NetScout Systems Inc 8-K Exhibit 10.2


     

    Exhibit
      10.2


    AGREEMENT
      RELATING TO EMPLOYMENT

    


    Agreement
      dated January 3, 2007 by and between NetScout Systems, Inc., a Delaware
      corporation (the “Company”),
      and Anil Singhal, a founder of the Company (“Mr.
      Singhal”).

    


    INTRODUCTION
      AND BACKGROUND

    


    WHEREAS,
      the Company wishes to continue the services of Mr. Singhal for the periods
      stated herein, and Mr. Singhal wishes to provide his services for such period,
      all upon the terms and conditions set forth in this Agreement.

    


    NOW,
      THEREFORE, in consideration of the foregoing and for other good and valuable
      consideration, the receipt and sufficiency of which is acknowledged, the
      parties, intending to be legally bound, agree as follows:

    


    1.
      TITLE
      AND DUTIES. The
      Company agrees to employ Mr. Singhal to serve the Company in the capacity of
      Chief Executive Officer and such other titles and duties as are assigned to
      and
      accepted by Mr. Singhal by the Board of Directors. In accordance with such
      position Mr. Singhal will have appropriate responsibilities, duties and
      authority for the management of the Company, sufficient for the accomplishment
      of the goals set for him by the Board of Directors to whom he shall be
      responsible. Mr. Singhal shall use his best efforts in directing the business
      of
      the Company with the objective of providing maximum profit and return on
      invested capital, establishing current and long-range objectives, plans and
      policies subject to the approval of the Board, and representing the Company
      with
      its major customers, the financial community and the public.

    


    The
      term of this Agreement will be for three (3) years (the “Initial
      Term”)
      commencing on January 19, 2007, (the “Effective
      Date”),
      and upon
      the expiration of the Initial Term, this Agreement shall automatically renew
      for
      successive one (1) year periods (each, a “Renewal
      Term”),
      unless written notice of non-renewal (a “Non-Renewal
      Notice”)
      is given by either party at least six months prior to the expiration of the
      Initial Term or any Renewal Term. The Initial Term and any Renewal Term shall
      be
      subject to termination as provided below.

     

    2.
      BASE
      SALARY AND BONUS. During
      the term of this Agreement, the Company shall pay Mr. Singhal a base salary
      at
      an annual rate of $300,000, which base salary may be increased as determined
      by
      the Compensation Committee of the Board of Directors subject to the approval
      of
      the Board of Directors from time to time. The base salary shall be payable
      in
      installments in accordance with the Company’s regular payroll practices, as such
      practices may be modified from time to time, but not less than once a month.
      During the term of this Agreement, Mr. Singhal also will be eligible to receive
      a year-end bonus in addition to his base salary. The range and performance
      criteria for Mr. Singhal’s bonuses, as well as the annual award, will be
      determined by the Compensation Committee, subject to the approval of the Board
      of Directors, in consultation with Mr. Singhal. Any payments to Mr. Singhal
      under this Agreement will be made subject to withholdings required by law or
      authorized by Mr. Singhal.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3. BENEFITS. Each
      year during the term of this Agreement,Mr.
      Singhal will be eligible for and receive all Company benefits, including but
      not
      limited to, disability insurance coverage of no less than 100% of base salary
      (if such coverage provides less than 100%, NetScout will pay the difference
      unless and until Mr. Singhal’s employment terminates because Mr. Singhal is
      Disabled as provided in Section 5), eight (8) weeks of paid vacation, group
      life
      insurance not to exceed $1,000,000 per year (unless increased by the Company),
      and the Company’s medical, dental and vision care plans providing for family
      coverage as from time to time in effect, as well as any other benefits generally
      made available to senior executives of the Company. Additionally, during the
      term of this Agreement, the Company will provide Mr. Singhal with or will
      reimburse Mr. Singhal for actual costs related to the provision of services
      to
      him by professional tax and estate planning advisors, provided that such costs
      incurred will be reimbursed by the Company as soon as practicable, subject
      to
      the provisions of Section 9 below.

    


    4.
      DEATH
      OF MR. SINGHAL. If
      Mr. Singhal’s employment terminates by reason of death, in addition to the
      foregoing Company provided life insurance, the Company will make the payments
      and provide for the benefits pursuant to Sections 2 and 3 of Schedule
      A
      hereto.

    


    5.
      DISABILITY. If
      Mr. Singhal’s employment terminates because Mr. Singhal is Disabled, then the
      Company (i) will assist Mr. Singhal in obtaining any payments due under the
      Company’s short term and long term disability policies then in effect to which
      he is entitled and (ii) shall make the payments and benefits as set forth on
      Schedule
      A.
      Payments from the Company under this Section 5 shall be subject to the
      provisions of Section 9 below. As used herein the terms “Disabled” and
“Disability” shall have the meanings set forth in the disability income
      insurance policy provided for Mr. Singhal by the Company.

    


    6.
      TERMINATION
      WITHOUT DUE CAUSE. In
      the event that Mr. Singhal is terminated by the Company at any time for any
      reason other than Due Cause, Mr. Singhal terminates his employment with the
      Company at any time for any reason or the Company or Mr. Singhal elects not
      to
      renew this Agreement for any reason, the Company’s sole liability to Mr. Singhal
      will be to pay the amounts set forth in Schedule
      A
      hereto.

    


    7.
      TERMINATION
      FOR DUE CAUSE. In
      the event that Mr. Singhal is terminated for Due Cause he will not be entitled
      to any severance payment, and the Company will have all of the rights and
      remedies available to it at law and in equity. In such a case, subject to the
      Company’s rights and remedies, including, without limitation, those of set-off,
      Mr. Singhal will be paid accrued base salary and vacation through the date
      of
      such termination and, for the period that he was employed by the Company during
      the fiscal year of termination, a bonus to the extent that such bonus has
      already been earned by Mr. Singhal due to the achievement of specific metrics
      and is determinable as of the date of termination. Payments under this Section
      7
      shall become payable as of the date of Mr. Singhal’s termination for Due Cause,
      subject to the provisions of Section 9 below.

    
       

      
        
          
          

        

        
          -
            2
            -

          
            

          

        

        
          
          

        

      

    

     

    “Due
      Cause” shall mean any of the following: (i)
      criminal conviction for willful fraud, embezzlement or theft against the Company
      or any of its affiliates; (ii) Mr. Singhal is
      convicted of, or pleads guilty or no contest to, a felony;
      (iii) willful, material nonperformance by Mr. Singhal (other than by reason
      of
      illness) of his material duties hereunder and failure to remedy such
      nonperformance within 30 days following written notice from the Board of
      Directors identifying the nonperformance and the actions required to cure it;
      or
      (iv) Mr. Singhal commits
      an act of gross negligence, engages in willful,
      material misconduct
      or otherwise acts with willful disregard for the Company’s best
      interests,
      and he fails to remedy such conduct within 30 days following written notice
      from
      the Board of Directors identifying the gross negligence, willful misconduct
      or
      willful disregard and the actions required to cure it (if such conduct can
      be
      cured). 

    


    Notwithstanding
      the foregoing, Mr. Singhal shall not be deemed to have been terminated for
      Due
      Cause unless and until there shall have been delivered to him (a) a copy of
      a
      resolution duly adopted by the unanimous affirmative vote of all of the members
      of the Board of Directors (exclusive of Mr. Singhal) at a meeting of the Board
      called and held for the purpose (after reasonable notice to Mr. Singhal and
      an
      opportunity for Mr. Singhal, together with his counsel, to be heard before
      the
      Board) finding that in the good faith opinion of the Board Mr. Singhal was
      guilty of conduct set forth above and specifying the particulars thereof in
      detail; and, if applicable (b) clear and conclusive evidence that Mr. Singhal
      engaged in willful
      fraud, embezzlement or theft against the Company or any of its affiliates or
      committed an act of gross negligence, engaged in willful, material misconduct
      or
      otherwise acted with willful disregard for the Company’s best
      interests.

    


    8.
      COMPANY
      CAR. Consistent
      with prior practice, during the term of this Agreement, the Company will provide
      Mr. Singhal with or will reimburse Mr. Singhal for the cost of leasing a company
      car of make and model comparable to that provided to senior executives of
      companies in the computer hardware or software industries, and the Company
      will
      reimburse Mr. Singhal for all operating expenses, maintenance and fees,
      including automobile insurance.

     

    9.
      SECTION
      409A COMPLIANCE. It
      is the intention of the parties that no payment or entitlement pursuant to
      this
      Agreement will give rise to any adverse tax consequences to any person pursuant
      to Section
      409A of the Internal Revenue Code of 1986, as amended (the “Code”). Any
      reimbursements due under any provision of this Agreement shall be paid on the
      earlier of (1) the date or dates specifically set forth in this Agreement,
      if
      any, and (2) March 15 of the year following the year in which the expense is
      paid. In the case of any payment on termination (other than in the event of
      death or disability within the meaning of Section 409A of the Code or compliance
      with the requirements of Proposed Regulation §1.409A-1(b)(iii) or (iv) or any
      successor thereto) while Mr. Singhal is a specified employee within the meaning
      of Section 409A of the Code, in no event will such payment be made earlier
      than
      6 months after the date Mr. Singhal’s employment with the Company terminates. In
      the event that, due to Section 409A of the Code, Mr. Singhal does not receive
      one or more cash payments he would otherwise be due during such six month
      period, all such delayed payments

    
       

      
        
          
          

        

        
          -
            3
            -

          
            

          

        

        
          
          

        

      

will be made
      on the first day after the six month anniversary of his employment termination,
      and thereafter any remaining payments shall be made in accordance with the
      previously agreed-upon schedule. Notwithstanding any provision in this Agreement
      to the contrary, this Agreement shall be interpreted, applied and to the minimum
      extent necessary, amended, so that this Agreement does not fail to meet, and
      is
      operated in accordance with, the requirements of Section 409A of the Code.
      Any
      reference in this Agreement to Section 409A of the Code shall also include
      any
      proposed, temporary or final regulations, or any other guidance, promulgated
      with respect to such Section by the U.S. Department of the Treasury or the
      Internal Revenue Service.

     

    10.
      ADVISORY
      SERVICES. In
      connection with a termination of Mr. Singhal’s employment, the Company and Mr.
      Singhal will be free to negotiate, but will have no obligation to enter into,
      an
      agreement whereby Mr. Singhal renders advisory services to the Company upon
      terms and conditions agreed to at such time. 

    


    11.
      SUCCESSORS
      AND ASSIGNS. This
      Agreement shall be binding upon and inure to the benefit of the parties and
      their respective successors and permitted assigns. The Company shall require
      any
      successor to all or substantially all of the business or assets of the Company
      to assume and agree to perform this agreement in the same manner and to the
      same
      extent that the Company would be required to perform it if no such succession
      had taken place. Neither this Agreement nor any rights or benefits hereunder
      may
      be assigned by Mr. Singhal, except that, upon the death of Mr. Singhal, his
      earned and unpaid economic benefits will be paid as provided herein, or if
      not
      so provided, to his heirs or beneficiaries. 

    


    12. MISCELLANEOUS.

    


    (a) Governing
      Law.
      The laws of the Commonwealth of Massachusetts shall apply to the construction,
      interpretation and enforcement of this Agreement, without application of its
      conflicts of laws principles.

    


    (b) Counterparts.
      This Agreement may be signed in two (2) counterparts, each of which shall be
      deemed an original and both of which shall together constitute one
      agreement.

    


    (c) Headings.
      The headings of the Sections hereof are inserted for convenience only and shall
      not be deemed to constitute a part, or affect the meaning, of this
      Agreement.

    


    (d) Complete
      Agreement; Modification.
      This Agreement sets forth the entire agreement of the parties with respect
      to
      the subject matter hereof, and supersedes any previous oral or written
      communications, negotiations, representations, understandings, or agreements
      between them. The Agreement Relating to Employment between Mr. Singhal and
      the
      Company (as successor to Frontier Software Development, Inc.), dated as of
      June
      1, 1994 as amended, is hereby terminated as of the Effective Date. Any
      modification of this Agreement shall be effective only if set forth in a written
      document signed by Mr. Singhal and a duly authorized officer or member of the
      Board of Directors of the Company other than Mr. Singhal. Nothing in this
      Agreement, nor any termination of Mr. Singhal’s employment with the Company for
      any 

    
       

      
        
          
          

        

        
          -
            4
            -

          
            

          

        

        
          
          

        

      

reason,
      shall affect the enforceability by Mr. Singhal against the Company of the
      Indemnification Agreement between him and the Company dated as of September
      13,
      2006.

    


    (e) Waiver.
      No consent to or waiver of any breach or default in the performance of any
      obligation hereunder shall be deemed or construed to be a consent to or waiver
      of any other breach or default in the performance of any of the same or any
      other obligations hereunder. No purported waiver hereunder shall be effective
      unless it is in writing and signed by the waiving party.

    


    (f) Severability.
      It is the express intent of the parties that in case any one or more of the
      provisions contained in this Agreement shall for any reason be held to be
      invalid, illegal or unenforceable, such invalidity, illegality or
      unenforceability shall not affect the other provisions of this Agreement, and
      this Agreement shall be construed as if such invalid, illegal or unenforceable
      provision had never been contained herein.

    


    [Signature
      Page to Follow]

    


    
      
        
        

      

      
        -
          5
          -

        
          

        

      

      
        
        

      

    



    


    


    


    
      	
              NETSCOUT
                SYSTEMS, INC.

            	
              MR.
                SINGHAL:

            
	 	 
	
              By:

                  
                /s/ David P.
                Sommers                       
                

                  
                Name: David P. Sommers

                  
                Title:   Chief Financial Officer and

                             Senior
                Vice President, General Operations

            	
               

              /s/
                Anil
                Singhal                            
                

              Anil
                Singhal

            


    

    


    


    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    SCHEDULE
      A

    


    1. Until
      the day that Mr. Singhal turns 65 years of age, the Company will provide him
      with the following payments and benefits, subject to the provisions of the
      Agreement:

     

    a) Monthly
      Payments.
      The Company will pay Mr. Singhal severance of $16,208 per month, minus any
      withholdings as required by law. Such payments will be paid concurrently with
      the Company’s regular payroll, but no less than monthly. In order to provide for
      a cost of living increase with respect to certain benefits to be borne by Mr.
      Singhal that the monthly payments under this Section 1(a) are intended to cover,
      $4,443 of such monthly payments will be adjusted on
      the first anniversary, and such adjusted amount each anniversary thereafter,
      of
      the date that the Company is first required to make such payments by any
      percentage increase in the Consumer Price Index (CPI-U), U.S. City Average,
      all
      items, published
      by the United States Bureau of Labor Statistics, during the immediately
      preceding twelve (12) month period.

     

    b) Benefits.
      The Company will either (a) continue Mr. Singhal’s family coverage under the
      Company’s group health, dental and vision plans at no expense to Mr. Singhal or
      (b) will pay for Mr. Singhal to obtain similar and comparable benefits.


     

    2. In
      the event that Mr. Singhal dies before the age of 65:

     

    a) The
      Company will pay the balance of the severance payments payable under Section
      1(a) above to Mr. Singhal’s wife (or in the event of his wife’s death, his
      estate) in a lump sum on a net present value basis as reasonably determined
      by
      the Company. Such lump sum payment will be paid in the year of death if Mr.
      Singhal dies prior to November 1 and otherwise in January of the year following
      the year of death.

     

    b) Until
      the date that Mr. Singhal would have turned the age of 65, the Company will
      continue to provide his wife and children with group health, dental and vision
      benefits at no expense to them, to the extent they are eligible for coverage
      under such group plans, or will pay for them to obtain similar and comparable
      benefits for as long as they would have been eligible for coverage if he had
      continued to work as an employee of the Company until he turned age 65.


     

    3. With
      respect to bonus, Mr. Singhal will be eligible to receive the bonus provided
      for
      under Section 2 of the Agreement with respect to the full fiscal year during
      which the applicable termination pursuant to the Agreement occurred. Any portion
      of such bonus that has already been earned by Mr. Singhal due to the achievement
      of specific metrics and is determinable as of the date of termination will
      become payable as of the date of termination, and any other portion of such
      bonus will be paid at the same time or times as other executive level officers
      of the Company, subject, in each case, to the provisions of Section 9 of the
      Agreement.