Exhibit 10.1

 

FIRST AMENDMENT
TO
SEVERANCE PROTECTION AGREEMENT

 

THE SEVERANCE PROTECTION AGREEMENT (THE “AGREEMENT”) DATED AS OF JULY 2, 2007,
BY AND BETWEEN NMS COMMUNICATION CORPORATION (THE “COMPANY”) AND STEVE GLADSTONE
(THE “EXECUTIVE”) IS HEREBY AMENDED AS FOLLOWS:

 

1.             Section 2(b)(2) is hereby amended by deleting said Section in its
entirety and substituting therefor the following:

 

(2) the Company shall pay the Executive as severance pay and in lieu of any
further compensation for periods subsequent to the Termination Date, an amount
equal to $300,000.

 

2.             Section 2(b)(3) is hereby deleted in its entirety.

 

3.             Section 2(d)  is hereby amended by deleting said Section in its
entirety and substituting therefor the following:

 

(d) Additional Limitation.

 

(1)           Anything in this Agreement to the contrary notwithstanding, in the
event that any compensation, payment or distribution by the Company or an
Affiliate to or for the benefit of the Executive, whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise (the “Severance Payments”), would be subject to the excise tax imposed
by Section 4999 of the Code, the following provisions shall apply:

 

(A)          If the Severance Payments, reduced by the sum of (1) the Excise Tax
and (2) the total of the Federal, state, and local income and employment taxes
payable by the Executive on the amount of the Severance Payments which are in
excess of the Threshold Amount, are greater than or equal to the Threshold
Amount, the Executive shall be entitled to the full benefits payable under this
Agreement.

 

(B)           If the Threshold Amount is less than (x) the Severance Payments,
but greater than (y) the Severance Payments reduced by the sum of (1) the Excise
Tax and (2) the total of the Federal, state, and local income and employment
taxes on the amount of the Severance Payments which are in excess of the
Threshold Amount, then the benefits payable under this Agreement shall be
reduced (but not below zero) to the extent necessary so that the maximum
Severance Payments shall not exceed the Threshold Amount.  To the extent that
there is more than one method of reducing the payments to bring them within the
Threshold Amount, the Executive shall determine which method shall be followed;
provided that if the Executive fails to make such determination within 45 days
after the Company has sent the Executive written notice of the need for such
reduction, the Company may determine the amount of such reduction in its sole
discretion.

 

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(2)           For the purposes of this Section 2(d), “Threshold Amount” shall
mean three times the Executive’s “base amount” within the meaning of
Section 280G(b)(3) of the Code and the regulations promulgated thereunder less
one dollar ($1.00); and “Excise Tax” shall mean the excise tax imposed by
Section 4999 of the Code, and any interest or penalties incurred by the
Executive with respect to such excise tax.

 

(3)           The determination as to which of the alternative provisions of
Section 2(d)(1) shall apply to the Executive shall be made by a nationally
recognized accounting firm selected by the Company (the “Accounting Firm”),
which shall provide detailed supporting calculations both to the Company and the
Executive within 15 business days of the Date of Termination, if applicable, or
at such earlier time as is reasonably requested by the Company or the
Executive.  For purposes of determining which of the alternative provisions of
Section 2(d)(1) shall apply, the Executive shall be deemed to pay federal income
taxes at the highest marginal rate of federal income taxation applicable to
individuals for the calendar year in which the determination is to be made, and
state and local income taxes at the highest marginal rates of individual
taxation in the state and locality of the Executive’s residence on the Date of
Termination, net of the maximum reduction in federal income taxes which could be
obtained from deduction of such state and local taxes.  Any determination by the
Accounting Firm shall be binding upon the Company and the Executive.

 

4.             Except as set forth herein, the Agreement remains in full force
and effect without modification or waiver.

 

5.             This first amendment may be executed in one or more counterparts
and by the parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which together shall be
deemed to constitute one and the same agreement.

 

[Remainder of Page Intentionally Blank]

 

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IN WITNESS WHEREOF, this first amendment has been executed as a sealed
instrument by the Company and the Executive this 3rd day of December, 2008.

 

 

 

NMS COMMUNICATIONS CORPORATION

 

 

 

 

 

By:

/s/ Robert P. Schechter

 

 

Name: Robert P. Schechter

 

 

Title: President, CEO and Chairman

 

 

 

 

EXECUTIVE

 

 

 

 

 

/s/ Steve Gladstone

 

Steve Gladstone

 

 

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