Exhibit 10.3
CHANGE OF CONTROL AGREEMENT
THIS CHANGE OF CONTROL AGREEMENT,
dated as of September 13, 2006 is between ARI Network
Services, Inc. (the “Company”) and Roy W. Olivier (the
“Employee”).
WITNESSETH:
WHEREAS, the Employee has been
employed by the Company since September 12, 2006 and currently
serves as its Vice President of Global Sales and Marketing;
and
WHEREAS, the Board of Directors of
the Company has determined that it wishes to assure the continued
availability of the Employee as Vice President of Global Sales and
Marketing of the Company by entering into this Change of Control
Agreement (the “Agreement”); and
WHEREAS, the Board of Directors of
the Company wants to assure that, in the event of a Change of
Control (as hereinafter defined), the Employee’s service to
the Company will be recognized.
NOW, THEREFORE, in consideration of
the mutual covenants and agreements set forth herein, the Company
and the Employee hereby agree as follows:
1.
Definitions . For Purposes of this
Agreement:
(a)
Cause . “Cause” means (i) the willful and
continued failure by the Employee to substantially perform the
Employee’s duties with the Company (other than any such
failure resulting from the Employee’s incapacity due to
physical or mental illness) for a period of at least ten days after
a written demand for substantial performance is delivered to the
Employee which specifically identifies the manner in which the
Employee has not substantially performed his duties, or
(ii) the willful engaging by the Employee in misconduct which
is demonstrably and materially injurious to the Company, monetarily
or otherwise. For purposes of this Agreement, no act or failure to
act on the Employee’s part shall be considered
“willful” unless done or omitted to be done by the
Employee not in good faith and without reasonable belief that such
action or omission was in the best interest of the Company.
Notwithstanding the foregoing, the Employee shall not be deemed to
have been terminated for Cause unless and until there shall have
been delivered to the Employee a copy of a resolution, duly adopted
by the affirmative vote of not less than a majority of the Board of
Directors of the Company at a meeting of the Board called and held
for such purposes (after reasonable notice to the Employee and an
opportunity for the Employee, together with the Employee’s
counsel, to be heard before the Board), stating that in the good
faith opinion of the Board the Employee was guilty of conduct
constituting Cause as set forth above and specifying the
particulars thereof in detail.
(b)
Change in Control . A “Change in Control” shall
mean the first to occur of the following:
(i) the
acquisition by an individual, entity or group, acting individually
or in concert (a “Person”) of beneficial ownership of
more than 50% of the then outstanding shares of common stock of the
Company (the “Outstanding Common Stock”);
provided , however , that for purposes of this
Subsection 1(b)(i), the following acquisitions shall not constitute
a Change in Control: (A) any acquisition directly from the
Company, (B) any acquisition by the Company, (C) any
acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation
controlled by the Company, or (D) any acquisition by any
corporation pursuant to a transaction which complies with clauses
(A), (B) and (C) of Subsection 1(b)(ii) below; or
(ii)
consummation of a reorganization, merger or consolidation, share
exchange, or sale or other disposition of all or substantially all
of the assets of the Company (a “Business
Combination”), in each case, unless, immediately following
such Business Combination, (A) all or substantially all of the
individuals and entities who were the beneficial owners of the
Outstanding Common Stock immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 50%
of, respectively, the then outstanding shares of common stock and
the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the
case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as
a result of such transaction owns the Company or all or
substantially all of the Company’s assets either directly or
through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business
Combination of the Outstanding Common Stock, (B) no Person
(excluding any employee benefit plan (or related trust) of the
Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, more than
50% of, respectively, the then outstanding common stock of the
corporation resulting from such Business Combination or the
combined voting power of the then outstanding voting securities of
such corporation except to the extent that such ownership existed
prior to the Business Combination, and (C) at least a majority
of the members of the Board of the corporation resulting from such
Business Combination were members of the Board of the Company at
the time of the execution of the initial agreement providing for
such Business Combination; or
(iii)
approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
(c)
Date of Termination . “Date of Termination”
means the date specified in the Notice of Termination where
required (which date shall be on or after the date of the Notice of
Termination) or in any other case during the Term, upon the
Employee’s ceasing to perform services for the Company.
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(d)
Effective Date . “Effective Date” means the date
on which the Change of Control occurs.
(e)
Good Reason . “Good Reason” means, without the
Employee’s written consent, the occurrence of one or more of
the following during the Term:
(i) a
material diminution of or interference with the Employee’s
duties and responsibilities as Vice President of Global Sales of
the Company, including, but not limited to a material demotion of
the Employee, a material reduction in the number or seniority of
other Company personnel reporting to the Employee, or a material
reduction in the frequency with which, or in the nature of the
matters with respect to which, such personnel are to report to the
Employee;
(ii) a
change in the principal workplace of the Employee to a location
outside of a 50-mile radius from Milwaukee, Wisconsin;
(iii) a
reduction or adverse change in the salary, bonus, perquisites,
benefits, contingent benefits or vacation time which had
theretofore been provided to the Employee; or
(iv) an
unreasonable increase in the workload of the Employee.
For purposes hereof, any good faith
determination made by the Employee that he has Good Reason to
terminate his employment with the Company shall be conclusive. The
Employee’s continued employment or failure to give Notice of
Termination will not constitute consent to, or a waiver of rights
with respect to, any circumstance constituting Good Reason
hereunder.
(f)
Notice of Termination . Any termination of the
Employee’s employment by the Company without Cause, or
termination by the Employee for Good Reason, during the Term will
be communicated by a Notice of Termination to the other party
hereto. A “Notice of Termination” means a written
notice which specifies a Date of Termination (which date shall be
on or after the date of the Notice of Termination), indicates the
provision in this Agreement applying to the termination and, if
applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Employee’s employment under the provision so indicated.
(g)
Term . The “Term” means a period beginning on
the Effective Date and ending on the date two years after the
occurrence of a Change of Control.
2. Termination of
Employment During the Term .
(a)
Termination by the Company Without Cause or by the Employee for
Good
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