-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SuHOT31N2Tt2lVtmH0JqNkVFDnU/C5n+g4Bsvls9ncw/DLw1YYVRr/wg5OCdud2u 0C5S5oOHzV1tJyODuw7GsA== 0000909518-07-000821.txt : 20070910 0000909518-07-000821.hdr.sgml : 20070910 20070910171702 ACCESSION NUMBER: 0000909518-07-000821 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20070904 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070910 DATE AS OF CHANGE: 20070910 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COMVERSE TECHNOLOGY INC/NY/ CENTRAL INDEX KEY: 0000803014 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE & TELEGRAPH APPARATUS [3661] IRS NUMBER: 133238402 STATE OF INCORPORATION: NY FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-15502 FILM NUMBER: 071109393 BUSINESS ADDRESS: STREET 1: 810 SEVENTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 212-739-1000 MAIL ADDRESS: STREET 1: 810 SEVENTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10019 8-K 1 mm09-0607_8k.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): September 4, 2007 COMVERSE TECHNOLOGY, INC. (Exact name of registrant as specified in its charter) NEW YORK 0-15502 13-3238402 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 810 Seventh Avenue, New York, New York 10019 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (212) 739-1000 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [_] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [_] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [_] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT. The information disclosed under Item 5.02 is incorporated herein by reference. ITEM 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS. On September 4, 2007, Comverse Technology, Inc. (the "Company") entered into an employment agreement (the "Employment Agreement") with Cynthia Shereda for her services as Executive Vice President, General Counsel and Corporate Secretary of the Company, reporting to the Company's Chief Executive Officer, effective on October 15, 2007. Ms. Shereda, age 47, served most recently from May, 2005 as Executive Vice President, Chief Legal Officer and Secretary of ATMI, Inc., a provider of specialty materials and high-purity materials handling and delivery solutions to the worldwide semiconductor industry. From May 2004 to May 2005, Ms. Shereda served as ATMI's Vice President, Chief Legal Officer and Secretary. From 1998 until May 2004, Ms. Shereda served as Transaction and Finance Counsel for General Electric Company, a diversified industrial company, focusing on mergers, acquisitions and divestitures. Previously, Ms. Shereda was an associate with Davis Polk & Wardwell and Cravath, Swaine & Moore working on matters ranging from securities to M&A. Prior thereto, Ms. Shereda was a Certified Public Accountant, serving in a variety of positions in public and private accounting. Ms. Shereda is a member of the Bar of the State of New York. Ms. Shereda holds a J.D. from the University of Texas and a B.S. from New York University. The Employment Agreement provides for Ms. Shereda's employment as Executive Vice President, General Counsel and Corporate Secretary for the Company for an initial term commencing on October 15, 2007 and ending eighteen (18) months thereafter, with subsequent one-year automatic extensions unless earlier terminated or not renewed in accordance with the terms of the Employment Agreement. During the initial term of employment, Ms. Shereda will be paid a base salary of $437,000. The base salary will be reviewed no less frequently than annually, and may be increased in the discretion of the Company's Board of Directors (the "Board") or its Compensation Committee. Ms. Shereda will be eligible to receive a bonus of up to $425,000 (subject to adjustment upon increases in base salary) if certain performance targets, developed by the Chief Executive Officer of the Company, are met; provided, however, that Ms. Shereda's bonus for fiscal year 2007 shall not be less than $200,000. During the term of employment, Ms. Shereda will be entitled to participate in any other 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 Company's Compensation Committee in its discretion, including equity-based plans. In addition, during the term of employment, Ms. Shereda will receive equity-based grants at a level commensurate with her position when such other senior-level executives receive grants. Ms. Shereda also will be entitled to participate in all employee welfare, pension benefit plans, and fringe benefit programs applicable to senior-level executives and to be reimbursed for reasonable business expenses. During the term of employment, Ms. Shereda will benefit from a term life insurance policy with a minimum death benefit equal to the unvested portion of the One-Time Equity Grant (as defined below) and will be entitled to reimbursement for reasonable legal fees and expenses in an amount of up to $15,000 incurred in connection with the negotiation and execution of the Employment Agreement. The term of employment and Ms. Shereda's employment may be terminated by either the Company or Ms. Shereda at any time and for any reason upon 60 calendar days advance written notice. If, other than in connection with a change of control, (i) Ms. Shereda's employment is terminated by the Company and all of its affiliates for any reason other than cause, (ii) Ms. Shereda terminates her employment for good reason within sixty (60) calendar days of becoming aware of the existence of good reason, or (iii) the Company terminates Ms. Shereda's employment by providing a notice of nonrenewal, then Ms. Shereda will be entitled to receive the following benefits: (A) severance pay equal to (1) a pro-rata share of the annual bonus Ms. Shereda would have earned if she remained employed through the end of the fiscal year in which she was terminated based upon actual performance against the performance targets, payable when bonuses are paid by the Company to its senior level executives, (2) 1.0 multiplied by the greater of Ms. Shereda's base salary in effect immediately prior to the date 2 set forth in the notice of termination or Ms. Shereda's base salary immediately prior to any reduction triggering the right to terminate for good reason payable in accordance with the Company's regular payroll practices and (3) 1.0 multiplied by the target bonus of $300,000 payable in a lump sum within the later of 30 calendar days after the date set forth in the notice of termination or the expiration of the revocation period for the release required to be delivered by Ms. Shereda to the Company; (B) medical, dental and life insurance coverage continuation for Ms. Shereda's covered beneficiaries for 12 months following termination of employment; (C) (1) earned but unpaid base salary and earned but unpaid annual bonus for the immediately preceding fiscal year, (2) reimbursement for business-related expenses, and (3) such other compensation and benefits, if any, to which Ms. Shereda may be entitled from time to time pursuant to the terms and conditions of employee compensation, incentive, equity, benefit or fringe benefit plans of the Company, other than pursuant to any Company severance policy and subject to certain exceptions; and (D) the acceleration or waiver of any time periods or conditions relating to the One Time Equity Grant. If, within one year following a change of control, (i) Ms. Shereda's employment is terminated by the Company and all of its affiliates for any reason other than cause, (ii) Ms. Shereda terminates her employment for good reason within sixty (60) calendar days of becoming aware of the existence of good reason, or (iii) the Company terminates Ms. Shereda's employment by providing a notice of nonrenewal, then Ms. Shereda will be entitled to receive the following benefits: (A) severance pay equal to (1) a pro-rata share of the annual bonus Ms. Shereda would have earned if she remained employed through the end of the fiscal year in which she was terminated based upon actual performance against the performance targets, payable when bonuses are paid by the Company to its senior level executives, (2) 1.5 multiplied by the greater of Ms. Shereda's base salary in effect immediately prior to the date set forth in the notice of termination or Ms. Shereda's base salary immediately prior to any reduction triggering the right to terminate for good reason payable in accordance with the Company's regular payroll practices and (3) 1.5 multiplied by the target bonus of $300,000 payable in a lump sum within the later of 30 calendar days after the date set forth in the notice of termination or the expiration of the revocation period for the release required to be delivered by Ms. Shereda to the Company; (B) medical, dental and life insurance coverage continuation for Ms. Shereda's covered beneficiaries for 18 months following termination of employment; (C) (1) earned but unpaid base salary and earned but unpaid annual bonus for the immediately preceding fiscal year, (2) reimbursement for business-related expenses, and (3) such other compensation and benefits, if any, to which Ms. Shereda may be entitled from time to time pursuant to the terms and conditions of employee compensation, incentive, equity, benefit or fringe benefit plans of the Company, other than pursuant to any Company severance policy and subject to certain exceptions; and (D) the acceleration or waiver of any time periods or conditions relating to the or conditions relating to any outstanding equity incentive award then held by Ms. Shereda. Ms. Shereda is also subject to certain confidentiality provisions, invention disclosure provisions, restrictive covenants and intellectual property assignment provisions. The foregoing description is not complete and is qualified in its entirety to the Employment Agreement, attached as Exhibit 10.1 to this Current Report on Form 8-K, and incorporated herein by reference. Pursuant to the Employment Agreement, Ms. Shereda will be entitled to an award of 25,000 deferred stock units under the Company's 2005 Stock Incentive Compensation Plan upon the commencement of her employment. The Company and Ms. Shereda entered into a Deferred Stock Award Agreement, dated September 4, 2007 (the "Deferred Stock Award Agreement"), evidencing such award. Each deferred stock unit represents the right to receive one share of common stock, $0.10 par value per share, of the Company on the respective vesting dates. The deferred stock unit award will vest 1/3 on each of the first, second and third anniversaries of October 15, 2007, subject to accelerated vesting under certain circumstances. The foregoing description is not complete and is qualified in its entirety to the Deferred Stock Agreement, attached as Exhibit 10.2 to this Current Report on Form 8-K, and incorporated herein by reference. Pursuant to the Employment Agreement, Ms. Shereda will be entitled to an additional 25,000 deferred stock units under the Company's 2005 Stock Incentive Compensation Plan in order to offset the loss of existing unvested equity 3 incentive rights she would have been entitled to at her current employer (the "One Time Equity Grant") upon the commencement of her employment. The Company and Ms. Shereda entered into a Deferred Stock Award Agreement, dated September 4, 2007 (the "One Time Equity Grant Deferred Stock Award Agreement"), evidencing such award. Each deferred stock unit represents the right to receive one share of common stock, $0.10 par value per share, of the Company on the respective vesting dates. The deferred stock unit award will vest 1/3 on each of the first, second and third anniversaries of October 15, 2007, subject to accelerated vesting under certain circumstances. The foregoing description is not complete and is qualified in its entirety to the One Time Equity Grant Deferred Stock Agreement, attached as Exhibit 10.3 to this Current Report on Form 8-K, and incorporated herein by reference. 4 ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS. (d) EXHIBITS: Exhibit No. Description ----------- ----------- 10.1 Employment Agreement, dated September 4, 2007, between Comverse Technology, Inc. and Cynthia Shereda 10.2 Deferred Stock Award Agreement, dated September 4, 2007, between Comverse Technology, Inc. and Cynthia Shereda 10.3 Deferred Stock Award Agreement, dated September 4, 2007, between Comverse Technology, Inc. and Cynthia Shereda 5 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. COMVERSE TECHNOLOGY, INC. Date: September 10, 2007 By: /s/ Andre Dahan -------------------------------- Name: Andre Dahan Title: President and Chief Executive Officer 6 EXHIBIT INDEX Exhibit No. Description ----------- ----------- 10.1 Employment Agreement, dated September 4, 2007, between Comverse Technology, Inc. and Cynthia Shereda 10.2 Deferred Stock Award Agreement, dated September 4, 2007, between Comverse Technology, Inc. and Cynthia Shereda 10.3 Deferred Stock Award Agreement, dated September 4, 2007, between Comverse Technology, Inc. and Cynthia Shereda 7 EX-10 2 mm09-0707_8ke101.txt 10.1 - EMPLOYMENT AGREEMENT EXHIBIT 10.1 ------------ EMPLOYMENT AGREEMENT This Employment Agreement (the "Agreement") is made and entered into as of the 4th day of September, 2007, by and between Comverse Technology, Inc., a New York corporation (together with its successors and assigns permitted under this Agreement, the "Company"), and Cynthia L. Shereda (the "Executive"). W I T N E S S E T H WHEREAS, the Company desires to employ the Executive as its Executive Vice President, General Counsel and Corporate Secretary and to enter into an employment agreement embodying the terms of such employment; and WHEREAS, the Executive desires to enter into this Agreement and to accept 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 base salary as determined in accordance with Section 4 below, including any applicable increases and permitted decreases. (b) "Board" shall mean the Board of Directors of the Company. (c) "Cause" shall mean: (i) an indictment or conviction of 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, as determined by a court or other governmental body of competent jurisdiction; (iii) willful misconduct or gross negligence by the Executive with regard to the Company resulting in material and demonstrable harm to the Company; (iv) a material violation by the Executive of any material Company policy or procedure provided to the Executive, including without limitation a material violation of the Company's Code of Business Conduct and Ethics, resulting in material and demonstrable harm to the Company; (v) the repeated and continued failure by the Executive to carry out, in all material respects, the reasonable and lawful directions of the Company's Chief Executive Officer and President and/or Board that are within the Executive's individual control and consistent with the Executive's status as a senior executive of the Company and her 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 (other than good faith immaterial expense account disputes); provided, however, that no finding of Cause pursuant to subsections (iii) or (iv) hereof shall be effective unless and until the Company has provided the Executive with written notice thereof in accordance with Section 25 below 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 25 below. For purposes of this Agreement, no act or failure to act, on the part of the Executive, shall be considered "willful" unless it is done, or omitted to be done, by the Executive in bad faith and without reasonable belief that the Executive's action or omission was in the best interests of the Company. Any act, or failure to act, based upon specific direction given pursuant to a resolution adopted by the Board of Directors or on the advice of Company counsel shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company. Notwithstanding the above, any termination of Executive's employment based on Cause shall not be deemed to be for Cause unless and until Executive has been provided with (i) written notice specifying in detail the basis for such action and (ii) on at least (10) days prior notice, an opportunity, together with legal counsel, to be heard on such proposed determination. (d) "Change in Control" shall occur upon: (i) any person, entity or affiliated group becoming the beneficial owner or owners of more than fifty percent (50%) of the outstanding equity securities of the Company, or otherwise becoming entitled to vote shares representing more than fifty percent (50%) of the total voting power of the Company's then-outstanding securities eligible to vote to elect members of the Board (the "Voting Securities"); (ii) a consolidation or merger (in one transaction or a series of related transactions) of the Company pursuant to which the holders of the Company's equity securities immediately prior to such transaction (or series of related transactions) would not be the holders immediately after such transaction (or series of related transactions) of more than fifty percent (50%) of the Voting Securities of the entity surviving such transaction (or series of related transactions); -2- (iii) 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 (iv) a sale of all or substantially all of the Company's assets. (e) "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time. (f) "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. (g) "Disability" shall mean the Executive's inability to substantially perform her 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, 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). (h) "Effective Date" shall mean October 15, 2007. (i) "Good Reason" shall mean, without the Executive's prior written consent, the occurrence of any of the following events or actions, provided that no finding of Good Reason 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 the finding of Good Reason, with written notice thereof in accordance with Section 25 below stating with specificity the facts and circumstances underlying the finding of Good Reason and, if the basis for such finding of Good Reason 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 25 below: (i) any reduction in the Executive's Base Salary or Target Bonus, other than as part of an across-the-board reduction applicable to all senior executives of the Company that results in a reduction to the Executive proportional to that of other executives, provided, however, that an across-the-board reduction of Executive's compensation in excess of 10% of Base Salary or 20% of Target Bonus shall constitute Good Reason; (ii) an actual relocation of the Executive's principal office to another location more than 35 miles from Manhattan, New York City, New York; -3- (iii) any material diminution in the Executive's title, position or reporting status, or any material diminution of the Executive's duties or responsibilities; (iv) notice to Executive of the Company's intention not to renew this Agreement pursuant to Section 2 below. (v) a failure of the Company to obtain the assumption in writing of its obligations under this Agreement by any successor to all or substantially all of the assets of the Company within ten (10) calendar days after completion of a merger, consolidation, sale or similar transaction and the failure to deliver a copy of the document effecting such assumption to the Executive upon the Executive's written request; or (vi) a material breach by the Company of any provision of this Agreement. (j) "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, for the period commencing on the Effective Date and ending 18 months thereafter, subject to earlier termination of the Term of Employment in accordance with the terms of this Agreement (the "Initial Term"). This Agreement shall be automatically renewed for additional one (1) year periods at the end of the Initial Term and on each anniversary thereafter, unless either Party notifies the other Party in writing, in accordance with Section 25, of her or its intention not to renew this Agreement not less than sixty (60) calendar days prior to such expiration date or anniversary, as the case may be. Executive shall be based in the Company's headquarters in New York, New York with such travel within and outside of the United States as may be reasonably required in the performance of Executive's duties. 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 Executive Vice President, General Counsel and Corporate Secretary of the Company. In this capacity, the Executive shall be have the duties, responsibilities and authority commensurate with the position and such other duties and responsibilities as are appropriate for a person holding the offices set forth in this section and assigned by the Company's Chief Executive Officer. Unless prevented by illness, injury or Disability, the Executive shall devote substantially all of the Executive's time, attention and efforts 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 Company's Chief Executive Officer, serve on other corporate boards or committees; provided, further, in each case of (a) and (b) and in the aggregate, that such activities do not conflict or interfere with the performance of the -4- Executive's duties hereunder or conflict with Section 13. The Executive shall report to the Company's Chief Executive Officer in carrying out her duties under this Agreement. If requested, the Executive shall also serve as an executive officer and/or member of the board of directors of any of the Company's subsidiaries or affiliates without additional compensation. 4. Base Salary. As of the Effective Date and for the remainder of fiscal year 2007, the Executive shall be paid a Base Salary at the rate of not less than four hundred and thirty-seven thousand ($437,000) per annum, payable in accordance with the regular payroll practices of the Company. Thereafter, the Base Salary shall be reviewed no less frequently than annually, including in respect of fiscal year 2008, and the amount thereof may be increased in the discretion of the Board or the Compensation Committee. After giving effect to the preceding two sentences, the Base Salary may not be decreased unless the Executive provides her prior written consent to such decrease or it is part of an across-the-board reduction applicable to all senior executive officers of the Company that results in a reduction to the Executive proportional to that of other executives (subject to the exception set forth in Section 1(i)(i). 5. Incentive Compensation Arrangements. The Executive's maximum annual bonus opportunity for each fiscal year shall be $425,000 (and shall be adjusted based on future increases in Base Salary) and will be payable based upon the achievement of performance criteria developed by the Company's Chief Executive Officer; provided, however, that the Executive's bonus for fiscal year 2007 shall not be less than Two Hundred Thousand Dollars ($200,000). For purposes of this Agreement, Executive's target bonus opportunity ("Target Bonus") shall be $300,000 (subject to achievement of the requisite performance criteria). Any bonuses shall be payable when bonuses are customarily payable under the Company's regular payroll practices, but in no event later than 2 and 1/2 months following the end of the applicable fiscal year. 6. Long-Term Incentive Compensation Programs. (a) On the Effective Date, there will be a grant to Executive of 25,000 deferred stock units representing the right to receive, upon vesting, shares of Company common stock ("Common Stock") in accordance with the terms and conditions of the Company's 2005 Stock Incentive Compensation Plan and the form of the Company's Deferred Stock Award Agreement that will vest one-third on each of the first, second and third anniversary of the Effective Date. (b) During the Term of Employment (including fiscal year 2008), the Executive will be eligible to receive equity awards under the Company's stock incentive plans based on the performance of the Company and the performance of the Executive, as recommended by the Company's Chief Executive Officer and determined in the good faith discretion of the Board and/or Compensation Committee, as applicable, and consistent with the Executive's role and responsibilities as Executive Vice President, General Counsel and Corporate Secretary of the Company, with such awards to be assessed on an annual basis. -5- 7. Equity Grant. On the Effective Date, there will be a one-time grant (in addition to any grant under Section 6 above) to Executive of 25,000 deferred stock units representing the right to receive, upon vesting, shares of Common Stock in accordance with the terms and conditions of the Company's 2005 Stock Incentive Compensation Plan and the form of the Company's Deferred Stock Award Agreement in order to offset the loss of existing unvested equity incentive rights that Executive is or would have been entitled to at Executive's current employer (the "Special One-Time Equity Grant"). These deferred stock units will vest one-third on each of the first, second and third anniversary of the Effective Date. 8. 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 applicable to senior-level executives other than those relating to cash bonuses or equity awards (as to which Sections 5 and 6 hereof shall govern). 9. Reimbursement of Business Expenses. During the Term of Employment, the Executive is authorized to incur reasonable business expenses in carrying out her duties and responsibilities under this Agreement, and the Company shall reimburse her for all such reasonable business expenses, subject to documentation in accordance with the Company's policies relating thereto. 10. Perquisites. (a) 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. (b) In addition to any Company provided life insurance coverage otherwise provided pursuant to Sections 8 or 10(a) above, the Company shall, during the period that the equity award under Section 7 above remains unvested, maintain for the benefit of Executive and her beneficiaries a term insurance policy on the life of Executive with a minimum death benefit equal to the value of the unvested portion of such equity award. (c) The Company shall pay for reasonable legal fees and expenses up to an amount of $15,000 incurred by the Executive in connection with the negotiation and drafting of this Agreement. 11. Vacation. The Executive be entitled to four (4) weeks paid vacation in each calendar year and seven (7) personal days administered in accordance with the Company's policies in place from time to time. -6- 12. Termination of Employment. (a) Termination of Employment Due to Death or Disability. In the event of the Executive's death or Disability during the Term of Employment, the Term of Employment shall end as of the date of the Executive's death or Disability and she or her estate and/or beneficiaries, as the case may be, shall be entitled to the following, subject to Section 28 below:: (i) Base Salary earned but not paid prior to the date of her death or Disability, and any annual bonus earned pursuant to Section 5, but unpaid, as of the date of death or Disability for the immediately preceding fiscal year, payable when bonuses are paid by the Company to its senior-level executives in respect of such fiscal year (but not later than 2-1/2 months after the end of such fiscal year); (ii) a pro-rata share of the annual bonus the Executive would have earned pursuant to Section 5 if she had remained employed through the end of the fiscal year in which her death or Disability termination occurred, based on the Company's actual performance against the goals set by the Compensation Committee for such fiscal year, payable when bonuses are paid by the Company to its senior-level executives in respect of such fiscal year (but not later than 2-1/2 months after the end of such fiscal year); (iii) any amounts earned, accrued or owing to the Executive prior to the date of her death but not yet paid under Sections 8, 9, 10 or 11 above in accordance with the terms thereof; and (iv) such other or additional benefits, if any, as may be provided under applicable plans, programs and/or arrangements of the Company. In addition, in the event of a termination of Executive's employment for Disability, all unvested deferred stock units pursuant to the Special One Time Equity Grant under Section 7 above shall become fully vested on the date of such termination. In no event shall a termination of the Executive's employment for Disability occur unless the Party terminating the Executive's employment provides written notice to the other Party in accordance with Section 25 below. (b) Termination of Employment by the Company for Cause. If the Company terminates the Executive's employment for Cause during the Term of Employment, the Term of Employment shall end as of the date of termination and the Executive shall be entitled to the following: (i) Base Salary earned but not paid prior to the date of termination; (ii) any amounts earned, accrued or owing to the Executive prior to the date of termination but not yet paid under Sections 8, 9, 10 or 11 above in accordance with the terms thereof; and -7- (iii) such other or additional benefits, if any, as may be provided under applicable plans, programs and/or arrangements of the Company. (c) Termination of Employment by the Company without Cause or by the Executive for Good Reason. If the Executive's employment is terminated by the Company without Cause (other than due to death or Disability) or by the Executive for Good Reason, the Term of Employment shall end as of the date of termination and the Executive shall be entitled to the following, subject to Section 28: (i) Base Salary earned but not paid prior to the date of termination; (ii) any annual bonus earned pursuant to Section 5, but unpaid, as of the date of termination for the immediately preceding fiscal year, payable when bonuses are paid by the Company to its senior-level executives in respect of such fiscal year (but not later than 2-1/2 months after the end of such fiscal year); (iii) a pro-rata share of the annual bonus the Executive would have earned pursuant to Section 5 if she had remained employed through the end of the fiscal year in which her employment terminated, based on the Company's actual performance against the goals set by the Compensation Committee for such fiscal year, payable when bonuses are paid by the Company to its senior-level executives in respect of such fiscal year (but not later than 2-1/2 months after the end of such fiscal year); (iv) one hundred percent (100%) of the greater of (A) the Base Salary in effect on the date of termination or (B) the Base Salary in effect immediately prior to any reduction that would constitute Good Reason, payable to Executive in a lump sum less applicable tax withholdings within the later of (i) 30 calendar days after the date of termination or (ii) the expiration of the revocation period, if applicable, under the release contemplated by Section 12(g) below, in accordance with the Company's regular payroll practice; (v) one hundred percent (100%) of the Target Bonus (regardless of any performance requirements), payable to Executive in a lump sum less applicable withholdings within the later of (i) 30 calendar days after the date of termination or (ii) the expiration of the revocation period, if applicable, under the release contemplated by Section 12(g) below, in accordance with the Company's regular payroll practice; (vi) to have the Company pay the full premiums (employer and employee portions) for the Executive's and any covered beneficiary's coverage under COBRA health continuation benefits over the twelve (12) month period immediately following the date of termination; -8- (vii) any amounts earned, accrued or owing to the Executive prior to the date of termination but not yet paid under Sections 8, 9, 10 or 11 in accordance with the terms thereof; (viii) All unvested deferred stock units pursuant to the Special One Time Equity Grant shall become fully vested on the date of termination ; and (ix) such other or additional benefits, if any, as may be provided under applicable plans, programs and/or arrangements of the Company. In no event shall a termination of the Executive's employment without Cause occur unless the Company gives written notice to the Executive in accordance with Section 25 below. (d) Termination of Employment by the Executive Without Good Reason. If the Executive terminates her employment without Good Reason, other than a termination of employment due to death or Disability, the Executive shall be entitled to the same payments and benefits as provided in Section 12(b) above. In no event shall a termination of the Executive's employment without Good Reason occur unless the Executive gives at least thirty (30) calendar days advance written notice to the Company in accordance with Section 25 below. (e) Termination of Employment Due to a Change in Control. If the Executive's employment is terminated by the Company without Cause or by the Executive for Good Reason in connection with or within one (1) year after a Change in Control, the Executive shall be entitled to the following, subject to Section 28: (i) Base Salary earned but not paid prior to the date of termination; (ii) any annual bonus earned pursuant to Section 5, but unpaid, as of the date of termination for the immediately preceding fiscal year, payable when bonuses are paid by the Company to its senior-level executives in respect of such fiscal year (but not later than 2-1/2 months after the end of such fiscal year); (iii) a pro-rata share of the annual bonus the Executive would have earned pursuant to Section 5 if she had remained employed through the end of the fiscal year in which her employment terminated, based on the Company's actual performance against the goals set by the Compensation Committee for such fiscal year, payable when bonuses are paid by the Company to its senior-level executives in respect of such fiscal year (but not later than 2-1/2 months after the end of such fiscal year); (iv) one hundred and fifty percent (150%) of the greater of (A) the Base Salary in effect on the date of termination or (B) the Base Salary in effect immediately prior to any reduction that would constitute Good Reason, payable to Executive in a lump sum less applicable tax withholdings within the later of (i) 30 calendar days after the date of termination or (ii) the expiration of the revocation period, if applicable, under the -9- release contemplated by Section 12(g) below, in accordance with the Company's regular payroll practice; (v) one hundred and fifty percent (150%) of the Target Bonus (regardless of any performance requirements), payable to Executive in a lump sum less applicable tax withholdings within the later of (i) 30 calendar days after the date of termination or (ii) the expiration of the revocation period, if applicable, under the release contemplated by Section 12(g) below, in accordance with the Company's regular payroll practice; (vi) to have the Company pay the full premiums (employer and employee portions) for the Executive's and any covered beneficiary's coverage under COBRA health continuation benefits over the eighteen (18) month period immediately following the date of termination; (vii) any amounts earned, accrued or owing to the Executive prior to the date of termination but not yet paid under Sections 8, 9, 10 or 11 in accordance with the terms thereof; (viii) the immediate vesting of all stock options and deferred stock awarded to the Executive, with any options granted after the Effective Date having a minimum exercise period of one (1) year from the date of termination or, if less, the maximum exercise period permitted by Section 409A, subject to any option plan provisions relating to a change in control or similar event and to the initial ten (10) year term of the options; provided, however, that, if necessary, such exercise period shall be extended if permitted by Section 409A until the exercise of the options would cease to violate any federal or state securities laws subject to the initial ten (10) year term of the options; and (ix) such other or additional benefits, if any, as may be provided under applicable plans, programs and/or arrangements of the Company. (f) Termination by Notice of Nonrenewal by the Company. If the Company terminates the Executive's employment as a result of or following the Company providing a notice of non-renewal of this Agreement in accordance with Section 2 above, the Executive shall be entitled to the same payments and benefits as provided in Section 12(c) or 12(e), as applicable. If the Company provides such nonrenewal notice, but does not terminate Executive's employment, then the Executive shall have Good Reason under Section 1(i). (g) No Mitigation; No Offset. In the event of a termination of the Executive's employment for any reason under this Section 12, 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 she 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 -10- 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 13. (h) Additional Payments. If the Executive becomes subject to the excise tax imposed by Code Section 4999 (the "Parachute Excise Tax") with respect to any payment(s), benefit(s) or distribution(s) received by, or payable to or for the benefit of, Executive (or otherwise) in connection with, or by reason of, any Change in Control or any change in ownership or effective control of the Company (as determined under IRC Section 280G) that occurs prior to January 1, 2010, the Company and the Executive agree that the Company shall pay to the Executive a tax gross-up payment so that after payment by the Executive of all federal, state and local excise, income, employment, Medicare and any other taxes (including any related penalties and interest) resulting from the payment of the parachute payments and the tax gross-up payments to the Executive by the Company, the Executive retains on an after-tax basis an amount equal to the amount that the Executive would have retained if she had not been subject to the Parachute Excise Tax. (i) Waiver and Release. As a condition precedent to receiving the compensation and benefits provided under Sections 12(c) and 12(e) (but not any of the amounts described in clauses (i), (vii) and (ix) of Sections 12(c) and 12(e) above), the Executive shall execute a waiver and release substantially in the form attached to this Agreement as Exhibit A. 13. Restrictive Covenants. (a) Nondisclosure. During the Term of Employment and thereafter, the Executive shall not disclose to anyone or make use of any trade secret or proprietary or confidential information of the Company, 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 she acquires during the Term 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 her work as an employee of the Company, (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 her 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 her violation of this Section 13(a). Nothing herein shall preclude Executive from discussing the Agreement and/or any plan or other agreement referred to herein and/or any aspect of her compensation and/or benefits with her family and/or her advisors. (b) Assignment of Rights. The Executive hereby sells, assigns and transfers to the Company all of her right, title and interest in and to all inventions, discoveries, improvements and copyrightable subject matter (the "Rights") that, during the Term of Employment, are made or conceived by her, alone or with others, and that relate to the Company's present business or arise out of any work she performs or information she receives regarding the business of the Company while employed by the Company. The Executive shall fully disclose to the Company as promptly as possible all information known or possessed by her concerning the Rights, and upon request by the Company and without any further compensation in any form to her by the Company, but at the expense of the -11- Company, execute all applications for patents and copyright registrations, assignments thereof and other applicable instruments and do all things that the Company may reasonably deem necessary to vest and maintain in it the entire right, title and interest in and to all such Rights. (c) Nonsolicitation. 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 she will not, at any time during her employment with the Company and for a period of twelve (12) months thereafter, directly or indirectly, induce, attempt to induce, or aid others in inducing, an employee 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 employee, owner, partner or consultant. The Executive further agrees that she will not, whether on Executive's 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 or any of its affiliates to cease being a customer, supplier, or vendor of the Company or any of its affiliates or to divert all or any part of such person's or entity's business from the Company or any of its affiliates. (d) Duration and Scope. The Company and the Executive agree that the duration and geographic scope of the restrictive covenants set forth in this Section 13 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 lesser time period and in the greatest lesser 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. The Executive acknowledges and agrees that the Company would not have an adequate remedy at law and would be irreparably harmed in the event that any of the provisions of this Section 13 were not performed in accordance with their specific terms or were otherwise breached. Accordingly, the Executive agrees that the Company shall be entitled to equitable relief, including preliminary and permanent injunctions and specific performance, in the event Executive breaches or threatens to breach any of the provisions of such Sections, without the necessity of posting any bond or proving special damages or irreparable injury. Such remedies shall not be deemed to be the exclusive remedies for a breach or threatened breach of the provisions of this Section 13 by Executive, but shall be in addition to all other remedies available to the Company at law or equity. Executive acknowledges and agrees that no breach by the Company of this Agreement or failure to enforce or insist on its rights under this Agreement shall constitute a waiver or abandonment of any such rights or defense to enforcement of such rights. If the provisions of this Section 13 are ever deemed by a court to exceed the limitations permitted by applicable law, the Executive and the Company agree that such provisions shall be, and are, automatically reformed to the maximum lesser limitations permitted by such law. -12- 14. Indemnification. The Company confirms and acknowledges that the Company is obligated to indemnify the Executive pursuant to the terms of the Indemnification Agreement between the Company and the Executive dated as of the date hereof and the Company's By-laws, and that the Executive shall, in any event, be indemnified to the fullest extent permitted by law. Executive shall be entitled to the same Director and Officer Insurance coverages as apply to other executive officers of the Company. 15. 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 such rights or obligations may be assigned or transferred pursuant to a transaction contemplated by clause (i) of the definition of a Change in Control, a merger or consolidation in which the Company is not the continuing entity, or the sale or liquidation of all or substantially all of the assets of the Company; provided further, however, that the assignee or transferee is the successor to all or substantially all of the assets of the Company and such assignee or transferee assumes the liabilities, obligations and duties of the Company, as contained in this Agreement, either contractually or as a matter of law. 16. 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 her and any other person, firm or organization that would be violated by the performance of her obligations under this Agreement. 17. Entire Agreement. This Agreement (including the attached Exhibit A and any plan, other agreements or attachments referred to herein) 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. 18. 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 -13- signed by the Executive or an authorized officer of the Company, as the case may be. 19. 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. 20. 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. 21. 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. 22. Controlling Document. If any provision of any agreement, plan, program, policy, arrangement or other written document between or relating to the Company and the Executive conflicts with any provision of this Agreement, the provision of this Agreement shall control and prevail. 23. 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 compensation or benefit payable hereunder following the Executive's death by giving the Company written notice thereof. In the event of the Executive's death, reference in this Agreement to the Executive shall be deemed, where appropriate, to refer to her beneficiary, estate or other legal representative. 24. Governing Law/Jurisdiction. This Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of New York without reference to principles of conflicts of law unless superseded by federal law. The Parties agree that any suit, action or other legal proceeding that is commenced to resolve any matter arising under or relating to any provision of this Agreement shall be commenced only in a court of the State of New York (or, if appropriate, a federal court located within the State of New York), and the Parties consent to the jurisdiction of such court. Each Party shall be responsible for paying its own fees and expenses (including reasonable attorney fees) in connection with any dispute under this Agreement except to the extent (if any) that -14- Executive's legal fees and expenses are required to be reimbursed pursuant to the Indemnification Agreement and/or D&O insurance coverage referred to in Section 14. 25. Notices. All notices shall be in writing, shall be hand delivered or sent to the following addresses listed below using a reputable overnight express delivery service and shall be deemed to be received when hand delivered or one (1) calendar day after depositing with such overnight service for next day delivery. If to the Company: Comverse Technology, Inc. 810 Seventh Avenue, 35th Floor New York, New York 10019 Attention: Chief Executive Officer with a copy to: Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, New York 10153 Attention: David Zeltner, Esq. If to the Executive: Cynthia Shereda at the most recent address of Executive set forth in the personnel records of the Company with a copy to Brian T. Foley, Esq. One North Broadway - Suite 411 White Plains, N.Y. 10601-2310 26. 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. 27. 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 related to events occurring during Executive's employment with 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 -15- asked to assist, testify or provide information by or to any person, entity or agency in any such proceeding or investigation. The Company shall reimburse the Executive for expenses reasonably incurred in connection therewith (including reasonable attorney fees if it is determined that utilization of Company counsel would create a conflict). The Company shall also compensate Executive for her time in connection with such cooperation if she is no longer employed by the Company at a rate of $300 per hour. Any such cooperation occurring after the termination of Executive's employment shall be subject to Executive's other business and personal commitments, and shall be scheduled to the extent reasonably practicable so as not to unreasonably interfere with Executive's business or personal affairs. Notwithstanding the above, nothing herein shall require Executive to waive any legal rights she has or may have at any time. 28. Compliance with Code Section 409A. (a) If any payment, compensation or other benefit provided to the Executive in connection with her employment termination is determined, in whole or in part, to constitute "nonqualified deferred compensation" within the meaning of Section 409A and the Executive is a specified employee as defined in Section 409A(2)(B)(i), no part of such payments shall be paid before the day that is six (6) months plus one (1) day after the date of termination (the "New Payment Date"). The aggregate of any payments that otherwise would have been paid to the Executive during the period between the date of termination and the New Payment Date shall be paid to the Executive in a lump sum on such New Payment Date. Thereafter, any payments that remain outstanding as of the day immediately following the New Payment Date shall be paid without delay over the time period originally scheduled, in accordance with the terms of this Agreement. Notwithstanding the foregoing, to the extent that the foregoing applies to the provision of any ongoing welfare benefits to the Executive that would not be required to be delayed if the premiums therefor were paid by the Executive, the Executive shall pay the full cost of premiums for such welfare benefits during the six-month period and the Company shall pay the Executive an amount equal to the amount of such premiums paid by the Executive during such six-month period promptly after its conclusion. (b) The Parties acknowledge and agree that the interpretation of Section 409A and its application to the terms of this Agreement is uncertain and may be subject to change as additional guidance and interpretations become available. Anything to the contrary herein notwithstanding, all benefits or payments provided by the Company to the Executive that would be deemed to constitute "nonqualified deferred compensation" within the meaning of Section 409A are intended to comply with Section 409A. If, however, any such benefit or payment is deemed to not comply with Section 409A, the Company and the Executive agree to renegotiate in good faith any such benefit or payment (including, without limitation, as to the timing of any severance payments payable hereof) so that either (i) Section 409A will not apply or (ii) compliance with Section 409A will be achieved; provided, however, that any resulting renegotiated terms shall provide to the Executive the after-tax economic equivalent of what otherwise has been provided to the Executive pursuant to the terms of this Agreement, and provided further, that any deferral of payments or other benefits shall be only for such time period as may be required to comply with Section 409A. -16- 29. 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 -17- IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first written above. COMVERSE TECHNOLOGY, INC. By: /s/ Andre Dahan ------------------------------- Name: Andre Dahan Title: Chief Executive Officer and President THE EXECUTIVE /s/ Cynthia L. Shereda ------------------------------------ Name: Cynthia L. Shereda -18- EXHIBIT A This RELEASE ("Release") dated as of ____________________ between Comverse Technology, Inc., a New York corporation (the "Company"), and Cynthia L. Shereda (the "Executive"). WHEREAS, the Company and the Executive previously entered into an employment agreement dated ____________ under which the Executive was employed to serve as the Company's Executive Vice President, General Counsel and Corporate Secretary (the "Employment Agreement"); and WHEREAS, the Executive's employment with the Company (has been) (will be) terminated effective __________________; and WHEREAS, pursuant to Section 12 of the Employment Agreement, the Executive is entitled to certain compensation and benefits upon such termination, contingent upon the execution of this Release; NOW, THEREFORE, in consideration of the premises and mutual agreements contained herein and in the Employment Agreement, the Company and the Executive agree as follows: 1. The Executive, on her own behalf and on behalf of her heirs, estate and beneficiaries, does hereby release the Company, and in such capacities, any of its subsidiaries or affiliates, and each past or present officer, director, agent, employee, shareholder, and insurer of any such entities, from any and all claims made, to be made, or which might have been made of whatever nature, whether known or unknown, from the beginning of time, including those that arose as a consequence of her employment with the Company, or arising out of the severance of such employment relationship, or arising out of any act committed or omitted during or after the existence of such employment relationship, all up through and including the date on which this Release is executed, including, but not limited to, those which were, could have been or could be the subject of an administrative or judicial proceeding filed by the Executive or on her behalf under federal, state or local law, whether by statute, regulation, in contract or tort, and including, but not limited to, every claim for front pay, back pay, wages, bonus, fringe benefit, any form of discrimination (including but not limited to, every claim of race, color, sex, religion, national origin, disability or age discrimination), wrongful termination, emotional distress, pain and suffering, breach of contract, compensatory or punitive damages, interest, attorney's fees, reinstatement or reemployment. If any arbitrator or court rules that such waiver of rights to file, or have filed on her behalf, any administrative or judicial charges or complaints is ineffective, the Executive agrees not to seek or accept any money damages or any other relief upon the filing of any such administrative or judicial charges or complaints. The Executive relinquishes any right to future employment with the Company and the Company shall have the right to refuse to re-employ the Executive, in each case without liability of the Executive or the Company. The Executive acknowledges and agrees that even though claims and facts in addition to those now known or believed by her to exist may subsequently be discovered, it is her intention to fully settle and release all claims she may -19- have against the Company and the persons and entities described above, whether known, unknown or suspected. 2. The Company and the Executive acknowledge and agree that the release contained in Paragraph 1 does not, and shall not be construed to, release or limit the scope of, or preclude the Executive from asserting her rights to enforce any existing obligation of the Company (i) to indemnify the Executive for her acts as an officer or director of Company in accordance with the Company's By-laws, the Indemnification Agreement (as defined in Section 15 of the Employment Agreement), and other agreements or the law, as to continued coverage and rights under director and officer liability insurance policies, (ii) to the Executive and her eligible, participating dependents or beneficiaries under any existing group welfare, equity, or retirement plan of the Company in which the Executive and/or such dependents are participants, or (iii) to pay any amounts payable under the terms of the Employment Agreement (including, without limitation, any severance or other items payable following termination of Executive's employment). In addition, Executive does not waive his right to file a charge with the EEOC or participate in an investigation conducted by the EEOC; however, Executive expressly waives his right to monetary or other relief should any administrative agency, including but not limited to the EEOC, pursue any claim on Employee's behalf. 3. The Executive acknowledges that she has been provided at least 21 days to review the Release and has been advised to review it with an attorney of her choice. In the event the Executive elects to sign this Release prior to this 21 day period, she agrees that it is a knowing and voluntary waiver of her right to wait the full 21 days. The Executive further understand that she has 7 days after the signing hereof to revoke it by so notifying the Company in writing, such notice to be received by _____________ within the 7 day period. The Executive further acknowledge that she has carefully read this Release, knows and understands its contents and its binding legal effect. The Executive acknowledge that by signing this Release, she does so of her own free will and act and that it is her intention that she be legally bound by its terms. IN WITNESS WHEREOF, the parties have executed this Release on the date first above written. COMVERSE TECHNOLOGY, INC. By: ------------------------------- Name: Title: THE EXECUTIVE /s/ ------------------------------------ Name: Cynthia L. Shereda -20- EX-10 3 mm09-0707_8ke102.txt 10.2 - DSAA REG. EQUITY AWARD EXHIBIT 10.2 ------------ Regular Equity Award COMVERSE TECHNOLOGY, INC. 2005 STOCK INCENTIVE COMPENSATION PLAN DEFERRED STOCK AWARD AGREEMENT SECTION 1. GRANT OF DEFERRED STOCK UNITS. (a) AWARD. On the terms and conditions set forth in this Agreement, and consistent with the commitments made in the Grantee's Employment Agreement, the Company grants to Cynthia L. Shereda (the "Grantee") a total of 25,000 Deferred Stock Units (the "Granted Units") on October 15, 2007 (the "Grant Date"). (b) SHAREHOLDER RIGHTS. The Grantee (or any successor in interest) shall not have any of the rights of a shareholder (including, without limitation, voting, dividend and liquidation rights) with respect to the Granted Units until such time as the Company delivers to the Grantee the shares of Common Stock in settlement of the Granted Units, as described in Section 4(a). (c) PLAN AND DEFINED TERMS. This award is granted under and subject to the terms of the 2005 Stock Incentive Compensation Plan (the "Plan"), which is incorporated herein by reference. Capitalized terms used herein and not defined in the Agreement (including Section 7 hereof) shall have the meaning set forth in the Plan. To the extent any conflict between the terms of this Agreement (other than Section 7 hereof) and the Plan, the terms of the Plan shall control. (d) GRANTEE UNDERTAKING. The Grantee agrees to execute such further instruments and to take such action as may reasonably be necessary to carry out the intent of this Agreement. SECTION 2. NO TRANSFER OR ASSIGNMENT OF AWARD. This Award and the rights and privileges conferred hereby shall not be sold, pledged or otherwise transferred (whether by operation of law or otherwise) and shall not be subject to sale under execution, attachment, levy or similar process; provided, however, that the Grantee shall be permitted to transfer this award, in connection with his or her estate plan, to the Grantee's spouse, siblings, parents, children and grandchildren or a charitable organization that is exempt under Section 501(c)(3) of the Code or to trusts for the benefit of such persons or partnerships, corporations, limited liability companies or other entities owned solely by such persons, including trusts for such persons or to the Grantee's former spouse in accordance with a domestic relations order. SECTION 3. VESTING; TERMINATION OF SERVICE. (a) VESTING. This award shall vest with respect to one-third of the Granted Units on each of the first, second and third anniversaries of the Grant Date or such earlier date as may be determined under Section 3(c) hereof (each, a "Vesting Date"). Regular Equity Award (b) TERMINATION OF CONTINUOUS SERVICE. Except as otherwise provided in this Section 3, the unvested portion of the award shall be forfeited as of the date (the "Termination Date") that the Grantee actually ceases to provide services to the Company or an Affiliate in any capacity (as an Employee, Director or Consultant) (irrespective of whether the Grantee continues to receive severance or any other continuation payments or benefits after such date) for any reason (such cessation of the provision of services by Grantee being referred to as "Service Termination"). A Service Termination shall not occur and Continuous Service shall not be considered interrupted in the case of (i) any vacation, sick leave or approved leave of absence, (ii) transfers among the Company, any Subsidiary or Affiliate, or any successor, in any capacity as an Employee, Director or Consultant, or (iii) any change in status as long as the individual remains in the service of the Company or a Subsidiary or Affiliate in any capacity as an Employee, Director or Consultant. (c) CHANGE IN CONTROL. Any unvested portion of the Granted Units shall become fully vested upon Service Termination by the Company or an Affiliate without Cause or by the Grantee for Good Reason within 12 months following any Change in Control. SECTION 4. SETTLEMENT OF GRANTED UNITS. (a) SETTLEMENT AMOUNT. Subject to Section 4(b) hereof, the Company shall deliver to the Grantee on each Vesting Date a number of shares of Common Stock equal to the aggregate number of Granted Units that vest as of such date; provided, however, that no shares of Common Stock will be issued in settlement of this award unless the issuance of shares complies with all relevant provisions of law and the requirements of any stock exchange upon which the shares of Common Stock may then be listed. No fractional shares of Common Stock will be issued. The Company will pay cash in respect of fractional shares of Common Stock. (b) TAX WITHHOLDING REQUIREMENTS. Unless the Grantee has made arrangements satisfactory to the Company to enable it to satisfy all such withholding requirements, the Company shall withhold from the settlement amount a sufficient number of shares of Common Stock to enable the Company to satisfy its withholding requirements with respect to the settlement of the Granted Units. SECTION 5. ADJUSTMENT OF GRANTED UNITS. If there shall be any change in the Common Stock of the Company, through merger, consolidation, reorganization, recapitalization, stock dividend, stock split, reverse stock split, split up, spinoff, combination of shares, exchange of shares, dividend in kind or other like change in capital structure or distribution (other than normal cash dividends), or any extraordinary dividend or distribution of cash or other assets to shareholders of the Company, in order to prevent dilution or enlargement of participants' rights under the Plan, the Committee shall adjust, in an equitable manner, the number and kind of shares that will be paid to the Grantee upon settlement of the Granted Units. 2 Regular Equity Award SECTION 6. MISCELLANEOUS PROVISIONS. (a) NO RETENTION RIGHTS, NO FUTURE AWARDS. Nothing in this award or in the Plan shall confer upon the Grantee any right to any future Awards and to continue in Continuous Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any Parent or Subsidiary employing or retaining the Grantee) or of the Grantee, which rights are hereby expressly reserved by each, to terminate his or her Continuous Service at any time and for any reason, with or without cause. (b) AWARD UNFUNDED. The Granted Units represent an unfunded promise. The Grantee's rights with respect to the Granted Units are no greater than the rights of a general unsecured creditor of the Company. (c) NOTICE. Whenever under this Agreement it becomes necessary to give notice, such notice shall be in writing, signed by the party or parties giving or making the same, and shall be served on the person or persons for whom it is intended or who should be advised or notified, by Federal Express (or other similar overnight service) or by registered or certified mail, with postage and fees prepaid. Notice shall be addressed to the Company at its principal executive office and to the Grantee at the address that he or she most recently provided in writing to the Company. (d) ENTIRE AGREEMENT. This Agreement, and the Plan constitute the entire contract between the parties hereto with regard to the subject matter hereof. They supersede any other agreements, representations or understandings (whether oral or written and whether express or implied) which relate to the subject matter hereof. (e) WAIVER. No waiver of any breach or condition of this Agreement shall be deemed to be a waiver of any other or subsequent breach or condition whether of like or different nature. (f) SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall inure to the benefit of, and be binding upon, the Company and its successors and assigns and upon the Grantee, the Grantee's assigns and the legal representatives, heirs and legatees of the Grantee's estate, whether or not any such person shall have become a party to this Agreement and have agreed in writing to be joined herein and be bound by the terms hereof. (g) CHOICE OF LAW. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York (regardless of the law that might otherwise govern under applicable New York principles of conflict of laws). (h) SECTION 409A. Anything to the contrary herein notwithstanding, the Granted Units are not intended to be "nonqualified deferred compensation" within the meaning of Section 409A and are intended to comply with the "short term deferral" rules under Section 409A. If, however, the Granted Units or any payment in lieu thereof is deemed to not comply with Section 409A, the Company and the Executive agree to renegotiate in good faith any such benefit or payment (including, without limitation, as to the timing of any settlement of Granted Units or any payment in lieu thereof) so that either (i) Section 409A will not apply or (ii) compliance with Section 409A will be achieved; provided, however, that any resulting renegotiated terms shall provide to the Executive the after-tax economic equivalent of what otherwise has been provided to the 3 Regular Equity Award Executive pursuant to the terms of this Agreement, and provided further, that any deferral of payments or other benefits shall be only for such time period as may be required to comply with Section 409A. SECTION 7. DEFINITIONS. (a) "AFFILIATE" shall mean (i) any entity other than the Subsidiaries in which the Company has a substantial direct or indirect equity interest, as determined by the Board, and (ii) any Subsidiary. (b) "AGREEMENT" shall mean this Deferred Stock Unit Award Agreement. (c) "CAUSE" shall have the meaning ascribed to it in the Grantee's written employment agreement then in effect. (d) "CODE" shall mean the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated thereunder. (e) "DISABILITY" shall have the meaning ascribed to it in the Grantee's written employment agreement then in effect. (f) "GOOD REASON" shall have the meaning set forth in the Grantee's written employment agreement then in effect. (g) "GRANT DATE" shall have the meaning described in Section 1(a) of this Agreement. (h) "GRANTED UNITS" shall have the meaning described in Section 1(a) of this Agreement. (i) "GRANTEE" shall have the meaning described in Section 1(a) of this Agreement. (j) "PLAN" shall have the meaning described in Section 1(c) of this Agreement. (k) "SERVICE TERMINATION" shall have the meaning described in Section 3(b) of this Agreement. (l) "TERMINATION DATE" shall have the meaning described in Section 3(b) of this Agreement. (m) "VESTING DATE" shall have the meaning described in Section 3(a) of this Agreement. (Signature Page Follows) 4 Regular Equity Award IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by its duly authorized officer, on September 4, 2007. GRANTEE: COMVERSE TECHNOLOGY, INC. /s/ Cynthia L. Shereda By: /s/ Andre Dahan - ---------------------------- ---------------------------- Cynthia L. Shereda Andre Dahan Chief Executive Officer and President 5 EX-10 4 mm09-0707_8ke103.txt 10.3 - DSAA MAKE-WHOLE AWARD EXHIBIT 10.3 ------------ Make-Whole Award COMVERSE TECHNOLOGY, INC. 2005 STOCK INCENTIVE COMPENSATION PLAN DEFERRED STOCK AWARD AGREEMENT SECTION 1. GRANT OF DEFERRED STOCK UNITS. (a) AWARD. On the terms and conditions set forth in this Agreement, and consistent with the commitments made in the Grantee's Employment Agreement, the Company grants to Cynthia L. Shereda (the "Grantee") a total of 25,000 Deferred Stock Units (the "Granted Units") on October 15, 2007 (the "Grant Date"). (b) SHAREHOLDER RIGHTS. The Grantee (or any successor in interest) shall not have any of the rights of a shareholder (including, without limitation, voting, dividend and liquidation rights) with respect to the Granted Units until such time as the Company delivers to the Grantee the shares of Common Stock in settlement of the Granted Units, as described in Section 4(a). (c) PLAN AND DEFINED TERMS. This award is granted under and subject to the terms of the 2005 Stock Incentive Compensation Plan (the "Plan"), which is incorporated herein by reference. Capitalized terms used herein and not defined in the Agreement (including Section 7 hereof) shall have the meaning set forth in the Plan. To the extent any conflict between the terms of this Agreement (other than Section 7 hereof) and the Plan, the terms of the Plan shall control. (d) GRANTEE UNDERTAKING. The Grantee agrees to execute such further instruments and to take such action as may reasonably be necessary to carry out the intent of this Agreement. SECTION 2. NO TRANSFER OR ASSIGNMENT OF AWARD. This Award and the rights and privileges conferred hereby shall not be sold, pledged or otherwise transferred (whether by operation of law or otherwise) and shall not be subject to sale under execution, attachment, levy or similar process; provided, however, that the Grantee shall be permitted to transfer this award, in connection with his or her estate plan, to the Grantee's spouse, siblings, parents, children and grandchildren or a charitable organization that is exempt under Section 501(c)(3) of the Code or to trusts for the benefit of such persons or partnerships, corporations, limited liability companies or other entities owned solely by such persons, including trusts for such persons or to the Grantee's former spouse in accordance with a domestic relations order. SECTION 3. VESTING; TERMINATION OF SERVICE. (a) VESTING. This award shall vest with respect to one-third of the Granted Units on each of the first, second and third anniversaries of the Grant Date or such earlier date as may be determined under Section 3(c) hereof (each, a "Vesting Date"). Make-Whole Award (b) TERMINATION OF CONTINUOUS SERVICE. Except as otherwise provided in this Section 3, the unvested portion of the award shall be forfeited as of the date (the "Termination Date") that the Grantee actually ceases to provide services to the Company or an Affiliate in any capacity as an Employee, Director or Consultant (irrespective of whether the Grantee continues to receive severance or any other continuation payments or benefits after such date) for any reason (such cessation of the provision of services by Grantee being referred to as "Service Termination"). A Service Termination shall not occur and Continuous Service shall not be considered interrupted in the case of (i) any vacation, sick leave or approved leave of absence, (ii) transfers among the Company, any Subsidiary or Affiliate, or any successor, in any capacity as an Employee, Director or Consultant, or (iii) any change in status as long as the individual remains in the service of the Company or a Subsidiary or Affiliate in any capacity as an Employee, Director or Consultant. (c) CERTAIN TERMINATIONs. In the event of Service Termination by the Company or an Affiliate without Cause or by the Grantee for Good Reason or resulting from the Grantee's Disability, the Granted Units shall vest on the Termination Date and the shares of Common Stock to be issued under the vested Granted Units in accordance with Section 4 of hereof shall be delivered to the Grantee on the applicable Vesting Date. SECTION 4. SETTLEMENT OF GRANTED UNITS. (a) SETTLEMENT AMOUNT. Subject to Section 4(b) hereof, the Company shall deliver to the Grantee on each Vesting Date a number of shares of Common Stock equal to the aggregate number of Granted Units that vest as of such date; provided, however, that no shares of Common Stock will be issued in settlement of this award unless the issuance of shares complies with all relevant provisions of law and the requirements of any stock exchange upon which the shares of Common Stock may then be listed. No fractional shares of Common Stock will be issued. The Company will pay cash in respect of fractional shares of Common Stock. (b) TAX WITHHOLDING REQUIREMENTS. Unless the Grantee has made arrangements satisfactory to the Company to enable it to satisfy all such withholding requirements, the Company shall withhold from the settlement amount a sufficient number of shares of Common Stock to enable the Company to satisfy its withholding requirements with respect to the settlement of the Granted Units. SECTION 5. ADJUSTMENT OF GRANTED UNITS. If there shall be any change in the Common Stock of the Company, through merger, consolidation, reorganization, recapitalization, stock dividend, stock split, reverse stock split, split up, spinoff, combination of shares, exchange of shares, dividend in kind or other like change in capital structure or distribution (other than normal cash dividends), any extraordinary dividend or distribution of cash or other assets to shareholders of the Company, in order to prevent dilution or enlargement of participants' rights under the Plan, the Committee shall adjust, in an equitable manner, the number and kind of shares that will be paid to the Grantee upon settlement of the Granted Units. 2 Make-Whole Award SECTION 6. MISCELLANEOUS PROVISIONS. (a) NO RETENTION RIGHTS, NO FUTURE AWARDS. Nothing in this award or in the Plan shall confer upon the Grantee any right to any future Awards and to continue in Continuous Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any Parent or Subsidiary employing or retaining the Grantee) or of the Grantee, which rights are hereby expressly reserved by each, to terminate his or her Continuous Service at any time and for any reason, with or without cause. (b) AWARD UNFUNDED. The Granted Units represent an unfunded promise. The Grantee's rights with respect to the Granted Units are no greater than the rights of a general unsecured creditor of the Company. (c) NOTICE. Whenever under this Agreement it becomes necessary to give notice, such notice shall be in writing, signed by the party or parties giving or making the same, and shall be served on the person or persons for whom it is intended or who should be advised or notified, by Federal Express (or other similar overnight service) or by registered or certified mail, with postage and fees prepaid. Notice shall be addressed to the Company at its principal executive office and to the Grantee at the address that he or she most recently provided in writing to the Company. (d) ENTIRE AGREEMENT. This Agreement, the Grantee's Employment Agreement and the Plan constitute the entire contract between the parties hereto with regard to the subject matter hereof. They supersede any other agreements, representations or understandings (whether oral or written and whether express or implied) which relate to the subject matter hereof. (e) WAIVER. No waiver of any breach or condition of this Agreement shall be deemed to be a waiver of any other or subsequent breach or condition whether of like or different nature. (f) SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall inure to the benefit of, and be binding upon, the Company and its successors and assigns and upon the Grantee, the Grantee's assigns and the legal representatives, heirs and legatees of the Grantee's estate, whether or not any such person shall have become a party to this Agreement and have agreed in writing to be joined herein and be bound by the terms hereof. (g) CHOICE OF LAW. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York (regardless of the law that might otherwise govern under applicable New York principles of conflict of laws). (h) SECTION 409A. Anything to the contrary herein notwithstanding, the Granted Units are not intended to be "nonqualified deferred compensation" within the meaning of Section 409A and are intended to comply with the "short term deferral" rules under Section 409A. If, however, the Granted Units or any payment in lieu thereof is deemed to not comply with Section 409A, the Company and the Executive agree to renegotiate in good faith any such benefit or payment (including, without limitation, as to the timing of any settlement of Granted Units or any payment in lieu thereof) so that either (i) Section 409A will not apply or (ii) compliance with Section 409A will be achieved; provided, however, that any resulting renegotiated terms shall provide to the Executive the after-tax economic equivalent of what otherwise has been provided to the 3 Make-Whole Award Executive pursuant to the terms of this Agreement, and provided further, that any deferral of payments or other benefits shall be only for such time period as may be required to comply with Section 409A. SECTION 7. DEFINITIONS. (a) "AFFILIATE" shall mean (i) any entity other than the Subsidiaries in which the Company has a substantial direct or indirect equity interest, as determined by the Board, and (ii) any Subsidiary. (b) "AGREEMENT" shall mean this Deferred Stock Unit Award Agreement. (c) "CAUSE" shall have the meaning ascribed to it in the Grantee's written employment agreement then in effect. (d) "CODE" shall mean the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated thereunder. (e) "DISABILITY" shall have the meaning ascribed to it in the Grantee's written employment agreement then in effect. (f) "GOOD REASON" shall have the meaning set forth in the Grantee's written employment agreement then in effect. (g) "GRANT DATE" shall have the meaning described in Section 1(a) of this Agreement. (h) "GRANTED UNITS" shall have the meaning described in Section 1(a) of this Agreement. (i) "GRANTEE" shall have the meaning described in Section 1(a) of this Agreement. (j) "PLAN" shall have the meaning described in Section 1(c) of this Agreement. (k) "SERVICE TERMINATION" shall have the meaning described in Section 3(b) of this Agreement. (l) "TERMINATION DATE" shall have the meaning described in Section 3(b) of this Agreement. (m) "VESTING DATE" shall have the meaning described in Section 3(a) of this Agreement. (Signature Page Follows) 4 Make-Whole Award IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by its duly authorized officer, on September 4, 2007. GRANTEE: COMVERSE TECHNOLOGY, INC. /s/ Cynthia L. Shereda By: /s/ Andre Dahan - ---------------------------- ---------------------------- Cynthia L. Shereda Andre Dahan Chief Executive Officer and President 5 -----END PRIVACY-ENHANCED MESSAGE-----