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Exhibit 10.36
INDUS INTERNATIONAL, INC.
CHANGE OF CONTROL SEVERANCE AGREEMENT
This
Change of Control Severance Agreement (the "Agreement") is made
and
entered into by and between Arthur W. Beckman (the "Executive") and
Indus
International, Inc., a Delaware Corporation (the "Company"),
effective as of May
5, 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;
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.
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
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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 three-fourths
(0.75) 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")
shall
immediately vest and become exercisable. In all other respects the
Options 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.
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 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
Company shall
bear all costs the Accountants may reasonably incur in connection
with any
calculations contemplated by this Section 4.
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5.
Definition of Terms. The following terms referred to in this
Agreement
shall have the following meanings:
(a) Cause. "Cause" means (i) an act of dishonesty made by the
Executive in connection with such Executive's responsibilities as
an Executive,
(ii) the Executive's indictment for, conviction of, or plea of
guilty or nolo
contendre to, a felony which the Board reasonably believes had or
will have a
material detrimental effect on the Company's reputation or
business, (iii) the
Executive's gross misconduct, (iv) the Executive's continued
substantial failure
to perform such Executive's duties after the Executive has received
a written
demand for performance from the Company which specifically sets
forth the
factual basis for the Company's belief that the Executive has not
substantially
performed such Executive's duties, (v) the willful and continued
material
violation of written Company policies or procedures by Executive,
after a
written demand for substantial compliance with such policies or
procedures is
delivered to Executive by the Compensation Committee of the Board
of Directors
of the Company which specifically identifies the manner in which
such Committee
or the Board believes that Executive has not substantially complied
with the
same, or (vi) Executive's breach of any of the provisions of
Sections 7 through
12 of this Agreement.
(b) Change of Control. "Change of Control" means the occurrence of
any
of the following:
(i) Any "person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended) is or
becomes the
"beneficial owner" (as defined in Rule 13d-3 under said Act),
directly or
indirectly, of securities of the Company representing fifty percent
(50%) or
more of the total voting power represented by the Company's then
outstanding
voting securities; or
(ii) A change in the composition of the Board occurring within
a
two-year period, as a result of which fewer than a majority of the
directors are
Incumbent Directors. "Incumbent Directors" shall mean directors who
either (A)
are directors of the Company as of the date hereof, or (B) are
elected, or
nominated for election, to the Board with the affirmative votes of
at least a
majority of the Incumbent Directors at the time of such election or
nomination
(but shall not include an individual whose election or nomination
is in
connection with an actual or threatened proxy contest relating to
the election
of directors to the Company); or
(iii) The date of the consummation of a merger or consolidation
of the Company with any other corporation that has been approved by
the
stockholders of the Company, other than a merger or consolidation
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 entity) at least
fifty percent
(50%) of the total voting power represented by the voting
securities of the
Company or such surviving entity outstanding immediately after such
merger or
consolidation, or the stockholders of the Company approve a plan of
complete
liquidation of the Company; or
(iv) The date of the consummation of the sale or disposition by
the Company of all or substantially all the Company's assets.
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(c) Disability. If the Company determines in good faith that
the
Disability of Executive has occurred, it may give to Executive
written notice of
its intention to terminate Executive's employment. In such event,
Executive's
employment with the Company shall terminate effective on the 30th
day after
receipt of such written notice by Executive, provided that, within
the 30 days
after such receipt, Executive shall not have returned to full-time
performance
of Executive's duties. For purposes of this Agreement, "Disability"
shall mean
the inability of Executive, as determined by the Board, to perform
the essential
functions of his regular duties and responsibilities, with or
without reasonable
accommodation, due to a medically determinable physical or mental
illness which
has lasted (or can reasonably be expected to last) for 90
consecutive days or an
aggregate of 180 days in a 12-month period. At the request of
Executive or his
personal representative, the Board's determination that the
Disability of
Executive has occurred shall be certified by a physician mutually
agreed upon by
Executive, or his personal representative, and the Company. Failing
such
independent certification (if so requested by Executive),
Executive's
termination shall be deemed a termination by the Company without
Cause and not a
termination by reason of his Disability.
(d) Good Reason. "Good Reason" means without the Executive's
consent
(i) a significant reduction or elimination of the Executive's
duties or
responsibilities, unless the Executive is provided with a
comparable position
(i.e., a position of equal or greater duties, compensation and
status),
excluding for this purpose an isolated, insubstantial and
inadvertent action not
taken in bad faith and which is remedied by the Company promptly
after receipt
of notice thereof given by Executive; (ii) a reduction by the
Company in the
base compensation of the Executive as in effect immediately prior
to such
reduction other than in connection with a generally applicable
reduction in
executive officer compensation; (iii) the involuntary relocation of
the
Executive to a facility or a location more than fifty (50) miles
from such
Executive's then current location; (iv) any failure by the Company
to comply
with and satisfy Section 6(a) of this Agreement; or (v) the
material breach by
the Company of any provision of this Agreement.
Good Reason shall not include Executive's death or Disability.
Executive's continued employment shall not constitute consent to,
or a waiver of
rights with respect to, any circumstance constituting Good Reason
hereunder. Any
good faith determination of Good Reason made by Executive shall be
conclusive,
but the Company shall have an opportunity to cure any claimed event
of Good
Reason within 30 days of notice from Executive and the Board's good
faith
determination of cure shall be binding. The Company shall notify
Executive of
the timely cure of any claimed event of Good Reason and the manner
in which such
cure was effected, and any notice of termination delivered by
Executive based on
such claimed Good Reason shall be deemed withdrawn and shall not be
effective to
terminate the Agreement.
6.
Successors.
(a) The Company's Successors. Any successor to the Company
(whether
direct or indirect and whether by purchase, merger, consolidation,
liquidation
or otherwise) to all or substantially all of the Company's business
and/or
assets shall assume the obligations under this Agreement and agree
expressly to
perform the obligations under this Agreement in the same manner and
to the same
extent as the Company would be required to perform such obligations
in the
absence of a succession. For all purposes under this Agreement, the
term
"Company" shall
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include any successor to the Company's business and/or assets which
executes and
delivers the assumption agreement described in this Section 6(a) or
which
becomes bound by the terms of this Agreement by operation of
law.
(b) The Executive's Successors. The terms of this Agreement and
all
rights of the Executive hereunder 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.
7.
Nondisclosure of Trade Secrets and Confidential Information.
(a) Trade Secrets Defined. As used in this Agreement, the term
"Trade
Secrets" shall mean all secret, proprietary or confidential
information
regarding Company or Company activities that fits within the
