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Exhibit 10.43
CHANGE IN CONTROL AGREEMENT
AGREEMENT dated as of December 30, 1998 by and between Aspen Technology,
Inc., a Massachusetts corporation (the "Company"), and Xxxxx Xxxxxx (the
"Executive").
WHEREAS, the Company considers it essential to the best interests of its
stockholders to xxxxxx the continuous employment of key management personnel;
and
WHEREAS, the Company has determined that appropriate steps should be taken
to reinforce and encourage the continued attention and dedication of members of
the Company's management, including the Executive, to their assigned duties
with the Company without distraction in the face of potentially disturbing
circumstances arising from the possibility of a Change in Control (as defined
herein);
NOW THEREFORE, in consideration of the premises and the mutual covenants
herein contained, and for other valuable consideration, the Company and the
Executive hereby agree as follows:
1. Defined Terms. The definitions of capitalized terms used in this
Agreement are provided in the last section hereof.
2. Term of Agreement. This Agreement shall commence on the date hereof and
shall continue in effect through June 30, 2002. Thereafter, this Agreement
shall be automatically renewed for successive one year terms unless the Company
sends written notice of termination to the Executive at least 60 days before
the expiration date of this Agreement, which termination will be effective at
that expiration date. If a Change in Control shall have occurred during the
term of this Agreement, however, this Agreement shall continue in effect for a
period of three years beyond the last day of the month in which the Change in
Control occurred. Notwithstanding the foregoing provisions of this Section 2,
this Agreement shall terminate, unless earlier terminated in accordance with
this Agreement, (i) one year after the Executive is notified in accordance with
Section 9 hereof that the Compensation Committee, upon recommendation of the
Company's chief executive officer, has voted to terminate this Agreement or
(ii) if earlier, immediately after the Executive is notified in accordance with
Section 9 hereof that the Compensation Committee has determined that the
Executive's level of responsibility (other than reporting responsibility) has
substantially changed from the Executive's current level of responsibility,
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in either case only if the notification occurs prior to a Potential Change in
Control that results in a Change in Control.
3. Payments After Change in Control.
3.1 If the Executive's employment shall be terminated for any reason
following a Change in Control and during the term of this Agreement, the
Company shall pay the Executive's full salary to the Executive through the Date
of Termination at the rate in effect at the time the Notice of Termination is
given, together with all compensation and benefits payable to the Executive
through the Date of Termination under the terms of any compensation or benefit
plan, program or arrangement maintained by the Company during such period.
3.2 Subject to Section 3.3, the Company shall pay to the Executive the
payments described in this Section 3.2 (the "Severance Payments") upon the
termination of the Executive's employment following a Change in Control and
during the term of this Agreement, in addition to the payments and benefits
described in Section 3.1, unless such termination is (i) by the Company for
Cause, (ii) by reason of death, (iii) by the Executive without Good Reason, or
(iv) after the Executive shall have attained age 70. In lieu of any further
salary payments to the Executive for periods subsequent to the Date of
Termination and in lieu of any severance benefits otherwise payable to the
Executive under any then existing broad-based employee severance plan, the
Company shall pay to the Executive a lump sum severance payment, in cash, equal
to three times the sum of (x) the higher of the Executive's annual base salary
in effect immediately prior to the occurrence of the event or circumstance upon
which the Notice of Termination is based or in effect immediately prior to the
Change in Control and (y) the higher of the average of the annual bonuses paid
to the Executive for the three years (or the number of years employed, if less)
immediately preceding the occurrence of the event or circumstance upon which
the Notice of Termination is based or the Change in Control. In lieu of any
further life, disability, accident and health insurance benefits otherwise due
to the Executive, the Company shall pay to the Executive a lump sum amount, in
cash, equal to the cost to the Company (as determined by the Company in good
faith with reference to its most recent actual experience) of providing such
benefits, to the extent that the Executive is eligible to receive such benefits
immediately prior to the Notice of Termination, for a period of three years
commencing on the Date of Termination.
3.3 The payments provided for in Section 3.2 shall be made not later than
the fifth day following the Date of Termination.
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3.4 The Company also shall pay to the Executive all legal fees and expenses
incurred by the Executive in seeking to obtain or enforce any benefit or right
provided by this Agreement, payable within five business days after delivery of
the Executive's written requests for payment accompanied with such evidence of
fees and expenses incurred as the Company reasonably may require.
4. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.
4.1 Notwithstanding any other provisions of this Agreement, in the event
that any payment or benefit received or to be received by the Executive in
connection with a Change in Control or the termination of the Executive's
employment (all such payments and benefits, including the Severance Payments,
the "Total Payments") is determined to be subject (in whole or part) to the
Excise Tax, then the Executive shall be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount such that after payment by the
Executive of all taxes (including any interest or penalties imposed with
respect to such taxes), including without limitation any income taxes and
Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount
equal to the Total Payments. Notwithstanding the foregoing provisions of this
Section 4.1, if it shall be determined that the Executive is entitled to a
Gross-Up Payment, but that the Total Payments do not exceed 110% of the
greatest amount (the "Reduced Amount") that could be paid to the Executive such
that the receipt thereof would not give rise to any Excise Tax, then no
Gross-Up Payment shall be made to the Executive and the Total Payments shall be
reduced to the Reduced Amount.
4.2 All determinations required to be made under this Section 4, including
whether and when a Gross-Up Payment is required and the amount of such Gross-Up
Payment and the assumptions to be utiliized in arriving at such determination,
shall be made by the Company's accountants or such other certified public
accounting firm reasonably acceptable to the Company as may be designated by
the Executive (the "Accounting Firm") which shall provide detailed supporting
calculations both to the Company and the Executive.
5. TERMINATION PROCEDURES.
5.1 NOTICE OF TERMINATION. After a Change in Control and during the term
of this Agreement, any purported termination of the Executive's employment
(other than by reason of death) shall be communicated by written Notice of
Termination from one party hereto to the other party hereto in accordance with
Section 8. Further, a Notice of Termination for
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Cause is required to include a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters of the entire membership of the
Board at a meeting of the Board which was called and held for the purpose of
considering such termination (after reasonable notice to the Executive and an
opportunity for the Executive, together with the Executive's counsel, to be
heard before the Board) finding that, in the good faith opinion of the Board,
the Executive was guilty of conduct set forth in the definition of Cause.
5.2 Date of Termination. "Date of Termination", with respect to any
purported termination of the Executive's employment after a Change in Control
and during the term of this Agreement, shall mean the date specified in the
Notice of Termination (which, in the case of a termination by the Company
otherwise than for Cause, shall not be less than thirty days and, in the case of
a termination by the Executive, shall not be less than fifteen days nor more
than sixty days, respectively, from the date such Notice of Termination is
given).
6. No Mitigation. If the Executive's employment by the Company is
terminated during the term of this Agreement, the Executive is not required to
seek other employment or to attempt in any way to reduce any amounts payable to
the Executive by the Company pursuant to Section 3. Further, the amount of any
payment or benefit provided for in Section 3 shall not be reduced by any
compensation earned by the Executive as the result of employment by another
employer, by retirement benefits, by offset against any mount claimed to be
owed by the Executive to the Company, or otherwise.
7. Executive's Covenants. The Executive agrees that, subject to the terms
and conditions of this Agreement, in the event of a Potential Change in Control
during the term of this Agreement, the Executive will remain in the employ of
the Company until the earliest of (i) a date which is six months from the date
of such Potential Change of Control, (ii) the date of a Change in Control, (iii)
the date of termination by the Executive of the Executive's employment for Good
Reason (determined by treating the Potential Change in Control as a Change in
Control in applying the definition of Good Reason), by reason of death or
Retirement; or (iv) the termination by the Company of the Executive's employment
for any reason.
8. Successors; Binding Agreement.
8.1 In addition to any obligations imposed by law upon any successor to the
Company, the Company will require any successor
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(whether direct or indirect, by purchase, merger, consolidation or otherwise)
to all or substantially all of the business and/or assets of the Company to
expressly 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. Failure of the Company to obtain such assumption
and agreement prior to the effectiveness of any such succession shall be a
breach of this Agreement and shall entitle the Executive to compensation from
the Company in the same amount and on the same terms as the Executive would be
entitled to hereunder if the Executive were to terminate the Executive's
employment for Good Reason after a Change in Control, except that, for purposes
of implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination.
8.2 This Agreement shall inure to the benefit of and be enforceable by
the Executive's personal or legal representatives. If the Executive shall die
while any amount would still be payable to the Executive hereunder (other than
amounts which, by their terms, terminate upon the death of the Executive) 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 Executive's representatives.
9. Notices. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
certified or registered mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth below, or to such other address
as either party may have furnished to the other in writing in accordance
herewith, except that notice of change of address shall be effective only upon
actual receipt:
To the Company:
Aspen Technology, Inc.
Xxx Xxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: General Counsel
To the Executive:
Xxxxx Xxxxxx
Oak House
Coopers Green Lane
St. Albans
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Xxxxxxxxxxxxx XX0 0XX
Xxxxxxx
10. Miscellaneous. No provision of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing and signed by the Executive and such officer as may be specifically
designated by the Board. Except as expressly provided herein, no waiver by
either party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set
forth in this Agreement. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the Commonwealth
of Massachusetts, and this Agreement shall be an instrument under seal. All
references to sections of the Exchange Act or the Code shall be deemed also to
refer to any successor provisions to such sections. Any payments provided for
hereunder shall be paid net of any applicable withholding required under
federal, state or local law and any additional withholding to which the
Executive has agreed.
11. Settlement of Disputes; Arbitration. 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. 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. The Executive shall, however, be entitled to
seek specific performance of the Executive's right to be paid until the Date of
Termination during the pendency of any dispute or controversy arising under or
in connection with this Agreement.
12. Definitions. For purposes of this Agreement, the following terms
shall have the-meanings indicated below:
"Beneficial owner" shall have the meaning defined in Rule 13d-3
under the Exchange Act.
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"Xxxxx" shall mean the Board of Directors of the Company.
"Cause" for termination by the Company of the Executive's employment, after
any Change in Control, shall mean (i) the willful and continued failure by the
Executive to substantially perform the Executive's duties with the Company
(other than any such failure resulting from the Executive's incapacity due to
physical or mental illness or any such actual or anticipated failure after the
issuance of a Notice of Termination for Good Reason by the Executive) after a
written demand for substantial performance is delivered to the Executive by the
Board, which demand specifically identifies the manner in which the Board
believes that the Executive has not substantially performed the Executive's
duties, or (ii) the willful engaging by the Executive in gross misconduct which
is demonstrably and materially injurious to the Company or any of its
subsidiaries, monetarily or otherwise. No act, or failure to act, on the
Executive's part shall be deemed "willful" unless done, or omitted to be done,
by the Executive not in good faith and without reasonable belief that the
Executive's act, or failure to act, was in the best interest of the Company.
A "Change in Control" shall be deemed to have occurred if the conditions
set forth in any one of the following paragraphs shall have been satisfied:
(a) Continuing Directors constitute two-thirds or less of the
membership of the Board, whether as the result of a proxy contest or for
any other reason or reasons; or
(b) Any Person is or becomes the Beneficial owner, directly or
indirectly, of securities of the Company representing twenty-five percent
or more of the combined voting power of the Company's then outstanding
voting securities; or
(c) There is a change in control of the Company of a nature that
would be required to be reported on Form 8-K or item 6(e) of Schedule 14A
of Regulation 14A or any similar item, schedule or form under the Exchange
Act, as in effect at the time of the change, whether or not the Company is
then subject to such reporting requirement, including without limitation
any merger or consolidation of the Company with any other corporation,
other than (i) a merger or consolidation
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which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the
surviving or parent entity) fifty-one percent or more of the combined
voting power of the voting securities (entitled to vote generally for
the election of directors) of the Company or such surviving or parent
entity outstanding immediately after such merger or consolidation and
which would result in those persons who are Continuing Directors
immediately prior to such merger or consolidation constituting more
than two-thirds of the membership of the Board or the board of such
surviving or parent entity immediately after, or subsequently at any
time as contemplated by or as a result of, such merger or
consolidation or (ii) a merger or consolidation effected to implement
a recapitalization of the company (or similar transaction) in which no
Person acquired twenty-five percent or more of the combined voting
power of the Company's then outstanding securities; or
(d) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all of the Company's assets (or
any transaction having a similar effect).
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
"Company" shall mean Aspen Technology, Inc. and any successor to its
business and/or assets which assumes or agrees to perform this Agreement, by
operation of law or otherwise.
"Compensation Committee" shall mean the Compensation and Nominating
Committee of the Board.
"Continuing Director" shall mean any director (i) who has continuously
been a member of the Board since not later than the date of a Potential Change
in Control or (ii) who is a successor of a director described in clause (i), if
such successor (and any intervening successor) shall have been recommended or
elected to succeed a Continuing Director by a majority of the then
Continuing Directors.
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"Date of Termination" shall have the meaning stated in Section 5.2 hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended
from time to time.
"Excise Tax" shall mean the tax imposed by Section 4999 of the Code.
"Executive" shall mean the individual named in the first paragraph of this
Agreement.
"Good Reason" for termination by the Executive of the Executive's
employment shall mean the occurrence (without the Executive's express written
consent) of any one of the following acts or failures to act by the Company
unless, in the case of any act or failure to act described in paragraph (a),
(e), (f) or (g) below, such act or failure to act is corrected prior to the
Date of Termination specified in the Notice of Termination given in respect
thereof or, in the case of paragraph (c) below, such act is not objected to in
writing by the Executive within four months after notification by the Company
to the Executive of the Company's intention to take the action contemplated by
such paragraph (c):
(a) the assignment to the Executive of any duties inconsistent with
the Executive's status as a senior executive officer of the Company or
a meaningful alteration, adverse to the Executive, in the nature or
status of the Executive's responsibilities) other than reporting
responsibilities) from those in effect immediately prior to the
Change in Control;
(b) a reduction by the Company in the Executive's annual base salary
as in effect on the date hereof or as the same may be increased from
time to time except for across-the-board salary reductions similarly
affecting all senior executives of the Company and all senior
executives of any Person in control of the Company;
(c) the Company's requiring the Executive to be based anywhere other
than the Boston Metropolitan Area (or, if different, the metropolitan
area in which the Company's principal executive offices are located
immediately prior to the Change in Control) except for required travel
on the Company business to an extent substantially consistent with the
Executive's present business travel obligations;
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(d) the failure by the Company, without the Executive's consent, to pay
to the Executive any portion of the Executive's current compensation,
or to pay to the Executive any portion of an installment of deferred
compensation under any deferred compensation program of the Company,
within fourteen days of the date such compensation is due;
(e) the failure by the Company to continue in effect any compensation plan
in which the Executive participates immediately prior to the Change in
Control which is material to the Executive's total compensation, or
the failure by the Company to continue the Executive's participation
therein 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, as existed at the time
of the Change in Control;
(f) the failure by the Company to continue to provide the Executive with
benefits substantially similar to those enjoyed by the Executive under
any of the Company's pension, life insurance, medical, health and
accident, or disability plans in which the Executive was participating
at the time of the Change in Control, the taking of any action by the
Company which would directly or indirectly materially reduce any of
such benefits or deprive the Executive of any material fringe benefit
enjoyed by the Executive at the time of the Change in Control, or the
failure by the Company to provide the Executive with the number of
paid vacation days to which the Executive is entitled on the basis of
years of service with the Company in accordance with the Company's
normal vacation policy in effect at the time of the Change in Control;
or
(g) any purported termination of the Executive's employment which is not
effected pursuant to a Notice of Termination satisfying the
requirements of Section 5.1.
"Notice of Termination" shall have the meaning stated in Section 5.1.
"Person" shall have the meaning given in Section 3(a)(9) of the Exchange
Act, as modified and used in Sections 13(d) and 14(d). thereof; however, a
Person shall not include (i) the Company or any of its subsidiaries, (ii) a
trustee or other fiduciary holding securities under an
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employee benefit plan of the Company or any of its subsidiaries, (iii) an
underwriter temporarily holding securities pursuant to a registered offering of
such securities in accordance with an agreement with the Company, or (iv) a
corporation owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company.
"Potential Change in Control" shall be deemed to have occurred if the
conditions set forth in any one of the following paragraphs shall have been
satisfied:
(a) the Company enters into an agreement, the consummation of which
would result in the occurrence of a Change in Control;
(b) the Company or any Person publicly announces an intention to take
or to consider taking actions which, if consummated, would constitute a Change
in Control;
(c) any Person becomes the Beneficial Owner, directly or indirectly,
of securities of the Company representing fifteen percent or more of the
combined voting power of the Company's then outstanding securities (entitled to
vote generally for the election of directors); or
(d) the Board adopts a resolution to the effect that, for purposes of
this Agreement, a Potential Change in Control has occurred.
"Severance Payments" shall mean those payments described in Section 3.2
hereof.
"Total Payments" shall mean those payments described in Section 4 hereof.
IN WITNESS WHEREOF, the Company and the Executive have executed and
delivered this Agreement on the date first written above.
ASPEN TECHNOLOGY, INC.
By: /s/ Xxxxxxxx X. Xxxxx
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Xxxxxxxx X. Xxxxx
By: /s/ Xxxxx X.Mushin
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Xxxxx Xxxxxx
