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Exhibit 10.34
CHANGE-OF-CONTROL
SEVERANCE AGREEMENT
This Agreement, dated as of January 1, 2007, is made and
entered into by and between AsiaInfo Holdings, Inc., a corporation
organized under the laws of the State of Delaware with its
principal place of business at Zhongdian Information Tower,
No. 6 Zhongguancun South Street, Beijing, People’s
Republic of China (the "Company"), and Eileen Chu, Vice President
and Chief Financial Officer (the "Executive").
WHEREAS, the Company considers it essential to the best
interests of its stockholders to foster the continuous employment
of key management personnel, and recognizes that, as is the case
with many publicly held corporations, the possibility of a Change
of Control (as defined below) may exist from time to time and that
such possibility, and the uncertainty and questions which it may
raise among management, may result in the distraction or departure
of management personnel to the detriment of the Company and its
stockholders; and
WHEREAS, the Board of Directors of the Company has determined
that appropriate steps should be taken to reinforce and encourage
the Executive’s continued attention and dedication to the
Executive’s assigned duties without distraction in the face
of potentially disturbing circumstances arising from the
possibility of a Change of Control of the Company, although no such
change is presently known to be contemplated.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
Section 1
DEFINITIONS
Except as may otherwise be specified or as the context may
otherwise require, the following terms shall have the respective
meanings set forth below whenever used herein:
"Base Salary" shall mean the annual base rate of regular
compensation of the Executive immediately before a Change of
Control, or if greater, the highest such rate at any time during
the 12-month period immediately preceding the Change of
Control.
"Board" shall mean the Board of Directors of the Company.
"Business Combination" shall mean a merger, consolidation, or
sale of all or substantially all of the Company’s assets.
"Cause" shall mean (i) the willful and continued failure by
the Executive substantially to perform his duties with the Employer
(other than any such actual or anticipated failure after the
issuance of a Notice of Termination for Good Reason) or
(ii) the willful engaging by the Executive in conduct which is
demonstrably and materially injurious to the Employer, monetarily
or otherwise. For purposes hereof, 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 in the absence of good
faith and without a reasonable belief that such act or omission was
in the best interest of the Employer.
"Change of Control" shall mean the first to occur, after the
date hereof, of any of the following:
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(i) any Person (excluding the Company, any employee benefit plan
of the Company or a corporation controlled by the Company’s
stockholders) is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company (not including in the securities
beneficially owned by such Person any securities acquired directly
from the Company or its Subsidiaries) representing more than 45% of
either the then outstanding shares of Stock of the Company or the
combined voting power of the Company’s then outstanding
securities;
(ii) during any period of 12 consecutive months during the
existence of this Agreement commencing on or after the date hereof,
the individuals who, at the beginning of such period, constitute
the Board (the "Incumbent Directors") cease to constitute at least
a majority thereof because of a vote of the Company’s
stockholders, provided that a director who was not a director at
the beginning of such 12-month
period shall be deemed to have satisfied such
12-month requirement (and be an Incumbent Director) if such
director was elected by, or on the recommendation of or with the
approval of, at least two-thirds of the directors who then
qualified as Incumbent Directors either actually (because they were
directors at the beginning of such 12-month period) or by prior
operation of this clause (ii);
(iii) the consummation of a merger or consolidation of the
Company with any other corporation other than (A) a merger or
consolidation which would result in the voting securities of the
Company outstanding immediately prior to such merger or
consolidation continuing to represent (either by remaining
outstanding or by being converted into voting securities of the
surviving entity or any parent thereof) at least 60% of the
combined voting power of the voting securities of the Company or
such surviving entity or any parent thereof outstanding immediately
after such merger or consolidation, or (B) a merger or
consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no Person is or becomes
the beneficial owner, as defined in clause (i), directly or
indirectly, of securities of the Company (not including in the
securities beneficially owned by such Person any securities
acquired directly from the Company or its Subsidiaries)
representing 45% or more of either the then outstanding shares of
Stock of the Company or the combined voting power of the
Company’s then outstanding securities;
(iv) the stockholders of the Company or the Board approve a plan
of complete liquidation or dissolution of the Company; or
(v) there is consummated an agreement for the sale or
disposition by the Company of all or substantially all of the
Company’s assets, other than a sale or disposition by the
Company of all or substantially all of the Company’s assets
to an entity, at least 60% of the combined voting power of the
voting securities of which are owned by Persons in substantially
the same proportion as their ownership of the Company immediately
prior to such sale.
Upon the occurrence of a Change of Control as provided above, no
subsequent event or condition shall constitute a Change of Control
for purposes of this Agreement, with the result that there can be
no more than one Change of Control hereunder.
"Code" shall mean the United States Internal Revenue Code of
1986, as amended.
"Company" shall mean, subject to Section 5.1(a), AsiaInfo
Holdings, Inc., a corporation organized under the laws of the State
of Delaware.
"Covered Termination" shall mean if, within the one-year period
immediately following a Change of Control, the Executive
(i) is terminated by the Employer without Cause (other than on
account of death or Disability), or (ii) terminates his
employment with the Employer for Good Reason. The Executive shall
not be deemed to have terminated his employment with the Employer
for purposes of this Agreement merely because he ceases to be
employed by the Employer and becomes employed by a new employer
involved in the Change of Control; provided that such new employer
shall be bound by this Agreement as if it were the Employer
hereunder with respect to the Executive. It is expressly understood
that no Covered Termination shall be deemed to have occurred merely
because, upon the occurrence of a Change of Control, the Executive
ceases to be employed by the Employer and does not become employed
by a successor to the Employer after the Change of Control if the
successor makes an offer to employ the Executive on terms and
conditions which, if imposed by the Employer, would not give the
Executive a basis on which to terminate employment for Good
Reason.
"Date of Termination" shall mean the date on which a Covered
Termination occurs.
"Disability" shall mean the occurrence after a Change of Control
of the incapacity of the Executive due to physical or mental
illness, whereby the Executive shall have been absent from the
full-time performance of his duties with the Employer for six
consecutive months.
"Employer" shall mean the Company (if and for so long as the
Executive is employed thereby) and each Subsidiary which may now or
hereafter employ the Executive or, where the context so requires,
the Company and such Subsidiaries collectively. A subsidiary which
ceases to be, directly or indirectly, through one or more
intermediaries, controlling, controlled by or under common
control
with the Company prior to a Change of Control
(other than in connection with and as an integral part of a series
of transactions resulting in a Change of Control) shall,
automatically and without any further action, cease to be (or be
part of) the Employer for purposes hereof.
"Exchange Act" shall mean the United States Securities Exchange
Act of 1934, as amended.
"Good Reason" shall mean, without the express written consent of
the Executive and except as a result of the Executive’s
failure to satisfy applicable performance criteria, the occurrence
after a Change of Control of any of the following circumstances,
unless such circumstances are fully corrected prior to the Date of
Termination specified in the Notice of Termination given in respect
thereof:
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(i) assignment to the Executive of any duties inconsistent in
any materially adverse or diminutive respect with his position,
authority, duties or responsibilities from those in effect
immediately prior to the Change of Control;
(ii) a reduction in the Executive’s Base Salary as in
effect immediately before the Change of Control, except for a
reduction that applies in equal proportion to all employees of the
Company;
(iii) a material reduction in the Executive’s aggregate
compensation opportunity, including (A) the Executive’s
Base Salary, (B) bonus opportunity, if any, and
(C) long-term or other incentive compensation opportunity, if
any (taking into account, in the case of such bonus and incentive
opportunities, without limitation, any target, minimum and maximum
amounts payable and the attainability and reasonability of any
performance hurdles, goals and other measures);
"Notice of Termination" shall mean a notice given by the
Employer or Executive, as applicable, which shall indicate the
specific termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive’s
employment under the provisions so indicated.
"Person" shall have the meaning ascribed thereto by
Section 3(a)(9) of the Exchange Act, as modified and used in
Sections 13(d) and 14(d) thereof (except that such term shall not
include (i) the Company or any of its Subsidiaries,
(ii) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any of its Subsidiaries,
(iii) an underwriter temporarily holding securities pursuant
to an offering of such securities, (iv) a corporation owned,
directly or indirectly, by the stockholders of the Company in
substantially the same proportion as their ownership of stock of
the Company, or (v) such Executive or any "group" (as such
term is used in Sections 13(d) and 14(d) of the Exchange Act) which
includes the Executive.
"Stock" shall mean the common stock, $.01 par value per share,
of the Company.
"Stock Options" shall mean options issued by the Company to
purchase Stock.
"Subsidiary" shall mean any entity, directly or indirectly,
through one or more intermediaries, controlled by the Company.
"Target Annual Bonus" shall mean the Executive’s annual
bonus for the Employer’s fiscal year in which the Date o
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