Parachute Amount is equal to 2.99 times the Executive Base
Amount (the "Reduced Amount"); provided that such amounts shall not be
so reduced if the Executive determines, based upon the advice of an
independent nationally recognized public accounting firm (which may, but
need not be the independent public accountants of the Employer), that
without such reduction Executive would be entitled to receive and
retain, on a net after tax basis (including, without limitation, any
excise taxes payable under Section 4999 of the Code), an amount which is
greater than the amount, on a net after tax basis, that the Executive
would be entitled to retain upon his receipt of the Reduced Amount.
(b) If the determination made pursuant to clause (a) of this
Section 5 results in a reduction of the payments that would otherwise be
paid to Executive except for the application of clause (a) of this
Section 5, Executive may then elect, in his sole discretion, which and
how much of any particular entitlement shall be eliminated or reduced
and shall advise the Employer in writing of his election within ten days
of the determination of the reduction in payments. If no such election
is made by Executive within such ten-day period, the Employer may elect
which and how much of any entitlement shall be eliminated or reduced and
shall notify Executive promptly of such election. Within ten days
following such determination and the elections hereunder, the Employer
shall pay to or distribute to or for the benefit of Executive such
amounts as are then due to Executive under this Plan and shall promptly
pay to or distribute to or for the benefit of Executive in the future
such amounts as become due to Executive pursuant to this Plan.
Section 6. Plan Administration. This Plan shall be administered by the
Compensation Committee of the Board. The Committee shall have discretionary and
final authority to interpret and implement the provisions of this Plan and to
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determine eligibility for benefits under the Plan. The Committee shall perform
all of the duties and exercise all of the powers and discretion that the
Committee deems necessary or appropriate for the proper administration of this
Plan. Every interpretation, choice, determination or other exercise by the
Committee of any power or discretion given either expressly or by implication to
it shall be conclusive and binding upon all parties having or claiming to have
an interest under this Plan or otherwise directly or indirectly affected by such
action, without restriction, however, upon the right of the Committee to
reconsider or re-determine such action. The Committee may adopt such rules and
regulations for the administration of this Plan as are consistent with the terms
hereof, and shall keep adequate records of its proceedings and acts. The
Committee may employ such agents, accountants and legal counsel (who may be
agents, accountants and legal counsel for an Employer) as may be appropriate for
the administration of the Plan. All reasonable administration expenses incurred
by the Committee in connection with the administration of the Plan shall be paid
by the Employer.
Section 7. Claims Procedure. If any person (hereinafter called the
"Claimant") feels he or she is being denied a benefit to which he or she is
entitled under this Plan, such Claimant may file a written claim for said
benefit with the Chairman of the Committee. Within 60 days of the receipt of
such claim the Committee shall determine and notify the Claimant as to whether
he or she is entitled to such benefit. Such notification shall be in writing
and, if denying the claim for benefit, shall set forth the specific reason or
reasons for the denial, make specific reference to the pertinent Plan
provisions, and advise the Claimant that he or she may, within 60 days of the
receipt of such notice, request in writing to appear before the Committee or its
designated representative for a hearing to review such denial. Any such hearing
shall be scheduled at the mutual convenience of the Committee or its designated
representative and the Claimant, and at such hearing the Claimant and/or his or
her duly authorized representative may examine any relevant documents and
present evidence and arguments to support the granting of the benefit being
claimed. The final decision of the Committee with respect to the claim being
reviewed shall be made within 60 days following the hearing thereon, and the
Committee shall in writing notify the Claimant of its final decision, again
specifying the reasons therefore and the pertinent Plan provisions upon which
such decision is based. The final decision of the Committee shall be conclusive
and binding upon all parties having or claiming to have an interest in the
matter being reviewed.
Section 8. Plan Amendment and Termination. The Company shall have the
right and power at any time and from time to time to amend this Plan, in whole
or in part, by written document executed by its duly authorized representative
and at any time to terminate this Plan; provided, however, that no such
amendment or termination shall reduce the amount of severance pay payable under
this Plan to a former Executive whose employment with an Employer terminated
prior to the date of such amendment or termination, or defer the date for the
payment of such former Executive's benefit hereunder except as provided pursuant
to Section 4, without the consent of such former Executive. Any provision of
this Plan to the contrary notwithstanding, any action to amend or terminate this
Plan on or after the date on which a Change of Control occurs shall not be
effective prior to the end of the two-year period beginning on the effective
date of the Change of Control.
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Section 9. Nature of Plan and Rights. This Plan is an unfunded employee
welfare benefit plan and no provision of this Plan shall be deemed or construed
to create a trust fund of any kind or to grant a property interest of any kind
to any Executive or former Executive. Any payment which becomes due under this
Plan to an Eligible Executive shall be made by his or her Employer out of its
general assets, and the right of any Eligible Executive to receive a payment
hereunder from his or her Employer shall be no greater than the right of any
unsecured general creditor of such Employer.
Section 10. Entire Agreement; Offset; Modification.
(a) This Plan constitutes the entire agreement between the
parties and, except as expressly provided herein, supersedes the
provisions of all other prior agreements expressly concerning the effect
of a termination of employment in connection with or following a Change
of Control on the relationship between the Company and its Affiliates
and Executive.
(b) Except as expressly provided herein, this Plan shall not
interfere in any way with the right of the Company to reduce Executive's
compensation or other benefits or terminate Executive's employment, with
or without Cause. Any rights that Executive shall have in that regard
shall be as set forth in any applicable employment agreement between
Executive and the Company.
Section 11. Spendthrift Provision. No right or interest of an Eligible
Executive under this Plan may be assigned, transferred or alienated, in whole or
in part, either directly or by operation of law, and no such right or interest
shall be liable for or subject to any debt, obligation or liability of such
Eligible Executive.
Section 12. Notice. Notice of termination without Cause shall be given
in accordance with this Section, and the effective date of termination. For the
purpose of this Plan, any notice and all other communication provided for in
this Plan shall be in writing and shall be deemed to have been duly given when
received at the respective addresses set forth below, or to such other address
as the Company or the Eligible Executive may have furnished to the other in
writing in accordance herewith.
If to the Company:
Comverse Technology, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
If to Executive:
To the most recent address of Executive set forth in the personnel
records of the Company.
Section 13. Applicable Law. This Plan shall be governed and construed in
accordance with New York and applicable federal law.
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Section 14. Effectiveness. This Plan shall be effective as of the date
of execution stated herein and shall remain in effect until January 26, 2009;
provided, however, that commencing with January 25, 2009 and on each anniversary
thereof, the effectiveness of the Plan shall be automatically extended for an
additional one-year period, unless the Company provides that the effectiveness
of the Plan shall not be so extended. Notwithstanding the foregoing, the Plan
shall, if in effect on the date of a Change of Control, remain in effect for two
years following the Change of Control.
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SCHEDULE A
COMVERSE, INC.
--------------
Uri Arad President MMG
▇▇▇▇ ▇▇▇▇▇ President EMEA
Yaron Tchwella President Messaging
Eitan Achlow President APAC
▇▇▇ ▇▇▇▇▇▇▇ CFO
▇▇▇▇▇ ▇▇▇▇▇▇▇ CMO
▇▇▇▇ ▇▇▇▇▇ SVP Operations
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ President Americas
Elli Giuseppe EVP Alliances
▇▇▇▇▇▇ ▇▇▇▇▇ President Billing
▇▇▇▇▇▇ ▇▇▇▇▇ SVP Global Customer Support
▇▇▇▇▇▇ ▇▇▇▇ SVP Human Resources
COMVERSE TECHNOLOGY, INC.
-------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ AVP Finance.
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EXHIBIT A
RESTRICTIVE COVENANTS
I. CONFIDENTIALITY. The Grantee shall not disclose to anyone or make use of
any trade secret or proprietary or confidential information of the Company or an
Affiliate, 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 Grantee acquires during the
period 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 Grantee's work as an employee of the
Company or an Affiliate, (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 Grantee 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 his or her violation
of this Exhibit A. The Grantee hereby sells, assigns and transfers to the
Company all of Grantee's right, title and interest in and to all inventions,
discoveries, improvements and copyrightable subject matter (the "Rights") that,
during Grantee's employment, are made or conceived by him or her, alone or with
others, and that relate to the Company or an Affiliate's present business or
arise out of any work Grantee performs or information Grantee receives regarding
the business of the Company or an Affiliate while employed by the Company or an
Affiliate. The Grantee shall fully disclose to the Company or an Affiliate as
promptly as possible all information known or possessed by him or her concerning
the Rights, and upon request by the Company or an Affiliate and without any
further compensation in any form to Grantee by the Company or an Affiliate, but
at the expense of the Company or an Affiliate, execute all applications for
patents and copyright registrations, assignments thereof and other applicable
instruments and do all things that the Company or an Affiliate may reasonably
deem necessary to vest and maintain in it the entire right, title and interest
in and to all such Rights.
II. NONCOMPETE; NON NONSOLICITION. 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 he will not, at any time during his employment with the Company
and for a period of twelve (12) months thereafter, directly or indirectly,
engage in any business or in any activity related to the development, sale,
production, manufacturing, marketing or distribution of products or services
that are in competition with products or services that the Company or any of its
subsidiaries produces, sells, manufactures, markets, distributes or has interest
in, in any state or foreign country in which the Company or any of its
subsidiaries then conducts business or reasonably has plans to conduct business.
It is not the intent of this covenant to bar the Executive from employment in
any company whose general business is the manufacture of communications
equipment or delivery of communications services, only to limit specific and
direct competition with the Company. Notwithstanding the foregoing, nothing
contained in this Agreement shall prevent the Executive from being an investor
in securities of a competitor listed on a national securities exchange or
actively traded over-the-counter so long as such investments are in amounts not
significant as compared to his total investments or to the aggregate of the
outstanding securities of the issuer of the same class or issue of the specific
securities involved. The Executive further agrees that during his employment by
the Company and for a period of twelve (12) months thereafter, the Executive
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shall not, directly or indirectly, induce, attempt to induce, or aid others in
inducing, an exempt Executive 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 Executive, owner, partner or consultant.
II. GEOGRAPHIC SCOPE. The Company and the Executive agree that the duration
and geographic scope of the Restrictive Covenant provision set forth in this
Exhibit A 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 time period and in the greatest 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.
III. CLAW BACK If a Executive violates the requirements of the restrictive
covenants in this Exhibit A, then in addition to all remedies in law and/or
equity available to the Company, Executive shall forfeit all Severance Pay that
may have accrued but not been paid and Executive shall immediately pay to the
Company an amount in cash equal to any Severance Pay previously paid to the
Executive by the Company, without regard to any taxes that may have been
deducted from such amount.
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