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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
August 15, 2005
Date of Report (Date of earliest event reported)
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SONUS NETWORKS, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 000-30229 04-3387074
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(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
250 APOLLO DRIVE, CHELMSFORD, MASSACHUSETTS 01824
(Address of Principal Executive Offices) (Zip Code)
(978) 614-8100
(Registrant's Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
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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.
Effective August 15, 2005, Paul K. McDermott commenced employment as Vice
President, Finance and Corporate Controller of Sonus Networks, Inc. (the
"Company"). A copy of the press release dated August 15, 2005 announcing the
employment of Mr. McDermott is attached as Exhibit 99.1 hereto and incorporated
herein by reference.
Pursuant to a written offer letter dated August 11, 2005, a copy of which
is attached as Exhibit 10.1 hereto and incorporated herein by reference, Mr.
McDermott will receive annual base compensation of $190,000. He is eligible for
an "on target bonus" of 20% of his annual base salary subject to the achievement
of specific objectives. Mr. McDermott will receive an option to purchase 150,000
shares of the Company's common stock at an exercise price of the closing price
of the Company's common stock on the NASDAQ National Market on the date of
grant, with 25% of the number of options vesting on the first anniversary of his
commencement date and the remaining 75% vesting in equal monthly increments
through the fourth anniversary of the commencement date. Mr. McDermott is an
employee-at-will.
Item 5.02. Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers.
Effective August 15, 2005, Paul K. McDermott commenced employment as Vice
President, Finance and Corporate Controller of the Company. Mr. McDermott will
serve as the Company's principal accounting officer and as an executive officer
reporting under Section 16(a) of the Securities Exchange Act of 1934.
Mr. McDermott served as Chief Financial Officer, Treasurer and Secretary of
Network Intelligence Corporation, a supplier of appliance-based security event
management products, from June 2002 until March 2005. Prior to serving in that
role, Mr. McDermott served as Chief Financial Officer, Vice President of Finance
& Administration, Treasurer and Secretary of Firepond, Inc., a global provider
of integrated sales and e-services software solutions from January 1999 to
January 2002. Mr. McDermott is 43 years old.
Exhibits 10.1 and 99.1 and the disclosure in Item 1.01 of this Current
Report on Form 8-K are incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits
10.1 Offer Letter between Sonus Networks, Inc. and Paul K. McDermott
dated August 9, 2005.
99.1 Press release of Sonus Networks, Inc. dated August 15, 2005
announcing employment of Vice President, Finance and Corporate
Controller.
SIGNATURE
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.
Date: August 15, 2005 SONUS NETWORKS, INC.
By:
/s/ Ellen Richstone
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Ellen Richstone
Chief Financial Officer
EXHIBIT INDEX
10.1 Offer Letter between Sonus Networks, Inc. and Paul K. McDermott
dated August 9, 2005.
99.1 Press release of Sonus Networks, Inc. dated August 15, 2005
announcing employment of Vice President, Finance and Corporate
Controller.
Sonus Networks, Inc.
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250 Apollo Drive, Chelmsford, MA 01824
August 9, 2005
Mr. Paul McDermott
18 Nipmuck Drive
Westborough, MA 01581
Dear Paul:
I am pleased to provide you with the terms and conditions of our offer of
employment to you by Sonus Networks, Inc. (the "Company").
1. Position. Your initial position will be VP, Corporate Controller and VP,
Finance, reporting to Ellen Richstone, Chief Financial Officer. In addition to
performing duties and responsibilities associated with the position of VP,
Controller from time to time the Company may assign you other duties and
responsibilities.
As a full-time employee of the Company, you will be expected to devote your full
business time and energies to the business and affairs of the Company.
2. Starting Date/Nature of Relationship. It is expected that your employment
will start on or within 1 week from August 29, 2005. No provision of this letter
shall be construed to create an express or implied employment contract for a
specific period of time. Employment at Sonus Networks, Inc. is considered "at
will" and either you or the Company may terminate the employment relationship at
any time and for any reason.
3. Compensation.
(a) Your initial salary will be annualized at $190,000. You will be
eligible to participate in the Bonus Program for 2005 (pro-rated) with
a target of 20% of annual base salary. Objectives will be agreed upon
within the first ninety days of your employment.
(b) You will be granted an option to purchase 150,000 shares of common
stock under the Company's Incentive Stock Plan, subject to the terms
of the Plan and approval of the Stock Option Committee. Should the
Company implement a change of control provision for corporate
officers, this position will be included.
4. Employment Eligibility. In compliance with the Immigration Reform and
Control Act of 1986, you are required to establish your identity and employment
eligibility. Therefore, on your first day of employment you will be required to
fill out an Employment Verification Form and present documents in accordance
with this form.
5. Benefits. You will be entitled as an employee of the Company to receive
such benefits as are generally provided its employees in accordance with Company
policy as in effect from time to time. Company benefits include group health,
life and dental insurance, and liberal holidays, vacation and 401K programs. All
employees begin accruing three (3) weeks of vacation upon date of hire. The
Company is committed to providing a healthy work environment for every employee.
Therefore, we provide a smoke free environment and require all employees to
comply.
The Company retains the right to change, add or cease any particular benefit.
6. Confidentiality. The Company considers the protection of its confidential
information and proprietary materials to be very important. Therefore, as a
condition of your employment, you and the Company will become parties to a
Noncompetition and Confidentiality Agreement. Two copies of this agreement are
sent with this offer letter. Both copies must be signed and returned to the
Company prior to the first day of employment.
7. General.
(a) This letter will constitute our entire agreement as to your employment
by the Company and will supercede any prior agreements or
understandings, whether in writing or oral.
(b) This letter shall be governed by the law of the Commonwealth of
Massachusetts.
(c) Sonus Networks is an equal opportunity employer.
You may accept this offer of employment and the terms and conditions thereof by
confirming your acceptance by August 17, 2005. Please send your signed letter to
the Company, or via e-mail to Nancy Forte at nforte@sonusnet.com which execution
will evidence your agreement with the terms and conditions set forth herein and
therein. You may retain the enclosed copy of this letter for your records. We
are enthusiastic about you joining us, and believe that our technical and
business goals will provide every opportunity for you to achieve you personal
and professional objectives.
Very truly yours,
/s/Colleen Humphrey
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Colleen Humphrey
Director, Human Resources
Exhibit 99.1
Sonus Networks Appoints Controller and Principal Accounting Officer
CHELMSFORD, Mass.--(BUSINESS WIRE)--Aug. 15, 2005--Sonus Networks
(Nasdaq: SONS), a leading supplier of service provider voice over IP
(VoIP) infrastructure solutions, today announced that Paul McDermott
has been appointed vice president of finance, corporate controller and
principal accounting officer. In this role, McDermott will direct the
Company's worldwide finance organization.
"Paul brings to Sonus a broad range of experience having led the
financial operations of several technology companies," said Ellen
Richstone, chief financial officer, Sonus Networks. "He has the right
mix of finance and accounting experience to help drive the next phase
of Sonus' global growth. I look forward to Paul's contributions as we
all work toward extending Sonus' leadership position."
McDermott has over 20 years of experience and a successful
background leading the finance operations of several high-technology
companies. Prior to joining Sonus, he was the chief financial officer
(CFO), treasurer and secretary at Network Intelligence Corporation, a
provider of appliance-based security event management products.
Previous to Network Intelligence Corporation, McDermott served as the
CFO of Firepond where he led the successful initial public offering of
the company. He has also held executive finance positions with
Serviceware Technologies, and Legent Corporation (acquired by Computer
Associates).
"Sonus has established a preeminent position in the rapidly
growing VoIP market," commented McDermott. "I look forward to working
with the great team that Sonus has assembled, and contributing to the
Company's efforts to expand its global market leadership in such an
important and dynamic industry."
About Sonus Networks
Sonus Networks, Inc. is a leading provider of voice over IP (VoIP)
infrastructure solutions for wireline and wireless service providers.
With its comprehensive IP Multimedia Subsystem (IMS) solution, Sonus
addresses the full range of carrier applications, including
residential and business voice services, wireless voice and
multimedia, trunking and tandem switching, carrier interconnection and
enhanced services. Sonus' voice infrastructure solutions are deployed
in service provider networks worldwide. Founded in 1997, Sonus is
headquartered in Chelmsford, Massachusetts of U.S. Additional
information on Sonus is available at http://www.sonusnet.com.
This release may contain forward-looking statements regarding
future events that involve risks and uncertainties. Readers are
cautioned that these forward-looking statements are only predictions
and may differ materially from actual future events or results.
Readers are referred to the "Risk Factors" section of Sonus' Annual
Report on Form 10-K, dated March 15, 2005, and the "Cautionary
Statements" section of Sonus' Quarterly Report on Form 10-Q, dated
August 8, 2005, both filed with the SEC, which identify important risk
factors that could cause actual results to differ from those contained
in the forward-looking statements. Risk factors include among others:
the impact of material weaknesses in our disclosure controls and
procedures and our internal control over financial reporting on our
ability to report our financial results timely and accurately; the
unpredictability of our quarterly financial results; risks associated
with our international expansion and growth; consolidation in the
telecommunications industry; and potential costs resulting from
pending securities litigation against the company. Any forward-looking
statements represent Sonus' views only as of today and should not be
relied upon as representing Sonus' views as of any subsequent date.
While Sonus may elect to update forward-looking statements at some
point, Sonus specifically disclaims any obligation to do so.
Sonus is a registered trademark of Sonus Networks. Open Services
Architecture is a trademark of Sonus Networks. All other company and
product names may be trademarks of the respective companies with which
they are associated.
CONTACT: Sonus Networks, Inc.
Investor Relations:
Jocelyn Philbrook, 978-614-8672
jphilbrook@sonusnet.com
or
Media Relations:
Sarah McAuley, 212-699-1836
smcauley@sonusnet.com