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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
APRIL 10, 2006
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)
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))
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ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
Effective April 24, 2006, James F. Collier commenced employment as Vice
President, Worldwide Sales of Sonus Networks, Inc. (the "Company"). A copy of
the press release dated April 24, 2006 announcing the employment of Mr. Collier
is attached as Exhibit 99.1 hereto and incorporated herein by reference. This
Form 8-K is being filed on the date of the first public announcement of Mr.
Collier's hiring.
Pursuant to a written offer letter dated April 10, 2006, a copy of which is
attached as Exhibit 10.1 hereto and incorporated herein by reference, Mr.
Collier will receive annual base compensation of $300,000, which may be
increased in subsequent years. He is eligible for an "on target bonus" of 100%
of his annual base salary subject to the achievement of specific objectives. For
fiscal year 2006, $103,562 of Mr. Collier's on target bonus will be guaranteed
(equal to 50% of his target bonus pro rated based on the number of days he is
employed with Sonus). Mr. Collier will receive an option to purchase 650,000
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 April 24, 2006,
with 25% of the number of options vesting (subject to continued employment) 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. Collier also will receive 200,000 shares of restricted stock which
shall vest (subject to continued employment): (i) 80,000 shares on December 31,
2006; (ii) 40,000 shares on April 30, 2007; (iii) 30,000 shares on October 31,
2007; and (iv) 50,000 shares on May 1, 2008. The agreement also provides for
acceleration of unvested shares that would vest within 24 months in the event of
an acquisition, and salary continuation payments for twelve months in the event
of termination by us other than for cause or Mr. Collier's resignation for good
reason. Mr. Collier is an employee-at-will.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits
10.1 Offer Letter between Sonus Networks, Inc. and James F.
Collier dated April 10, 2006.
99.1 Press release of Sonus Networks, Inc. dated April 24, 2006
announcing employment of Vice President, Worldwide Sales.
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: April 24, 2006 SONUS NETWORKS, INC.
By: /s/ Charles J. Gray
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Charles J. Gray
Vice President and General Counsel
EXHIBIT INDEX
10.1 Offer Letter between Sonus Networks, Inc. and James F. Collier dated
April 10, 2006.
99.1 Press release of Sonus Networks, Inc. dated April 24, 2006 announcing
employment of Vice President, Worldwide Sales.
EXHIBIT 10.1
April 10, 2006
James F. Collier
15 Fairfield Drive
Morristown, NJ 07960
Dear Jim:
I am pleased to provide you with the terms and conditions of our offer of
employment to you by Sonus Networks, Inc. ("Sonus" or the "Company").
1. Position. Your title will be Vice President, Worldwide Sales of
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the Company and you will also be an executive officer of the
Company for SEC reporting purposes. You will report to me as the
President and Chief Operating Officer of Sonus. You will have
overall responsibility for Sales as well as responsibility for
the Company's Network Services Organization. In addition to
performing duties and responsibilities associated with the
position of Vice President, Sales, from time to time the Company
may assign you other duties and responsibilities not
inconsistent with your position and responsibilities set forth
above. Subject to the provisions of paragraph 8 hereof, your
place of work will be at Sonus' headquarters. 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, provided that you may sit on the Boards of no more
than two companies not in competition with Sonus with prior
approval of the Company, and you may sit on charitable Boards,
provided that such participation does not interfere with your
provision of services to the Company hereunder and your total
commitment to outside boards does not exceed two.. In the event
the Company introduces the use of Senior Vice President or
Executive Vice President to designate its executive officers,
your title will be modified to reflect the relevant designation.
2. Starting Date/Nature of Relationship. It is expected that your
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employment will start on or about May 1, 2006 (the "Start
Date"). 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, subject to the
provisions of this letter.
3. Compensation.
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(a) Your initial base salary will be at the rate of $300,000
annually, which will be reviewed annually and may, but is
not required to be increased as a result of such review.
Your salary may not be decreased except as part of a plan,
to which you agree, in which the salary of all executive
officers is decreased uniformly in order to address exigent
circumstances in the business that may arise in the future.
(b) You will be eligible to participate in the Executive
Incentive Compensation Program with a target of 100% of
annual base salary (your "On Target Bonus"), which will be
payable on a quarterly basis, and for 2006 will be pro rated
for the number of days in 2006 that you are employed with
the Company. Your On Target Bonus for 2006 shall be based on
the following: 40% based on a bookings target; 40% based on
a revenue target; and 20% based on an operating profit
target. The specific objectives will be based on the
Company's 2006 Operating Plan. For fiscal year 2006 (ending
December 31, 2006) payment of fifty percent (50%) of your
pro rated On Target Bonus will be guaranteed (the
"Guaranteed Portion"). The Guaranteed Portion will be paid
in three equal installments on July 31, 2006, October 31,
2006 and December 31, 2006. The details of your On Target
Bonus for 2007 going forward will be developed with you
based on your duties and responsibilities with the Company.
Your base salary and On Target Bonus for any year will be
referred to in this letter as your "Total Cash
Compensation."
(c) You will be granted an option to purchase 650,000 shares
(the "Shares") of common stock of the Company under the
Company's Incentive Stock Plan (the "New Hire Option
Grant"), subject to the terms of the Plan and approval of
the Compensation Committee of the Company's Board of
Directors. The New Hire Option Grant will permit you to
purchase the Shares at a price equal to the closing price of
the Company's common stock on the NASDAQ National Market on
the grant date set by the Compensation Committee. The New
Hire Option Grant shall vest and become exercisable (i) with
respect to 25% of the Shares on the first anniversary of the
date that your employment with the Company commences
("Employment Date") and, (ii) with respect to the remaining
75% of the Shares, in equal increments of 2.0833% of the
Shares shall vest monthly thereafter through the fourth
anniversary of the date of employment. In the event that you
cease to be employed by the Company for any reason, then you
shall have at least 90 days to exercise such options (to the
extent that the Compensation Committee of the Board of
Directors of the Company has the authority to permit, or
that the Company's Incentive Stock Plan permits, such 90 day
period to be extended if and to the extent that there are
trading restrictions applicable to the option shares during
this 90 day period).
(d) You will also be awarded 200,000 shares of the Company's
common stock, $0.001 par value, (the "Restricted Shares")
under the Company's Incentive Stock Plan (the "Restricted
Stock Grant"), subject to the terms of the Plan, the
restrictions set forth in a Restricted Stock Agreement to be
entered into by the parties and approval of the Compensation
Committee of the Company's Board of Directors. The
Restricted Shares shall vest and become exercisable (i) with
respect to 80,000 Restricted Shares on December 31, 2006,
(ii) with respect to 40,000 Restricted Shares on April 30,
2007, (iii) with respect to 30,000 Restricted Shares on
October 31, 2007 and (iv) with respect to the remaining
50,000 Restricted Shares on May 1, 2008. If there is tax
withholding required as a result of the vesting of
Restricted Shares, the Company will work with you to
determine a method for you to satisfy the withholding
obligation either by permitting you to remit Restricted
Shares to the Company or by some other method such that your
obligation is satisfied directly or indirectly through the
transfer of Restricted Shares.
(e) In the event of an Acquisition (as defined below), any of
the Shares in the New Hire Option Grant or any Restricted
Shares in the Restricted Stock Grant, which are not then
vested or exercisable but which shall vest within 24 months
of the Acquisition, shall immediately become 100% vested and
exercisable upon the consummation of the Acquisition.
For purposes of this letter, Acquisition means the closing
of any (i) merger or consolidation which results in the
voting securities of the Company outstanding immediately
prior thereto representing immediately thereafter less than
a majority of the combined, voting securities of the Company
or any entity into which the Company may be consolidated
outstanding immediately after such merger or consolidation,
or (ii) sale of all or substantially all of the assets or
operating businesses of the Company.
4. Termination. In the event that your employment with the Company
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is terminated by the Company for any reason other than Cause, or
if you resign from the Company for Good Reason, then in either
case you will be eligible to receive 12 months of Total Cash
Compensation payments equal to the amount of your annual base
salary at the time of your termination, payable in accordance
with normal payroll practices. Your health, dental and eye-care
benefits will also continue during the twelve month period
following the termination of your employment. In the event that
your employment with the Company is terminated for Cause, the
provisions of this paragraph related to your ability to
terminate your employment for Good Reason shall not apply.
For the purposes of this letter, "Cause" means (i) your willful
or grossly negligent failure substantially to perform your
duties that occurs more than thirty (30) days after receiving
written notice of such non-performance; your commission of any
material act of dishonesty to or fraud on the Company; (iii) a
breach by you of any material employment obligations set forth
in this letter after receiving written notice and having thirty
(30) days to cure; or (iv) your conviction of, or the entry of a
plea of guilty by you to a felony involving your personal
conduct under the laws of the United States or any state
thereof.
For the purposes of this letter, "Good Reason" means (i) a
material diminution of your title, duties or responsibilities
with the Company (not including organizational redesigns
associated with growth of the company); or (ii) a Company breach
of any material obligation set forth in this letter after
receiving written notice and having thirty (30) days to cure.
5. Employment Eligibility. In compliance with the Immigration
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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.
6. Benefits. You will be entitled as an employee of the Company to
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receive such benefits as are generally provided to the executive
officers of the Company in accordance with Company policies 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.
7. Confidentiality. The Company considers the protection of its
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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 mutually acceptable
Noncompetition and Confidentiality Agreement. A proposed form of
this agreement has been sent with this offer letter. .
8. Re-location. Through July, 2007, we recognize that you will not
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relocate to the Boston area, with the understanding, however,
that during this period you will be engaging in significant
business travel and otherwise be available at headquarters as
needed. The Company will pay your relocation costs, including
moving expenses, temporary living expenses and any related
expenses, but not including any commissions you pay to real
estate brokers for the sale of your home ("Relocation
Expenses"). You agree to submit receipts supporting all of your
Relocation Expenses. In the event you voluntarily terminate your
employment within twelve (12) months of your Start Date, you
shall pay back all Relocation Expenses in full.
9. General.
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(a) The Company will indemnify you against all claims and
actions brought against you and/or the company to the
fullest extent permitted by its charter and by-laws to do so
and shall enter into a separate indemnification agreement
with you. A proposed form of this indemnification agreement
has been sent with this offer letter. Additionally, based on
your representation that you have fully disclosed to the
Company the existence of a certain Agreement with CIENA
Corporation titled "Proprietary Information, Inventions and
Non-Solicitation Agreement" signed on or about April l5,
2002 (the "CIENA Agreement"), the Company will indemnify you
and hold you harmless from reasonable legal fees (provide
that the Company selects the attorney retained), that you
may incur if CIENA Corporation takes legal action against
you in an attempt to enforce the CIENA Agreement as a result
of your employment with the Company.
(b) This letter will constitute our entire agreement as to your
employment by the Company and will supersede any prior
agreements or understandings, whether in writing or oral.
(c) This letter shall be governed by the law of the Commonwealth
of Massachusetts without regard to its conflict of laws
principles.
You may accept this offer of employment and the terms and conditions thereof by
confirming your acceptance by April 11, 2006. Please send your signed letter to
me, or e-mail me at bnotini@sonusnet.com which execution will evidence your
agreement with the terms and conditions set forth herein. You may retain the
enclosed copy of this letter for your records. We are enthusiastic about your
joining us, and believe that our business goals will provide every opportunity
for you to achieve your personal and professional objectives.
Jim, on a more personal note, Hassan, the Board and I all look forward to your
joining Sonus as part of our leadership team.
Best Regards,
Albert A. Notini
President and Chief Operating Officer
Agreed and Accepted
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EXHIBIT 99.1
SONUS NETWORKS ANNOUNCES KEY APPOINTMENT TO EXECUTIVE TEAM
INDUSTRY VETERAN JOINS SONUS AS VICE PRESIDENT OF WORLDWIDE SALES
CHELMSFORD, Mass., April 24 /PRNewswire-FirstCall/ -- Sonus Networks, Inc.
(Nasdaq: SONS), a leading supplier of service provider Voice over IP (VoIP)
infrastructure solutions, announced today that James Collier has joined the
company as its vice president of worldwide sales. In this role, Collier will be
responsible for Sonus' global sales and network services organizations. A
respected industry executive with more than 25 years of experience in the
telecommunications market, Collier joins Sonus from Ciena Corporation where he
most recently led the Company's worldwide sales organization. Collier will fill
the role previously held by Gary Rogers who will leave the company to pursue
personal interests.
"I am extremely pleased to welcome Jim to the Sonus team. Jim brings to
Sonus a deep knowledge of our industry and an exceptional record of
accomplishment within major wireline and wireless operators globally. I am
confident that he will play a critical role in enabling Sonus to capitalize on
the growing global market for IP-based voice networks," said Hassan Ahmed,
chairman and CEO. "I'd also like to personally thank Gary for his numerous
contributions, his leadership and his friendship which have been vital to
building Sonus into a predominant supplier in next-generation
telecommunications."
Before joining Sonus, Collier was the senior vice president of worldwide
sales at Ciena Corporation and was responsible for nearly doubling Ciena's
revenue during his tenure. He also significantly expanded Ciena's presence
within Postal Telegraph and Telephone (PTT) operators. Prior to assuming this
role at Ciena, Collier was responsible for corporate development at Ciena
leading the development and management of corporate alliances, partnerships and
M&A activities within the Company after having lead Ciena's North American sales
organization.
As an accomplished industry executive, Collier had a distinguished 20-year
career at Northern Telecom Inc. (Nortel), where he was responsible for sales of
the company's wireless and optical solutions. He also held various engineering,
business development and product marketing positions at Nortel.
"As Sonus continues its expansion into the wireless and global markets,
Jim's leadership in providing innovative solutions that meet network operators'
needs adds strength and breadth to our execution," said Bert Notini, president
and COO. "Further, by combining worldwide sales and network services together in
one organization, we will accelerate our ability to deliver superior
professional and deployment services in support of our customers' networks."
"Sonus is the recognized leader in the next-generation communications market
with some of the most dynamic network operators in the world as customers," said
James Collier. "This success is the result of Sonus' long- standing commitment
to putting its customers first and its relentless mission of delivering the
industry's most innovation and reliable IP-based voice solutions. I am excited
to join the market leader and look forward to deepening Sonus' relationship with
network operators globally."
Collier holds a bachelors of science in electrical engineering from North
Carolina State University and a masters of business administration from Duke
University.
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. 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
November 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, Inc. Sonus GSX9000 Open
Services Switch, PSX Call Routing Server, SGX Signaling Gateway, and the Sonus
Insight Management System are trademarks of Sonus Networks, Inc. All other
company and product names may be trademarks of the respective companies with
which they are associated.
For more information, please contact:
Investor Relations: Media Relations:
Jocelyn Philbrook Sarah McAuley
978-614-8672 212-699-1836
jphilbrook@sonusnet.com smcauley@sonusnet.com
SOURCE Sonus Networks, Inc.
-0- 04/24/2006
/CONTACT: Investor Relations, Jocelyn Philbrook, +1-978-614-8672,
jphilbrook@sonusnet.com, Media Relations, Sarah McAuley, +1-212-699-1836,
smcauley@sonusnet.com /
/Web site: http://www.sonusnet.com /
(SONS)