Exhibit 10.1
EXECUTION COPY
SEPARATION AND CONSULTING
AGREEMENT
This Separation and Consulting
Agreement (this “Agreement”) dated as of
February 25, 2011 (the “Effective Date”) is
entered into by and between Comverse Technology, Inc., a New York
corporation (the “Company”) and Andre Dahan (the
“Executive”) to set forth the terms and conditions of
the Executive’s separation from the Company on March 4,
2011 (the “Separation Date”) and the terms and
conditions of the Executive’s consultancy with the Company
immediately following the Separation Date.
RECITALS
A. The Company and the Executive
previously entered into an employment agreement on April 10,
2007, effective as of April 30, 2007, which was amended and
restated as of December 2, 2008 under which the Executive was
employed to serve as the Company’s President and Chief
Executive Officer (the “Employment
Agreement”).
B. The Company and the Executive
wish to enter into this Agreement to supersede and replace the
Employment Agreement, except where otherwise specifically noted
herein.
C. The Executive has been employed
by the Company as its President and Chief Executive Officer and
will remain as its President and Chief Executive Officer in
accordance with the terms of this Agreement through the Separation
Date.
D. The Executive’s position
and employment with the Company is hereby terminated effective on
the Separation Date. In connection with such separation from the
Company, the Executive shall be entitled to the payments described
herein in lieu of any and all other payments under the Employment
Agreement or otherwise.
E. The Company wishes to retain the
Executive as an independent contractor Consultant to the Company
for a period of ninety (90) days beginning upon the day after
the Separation Date (the “Consulting Period”) pursuant
to the terms and conditions of this Agreement and the Executive
wishes to accept such position.
F. The Executive and the Company
agree that this Agreement is expressly conditioned upon the
execution and non-revocation of the Release Agreement attached
hereto as Appendix A as of March 4, 2011, provided that, if
the Release Agreement is not executed or is executed and revoked,
then this Agreement shall be null and void ab initio and all
other rights of the parties under the Employment Agreement and
otherwise shall remain in full force and effect.
AGREEMENT
To provide the Executive with
severance pay and to fully and finally resolve any and all issues
the Executive may have regarding his prior employment with the
Company, including the termination of that employment, to provide
the terms of the Executive’s position as a Consultant with
the Company for the Consulting Period, the Executive and the
Company hereby agree as follows:
1. Separation Date. The
Executive’s employment with the Company and his position as
the Company’s President and Chief Executive Officer and as an
officer of any subsidiaries of the Company, shall terminate
immediately upon the Separation Date.
(i) Base Salary . The
Executive shall be paid a Base Salary at the rate of one-million
dollars ($1,000,000) per annum, less applicable deductions through
the Separation Date, in accordance with the Company’s usual
payroll practices.
(ii) Employee Benefit
Programs . Through the Separation Date, the Executive shall be
entitled to participate in all employee welfare and pension benefit
plans, programs and/or arrangements applicable to senior-level
executives, in accordance with the terms of such plans and
policies, as in effect from time to time.
(iii) Incentive Compensation
Arrangements . The Executive shall not be entitled to any bonus
or other incentive compensation with respect to the fiscal year or
any part thereof ending January 31, 2012. The Executive is
entitled to an annual bonus earned pursuant to Section 5 of
the Employment Agreement with respect to the fiscal year ending
January 31, 2011, payable as soon as practicable but not later
than the April 15, 2011 (the “FY2010 Bonus”). The
FY2010 Bonus has been determined to be $800,000 (80% percent of the
Executive’s target annual bonus for such fiscal
year).
(iv) Reimbursement of Business
Expenses . Through the Separation Date, the Executive is
authorized to incur reasonable business expenses in carrying out
his duties and responsibilities under this Agreement, and the
Company shall reimburse him for all such reasonable business
expenses, subject to documentation and payable in accordance with
the Company’s policies relating thereto.
(v) Perquisites . Through the
Separation Date, the Executive shall be entitled to participate in
the Company’s executive fringe benefit and perquisite
programs applicable to the Executive as of immediately prior to the
date hereof in accordance with the terms and conditions of such
programs as in effect from time to time.
(iv) Board Resignation . The
Executive hereby resigns his positions as a member of the Boards of
the Company and its subsidiaries and as a fiduciary of any benefit
plans of the Company and its subsidiaries, effective upon the
Separation Date.
2. Terms of
Consultancy.
(i) Term of Consultancy; Duties
and Responsibilities; Reporting . The Executive will act as an
independent contractor consultant to the Company during the
Consulting Period. The Executive shall advise and assist as
reasonably requested by the Chairman (the “Chairman”)
of the Board of Directors of the Company (the “Board”)
and the Executive shall report to the Chairman in carrying out such
duties, provided however, that in no event shall the Executive be
expected to perform, or perform, services that exceed twenty
percent (20%) of the average level of bona fide services he
provided to the Company during the final thirty-six
(36) months of his term as the President and Chief Executive
Officer of the Company. The Executive shall not provide services
not requested by the Chairman. The intent of the foregoing is that
Executive shall have incurred a “separation
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from service, within the meaning of
Section 409A, from the Company on the Separation Date and
shall be interpreted accordingly. The Executive shall not be
required to perform any request requiring travel or communications
expense unless the Chairman also approves, as required by
Section 2(iii) below, the reasonable expense thereof in
accordance with Company policy (at a level commensurate with that
of Executive).
(ii) Consulting Fee . The
Executive shall be paid a fee for his services as an independent
contractor Consultant during the Consulting Period equal to
$246,575 (“Consulting Fees”) payable in six equal
installments on March 11, 2011, and March 25,
2011, April 8, 2011, April 22,
2011, May 6, 2011, May 20, 2011, and
June 3, 2011 of $41,095.83. Except as otherwise set forth
herein, the Executive shall not be entitled to any other rights,
entitlements, compensation or benefits with respect to the
consulting services from the Company.
(iii) Reimbursement of Expenses;
Indemnification . Company shall reimburse the Executive
pursuant to the Company’s reimbursement policies for such
reasonable business expenses incurred by the Executive in
connection with the performance of the consulting services
described in this Section 2 to the extent expressly agreed
upon in writing by the Chairman prior to the incurrence of such
expenses by the Executive, subject to documentation and payable in
accordance with the Company’s policies relating thereto. The
Executive shall have no liability to the Company as a result of his
services provided as a consultant except for any action taken in
bad faith or due to his negligence. In addition, the Company shall
indemnify the Executive for any claims or liability he incurs
arising from his good faith performance of the consulting services
in the course of his consultancy to the fullest extent permitted by
law, other than with respect to such claims or liability that arise
as the result of his bad faith or negligence.
(iv) Status as an Independent
Contractor. The Company and the Executive acknowledge and agree
that in performing consulting services pursuant to this Agreement
the Company shall not exercise general supervision or control over
the time, place or manner in which the Executive provides
consulting services hereunder and the Executive shall be acting and
shall act at all times during the Consulting Period as an
independent contractor only and not as an employee, agent, partner
or joint venturer of or with the Company or any entity for which
the Company provides services. The Executive acknowledges that he
is solely responsible for the payment of all Federal, state, local
and foreign taxes that are required of him by applicable laws or
regulations to be paid with respect to the Consulting Fees payable
hereunder.
3. Severance Pay. (a)
In lieu of any other rights, entitlements or benefits
he may have had under the Employment Agreement (except as expressly
provided otherwise herein), the Executive will be entitled to the
following:
(i) his Base Salary earned but not
paid prior to the Separation Date, to be paid in accordance with
the Company’s regular payroll practices;
(ii) $1,500,000 (an amount equal to
one hundred fifty percent of the Base Salary), payable on the date
that is six (6) months plus one (1) day after the
Separation Date (the “New Payment Date”);
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(iii) $1,500,000 (an amount equal to
one hundred fifty percent (150%) of the Target Bonus as
defined in Section 5 of the Employment Agreement), payable on
the New Payment Date;
(iv) the full monthly premiums
(employer and employee portions) for the Executive’s and any
covered beneficiary’s coverage under COBRA health
continuation benefits on a monthly basis over the eighteen
(18) month period immediately following the Separation Date,
and which premiums will be treated as taxable income to the
Executive;
(v) the immediate vesting as of the
Separation Date of all of the Executive’s outstanding
unvested deferred stock awards that were granted to the Executive
pursuant to the Employment Agreement and under the Company’s
2005 Stock Incentive Compensation Plan or otherwise (the
“Deferred Stock Awards”), which Deferred Stock Awards
shall be settled in accordance with the terms of the applicable
long-term incentive plan and award agreement by the Company’s
delivery of shares of Company Common Stock on the New Payment Date,
net of a sufficient number of shares to enable the Company to
satisfy the minimum withholding requirements with respect to the
settlement of such Deferred Stock Awards. Exhibit A hereto sets
forth a complete list of all of the Executive’s Deferred
Stock Awards that are currently outstanding, indicating the date of
grant of such Deferred Stock Units and the number of shares of
Company Common Stock to be issued in settlement of such Deferred
Stock Awards pursuant to this Section 2(v); and
(vi) any amounts earned, accrued or
owing to the Executive prior to the Separation Date but not yet
paid under Sections 7, 8, or 9 of the Employment Agreement or
Sections 1(i) –(v) of this Agreement. In addition, the
Executive will be paid $128,000 in a lump sum in cash with respect
to all his accrued, unused vacation of 32 days as of the Separation
Date, which was earned prior to the Effective Date, to be paid in
accordance with the Company’s regular payroll
practices.
(b) The Executive and the Company
acknowledge and agree that the provisions set forth in Sections
12(j) and 14 of the Employment Agreement are hereby incorporated
herein and shall continue to apply in accordance with the terms
thereof and that the termination is a termination without Cause (as
defined in the Employment Agreement). For the avoidance of doubt,
the Executive shall not be entitled to any payments or benefits
under Section 12(d) of the Employment Agreement but instead
shall be entitled to the payments and benefits specified
herein.
4. No Additional Compensation
. The Executive and the Company agree that, except as expressly set
forth in this Agreement, the Executive shall not be entitled to
receive any additional compensation, bonuses, incentive
compensation, Executive benefits or other consideration from the
Company in connection with or in any way related to his termination
from, or prior employment by, the Company.
5. Release Agreement . The
Executive and the Company agree that this Agreement (including the
payments and benefits contained in Sections 3(ii) –
(v) hereof) is expressly conditioned upon the execution and
non-revocation of the Release Agreement attached hereto as Appendix
A, provided that, if the Release Agreement is not executed or is
executed and revoked, this Agreement shall be null and void ab
initio and all other rights of the parties under the Employment
Agreement and otherwise shall remain in full force and
effect.
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6. Restrictive Covenants .
The Executive acknowledges and agrees that the covenants set forth
in Section 14 of the Employment Agreement are hereby
incorporated herein and shall continue to apply in accordance with
the terms thereof; provided, however, that at the Executive’s
request the Chairman will consider in good faith whether a company
for which the Executive desires to work is a Competitive Business
and the Chairman will respond within a reasonable time following
Executive’s request.
7. Return of Company Property;
Cooperation . The Executive will promptly following
March 4, 2011 return to the Company all Company property he is
aware of or reasonably should be aware of being in his possession,
including, without limitation, any keys, access cards, credit
cards, books, manuals, files, computer software, disks and the
like, as well as all paper and electronic copies of materials and
documents in his possession or under his direct or indirect control
relating to the Company, its business, Executives, and customers,
and that he has not retained
