Re: Offer of
Employment with Veraz Networks, Inc.
Veraz Networks,
Inc. (the “Company”) is pleased to offer you employment
as the Company’s President and Chief Executive Officer on the
terms and conditions set forth in this letter agreement (the
“Agreement”). If you agree to the terms and conditions
set forth herein, please initial the bottom of each page and sign
where indicated below. Your employment with the Company pursuant to
this Agreement will begin on December 1, 2004 (the
“Commencement Date”).
1.
Duties. You will be responsible for all aspects of the
Company and shall perform such duties as are ordinary, customary
and necessary in your role as the President and Chief Executive
Officer. You will report directly to the Board of Directors of the
Company (the “Board”). You shall devote your best
efforts and your full business time, skill and attention to the
performance of your duties. You will also be expected to adhere to
the general employment policies and practices of the Company that
may be in effect from time to time, except that when the terms of
this Agreement conflict with the Company’s general employment
policies or practices, this Agreement will control.
2.
Compensation. You will be paid an annual base salary of
$250,000 per year, less applicable deductions and withholdings, to
be paid semi-monthly in accordance with the Company’s payroll
practices, as may be in effect from time to time.
3.
Benefits. The Company will provide you with medical, dental,
life, supplemental life, disability benefits, sick leave, vacation
and many other Company-sponsored programs on the same terms and
conditions as such benefits are generally available to its
executive officers. The Company may, from time to time, change
these benefits. Additional information regarding these benefits is
available for your review upon request.
4. Stock
Option. Upon Board approval, the Company will grant you a stock
option to purchase a number of shares of the Company’s common
stock (the “Shares”) that is equal to four percent (4%)
of the capital stock of the Company calculated on a fully-diluted
basis, which calculation shall mean the number of outstanding
shares of the Company’s common stock, the number of
outstanding shares of the Company’s preferred stock, and the
number of shares issuable upon the exercise of all outstanding
options and warrants or available for issuance under the
Company’s equity incentive plans. The Shares shall be issued
pursuant to the terms and conditions of the Company’s 2001
Equity Incentive Plan (the “Plan”) and the per share
exercise
Doug
Sabella
January 10, 2003
Page 2
price shall be
the fair market value of the Company’s common stock on the
date of grant as determined by the Board. The Shares shall vest
over a four-year period, with one quarter (1/4) of the Shares
vesting on the one year anniversary of your Commencement Date, and
the remaining portion of the Shares vesting equally over the next
36 months of continuous service thereafter. Except as
otherwise set forth herein, all terms, conditions and limitations
of the Shares shall be governed by the Plan and related
documents.
5.
Performance Bonuses. You will be eligible to receive an
annual bonus of up to forty percent (40%) of your annual base
salary which shall become payable upon the achievement of certain
milestones mutually agreed upon by you and the Board. Such
milestones shall be outlined in writing and agreed upon within
forty-five (45) days of your Commencement Date.
6. Board
Seat. The Company shall cause you to be elected or appointed to
the Board. You agree to immediately resign your position on the
Board upon the termination of your employment as Chief Executive
Officer for any reason, or upon the Company’s earlier
request.
7. Change
of Control Termination. Subject to the terms and conditions set
forth in this paragraph 7, if your employment with the Company is
terminated by the Company without Cause (as defined herein) or you
resign for Good Reason (as defined herein), and either such event
occurs within twelve (12) months after a Change of Control (as
defined herein), then, as of the date of termination, the vesting
of one hundred percent (100%) of the Shares that remain subject to
vesting shall be accelerated in full.
(a) Change of Control. “Change of Control”
shall mean the consummation of any one of the following events:
(a) a sale, lease or other disposition of all or substantially
all of the assets of the Company; (b) a consolidation or
merger of the Company with or into any other corporation or other
entity or person, or any other corporate reorganization, in which
the shareholders of the Company immediately prior to such
consolidation, merger or reorganization, own less than 50% of the
Company’s outstanding voting power of the surviving entity
(or its parent) following the consolidation, merger or
reorganization or (c) any transaction (or series of related
transactions involving a person or entity, or a group of affiliated
persons or entities) in which in excess of fifty percent (50%) of
the Company’s outstanding voting power is transferred
(excluding (i) any consolidation or merger effected
exclusively to change the domicile of the Company, or (ii) any
transaction or series of transactions principally for bona fide
equity financing purposes in which cash is received by the Company
or any successor or indebtedness of the Company is cancelled or
converted or a combination thereof).
(b) Cause . For purposes of this Agreement,
“Cause” shall mean one or more of the following:
(a) Executive’s conviction of a felony;
(b) Executive commission of any act of fraud with respect to
the Company; (c) any intentional misconduct by Executive that
has a materially adverse effect upon the Company’s business
that is not cured by Executive within thirty (30) days of
written not
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