Exhibit 10.1
Sonus
Networks, Inc.
Retention and Restricted Stock
Agreement
This Agreement
(the “Agreement”) is made between Sonus Networks, Inc.
(the “Company”) and Hassan M. Ahmed (the
“Executive”) as of November 14, 2007 (the “Award
Date”). Capitalized terms used and not otherwise defined in
this Agreement are used as defined in the Company’s 1997
Stock Incentive Plan, as amended (the
“Plan”).
For good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and the Executive agree as
follows:
1.
CEO Retention. The Company’s Board of Directors
recognizes the contributions the Executive has made to continued
success of the Company and wishes to retain the Executive as set
forth in this Agreement.
2.
Award and Issuance of Shares. The Company shall issue
to the Executive, in consideration of employment services rendered
and to be rendered, 750,000 shares of common stock, $0.001 par
value, of the Company (the “Shares”). This Award is
being issued to the Executive pursuant to the Plan and the Award is
in all respects subject to the terms and conditions of the Plan, a
copy of which has been provided to the Executive (the receipt of
which the Executive hereby acknowledges). The Executive hereby
accepts the Award subject to all the terms and provisions of the
Plan. The Executive further agrees that all decisions under and
interpretations of the Plan by the Company will be final, binding,
and conclusive upon the Executive and his successors, permitted
assigns, heirs, and legal representatives. The Company shall issue
to the Executive one or more certificates in the name of the
Executive for the Shares being acquired by the Executive. The
Executive agrees that unvested Shares shall be subject to
forfeiture as set forth in Section 3 of this Agreement and the
restrictions on transfer set forth in Section 5 of this Agreement.
The Shares shall be deposited in Escrow in accordance with Section
6 of this Agreement.
3.
Vesting.
(a)
The Shares shall vest on November 14, 2009 subject to the
Executive’s continued service as an executive or as a board
director for the Company through November 14, 2009 unless as
otherwise set forth herein. Notwithstanding the foregoing:
(i)
187,500 Shares shall vest on the date on which the closing price of
the common stock of the Company, as reported on the NASDAQ Global
Select Market (or such other securities exchange on which the
common stock is then listed) is at least $10.00 per share (subject
to proportionate adjustment in the event of any stock split,
reverse stock split, stock dividend or similar recapitalization
event affecting the common stock) for the 10 th
consecutive trading day, provided the Executive is then an employee
or board director of the Company.
(ii)
187,500 Shares shall vest on the date the Company first reports its
operating results for the fiscal year ending December 31, 2008 in a
report furnished to or filed with the Securities and Exchange
Commission if the Company’s revenue for such year, as so
reported, achieves the Company’s 2008 operating plan, as
approved by the Board of Directors. The Compensation Committee of
the Board of Directors shall determine whether clause 3(a)(ii)
above has been achieved, provided the Executive is then an employee
or board director of the Company.
(iii)
375,000 of the Shares shall vest if the Company hires a successor
President or Chief Executive Officer or appoints a successor
Chairman, on the date that is three (3) months after the date on
which the new President, Chief Executive Officer or Chairman
commences employment or service provided the Executive shall assist
with the transition as reasonably requested by the Company during
such three (3) month period.
(iv)
All of the unvested Shares shall become vested in full upon (A) an
Acquisition of the Company provided the Executive is then an
employee or board director of the Company; (B) the termination of
the Executive’s employment with the Company by the Company or
removal as Chairman without Cause (as defined below); (C) the
termination of the Executive’s employment with the Company by
the Executive for Good Reason (as defined below) other than in
connection with the Company’s hiring of a successor President
or Chief Executive Officer or appointment of a successor Chairman;
or (D) the termination of the Executive’s employment or
service as Chairman as a result of the Executive’s total or
partial incapacity due to physical or mental illness, or death.
(b)
The Compensation Committee of the Board of Directors may in its
discretion accelerate the vesting schedule at any time.
(c)
For purposes of this Agreement:
(i)
“Cause” means (A) the Executive’s willful failure
substantially to perform his duties as President and Chief
Executive Officer that the non-executive Directors of the Board
unanimously conclude occurred more than thirty (30) days after
receiving written notice of a unanimous vote by the non-executive
Directors of such non-performance (other than (x) as a result of
total or partial incapacity due to physical or mental illness, or
death, or (y) for Good Reason); (B) the Executive’s willful
commission of any material act of fraud on the Company as
determined by a unanimous vote of the non-executive Directors of
the Board; or (C) the Executive’s conviction of, or the entry
of a plea of guilty by the Executive to, a felony involving his
personal conduct under the laws of the United States or any state
thereof; and
(ii)
“Good Reason” means (A) the removal of the Executive
from any of the positions as Chief Executive Officer, President or
Chairman of the Company without Cause; (B) the assignment to the
Executive of duties or responsibilities that are inconsistent with
his position as Chief Executive Officer, President or Chairman
of the Company; (C) a reduction of the Executive’s
annual base salary or target bonus as Chief Executive Officer,
President or Chairman of the Company other than as part of a
broad-based management or employee reduction; (D) the relocation of
the Executive’s place of work such that the distance from the
Executive’s current residence to his place of work is
increased by more than 30 miles.
4.
Forfeiture of Shares. In the event that the
Executive’s employment is terminated by the Company for Cause
or by the Executive without Good Reason prior to November 14, 2009,
then, effective upon the cessation of his employment and subject to
any accelerated vesting provided for in this Agreement, the
Executive shall automatically forfeit (“Forfeiture”),
without any action required on the part of the Executive, all of
the unvested Shares (“Forfeited Shares”) that the
Executive received under the Award without the payment of any
consideration by the Company and the Forfeited Shares shall revert
to the Company. Upon and after Forfeiture, the Company shall not
pay any dividend to the Executive on account of such Forfeited
Shares or permit the Executive to exercise any of the privileges or
rights of a stockholder with respect to such Forfeited Shares, but
shall, in so far as permitted by law, treat the Company as the
owner of the Forfeited Shares. Military or sick leave or other bona
fide leave will not be deemed a termination of employment provided
that it does not exceed the longer of ninety (90) days or the
period during which the absent Executive’s re-employment
rights are guaranteed by statute or by contract.
5.
Restrictions on Transfer. The Executive shall not,
during the term of this Agreement, sell, assign, transfer, pledge,
hypothecate or otherwise dispose of, by operation of law or
otherwise (collectively “Transfer”), any of the Shares,
or any interest therein, unless and until such Shares are no longer
subject to risk of Forfeiture. Notwithstanding the foregoing, the
Executive may transfer (i) any or all of his Shares (A) to his
parents, spouse, children, stepchildren, grandchildren, or
siblings, or spouse of any such person (collectively,
“Immediate Family”), (B) to a trust established for the
benefit of his Immediate Family or himself, or (C) to a limited
liability
2
company or limited
partnership, the members or partners of which are members of his
Immediate Family or himself, or (ii) any or all of his Shares under
his will, provided that all such Shares transferred under
(i) or (ii) shall remain subject to this Agreement (including
without limitation the restrictions on transfer set forth in this
Section 5 and the Forfeiture provision in Section 4) and such
permitted transferee shall, as a condition to such transfer,
deliver to the Company a written instrument confirming that such
transferee shall be bound by all of the terms and conditions of
this Agreement. The Company shall not be required (a) to transfer
on its books any of the Shares which shall have been sold or
transferred in violation of any of the provisions set forth in this
Agreement, or (b) to treat as owner of such Shares or to pay
dividends to any transferee to whom any such Shares
shall
|
