Exhibit 10.1

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SEPARATION AGREEMENT AND GENERAL RELEASE

This Agreement and General Release (“Agreement”) is between Howard Handler
(“Employee” or “you”) and Virgin Mobile USA, L.P. (the “Company”).

1. You acknowledge that your last date of employment with the Company is
March 31, 2008 (the “Separation Date”). You will receive the value of any
accrued but unused vacation following your Separation Date and your 2007 annual
bonus and 2007 debt bonus at the same time as other employees based on company
performance at the end of February. The Separation Date shall be the last date
of your employment for purposes of participation in and coverage under all
benefit plans and programs sponsored by or through the Company. You acknowledge
and agree that the Company shall have no obligation to rehire you, or to
consider you for employment, after the Separation Date. You agree that you will
not seek employment with the Company at any time in the future.

2. Following the Effective Date of this Agreement (see paragraph 13, below), the
Company agrees to provide the following payments and benefits, all of which
shall be treated as separate payments under Section 409A of the Internal Revenue
Code:

(a) severance pay in the amount of $312,000 (one times annual base salary) less
applicable tax withholdings and other payroll deductions. This payment will be
made in equal installments each pay period for 12 months following the
Separation Date. In the event of your death following the commencement of
payments, the remaining balance of payments, if any, will be paid in a single
lump sum payment to your estate as soon as practicable following your death.

(b) severance pay in the amount of $187,200 (an amount equal to 80% of your 2008
annual bonus target) less applicable tax withholdings and other payroll
deductions. Payment of this amount shall commence on the earlier of
(i) October 1, 2008, in which case you will receive a payment of $93,600 (less
applicable tax withholdings and other payroll deductions) on October 1, 2008 and
the remaining amount of $93,600 (less applicable tax withholdings and other
payroll deductions) will be paid to you in equal installments each pay period
for six (6) months following such date or (ii) your date of death, in which case
the payments will be made in a single lump sum to your estate. In the event of
your death following the commencement of payments on October 1, 2008, the
remaining balance of payments, if any, will be paid in a single lump sum payment
to your estate as soon as practicable following your death.

(c) severance pay in an amount equal to three months of your 2008 annual bonus
target) less applicable tax withholding and other payroll deductions adjusted
for company performance during the January-June 2008 performance period. The
payment will be made to you in a single lump sum on the earlier of
(i) October 1, 2008 or (ii) your date of death.

 

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(d) continuation of benefits (including medical, dental and vision) at active
employee rates through COBRA for a period of 12 months following the Separation
Date. You will be responsible for paying the full COBRA premium for benefit
coverage extending beyond the 12-month period.

(e) accelerated vesting of outstanding equity that would otherwise have become
vested in the twelve-month period following your Separation Date. This means
that as of your Separation Date the following options and restricted stock units
will be vested:

Vested and Unvested options as of March 31, 2008 including acceleration

 

Grant Date

   Vesting
Date    Grant
Type    Options/
RSUs
Granted    Grant
Price    Vested
Options/
RSUs    Unvested
Options/
RSUs

05/23/07

   05/23/07    RS    8,536    N/A    2,134    6,402

06/01/06

   06/01/06    Option    21,339    17.45    10,670    10,669

07/01/05

   07/01/05    Option    10,670    17.45    8,003    2,667

01/06/03

   01/06/03    Option    170,716    14.64    170,716    0

10/10/07

   07/01/07    Option    40,444    15.00    10,111    30,333

10/10/07

   10/10/07    RSU    30,000    N/A    15,000    15,000

All other unvested options, restricted stock and restricted stock units not
listed in the above table will be forfeited as of your Separation Date.

(f) extension of the period of time to exercise your vested options from the
current 90 day period following your Separation Date to 18 months following your
Separation Date. This means that vested options that are not exercised will
expire on September 30, 2009.

3. You acknowledge and agree that the payment(s) and other benefits provided
pursuant to this Agreement exceed(s) any payment, benefit, or other thing of
value to which you might otherwise be entitled under any policy, plan or
procedure of the Company and/or any agreement between you and the Company.

4. (a) In consideration for the payment and benefits to be provided to you
pursuant to paragraph 2 above, you, for yourself and for your heirs, executors,
administrators, trustees, legal representatives and assigns (hereinafter
referred to collectively as “Releasors”), forever release and discharge the
Company and its past, present and future parent entities, subsidiaries,
divisions, affiliates and related business entities, successors and assigns,
assets, employee benefit plans or funds, and any of its or their respective
past, present and/or future directors, officers, fiduciaries, agents, trustees,
administrators, employees and assigns, whether acting on behalf of the Company
or in their individual capacities (collectively the “Company Entities”) from any
and all claims, demands, causes of action, fees and liabilities of any kind
whatsoever, whether known or unknown,

 

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which you ever had, now have, or may have against any of the Company Entities by
reason of any act, omission, transaction, practice, plan, policy, procedure,
conduct, occurrence, or other matter up to and including the date on which you
sign this Agreement.

(b) Without limiting the generality of the foregoing, this Agreement is intended
to and shall release the Company Entities from any and all claims, whether known
or unknown, which Releasors ever had, now have, or may have against the
Companies Entities arising out of your employment and/or your separation from
that employment, including, but not limited to: (i) any claim under the Age
Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, the
Civil Rights Act of 1991, Section 1981 of the Civil Rights Act of 1866, the
Americans with Disabilities Act, the Equal Pay Act, the Immigration Reform and
Control Act of 1986, the Employee Retirement Income Security Act of 1974
(excluding claims for accrued, vested benefits under any employee benefit or
pension plan of the Company Entities subject to the terms and conditions of such
plan and applicable law), the Family and Medical Leave Act, and the
Sarbanes-Oxley Act of 2002 (a federal whistleblower law); (ii) any claim under
the New Jersey Law Against Discrimination, the New Jersey Family Leave Act, the
New Jersey Conscientious Employee Protection Act (also known as the
Whistleblower Statute), the New Jersey State Wage and Hour Law, the New Jersey
Civil Rights Act, the New Jersey Political Activities of Employees law, the New
Jersey Jury Duty Protection law, the New Jersey Lie Detector Testing law, the
New Jersey Tobacco Use law and the New Jersey Genetic Testing Law; (iii) any
other claim (whether based on federal, state, or local law, statutory or
decisional) relating to or arising out of your employment, the terms and
conditions of such employment, the termination of such employment, and/or any of
the events relating directly or indirectly to or surrounding the termination of
that employment, including but not limited to breach of contract (express or
implied), wrongful discharge, detrimental reliance, defamation, emotional
distress, claims for salary, pay, benefits (except for vested benefits),
bonuses, commissions, or other wage compensation, or compensatory or punitive
damages; and (iv) any claim for attorneys’ fees, costs, disbursements and/or the
like. Nothing in this Agreement shall be a waiver of claims that may arise after
the date on which you sign this Agreement.

(c) In consideration for your agreements contained herein, the Company, for
itself and its affiliates, successors and assigns (hereinafter referred to
collectively as “Company Releasors”), forever release and discharge you and your
administrators, heirs and agents, successors and assigns from any and all
claims, demands, causes of action, fees and liabilities of any kind whatsoever,
known as of the Effective Date, which the Company Releasors ever had or now
have against you or the released parties set forth above by reason of any act,
omission, transaction, practice, plan, policy, procedure, conduct, occurrence,
or other matter up to and including the Effective Date; notwithstanding the
foregoing, the Company’s release of claims set forth in this paragraph 5(c) does
not include any claims, demands, causes of action, fees or liabilities arising
out of facts of which the Company is unaware as of the Effective Date.

(d) The Company hereby agrees to defend, hold harmless and indemnify you in any
suits or claims arising from actions arising from or during the course of your
employment on the same basis as with other similarly situated officers and
directors and in accordance with, and subject to the terms of, the Company’s
By-Laws, as amended, and applicable law. In addition, to the extent the Company
maintains directors’ and officers’ insurance for its directors and officers, the
Company shall continue to maintain such insurance for you, covering costs,
charges and expenses incurred in connection with any action, suit or proceeding
to which you may be made a party by reason of having been a director or officer
of the Company.

 

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5. You represent that you have returned (or will return no later than your
Separation Date) to the Company all property belonging to the Company and/or the
Company Entities, including but not limited to all documents, materials, records
or other items in your possession or control belonging to the Company and/or the
Company Entities or containing any proprietary information relating to the
Company and/or the Company Entities, and that you have not (or will not) retain
any copies of such items. You further agree that you have surrendered (or will
surrender) to the Company your laptop, cell phone, keys, card access to the
building and office floors, Employee Handbook, phone card, rolodex (if provided
by the Company and/or the Company Entities), computer user name and password,
disks and/or voicemail code. You further acknowledge and agree that the Company
shall have no obligation to make the payment(s) and provide the benefits
referred to in paragraph 2 above until you have satisfied all your obligations
pursuant to this paragraph.

6. If any provision of this Agreement is held by a court of competent
jurisdiction to be illegal, void or unenforceable, such provision shall have no
effect; however, the remaining provisions shall be enforced to the maximum
extent possible.

7. (a) This Agreement is not intended, and shall not be construed, as an
admission of the Company has violated any federal, state or local law (statutory
or decisional), ordinance or regulation, breached any contract or committed any
wrong whatsoever against you.

(b) Should any provision of this Agreement require interpretation or
construction, it is agreed by the parties that the entity interpreting or
constructing this Agreement shall not apply a presumption against one party by
reason of the rule of construction that a document is to be construed more
strictly against the party who prepared the document.

8. This Agreement is binding upon, and shall inure to the benefit of, the
parties and their respective heirs, executors, administrators, successors and
assigns.

9. This Agreement shall be construed and enforced in accordance with the laws of
the State of New Jersey without regard to the principles of conflicts of law.

10. You understand that this Agreement constitutes the complete understanding
between the Company and you and, with the exception of your Employment Agreement
dated July 3, 2007 and the Agreement regarding Confidentiality, Inventions,
Competition and Solicitation signed by you on February 18, 2003 which is/are
incorporated by reference into this Agreement, supersedes any and all
agreements, understandings, and discussions, whether written or oral, between
you and any of the Company Entities. No other promises or agreements shall be
binding unless in writing and signed by both the Company and you after the
Effective Date of this Agreement.

11. You acknowledge that you: (a) have carefully read this Agreement in its
entirety; (b) have had an opportunity to consider it for at least twenty-one
(21) days; (c) are hereby advised by the Company in writing to consult with an
attorney of your choosing in connection with this Agreement; (d) fully
understand the significance of all of the terms and conditions of this Agreement
and have discussed them with your independent legal counsel, or had a reasonable
opportunity to do so; (e) have had answered to your satisfaction any questions
you have asked with regard to the meaning and significance of any of the
provisions of this Agreement; and (f) are signing this Agreement voluntarily and
of your own free will and agree to abide by all the terms and conditions
contained herein.

 

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12. You may accept this Agreement by signing it and returning it to David
Messenger, Chief People Officer at 10 Independence Blvd, Warren, NJ 07059 on or
before February 15. After executing this Agreement, you shall have seven
(7) days (the “Revocation Period”) to revoke this Agreement by indicating your
desire to do so in writing delivered to David Messenger at the address above (or
by fax at 908-626-0476) by no later than 5:00 p.m. on the seventh (7th) day
after the date you sign this Agreement. The effective date of this Agreement
shall be the eighth (8th) day after you sign the Agreement (the “Effective
Date”). If the last day of the Revocation Period falls on a Saturday, Sunday or
holiday, the last day of the Revocation Period will be deemed to be the next
business day. In the event you do not accept this Agreement as set forth above,
or in the event you revoke this Agreement during the Revocation Period, this
Agreement, including but not limited to the obligation of the Company to provide
the payment(s) and other benefits referred to in paragraph 2 above, shall be
deemed automatically null and void.

 

Print Name:  

Howard Handler

    Date:  

1/23/2008

  Employee       Signature:  

/s/ Howard Handler

        Employee      

 

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Sworn to before me on this 23 day of January, 2008.

 

/s/ Stephen M. Hines

Notary Public

 

VIRGIN MOBILE USA, L.P.       By:  

/s/ David Messenger

    Date:   1/23/2008   David Messenger, Chief People Officer      

 

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