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Exhibit
10.1
MSC.SOFTWARE
CORPORATION
SEVERANCE COMPENSATION
AGREEMENT
THIS AGREEMENT, effective April 16,
2007, is between MSC.Software Corporation, a Delaware corporation
(the “Company”) and Sam M. Auriemma (the
“Executive”).
The Company’s Compensation
Committee and Board of Directors has determined that it is
appropriate to reinforce and encourage the continued attention and
dedication of members of the Company’s management to their
assigned duties without distraction in potentially disturbing
circumstances arising from the possibility of a change in control
of the Company.
This Agreement sets forth the severance
compensation which the Company agrees it will pay to the Executive
if the Executive’s employment with the Company terminates
under one of the circumstances described herein following a Change
in Control of the Company (as defined herein).
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1.
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Term . This Agreement
shall terminate, except to the extent that any obligation of the
Company hereunder remains unpaid as of such time, upon the earliest
of (i) December 31 st of
any year after 2006, provided that either party has given at least
60 days prior written notice to the other party of its or his
intention to terminate this Agreement under this paragraph 1(i);
(ii) the termination of the Executive’s employment with
the Company based on death, Disability (as defined in
Section 3(b)), Retirement (as defined in Section 3(c)) or
Cause (as defined in Section 3(d)) or by the Executive other
than for Good Reason (as defined in Section 3(e)); and
(iii) two years from the date of a Change in Control of the
Company if the Executive has not terminated his employment for Good
Reason as of such time.
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| 2. |
Change in Control . No compensation shall be payable
under this Agreement unless and until (a) there shall have
been a Change in Control of the Company, while the Executive is
still an employee of the Company and (b) the Executive’s
employment by the Company thereafter shall have been terminated in
accordance with Section 3. For purposes of this Agreement, a
Change in Control of the Company shall be deemed to have occurred
if: |
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(i) |
there shall be consummated any consolidation or merger of the
Company and, as a result of such consolidation or merger
(x) less than 50% of the outstanding common shares and 50% of
the voting shares of the surviving or resulting corporation are
owned, immediately after such consolidation or merger, by the
owners of the Company’s common shares immediately prior to
such consolidation or merger, or (y) any person (as such term
is used in Section 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)
shall become the beneficial owner (within the meaning of Rule 13d-3
under the Exchange Act) of 20% or more of the surviving or
resulting corporation’s outstanding common shares;
or |
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(ii) |
any sale, lease, exchange or other transfer (in one transaction
or a series of related transactions) of all, or substantially all,
of the assets of the Company shall be consummated; or |
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(iii) |
the shareholders of the Company shall approve any plan or
proposal for the liquidation or dissolution of the Company;
or |
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(iv) |
any person (as such term is used in Section 13(d) and
14(d)(2) of the Exchange Act) shall become the beneficial owner
(within the meaning of Rule 13d-3 under the Exchange Act) of 20% or
more of the Company’s outstanding common shares;
or |
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(v) |
during any period of two consecutive years, individuals who at
the beginning of such period constitute the entire Board of
Directors shall cease for any reason to constitute a majority
thereof unless the election or the nomination for election by the
Company’s shareholders of each new director was approved by a
vote of at least two-thirds of the directors then still in office
who were directors at the beginning of the period. |
| 3. |
Termination Following Change in Control |
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(a) |
If a Change in Control of the Company shall have occurred while
the Executive is still an employee of the Company, the Executive
shall be entitled to the compensation provided in Section 4
upon the subsequent termination of the Executive’s employment
with the Company by the Executive or by the Company unless such
termination is as a result of (i) the Executive’s death;
(ii) the Executive’s Disability (as defined in
Section 3(b) below); (iii) the Executive’s
Retirement (as defined in Section 3(c) below); (iv) the
Executive’s termination by the Company for Cause (as defined
in Section 3(d) below); or (v) the Executive’s
decision to terminate employment other than for Good Reason (as
defined in Section 3(e) below). |
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(b) |
Disability. If, as a result of the Executive’s
incapacity due to physical or mental illness, the Executive shall
have been absent from his duties with the Company on a full-time
basis for twelve months and within 30 days after written notice of
termination is thereafter given by the Company the Executive shall
not have returned to the full-time performance of the
Executive’s duties, the Company may terminate this Agreement
for “Disability.” |
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(c) |
Retirement . The term “Retirement” as used
in this Agreement shall mean termination by the Company or the
Executive of the Executive’s employment based on the
Executive having reached age 65 or such other age as shall have
been fixed in any written arrangement regarding the
Executive’s retirement established with the Executive’s
consent with respect to the Executive. |
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(d) |
Cause . The Company may terminate the Executive’s
employment for Cause. For purposes of this Agreement only, the
Company shall have “Cause” to terminate the
Executive’s employment hereunder only on the basis of fraud,
misappropriation or embezzlement on the part of the Executive.
Notwithstanding the foregoing, the Executive shall not be deemed to
have been terminated for Cause unless and until there shall have
been delivered to the Executive a copy of a resolution duly adopted
by the affirmative vote of not less than three-quarters of the
entire membership of the Company’s Board of Directors at a
meeting of the Board called and held for the purpose (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 second
sentence of this Section 3(d) and specifying the particulars
thereof in detail. |
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(e) |
Good Reason . The Executive may terminate the
Executive’s employment for Good Reason at any time during the
term of this Agreement. For purposes of this Agreement “Good
Reason” shall mean any of the following without the
Executive’s express written consent: |
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(i) |
the
assignment to the Executive by the Company of duties inconsistent
with the Executive’s position, duties, responsibilities and
status with the Company immediately prior to a Change in Control of
the Company, or a
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change in the
Executive’s titles or offices as in effect immediately prior
to a Change in Control of the Company, or any removal of the
Executive from or any failure to reelect the Executive to any of
such positions, except in connection with the termination of his
employment for Disability, Retirement or Cause or as a result of
the Executive’s death or by the Executive other than for Good
Reason;
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(ii) |
a reduction by the Company in the Executive’s base salary
as in effect on the Date of Termination; |
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(iii) |
any failure by the Company to continue in effect any benefit
plan or arrangement (including, without limitation, the
Company’s retirement plan, group life insurance plan, and
medical, dental, accident and disability plans) in which the
Executive is participating at the time of a Change in Control of
the Company (or any other plans providing the Executive with
substantially similar benefits) (hereinafter referred to as
“Benefit Plans”), or the taking of any action by the
Company which would adversely affect the Executive’s
participation in or materially reduce the Executive’s
benefits under any such Benefit Plan or deprive the Executive of
any material fringe benefit enjoyed by the Executive at the time of
a Change in Control of the Company; |
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(iv) |
any failure by the Company to continue the Executive’s
eligibility to participate in annual executive bonus arrangements
in which the Executive is participating at the time of a Change in
Control of the Company (or any plans or arrangements providing him
with substantially similar benefits) (hereinafter referred to as
“Incentive Plans”) or the taking of any action by the
Company which would significantly reduce the Executive’s
opportunity to earn incentive compensation which is related to
performance results as compared to performance expectations
periodically determined by the Company; |
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(v) |
a relocation of the Company’s principal executive
offices, or the Executive’s relocation to any place other
than the location at which the Executive performed the
Executive’s duties prior to a Change in Control of the
Company, except for required travel by the Executive on the
Company’s business to an extent substantially consistent with
the Executive’s business travel obligations at the time of a
Change in Control of the Company; |
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(vi) |
any failure by the Company to provide the Executive with the
number of paid vacation days to which the Executive is entitled at
the time of a Change in Control of the Company; |
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(vii) |
any material breach by the Company of any provision of this
Agreement; |
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(viii) |
any failure by the Company to obtain the assumption in writing
of this Agreement by any successor or assign of the Company, unless
consent given by Executive; |
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(ix) |
any purported termination of the Executive’s employment,
which is not effected pursuant to a Notice of Termination
satisfying the requirements of Section 3(f), and for purposes
of this Agreement, no such purported termination shall be
effective; or |
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(x) |
the failure of the Company to maintain Directors’ and
Officers’ Liability Insurance on terms not materially less
favorable to the Executive than the terms of the policy presently
in effect. |
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(f) |
Notice of Termination . Any termination by the Company
pursuant to Section 3(b), 3(c) or 3(d) shall be communicated
by a Notice of Termination. For purposes of this Agreement, a
“Notice of Termination” shall mean a written notice
which shall indicate those specific termination provisions in this
Agreement relied upon and which sets forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination
of the Executive’s employment under the provision so
indicated. For purposes of this Agreement, such purported
termination by the Company shall not be effective without such
Notice of Termination. |
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(g) |
Date of Termination . “Date of Termination”
shall mean (a) if this Agreement is terminated by the Company
for Disability, 30 days Notice of Termination is given to the
Executive (provided that the Executive shall not have returned to
the performance of the Executive’s duties on a full-time
basis during such 30-day period) or (b) if the
Executive’s employment is terminated by the Company for any
other reason, the date on which a Notice of Termination is given;
provided that if within 30 days after any Notice of Termination is
given to the Executive by the Company the Executive notifies the
Company that a dispute exists concerning the termination, the Date
of Termination shall be the date the dispute is finally determined,
whether by mutual agreement by the parties or upon final judgment,
order or decree of a court of competent jurisdiction (the time for
appeal therefrom having expired and no appeal having been
perfected.) |
| 4. |
Compensation Under this Agreement |
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(a) |
If within two years after a Change in Control of the Company, a
Notice of Termination is given either by the Company to the
Executive or by the Executive to t |
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