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Exhibit 10.6
INDUS INTERNATIONAL, INC.
CHANGE OF CONTROL SEVERANCE AGREEMENT
This Change of
Control Severance Agreement (the "Agreement") is made and
entered into by and between John D. Gregg
(the "Executive") and Indus
International, Inc., a Delaware Corporation
(the "Company"), effective as of
October 1, 2005 (the "Effective Date").
RECITALS
1. It is
expected that the Company from time to time will consider the
possibility of an acquisition by another
company or other change of control. The
Board of Directors of the Company (the
"Board") recognizes that such
consideration can be a distraction to the
Executive and can cause the Executive
to consider alternative employment
opportunities. The Board has determined that
it is in the best interests of the Company
and its stockholders to assure that
the Company will have the continued
dedication and objectivity of the Executive,
notwithstanding the possibility, threat or
occurrence of a Change of Control (as
defined herein) of the Company.
2. The Board
believes that it is in the best interests of the Company and
its stockholders to provide the Executive
with an incentive to continue his or
her employment and to motivate the
Executive to maximize the value of the
Company upon a Change of Control for the
benefit of its stockholders.
3. The Board
believes that it is imperative to provide the Executive with
certain severance benefits upon the
Executive's termination of employment
following a Change of Control. These
benefits will provide the Executive with
enhanced financial security and incentive
and encouragement to remain with the
Company notwithstanding the possibility of
a Change of Control.
4. Certain
capitalized terms used in the Agreement are defined in Section
5
below.
AGREEMENT
NOW, THEREFORE,
in consideration of the mutual covenants contained herein
and the continued employment of Executive
by the Company, the parties agree as
follows:
1. Term of
Agreement. This Agreement shall be for a one year term
commencing on the Effective Date; provided,
however, that the Compensation
Committee may affirmatively extend the term
of the Agreement at any time. The
Executive may, by notice to the Company
given not less than 60 days, but not
more than 90 days, prior to the expiration
of the then-current term, cause the
term of this Agreement not to be extended.
In the event that the Compensation
Committee does not extend the term of the
Agreement, or upon such notice of
non-renewal by the Executive, the term of
this Agreement shall terminate upon
the expiration of the then-current term,
including any prior extensions.
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2. At-Will
Employment. This Agreement is not an employment agreement and
does not guarantee any specific term of
employment. The Company and the
Executive acknowledge that the Executive's
employment is and shall continue to
be at-will, as defined under applicable
law, except as may otherwise be
specifically provided under the terms of
any written formal employment agreement
between the Company and the Executive (an
"Employment Agreement").
3. Severance
Benefits.
(a) Involuntary Termination Following a Change of Control. If
within
twenty-four (24) months following a Change
of Control (A) the Executive
terminates his or her employment with the
Company (or any parent or subsidiary
of the Company) for "Good Reason" (as
defined herein) or the Company (or any
parent or subsidiary of the Company)
terminates the Executive's employment for
other than "Cause" (as defined herein), and
(B) the Executive signs the
Company's standard separation agreement and
release of claims with the Company,
then the Executive shall be entitled to
receive the following severance benefits
from the Company: (i) a lump sum amount
equal to one (1) times the sum of (x)
Executive's then-current base salary plus
(y) a payment equal to Executive's
annual bonus target for the performance
year in which the Change in Control
occurs, or if such amount is not
determinable, Executive's annual bonus paid or
payable, including any bonus or portion
thereof which has been earned but
deferred, for the most recently completed
fiscal year; and (ii) reimbursement
for full COBRA (for the Executive and any
of Executive's dependents that
Executive had elected to cover by Company's
benefit plans during Executive's
employment at the Company) expenses for the
earlier of eighteen (18) months or
until Executive receives health, medical
and/or dental benefits, respectively,
from a new employer. In addition,
Executive's outstanding options to purchase
shares of the Company's Common Stock (the
"Options") and unvested restricted
shares of the Company's Common Stock (the
"Restricted Stock") shall immediately
vest and, in the case of Options, become
exercisable. In all other respects the
Options and Restricted Stock shall continue
to be bound by and subject to the
terms of their respective agreements.
(b) Timing of Severance Payments. The severance payments to which
the
Executive is entitled shall be paid by the
Company to the Executive in a lump
sum in cash within 30 days after the date
of termination.
(c)
Voluntary Resignation; Termination For Cause. If the
Executive's
employment with the Company terminates (i)
voluntarily by the Executive or (ii)
for Cause by the Company, then the
Executive shall not be entitled to receive
severance or other benefits except for
those (if any) as may then be established
under the Company's then-existing severance
and benefits plans and practices or
pursuant to his or her Employment Agreement
or other written agreements, if any,
with the Company.
(d) Disability; Death. If the Company terminates the
Executive's
employment as a result of the Executive's
Disability, or the Executive's
employment terminates due to his or her
death, then the Executive shall not be
entitled to receive severance or other
benefits except for those (if any) as may
then be established under the Company's
then-existing written severance and
benefits plans and practices or pursuant to
his or her Employment Agreement or
other written agreements, if any, with the
Company.
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(e) Termination Apart from Change of Control. In the event the
Executive's employment is terminated for
any reason, either prior to the
occurrence of a Change of Control or after
a twenty-four (24) month period
following a Change of Control, then the
Executive shall not be entitled to
receive any payments, benefits, damages,
awards, or compensation other than as
provided under the Company's then-existing
written severance and benefits plans
and practices or pursuant to his or her
Employment Agreement or other written
agreements with the Company.
(f) Exclusive Remedy. In the event of a termination of
Executive's
employment within twenty-four (24) months
following a Change of Control, the
provisions of this Section 3 are intended
to be and are exclusive and in lieu of
any other rights or remedies to which the
Executive or the Company may otherwise
be entitled, whether at law, tort or
contract, in equity, or under this
Agreement. The Executive shall be entitled
to no benefits, compensation or other
payments or rights upon termination of
employment within twenty-four (24) months
following a Change in Control other than
those benefits expressly set forth in
this Section 3.
(g) Termination in Anticipation of a Change of Control. If a Change
of
Control occurs, and if Executive's
employment with the Company is terminated by
the Executive for Good Reason or by the
Company (or any parent or subsidiary of
the Company) for other than Cause within
six (6) months prior to the date on
which the Change of Control occurs, and if
it is reasonably demonstrated by
Executive that such termination of
employment (i) was at the request of a third
party who has taken steps reasonably
calculated to effect a Change of Control or
(ii) otherwise arose in connection with or
in anticipation of a Change of
Control, then for purposes of this Section
3, such termination of employment
shall be deemed to have occurred
immediately following the Change of Control and
Executive shall be entitled to the benefits
described in Section 3(a).
4. Limitation on
Payments. In the event that the severance and other
benefits provided for in this Agreement or
otherwise payable to the Executive
(i) constitute "parachute payments" within
the meaning of Section 280G of the
Internal Revenue Code of 1986, as amended
(the "Code") and (ii) but for this
Section 4, would be subject to the excise
tax imposed by Section 4999 of the
Code, then the Executive's severance and
benefits shall be either:
(a)
delivered in full, or
(b) delivered as to such lesser extent which would result in no
portion of such severance benefits being
subject to excise tax under Section
4999 of the Code, whichever of the
foregoing amounts, taking into account the
applicable federal, state and local income
taxes and the excise tax imposed by
Section 4999, results in the receipt by the
Executive on an after-tax basis, of
the greatest amount of severance benefits,
notwithstanding that all or some
portion of such severance benefits may be
taxable under Section 4999 of the
Code. Unless the Company and the Executive
otherwise agree in writing, any
determination required under this Section 4
shall be made in writing by the
Company's independent public accountants
immediately prior to Change of Control
(the "Accountants"), whose determination
shall be conclusive and binding upon
the Executive and the Company for all
purposes. For purposes of making the
calculations required by this Section 4,
the Accountants may make reasonable
assumptions and approximations concerning
applicable taxes and may rely on
reasonable, good faith interpretations
concerning the application of Sections
280G and 4999 of the Code. The
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Company and the Executive shall furnish to
the Accountants such information and
documents as the Accountants may reasonably
request in order to make a
determination under this Section. The
Compan
