Mr. Al
Wood
C/O Veraz Networks, Inc.
926 Rock Avenue, Suite 20
San Jose, CA 95131
Re: Offer of
Employment with Veraz Networks, Inc.
Veraz Networks,
Inc. (the “Company”) is pleased to offer you employment
as the Company’s Chief Financial Officer on the terms and
conditions set forth in this letter agreement (the
“Agreement”).
1. Duties. You will be responsible for all financial
operations of the Company and shall perform such duties as are
ordinary, customary and necessary in the Chief Financial Officer
role. You will report to the Company’s Chief Executive
Officer (“CEO”). You shall devote your best efforts and
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. The Company may
change your position, duties, work location and compensation from
time to time in its discretion.
2. Compensation. You will be paid an annual base salary
of $210,000, 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. You will also
receive a sign-on bonus equal to two months of your base salary,
payable on the first regularly-scheduled payroll date following
your first day of employment. If, prior to the first anniversary of
your hire, your employment terminates at your request, or the
Company terminates your employment for Cause (as defined below),
and neither your resignation nor termination occurs following a
Change of Control (as defined herein), then you must repay a
portion of this bonus, prorated based on your actual length of
employment during the period from your start date through one year
after your hire date.
3. Benefits. The Company will provide you with medical,
dental, life, supplemental life, and disability insurance, as well
as sick leave, paid vacation and other Company-sponsored benefits
and 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 in its discretion.
Additional information regarding these benefits is available for
your review upon request.
4. Stock
Option. Subject to approval by the Company’s Board of
Directors (the “Board”), the Company will grant you a
stock option to purchase one hundred fifty thousand (150,000)
shares of the Company’s common stock (the
“Option”). The Option shall be issued pursuant to the
terms and conditions of the Company’s 2001 Equity Incentive
Plan (the “Plan”) and the per share exercise price
shall be the fair market value of the Company’s common stock
on the date of grant as determined by the Board. The Option shall
vest over a four-year period, with one quarter (1/4) of the shares
subject to the Option vesting on the one year anniversary of your
Commencement Date (as defined herein), and the remaining portion of
the shares vesting equally over the following 36 months of
continuous service thereafter. Except as otherwise set forth
herein, all terms, conditions and limitations of the Options shall
be governed by the Plan and related documents.
5. Performance Bonuses. Each year, you will be eligible
for an annual incentive bonus equal to thirty percent (30%) of your
annual base salary. Whether you receive such a bonus, and the
amount of any such bonus, shall be determined by the Board in its
sole discretion, and shall be based on achievement of annualized
objectives to be established by the Board and the CEO. Bonuses are
generally paid at the end of the first quarter of the following
year and are subject to standard payroll deductions and
withholdings. You must be employed on the day that your bonus (if
any) is paid in order to earn the bonus. Therefore, if your
employment is terminated either by you or the Company for any
reason prior to the bonus being paid, you will not have earned the
bonus and no partial or prorated bonus will be paid.
6. Change
of Control Termination. Subject to the terms and conditions set
forth in this paragraph 6, 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 subject to the Option
that remain subject to vesting shall be accelerated in full.
Additionally, if your termination is effective after the end of a
calendar year, but before you have been paid your performance bonus
for that preceding year, then the Company will pay you, as
severance, your performance bonus for the preceding
year.
(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) your conviction of a felony; (b) your commission of
any act of fraud with respect to the Company; (c) any
intentional misconduct by you that has a material adverse effect
upon the Company’s business that is not cured by you within
thirty (30) days after written notice is given to you by the
Company identifying such misconduct; (d) your breach of any
fiduciary or contractual obligation that you owe to the Company
that has a material adverse effect upon the Company’s
business and is not cured by you within thirty (30) days after
written notice is given to you by the Company identifying such
breach; (e) willful misconduct or gross negligence in the
performance of your duties hereunder, including (without
limitation) your refusal to comply in any material respect with the
legal directives of the Board or the CEO, so long as such
directives are not inconsistent with your position and duties, that
are not cured by you within thirty (30) days after written
notice is given to you by the Company identifying such misconduct
or negligence.
(c) Good Reason . For the purposes of this Agreement,
“Good Reason” shall mean any one of the following
events which occurs on or after the commencement of your employment
without your consent: (i) any reduction of your then current
annual base salary; (ii) any material diminution of your
duties, responsibilities, or authority to a level below that of an
officer of the Company, excluding for this purpose (1) an
isolated or inadvertent action not taken in bad faith that is
remedied by the Company immediately after notice thereof is given
by you, and (2) any change in your title, duties,
responsibilities or authority if you are given or you retain other
officer level duties within the Company; or (iii) any
requirement that you relocate to a work site more than twenty five
(25) miles from the Company’s current
location.
(d) Release Requirements. To receive the Change of
Control accelerated vesting benefits and bonus payment set forth
above, you must (i) first sign and deliver to the Company a
general release of claims, in a form acceptable to the Company,
within t
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