Document:

exv10w2

Exhibit 10.2

SoundBite Communications, Inc.

Executive Retention Agreement

     This Executive Retention Agreement is entered into between SoundBite Communications,
Inc., a Delaware corporation (the “Company”), and James A. Milton (the “Executive”) as of May 1,
2009.

     Whereas, the board of directors of the Company (the “Board”) has determined that
appropriate steps should be taken to reinforce and encourage the continued employment and
dedication of the Company’s key personnel;

     Now, Therefore, as an inducement for and in consideration of the Executive accepting
employment with the Company, the Company agrees that the Executive shall receive the severance
benefits set forth in this Agreement in the event the Executive’s employment with the Company is
terminated under the circumstances described below.

     1. Key Definitions. As used herein, the following terms shall have the following
respective meanings:

     1.1. “Cause” means termination for any one of the following reasons:

	 	(a)	 	the Executive’s willful misconduct or gross negligence in the
performance of his duties as an employee and officer of the Company (as
determined by a majority of the directors of the Company other than, if
applicable, the Executive); or
	 
	 	(b)	 	the Executive’s criminal misconduct in connection with the
performance of his duties as an employee and officer of the Company.

     1.2. “Change in Control” means:

	 	(a)	 	a sale by the Company, whether for cash or securities, of all
or substantially all of its assets; or
	 
	 	(b)	 	a merger or consolidation of the Company with or into another
entity in a transaction where the shares of the Company’s capital stock
outstanding immediately prior to the closing of such merger or consolidation
represent or are converted into or exchanged for shares that represent less
than a majority of the shares of capital stock of the resulting or surviving
entity outstanding immediately after the closing of such merger or
consolidation.

     1.3. “Disability” means the Executive’s absence from the full-time performance of
the Executive’s duties with the Company for 180 consecutive calendar days as a result of
incapacity due to mental or physical illness that is determined to be total and permanent by a
physician selected by the Company or its insurers and acceptable to the Executive or the
Executive’s legal representative.

     1.4. “Good Reason" means the occurrence, without the Executive’s
written consent, of any of the events or circumstances set forth in subsections (a) through
(f) below:

	 	(a)	 	a substantial reduction in the scope or nature of the
Executive’s responsibilities, duties, authorities, position, powers or
reporting structure or relationships;
	 
	 	(b)	 	a reduction in the Executive’s annual base salary;
	 
	 	(c)	 	the failure by the Company to:

 

 

	 	(i)	 	continue in effect any material compensation or benefit plan or
program (including any life insurance, medical, health and accident or
disability plan and any vacation or automobile program or policy) (a “Benefit
Plan”) in which the Executive participates or that is applicable to the
Executive, unless an equitable arrangement (embodied in an ongoing substitute
or alternative plan) has been made with respect to such plan or program,
	 
	 	(ii)	 	continue the Executive’s participation therein (or in
such substitute or alternative plan) on a basis not materially less
favorable, both in terms of the amount of benefits provided and the level
of the Executive’s participation relative to other participants, than the
basis existing previously,
	 
	 	(iii)	 	award cash bonuses to the Executive in amounts and
in a manner substantially consistent with past practice in light of the
Company’s financial performance, or
	 
	 	(iv)	 	a change by the Company in the location at which the
Executive performs his principal duties for the Company to a new location
that is more than 50 miles from the location at which the Executive
previously performed his principal duties for the Company;

	 	(d)	 	the failure of the Company to obtain the agreement from any
successor to the Company to assume and agree to perform this Agreement, as
required by Section 6.1;
	 
	 	(e)	 	any failure of the Company to pay or provide to the Executive
any portion of the Executive’s compensation or benefits due under any Benefit
Plan within seven days of the date such compensation or benefits are due; or
	 
	 	(f)	 	any material breach by the Company of this Agreement or any
employment agreement with the Executive.

Notwithstanding the foregoing, any such event or circumstance shall not be deemed to
constitute Good Reason if, prior to the Date of Termination specified in the Notice of
Termination (each as defined in Section 3.2(a)) given by the Executive in respect thereof,
such event or circumstance has been fully corrected and the Executive has been reasonably
compensated for any losses or damages resulting therefrom, provided that such right of
correction by the Company shall only apply to the first Notice of Termination for Good Reason
given by the Executive. The Executive’s right to terminate his employment for Good Reason
shall not be affected by his incapacity due to physical or mental illness.

     2. Term of Agreement. This Agreement, and all rights and obligations of the parties
hereunder, shall be effective for the period (the “Term”) commencing as of the date hereof and
continuing in effect through December 31, 2009; provided, however, that commencing on January 1,
2010 and each January 1 thereafter, the Term shall be automatically extended for one additional
year unless, not later than 90 days prior to the scheduled expiration of the Term (or any extension
thereof), the Company shall have given the Executive written notice that the Term will not be
extended.

     3. Employment Status; Termination.

     3.1. Not an Employment Contract. The Executive acknowledges that this Agreement
does not constitute a contract of employment or impose on the Company any obligation to retain
the

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Executive as an employee and that this Agreement does not prevent the Executive from
terminating employment at any time.

     3.2. Termination of Employment.

     (a) Any termination of the Executive’s employment by the Company or by the Executive
(other than due to the death of the Executive) shall be communicated by a written notice
to the other party hereto (the “Notice of Termination”), given in accordance with Section
7. Any Notice of Termination shall:

	 	(i)	 	indicate the specific termination provision (if any)
of this Agreement relied upon by the party giving such notice,
	 
	 	(ii)	 	to the extent applicable, set forth in reasonable
detail the facts and circumstances claimed to provide a basis for
termination of the Executive’s employment under the provision so indicated
and
	 
	 	(iii)	 	specify the Date of Termination (as defined below).

The effective date of an employment termination (the “Date of Termination”) shall be the
close of business on the date specified in the Notice of Termination (which date may not
be less than 15 days or more than 120 days after the date of delivery of such Notice of
Termination), in the case of a termination other than one due to the Executive’s death,
or the date of the Executive’s death, as the case may be. In the event the Company fails
to satisfy the requirements of Section 3.2(a) regarding a Notice of Termination, the
purported termination of the Executive’s employment pursuant to such Notice of
Termination shall not be effective for purposes of this Agreement.

     (b) The failure by the Executive or the Company to set forth in the Notice of
Termination any fact or circumstance that contributes to a showing of Good Reason or
Cause shall not waive any right of the Executive or the Company, respectively, hereunder
or preclude the Executive or the Company, respectively, from asserting any such fact or
circumstance in enforcing the Executive’s or the Company’s rights hereunder.

     (c) Any Notice of Termination for Cause given by the Company must be given within 90
days of the occurrence of the event(s) or circumstance(s) that constitute(s) Cause.
Prior to any Notice of Termination for Cause being given (and prior to any termination
for Cause being effective), the Executive shall be entitled to a hearing before the Board
at which he may, at his election, be represented by counsel and at which he shall have a
reasonable opportunity to be heard. Such hearing shall be held on not less than 15 days
prior written notice to the Executive stating the Board’s intention to terminate the
Executive for Cause and stating in detail the particular event(s) or circumstance(s) that
the Board believes constitutes Cause for termination.

     (d) Any Notice of Termination for Good Reason given by the Executive must be given
within 90 days of the occurrence of the event(s) or circumstance(s) that constitute(s)
Good Reason.

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     4. Benefits to Executive.

     4.1. Compensation.

     (a) Termination Without Cause or for Good Reason. Subject to Section 4.3,
if the Executive’s employment with the Company is terminated by the Company (other than
for Cause, Disability or death) or by the Executive for Good Reason, then the Executive
shall be entitled to the following benefits:

	 	(i)	 	the Company shall pay to the Executive in a lump sum
in cash within 30 days after the Date of Termination the aggregate of the
following amounts:

	 	(1)	 	the sum of (A) the Executive’s base salary
through the Date of Termination, (B) the product of (x) the annual
bonus paid or payable (including any bonus or portion thereof that
has been earned but deferred) for the most recently completed fiscal
year and (y) a fraction, the numerator of which is the number of days
in the current fiscal year through the Date of Termination, and the
denominator of which is 365, (C) the amount of any commission earned
through the Date of Termination, and (D) the amount of any
compensation previously deferred by the Executive (together with any
accrued interest or earnings thereon) and any accrued vacation pay,
in each case to the extent not previously paid (the amounts described
in clauses (A), (B), (C) and (D) are referred to as the “Accrued
Obligations”); and
	 
	 	(2)	 	the amount equal to (A) 1.0 multiplied by
(B) the sum of (x) the Executive’s highest annual base salary at any
time during the twelve months prior to the date of delivery of the
Notice of Termination, and (y) the Executive’s commission for the
most recently completed fiscal year.

	 	(ii)	 	for 12 months after the Date of Termination, or such
longer period as may be provided by the terms of the appropriate plan,
program, practice or policy, the Company shall continue to provide
benefits to the Executive and the Executive’s family at least equal to
those that would have been provided to them if the Executive’s employment
had not been terminated, in accordance with the applicable Benefit Plans
in effect on the date of delivery of the Notice of Termination or, if more
favorable to the Executive and his family, in effect generally at any time
thereafter with respect to other peer executives of the Company and its
affiliated companies; provided, however, (A) that if the Executive becomes
reemployed with another employer and is eligible to receive a particular
type of benefits (e.g., health insurance benefits) from such employer on
terms at least as favorable to the Executive and his family as those being
provided by the Company, then the Company shall no longer be required to
provide those particular benefits to the Executive and his family and (B)
to the extent such payments are taxable and/or extend beyond the period of
time during which the Executive would be entitled (or would, but for this
clause (B)) to COBRA continuation coverage under a group health plan of
the Company, such payments shall be made on a monthly basis);
	 
	 	(iii)	 	to the extent not previously paid or provided, the
Company shall pay or provide to the Executive within 90 days after the
Date of Termination any

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	 	 	 	other amounts or benefits required to be paid or provided
or that the Executive is eligible to receive following the Executive’s
termination of employment under any plan, program, policy, practice,
contract or agreement of the Company and its affiliated companies (such
other amounts and benefits shall be hereinafter referred to as the “Other
Benefits”); and
	 	(iv)	 	for purposes of determining eligibility (but not the
time of commencement of benefits) of the Executive for retiree benefits to
which the Executive is entitled, the Executive shall be considered to have
remained employed by the Company until 12 months after the Date of
Termination.

     (b) Resignation without Good Reason; Termination for Death or Disability.
Subject to Section 4.3, if the Executive voluntarily terminates his employment with the
Company, excluding a termination for Good Reason, or if the Executive’s employment with
the Company is terminated by reason of the Executive’s death or Disability, then the
Company shall (i) pay the Executive (or his estate, if applicable), in a lump sum in cash
within 30 days after the Date of Termination, the Accrued Obligations and (ii) pay or
provide to the Executive within 90 days after the Date of Termination the Other Benefits.

     (c) Termination for Cause. If the Company terminates the Executive’s
employment with the Company for Cause, then the Company shall (i) pay the Executive, in a
lump sum in cash within 30 days after the Date of Termination, the sum of (A) the
Executive’s annual base salary through the Date of Termination and (B) the amount of any
compensation previously deferred by the Executive, in each case to the extent not
previously paid, and (ii) pay or provide to the Executive within 90 days after the Date
of Termination the Other Benefits.

     4.2. Taxes.

     (a) Notwithstanding any other provision of this Agreement, except as set forth in
Section 4.2(b), in the event that the Company undergoes a “Change in Ownership or
Control” (as defined below), the Company shall not be obligated to provide to the
Executive a portion of any “Contingent Compensation Payments” (as defined below) that the
Executive would otherwise be entitled to receive to the extent necessary to eliminate any
“excess parachute payments” (as defined in Section 280G(b)(1) of the Internal Revenue
Code of 1986, as amended (the “Code”)) for the Executive. For purposes of this Section
4.2, the Contingent Compensation Payments so eliminated shall be referred to as the
“Eliminated Payments” and the aggregate amount (determined in accordance with Treasury
Regulation Section 1.280G-1, Q/A-30 or any successor provision) of the Contingent
Compensation Payments so eliminated shall be referred to as the “Eliminated Amount.”

     (b) Notwithstanding the provisions of Section 4.2(a), no such reduction in
Contingent Compensation Payments shall be made if (i) the Eliminated Amount (computed
without regard to this sentence) exceeds (ii) 110% of the aggregate present value
(determined in accordance with Treasury Regulation Section 1.280G-1, Q/A-31 and Q/A-32 or
any successor provisions) of the amount of any additional taxes that would be incurred by
the Executive if the Eliminated Payments (determined without regard to this sentence)
were paid to him (including, state and federal income taxes on the Eliminated Payments,
the excise tax imposed by Section 4999 of the Code payable with respect to all of the
Contingent Compensation Payments in excess of the Executive’s “base amount” (as defined
in Section 280G(b)(3) of the Code), and any withholding taxes). The override of such
reduction in Contingent Compensation Payments pursuant to this Section 4.2(b) shall be
referred to as a “Section 4.2(b) Override.” For purpose of this paragraph, if any
federal or state income taxes would be attributable to the receipt of

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any Eliminated Payment, the amount of such taxes shall be computed by multiplying
the amount of the Eliminated Payment by the maximum combined federal and state income tax
rate provided by law.

     (c) For purposes of this Section 4.2 the following terms shall have the following
respective meanings:

     (i) “Change in Ownership or Control” shall mean a change in the ownership or
effective control of the Company or in the ownership of a substantial portion of the
assets of the Company determined in accordance with Section 280G(b)(2) of the Code.

     (ii) “Contingent Compensation Payment” shall mean any payment (or benefit) in
the nature of compensation that is made or made available (under this Agreement or
otherwise) to a “disqualified individual” (as defined in Section 280G(c) of the
Code) and that is contingent (within the meaning of Section 280G(b)(2)(A)(i) of the
Code) on a Change in Ownership or Control of the Company.

     (d) Any payments or other benefits otherwise due to the Executive following a Change
in Ownership or Control that could reasonably be characterized (as determined by the
Company) as Contingent Compensation Payments (the “Potential Payments”) shall not be made
until the dates provided for in this Section 4.2(d). Within 30 days after each date on
which the Executive first becomes entitled to receive (whether or not then due) a
Contingent Compensation Payment relating to such Change in Ownership or Control, the
Company shall determine and notify the Executive (with reasonable detail regarding the
basis for its determinations) (i) which Potential Payments constitute Contingent
Compensation Payments, (ii) the Eliminated Amount and (iii) whether the Section 4.2(b)
Override is applicable. Within 30 days after delivery of such notice to the Executive,
the Executive shall deliver a response to the Company (the “Executive Response”) stating
either (A) that he agrees with the Company’s determination pursuant to the preceding
sentence, in which case he shall indicate, if applicable, which Contingent Compensation
Payments, or portions thereof (the aggregate amount of which, determined in accordance
with Treasury Regulation Section 1.280G-1, Q/A-30 or any successor provision, shall be
equal to the Eliminated Amount), shall be treated as Eliminated Payments or (B) that he
disagrees with such determination, in which case he shall set forth (i) which Potential
Payments should be characterized as Contingent Compensation Payments, (ii) the Eliminated
Amount, (iii) whether the Section 4.2(b) Override is applicable, and (iv) which (if any)
Contingent Compensation Payments, or portions thereof (the aggregate amount of which,
determined in accordance with Treasury Regulation Section 1.280G-1, Q/A-30 or any
successor provision, shall be equal to the Eliminated Amount, if any), shall be treated
as Eliminated Payments. In the event that the Executive fails to deliver an Executive
Response on or before the required date, the Company’s initial determination shall be
final and the Contingent Compensation Payments that shall be treated as Eliminated
Payments shall be determined by the Company in its absolute discretion. If the Executive
states in the Executive Response that he agrees with the Company’s determination, the
Company shall make the Potential Payments to the Executive within three business days
following delivery to the Company of the Executive Response (except for any Potential
Payments which are not due to be made until after such date, which Potential Payments
shall be made on the date on which they are due). If the Executive states in the
Executive Response that he disagrees with the Company’s determination, then, for a period
of 60 days following delivery of the Executive Response, the Executive and the Company
shall use good faith efforts to resolve such dispute. If such dispute is not resolved
within such 60-day period, such dispute shall be settled exclusively by arbitration in
Boston, Massachusetts, in accordance with the rules of the

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American Arbitration Association then in effect. Judgment may be entered on the
arbitrator’s award in any court having jurisdiction. The Company shall, within three
business days following delivery to the Company of the Executive Response, make to the
Executive those Potential Payments as to which there is no dispute between the Company
and the Executive regarding whether they should be made (except for any such Potential
Payments which are not due to be made until after such date, which Potential Payments
shall be made on the date on which they are due). The balance of the Potential Payments
shall be made within three business days following the resolution of such dispute. The
Company shall not be obligated to pay any interest with respect to any payments to be
made to the Executive following the resolution of such dispute.

     (e) The provisions of this Section 4.2 are intended to apply to any and all payments
or benefits available to the Executive under this Agreement or any other agreement or
plan of the Company under which the Executive receives Contingent Compensation Payments.

     4.3. Payments Subject to Section 409A.

     (a) Subject to this Section 4.3, payments or benefits under Section 4.1 shall begin
only upon the date of a “separation from service” of the Executive (determined as set
forth below) which occurs on or after the termination of the Executive’s employment. The
following rules shall apply with respect to distribution of the payments and benefits, if
any, to be provided to the Executive under Section 4.1, as applicable:

     (i) It is intended that each installment of the payments and benefits provided
under Section 4.1 shall be treated as a separate “payment” for purposes of Section
409A of the Code and the guidance issued thereunder (“Section 409A”). Neither the
Company nor the Executive shall have the right to accelerate or defer the delivery
of any such payments or benefits except to the extent specifically permitted or
required by Section 409A.

     (ii) If, as of the date of the “separation from service” of the Executive from
the Company, the Executive is not a “specified employee” (within the meaning of
Section 409A), then each installment of the payments and benefits shall be made on
the dates and terms set forth in Section 4.1.

     (iii) If, as of the date of the “separation from service” of the Executive from
the Company, the Executive is a “specified employee” (within the meaning of Section
409A), then:

	 	(1)	 	Each installment of the payments and
benefits due under Section 4.1 that, in accordance with the dates and
terms set forth herein, will in all circumstances, regardless of when
the separation from service occurs, be paid within the Short-Term
Deferral Period (as hereinafter defined) shall be treated as a
short-term deferral within the meaning of Treasury Regulation Section
1.409A-1(b)(4) to the maximum extent permissible under Section 409A.
For purposes of this Agreement, the “Short-Term Deferral Period”
means the period ending on the later of the 15th day of
the third month following the end of the Executive’s tax year in
which the separation from service occurs and the 15th day
of the third month following the end of the Company’s tax year in
which the separation from service occurs; and

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	 	(2)	 	Each installment of the payments and
benefits due under Section 4.1 that is not described in Section
4.3(a)(iii)(1) and that would, absent this subsection, be paid within
the six-month period following the “separation from service” of the
Executive from the Company shall not be paid until the date that is
six months and one day after such separation from service (or, if
earlier, the Executive’s death), with any such installments that are
required to be delayed being accumulated during the six-month period
and paid in a lump sum on the date that is six months and one day
following the Executive’s separation from service and any subsequent
installments, if any, being paid in accordance with the dates and
terms set forth herein; provided, however, that the preceding
provisions of this sentence shall not apply to any installment of
payments and benefits if and to the maximum extent that that such
installment is deemed to be paid under a separation pay plan that
does not provide for a deferral of compensation by reason of the
application of Treasury Regulation 1.409A-1(b)(9)(iii) (relating to
separation pay upon an involuntary separation from service). Any
installments that qualify for the exception under Treasury Regulation
Section 1.409A-1(b)(9)(iii) must be paid no later than the last day
of the Executive’s second taxable year following his taxable year in
which the separation from service occurs.

     (b) The determination of whether and when a separation from service of the Executive
from the Company has occurred shall be made and in a manner consistent with, and based on
the presumptions set forth in, Treasury Regulation Section 1.409A-1(h). Solely for
purposes of this Section 4.3(b), “Company” shall include all persons with whom the
Company would be considered a single employer under Section 414(b) and (c) of the Code.

     (c) All reimbursements and in-kind benefits provided under the Agreement shall be
made or provided in accordance with the requirements of Section 409A to the extent that
such reimbursements or in-kind benefits are subject to Section 409A.

     4.4. Mitigation. The Executive shall not be required to mitigate the amount of
any payment or benefits provided for in this Section 4 by seeking other employment or
otherwise. Further, except as provided in Section 4.1(a)(ii), the amount of any payment or
benefits provided for in this Section 4 shall not be reduced by any compensation earned by the
Executive as a result of employment by another employer, by retirement benefits, by offset
against any amount claimed to be owed by the Executive to the Company or otherwise.

     4.5. Release. The obligation of the Company to make the payments and provide the
benefits to the Executive under Sections 4.1(a)(i)(2) and 4.1(a)(ii) is conditioned upon the
Executive signing a release of claims, in a customary and reasonable form requested by the
Company (the “Executive Release”), within such period of time as the Company may specify
following the Date of Termination, and upon the Executive Release becoming effective in
accordance with its terms. The Company shall not be obligated to make any payments to the
Executive under Section 4.1(a)(i)(2) until the Executive Release has become effective;
provided that at such time as the Executive Release becomes effective, the Company shall
promptly pay to the Executive any payments that would otherwise have been made to the
Executive between the Date of Termination and date on which the Executive Release becomes
effective.

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     5. Disputes. All claims by the Executive for benefits under this Agreement shall be
directed to and determined by the Board and shall be in writing. Any denial by the Board of a
claim for benefits under this Agreement shall be delivered to the Executive in writing and shall
set forth the specific reasons for the denial and the specific provisions of this Agreement relied
upon. The Board shall afford a reasonable opportunity to the Executive for a review of the
decision denying a claim. Any further dispute or controversy arising under or in connection with
this Agreement shall be settled exclusively by arbitration in Boston, Massachusetts, in accordance
with the rules of the American Arbitration Association then in effect. Judgment may be entered on
the arbitrator’s award in any court having jurisdiction.

     6. Successors.

     6.1. Successor to Company. The Company shall require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially
all of the business or assets of the Company expressly to assume and agree to perform this
Agreement to the same extent that the Company would be required to perform it if no such
succession had taken place. Failure of the Company to obtain an assumption of this Agreement
at or prior to the effectiveness of any succession shall be a breach of this Agreement and
shall constitute Good Reason if the Executive elects to terminate employment, except that for
purposes of implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination. As used in this Agreement, “Company” shall
mean the Company as defined above and any successor to its business or assets as aforesaid
that assumes and agrees to perform this Agreement, by operation of law or otherwise.

     6.2. Successor to Executive. This Agreement shall inure to the benefit of and be
enforceable by the Executive’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive should die while any
amount would still be payable to the Executive or his family hereunder if the Executive had
continued to live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the executors, personal representatives or
administrators of the Executive’s estate.

     7. Notice. All notices, instructions and other communications given hereunder or in
connection herewith shall be in writing. Any such notice, instruction or communication shall be
sent either (i) by registered or certified mail, return receipt requested, postage prepaid, or (ii)
prepaid via a reputable nationwide overnight courier service, in each case addressed to the
Company, at 22 Crosby Drive, Bedford, Massachusetts 01730, Attention: Chief Financial Officer, and
to the Executive at his address set forth on the signature page of this Agreement (or to such other
address as either the Company or the Executive may have furnished to the other in writing in
accordance herewith). Any such notice, instruction or communication shall be deemed to have been
delivered five business days after it is sent by registered or certified mail, return receipt
requested, postage prepaid, or one business day after it is sent via a reputable nationwide
overnight courier service. Either party may give any notice, instruction or other communication
hereunder using any other means, but no such notice, instruction or other communication shall be
deemed to have been duly delivered unless and until it actually is received by the party for whom
it is intended.

     8. Miscellaneous.

     8.1. Employment by Subsidiary. For purposes of this Agreement, the Executive’s
employment with the Company shall not be deemed to have terminated solely as a result of the
Executive continuing to be employed by a wholly-owned subsidiary of the Company.

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     8.2. Severability. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.

     8.3. Injunctive Relief. The Company and the Executive agree that any breach of
this Agreement by the Company is likely to cause the Executive substantial and irrevocable
damage and therefore, in the event of any such breach, in addition to such other remedies that
may be available, the Executive shall have the right to specific performance and injunctive
relief.

     8.4. Governing Law. The validity, interpretation, construction and performance
of this Agreement shall be governed by the internal laws of the Commonwealth of Massachusetts,
without regard to conflicts of law principles.

     8.5. Waivers. No waiver by the Executive at any time of any breach of, or
compliance with, any provision of this Agreement to be performed by the Company shall be
deemed a waiver of that or any other provision at any subsequent time.

     8.6. Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed to be an original but both of which together shall constitute one and the same
instrument.

     8.7. Tax Withholding. Any payments provided for hereunder shall be paid net of
any applicable tax withholding required under federal, state or local law.

     8.8. Entire Agreement. This Agreement sets forth the entire agreement of the
parties hereto in respect of the subject matter contained herein and supersedes all prior
agreements, promises, covenants, arrangements, communications, representations or warranties,
whether oral or written, by any officer, employee or representative of any party hereto in
respect of the subject matter contained herein; and any prior agreement of the parties hereto
in respect of the subject matter contained herein is hereby terminated and cancelled.
Notwithstanding the foregoing, this Agreement shall not be deemed to supersede, in part or in
whole, the terms of (a) the Amended and Restated Change in Control Agreement entered into
between the Company and the Executive as of the date hereof or (b) any stock option agreement,
whether outstanding as of the date of this Agreement or granted subsequently, even if the
vesting of options granted thereunder may be accelerated by an event or occurrence that
constitutes a Change in Control for purposes of this Agreement.

     8.9. Construction. The headings of the Sections of this Agreement are included
only for convenience and shall not affect the meaning or interpretation of this Agreement.
References herein to Sections shall mean such Sections of this Agreement, except as otherwise
specified. The words “herein” and “hereof” and other words of similar import refer to this
Agreement as a whole and not to any particular part of this Agreement. The word “including”
as used herein shall not be construed so as to exclude any other thing not referred to or
described.

     8.10. Amendments. This Agreement may be amended or modified only by a written
instrument executed by both the Company and the Executive.

     8.11. Executive’s Acknowledgements. The Executive acknowledges that he:

	 	(a)	 	has read this Agreement;
	 
	 	(b)	 	has been represented in the preparation, negotiation, and
execution of this Agreement by legal counsel of the Executive’s own choice or
has voluntarily declined to seek such counsel;

10

 

	 	(c)	 	understands the terms and consequences of this Agreement; and
	 
	 	(d)	 	understands that the law firm of WilmerHale is acting as
counsel to the Company in connection with the transactions contemplated by this
Agreement, and is not acting as counsel for the Executive.

     8.12. Section 409A. This Agreement is intended to comply with the provisions of
Section 409A and the Agreement shall, to the extent practicable, be construed in accordance
therewith. The Company makes no representation or warranty and shall have no liability to the
Executive or any other person if any provisions of this Agreement are determined to constitute
deferred compensation subject to Section 409A and do not satisfy an exemption from, or the
conditions of, Section 409A.

     In Witness Whereof, the parties hereto have executed this Agreement as of the day and
year first set forth above.

	 	 	 	 	 
	 	SoundBite Communications, Inc.

 	 
	 	By:  	 	 
	 	 	Chief Operating Officer and 	 
	 	 	Chief Financial Officer 	 
	 
	 	James A. Milton

 	 
	 	
 	 
	 
	 	Address of Executive:
 	 
	 	2508 Beacon Crest Drive

Plano, Texas  75093 	 
	 

11exv10w3

Exhibit 10.3

SoundBite Communications, Inc.

Change in Control Agreement

May 1, 2009

Mr. James A. Milton

2508 Beacon Crest Drive

Plano, Texas 75093

Dear Jim:

     This change in control agreement (this “Agreement”) will confirm the terms of certain
compensation due to you by SoundBite Communications, Inc. and any successor (the “Company”) in the
event of a Change in Control (as defined below) of the Company.

     1. Definitions.

     (a) “Awards” means stock, options, awards and purchase rights granted to you under any of
the stock plans or stock option plans of the Company and outstanding immediately before a
Change in Control.

     (b) “Cause” means termination of your employment by the Company for either of the
following reasons:

	 	(i)	 	your willful misconduct or gross negligence in the performance
of your duties as an employee and officer of the Company (as determined by a
majority of the directors of the Company other than, if applicable, you); or
	 
	 	(ii)	 	your criminal misconduct by you in connection with the
performance of your duties as an employee and officer of the Company.

     (c) “Change in Control” means:

	 	(i)	 	a sale by the Company, whether for cash or securities, of all
or substantially all of its assets; or
	 
	 	(ii)	 	a merger or consolidation of the Company with or into another
entity in a transaction where the shares of the Company’s capital stock
outstanding immediately prior to the closing of such merger or consolidation
represent or are converted into or exchanged for shares that represent less
than a majority of the shares of capital stock of the resulting or surviving
entity outstanding immediately after the closing of such merger or
consolidation.

Notwithstanding the foregoing, the issuance by the Company of its capital stock in an
equity financing, either in a private or public transaction, shall not constitute a Change in
Control.

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     (d) “Employment Event” means:

	 	(i)	 	the termination of your employment for any reason other than
Cause;
	 
	 	(ii)	 	a substantial reduction in the scope or nature of your
responsibilities, duties, authorities, position, powers or reporting structure
or relationships in effect immediately prior to a Change in Control (other than
for Cause); or
	 
	 	(iii)	 	the Company moves your place of employment more than 50 miles
from the location in effect immediately prior to a Change in Control.

     2. Acceleration of Vesting.

     (a) In the event of the occurrence of a Change in Control, the following percentage of
your unvested Awards shall become fully vested and exercisable effective immediately prior to
the closing of the Change in Control:

	 	 	 	 	 	 	 	 	 
	Date of Change in Control	 	Initial Vesting	 	Subsequent Vesting
	From May 1, 2009 through May 31, 2009
	 	 	0	%	 	 	0	%
	From June 1 through June 30, 2009
	 	 	4-1/6	%	 	 	16-2/3	%
	From July 1 through July 31, 2009
	 	 	8-1/3	%	 	 	33-1/3	%
	From August 1, 2009 through August 31, 2009
	 	 	12-1/2	%	 	 	50	%
	From September 1, 2009 through September 30,
2009
	 	 	16-2/3	%	 	 	66-2/3	%
	From October 1, 2009 through October 31, 2009
	 	 	20-5/6	%	 	 	83-1/3	%
	On or after November 1, 2009
	 	 	25	%	 	 	100	%

provided that in the event the Company’s board of directors does not, in connection with the
Change in Control, make provision for all of the Awards to be assumed, or substantially
equivalent Awards to be substituted, by the acquiring, succeeding or surviving
corporation (as the case may be), then the percentage of the Awards set forth under
“Subsequent Vesting” above opposite the period during which the Change in Control
occurred shall become fully vested and exercisable effective immediately prior to the
closing of the Change in Control.

     (b) In the event an Employment Event occurs within six months following the closing of a
Change in Control, the percentage of the Awards set forth under “Subsequent Vesting” in
Section 2(a) above opposite the period during which the Change in Control occurred shall
become fully vested and exercisable effective immediately upon the occurrence of the
Employment Event.

     3. General.

     (a) Nothing in this Agreement is intended, or shall be construed, to restrict or
otherwise limit the Company’s right to terminate your employment with or without Cause and
with or without notice. This Agreement is not a guarantee of continued employment, it being
understood you are and continue to be employed at will.

     (b) This Agreement shall constitute the sole and entire agreement between the parties
with respect to the subject matter hereof, and supersedes and cancels all prior, concurrent
and/or contemporaneous arrangements, understandings, agreements and/or discussions, whether
written or oral, by or between the parties regarding the subject matter hereof; provided,
however, that this Agreement is not intended to, and shall not, supersede, affect, limit,
modify or terminate any of the following, all of which shall remain in full force and effect
in accordance with their respective

-2-

 

terms: (i) any written stock or stock option agreements between you and the Company
(except as expressly modified hereby); (ii) the Executive Retention Agreement entered into
between the Company and you as of the date hereof; (iii) any written agreements between you
and the Company concerning noncompetition, nonsolicitation, inventions and/or nondisclosure
obligations; and (iv) any written agreements between you and the Company that do not relate to
the subject matter hereof.

     (c) You may not assign any rights or delegate any duties or obligations under this
Agreement. The Company shall require its assigns and successors to assume this Agreement and
to agree to perform hereunder in the same manner and to the same extent that the Company would
be required to perform if no such assignment or succession had taken place. Regardless of
whether such an agreement is executed, this Agreement shall inure to the benefit of, and be
binding upon, the Company’s respective successors and assigns and your heirs, estate,
legatees, executors, administrators, and legal representatives.

     (d) The validity, interpretation, construction and performance of this Agreement shall be
governed by the internal laws of the Commonwealth of Massachusetts, without regard to
conflicts of law principles.

     Please indicate your acceptance of this Agreement by signing the enclosed copy of this
Agreement and returning it to me.

	 	 	 	 	 
	 	Very truly yours,

SoundBite Communications, Inc.

 	 
	 	By:  	
 	 
	 	 	Chief Operating Officer and 	 
	 	 	Chief Financial Officer 	 
	 

Accepted and Agreed:

James A. Milton

                                                                              

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