Employment Agreement - Aspect Communications Corp. and Gary L. Smith
April 6, 2000
Mr. Gary L. Smith
Chief Operating Officer
Aspect Communications
San Jose, CA 95131
Dear Gary:
This letter agreement (the "Agreement") is to confirm the terms of your
ongoing employment with Aspect Communications Corporation (the "Company") and
supersedes and replaces all prior oral and/or written agreements regarding the
subject matter hereof between you and the Company.
1. This Agreement will commence on the date hereof and continue until
February 28, 2002 (the "Original Term"), unless extended for one or more
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additional one-year terms upon mutual written agreement between you and the
Company or unless terminated pursuant to the terms described herein. Approval by
the Company shall be evidenced by the adoption of resolutions by the
Compensation Committee of the Board of Directors of the Company (the
"Committee"). In the event that the Company has entered into discussions with a
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third party regarding a Change of Control in the beneficial ownership of the
Company (as defined below) and such Change of Control discussions are ongoing at
the end of the Original Term or any extension, this Agreement automatically
shall be extended until the later of (a) the end of a period of eighteen (18)
months following the closing of such Change of Control transaction or (b) at the
time that the parties have ceased their discussions.
2. You are employed as Chief Operating Officer of the Company, and as
such report to the Company's CEO/President. Your job duties and responsibilities
are described on Exhibit A attached hereto. You agree to the best of your
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ability and experience that you will, to the reasonable satisfaction of the
Company and its Board, at all times loyally and conscientiously perform all of
the duties and obligations required of you pursuant to the terms of this
Agreement; provided, however, that you shall not be precluded from engaging in
civic, charitable or religious activities, from devoting a reasonable amount of
time to private investments, or from serving on the board of directors of other
business entities with the prior written approval of the Board of Directors of
the Company (the "Board"), so long as such activities or service do not
interfere with your responsibilities to the Company hereunder. You will comply
with and be bound by the Company's operating policies, procedures and practices
in effect from time to time during the term of your employment.
3. You acknowledge that your employment is and will continue to be at-
will, as defined under applicable law, and that your employment with the Company
may be terminated by either party at any time for any or no reason, with or
without cause, and with or without notice. If your employment terminates for any
reason, you will be entitled to any payments, benefits, damages, award or
compensation other than as provided in this Agreement. Notwithstanding the
foregoing, you still shall have the right to receive (i) payment of regular
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monthly salary and any bonus that has accrued but is unpaid on the date of
termination, (ii) payment of all of your accrued and unused vacation through the
date of termination, (iii) following your submission of proper expense reports,
reimbursement by the Company for all expenses reasonably and necessarily
incurred by you in connection with the business of the Company prior to
termination, (iv) vested contributions and earnings from the Company's 401(k)
plan, and (v) your rights under any of the Company's employee benefit plans,
policies or arrangements in accordance with the terms of such plans, policies
and arrangements. Any payments described in this paragraph shall be made
promptly upon termination, but in any event in compliance with applicable law
and any applicable terms of the Company's plans, policies, and arrangements. The
rights and duties created by this paragraph may not be modified in any way
except by a written agreement executed by you and the Chief Executive Officer on
behalf of the Company.
4. If your employment is involuntarily terminated other than for Cause
(as defined below) or terminated by you following a Constructive Termination (as
defined below) at any time upon or within twelve (12) months following a Change
of Control (the "Coverage Period"), you will be entitled to receive payment of
severance benefits equal to 24 months of your regular monthly salary plus your
annual target bonus (subject to any applicable tax withholding) in effect on the
date of your termination or upon the occurrence of the Change of Control,
whichever is greater. (Effective January 1, 2001, the Coverage Period shall be
expanded to include the period beginning three (3) months prior to the
occurrence of a Change of Control and ending thirteen (13) months following a
Change of Control.) Payment will be made in a lump sum not more than thirty (30)
days following the date of termination. Provided that you make a timely election
to continue coverage under the Company's group health plans pursuant to the
Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"), health
insurance benefits with the same coverage provided to you prior to the
termination (e.g. medical, dental, optical, mental health) will be provided at
the Company's cost for eighteen (18) months following the termination date, but
not longer than until you are covered by comparable health insurance benefits
from another employer or are otherwise ineligible for COBRA continuation
coverage. Nothing in this Section 4 shall restrict the ability of the Company or
its successor from changing some or all of the terms of such health insurance
benefits, the cost to participants, or other features of such benefits;
provided, however, that all similarly situated participants are treated the
same. In addition, and except as otherwise determined below, each stock option
and share of restricted stock you hold that is not otherwise fully exercisable
and/or vested (i.e. released from the Company's repurchase option) as of the
termination date shall become immediately exercisable and/or vested in full as
of such date.
Notwithstanding the foregoing, you shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other employment
or otherwise nor, except for your eligibility for COBRA continuation coverage,
shall the amount of any payment or benefit provided for in this paragraph be
reduced or otherwise affected by any compensation or benefits received by you as
a result of employment by another employer or self-employment, by any retirement
benefits regardless of source, by offset against any amount claimed to be owed
by you to the Company, or otherwise.
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5. In the event that the severance and other benefits provided to you by
this Agreement (i) constitute "parachute payments" within the meaning of Section
280G of the Internal Revenue Code of 1986, as amended (the "Code"), or any
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comparable successor provisions, and (ii) but for this paragraph would be
subject to the excise tax imposed by Section 4999 of the Code, or any comparable
successor provisions (the "Excise Tax"), then your benefits hereunder shall be
either
(i) provided to you in full, or
(ii) provided to you as to such lesser extent which would result
in no portion of such benefits being subject to the Excise
Tax.
whichever of the foregoing amounts, when taking into account applicable federal,
state, local and foreign income and employment taxes, the Excise Tax, and any
other applicable taxes, results in the receipt by you, on an after-tax basis, of
the greatest amount of benefits, notwithstanding that all or some portion of
such benefits may be taxable under the Excise Tax. Unless the Company and you
agree otherwise in writing, any determination required under this paragraph
shall be made in writing in good faith by a qualified third party (the
"Professional Service Firm"). In the event of a reduction of benefits hereunder,
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you shall be given the choice of which benefits to reduce, in the event that the
reduction to zero dollars ($0) of all benefits paid in cash is insufficient to
avoid liability under the Excise Tax. For purposes of making the calculations
required by this paragraph, the Professional Service Firm may make reasonable
assumptions and approximations concerning applicable taxes and may rely on
reasonable, good faith interpretations concerning the application of the Code,
and other applicable legal authority. The Company and you shall furnish to the
Professional Service Firm such information and documents as the Professional
Service Firm may reasonably request in order to make a determination under this
Section 5. The Company shall bear all costs the Professional Service Firm may
reasonably incur in connection with any calculations contemplated by this
paragraph.
If, notwithstanding any reduction described in this paragraph, the Internal
Revenue Service ("IRS") determines that you are liable for the Excise Tax as a
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result of the receipt of the payment of benefits described above, then you shall
be obligated to pay back to the Company, within thirty (30) days after a final
IRS determination or in the event that you challenge the final IRS
determination, a final judicial determination, a portion of the payment equal to
the "Repayment Amount." The Repayment Amount with respect to the payment of
benefits shall be the smallest amount, if any, as shall be required to be paid
to the Company so that your net after-tax proceeds with respect to any payment
of benefits (after taking into account the payment of the Excise Tax and all
other applicable taxes imposed on such payment) shall be maximized. The
Repayment Amount with respect to the payment of benefits shall be zero if a
Repayment Amount of more than zero would not result in your net after-tax
proceeds with respect to the payment of such benefits being maximized. If the
Excise Tax is not eliminated pursuant to this paragraph, you shall pay the
Excise Tax.
Notwithstanding any other provision of this paragraph, if (i) there is a
reduction in the payment of benefits as described in this paragraph, (ii) the
IRS later determines that you are liable for the Excise Tax, the payment of
which would result in the maximization of your net
<PAGE>
after-tax proceeds (calculated as if your benefits previously had not been
reduced), and (iii) you pay the Excise Tax, then the Company shall pay to you
those benefits which were reduced pursuant to this paragraph contemporaneously
or as soon as administratively possible after you pay the Excise Tax so that
your net after-tax proceeds with respect to the payment of benefits is
maximized.
6. For purposes of this Agreement, the following definitions will apply:
(a) "Cause" for your termination will exist if the Company terminates
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your employment for any of the following reasons: (i) you willfully fail to
substantially perform your duties hereunder (other than any such failure due to
your physical or mental illness), and such willful failure is not remedied
within ten (10) business days after written notice from the Company's Chief
Executive Officer, which written notice shall state that failure to remedy such
conduct may result in an involuntary termination for Cause; (ii) you engage in
willful and serious misconduct (including, but not limited to, an act of fraud
or embezzlement) that has caused or is reasonably expected to result in material
injury to the Company or any of its affiliates, (iii) you are convicted of or
enter a plea of guilty or nolo contendere to a crime that constitutes a felony
related to your employment with the Company or which materially adversely
affects your ability to perform your duties on behalf of the Company, or (iv)
you willfully breach any of your obligations hereunder or under any other
written agreement or covenant with the Company or any of its affiliates,
including, but not limited to, the Confidentiality Agreement, and such willful
breach is not remedied within ten (10) business days after written notice from
the Company's Chief Executive Officer, which written notice shall state that
failure to remedy such conduct may result in an involuntary termination for
Cause.
(b) "Change of Control" will mean i) a dissolution or liquidation of
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the Company; (ii) a sale, lease or other disposition of all or substantially all
of the assets of the Company so long as the Company's stockholders of record
immediately prior to such transaction will, immediately after such transaction,
hold less than fifty percent (50%) of the voting power of the acquiring entity;
(iii) an acquisition of the Company by another entity by means of any
transaction or series of related transactions (including, without limitation,
any reorganization, merger or consolidation but excluding any merger effected
exclusively for the purpose of changing the domicile of the Company), so long as
the Company's stockholders of record immediately prior to such transaction or
series of related transactions will, immediately after such transaction or
series of related transactions, hold less than fifty percent (50%) of the voting
power of the surviving or acquiring entity; or (iv) the individuals who, as of
the date of this Agreement, are members of the Board (the "Incumbent Board"),
cease for any reason to constitute at least fifty percent (50%) of the Board. If
the election, or nomination for election by the Company's stockholders, of any
new director was approved by a vote of at least fifty percent (50%) of the
Incumbent Board, such new director shall be considered as a member of the
Incumbent Board.
Effective January 1, 1001, "Change of Control" will mean (i) a dissolution
or liquidation of the Company; (ii) a sale, lease or other disposition of all or
substantially all of the assets of the Company so long as the Company's
stockholders immediately prior to such transaction will, immediately after such
transaction, fail to possess direct or indirect beneficial ownership of more
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than fifty percent (50%) of the voting power of the acquiring entity (for
purposes of this clause 7(b)(ii), any person who acquired securities of the
Company prior to the occurrence of such asset transaction in contemplation of
such transaction and who after such transaction possesses direct or indirect
ownership of at least ten percent (10%) of the securities of the acquiring
entity immediately following such transaction shall not be included in the group
of stockholders of the Company immediately prior to such transaction); (iii)
either a merger or consolidation in which the Company is not the surviving
corporation and the stockholders of the Company immediately prior to the merger
or consolidation fail to possess direct or indirect beneficial ownership of more
than fifty (50%) of the voting power of the securities of the surviving
corporation (or if the surviving corporation is a controlled affiliate of
another entity, then the required beneficial ownership shall be determined with
respect to the securities of that entity which controls the surviving
corporation and is not itself a controlled affiliate of any other entity)
immediately following such transaction, or a reverse merger in which the Company
is the surviving corporation and the stockholders of the Company immediately
prior to the reverse merger fail to possess direct or indirect beneficial
ownership of more than fifty percent (50%) of the securities of the Company (or
if the Company is a controlled affiliate of another entity, then the required
beneficial ownership shall be determined with respect to the securities of that
entity which controls the Company and is not itself a controlled affiliate of
any other entity) immediately following the reverse merger (for purposes of this
clause 6(b)(iii), any person who acquired securities of the Company prior to the
occurrence of a merger, reverse merger, or consolidation in contemplation of
such transaction and who after such transaction possesses direct or indirect
beneficial ownership of at least ten percent (10%) of the securities of the
Company or the surviving corporation (or if the Company or the surviving
corporation is a controlled affiliate, then of the appropriate entity as
determined above) immediately following such transaction shall not be included
in the group of stockholders of the Company immediately prior to such
transaction); (iv) an acquisition by any person, entity or group within the
meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or any comparable successor provisions (excluding
any employee benefit plan, or related trust, sponsored or maintained by the
Company or a subsidiary or other controlled affiliate of the Company) of the
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act, or comparable successor rule) of securities of the Company
representing at least fifty percent (50%) of the combined voting power entitled
to vote in the election of directors; or (v) the individuals who, as of the date
of this Agreement, are members of the Board (the "Incumbent Board"), cease for
any reason to constitute at least fifty percent (50%) of the Board. If the
election, or nomination for election by the Company's stockholders, of any new
director was approved by a vote of at least fifty percent (50%) of the Incumbent
Board, such new director shall be considered as a member of the Incumbent Board.
(c) "Constructive Termination" will be deemed to occur if (A) (i)
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your duties and responsibilities as Chief Operation Officer of the Company (or a
successor corporation) are materially diminished from your duties and
responsibilities as in effect at any time from the time immediately prior to the
occurrence of a Change of Control or at any time thereafter, without your prior
written consent; (ii) any reduction in the total value of your base compensation
and benefits occurs; (iii) your new business office location is either (a) more
than thirty (30) miles in distance from your current business office location or
(b) greater than your current commute to and from your current business office
location; and (B) within sixty (60) days immediately
<PAGE>
following such event described in clauses (i) through (iii) above, you elect to
terminate your employment voluntarily. For purposes of this definition and this
Agreement, however, a change in title with substantially the same duties and
responsibilities shall not be considered a Constructive Termination, should this
result solely from an acquisition by a larger company in which you have
continuing responsibilities for the acquirer which are substantially the same as
those you had for the Company when it was independent.
7. You have signed a document entitled "Employee Agreement" (the
"Confidentiality Agreement") substantially in the form attached hereto as
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Exhibit B. You hereby represent and warrant to the Company that you have
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complied with all obligations under the Confidentiality Agreement and agree to
continue to abide by the terms of the Confidentiality Agreement and further
agree that the provisions of the Confidentiality Agreement will survive any
termination of this Agreement or of your employment relationship with the
Company.
8. Upon your involuntary termination of employment other than for Cause
or your voluntary termination following a Constructive Termination, and as a
condition of the receipt of any benefits under this Agreement, you shall execute
an effective release (the "Release") in substantially the form incorporated
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herein and attached hereto as Exhibit C (or if you are under forty (40) years
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old at the time of such termination, in substantially the form attached hereto
as Exhibit C with appropriate changes to reflect the inapplicability of the Age
Discrimination in Employment Act) as shall ultimately be determined by the
Company. Such Release shall specifically relate to all of your rights and
claims in existence at the time of such execution and shall confirm your
obligations under the Confidentiality Agreement. It is understood that you have
twenty-one (21) days to consider whether to execute such Release, and you may
revoke such Release within seven (7) business days after execution. In the event
you do not execute such Release within the twenty-one (21) day period, or if
you revoke such Release within the subsequent seven (7) business day period, no
benefits shall be payable under this Agreement and this Agreement shall be null
and void. Notwithstanding the foregoing, in addition to or in lieu of the
Release attached hereto as Exhibit C, you may be required to execute and deliver
an effective release in such other form as the Company may, in its sole
discretion, determine to be necessary or appropriate in order to comply with the
requirements of the laws of any jurisdiction applicable to you in order to make
a general release of claims effective and enforceable.
9. You represent that you have not entered into any agreements,
understandings, or arrangements with any other person or entity which would be
breached by you as a result of, or that would in any way preclude or prohibit
you from entering into this Agreement or performing any of the duties and
responsibilities provided for herein.
10. Any successor to the Company as a result of the occurrence of a Change
of Control (whether direct or indirect and whether by purchase, lease, merger,
consolidation, liquidation or otherwise) or otherwise which succeeds 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 include any
successor to the Company's business and/or assets which executes and delivers
the assumption agreement
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described in this paragraph or which becomes bound by the terms of this
Agreement by operation of law.
The terms of this Agreement and all of your rights hereunder shall inure to
the benefit of, and be enforceable by, your personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees or
legatees.
11. This Agreement, including any Exhibits hereto, constitutes the sole
agreement of the parties and supersedes all negotiations and prior agreements
with respect to the subject matter hereof, i.e., the rights and responsibilities
of you and the Company in the event of certain terminations of your employment
with the Company relating to the occurrence of a Change of Control.
12. Any term of this Agreement may be amended or waived only with the
written consent of the parties.
13. Any notice required or permitted by this Agreement will be in writing
and will be deemed sufficient upon receipt, when delivered personally, by
facsimile or by a nationally-recognized delivery service (such as Federal
Express or Express Mail), or 72 hours after being deposited in the U.S. mail as
certified or registered mail with the postage prepaid, if such notice is
addressed to the party to be notified at such party's address as set forth below
or as subsequently modified by written notice.
14. The validity, interpretation, construction and performance of this
Agreement will be governed by the laws of the State of California, without
giving effect to the principles of conflict of laws.
15. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, the parties agree to re-negotiate such
provision in good faith. In the event that the parties cannot reach a mutually
agreeable and enforceable replacement for such provision, then (i) such
provision will be excluded from this Agreement or a legal authority of competent
jurisdiction (including an arbitrator) will have the authority to modify or
replace the invalid or unenforceable provision with a valid and enforceable
provision that most accurately embodies the parties' intention with respect to
the invalid or unenforceable provision, (ii) the balance of the Agreement will
be interpreted as if such provision were so excluded, modified or replaced and
(iii) the balance of the Agreement will be enforceable in accordance with its
terms.
16. You and the Company agree to attempt to settle any disputes arising in
connection with this Agreement through good faith consultation. In the event
that we are not able to resolve any such disputes within fifteen (15) days after
notification in writing to the other, we agree that any dispute or claim arising
out of or in connection with this Agreement will be finally settled by binding
arbitration in Santa Clara County, California in accordance with the rules of
the American Arbitration Association by one arbitrator appointed in accordance
with said rules. The arbitrator will apply California law, without reference to
rules of conflicts of law or rules of statutory arbitration, to the resolution
of any dispute. Judgment on the award rendered by the arbitrator may be entered
in any court having jurisdiction thereof. Notwithstanding the
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foregoing, the parties may apply to any court of competent jurisdiction for
preliminary or interim equitable relief, or to compel arbitration in accordance
with this paragraph, without breach of this arbitration provision. You agree
that punitive damages will not be awarded. This paragraph will not apply to the
Confidentiality Agreement.
If there is a termination of your employment with the Company followed by a
dispute as to whether you are entitled to the benefits provided under this
Agreement, then, during the period of that dispute the Company shall pay you
fifty percent (50%) of the amount specified in Section 4 hereof (except that the
Company shall pay one hundred percent (100%) of any insurance premiums provided
for in Section 4), if, and only if, you agree in writing that if the dispute is
resolved against you, you shall promptly refund to the Company all payments you
receive plus interest at the rate provided in Section 1274(d) of the Code,
compounded quarterly. If the dispute is resolved in your favor, promptly after
resolution of the dispute the Company shall pay you the sum that was withheld
during the period of the dispute plus interest at the rate provided in Section
1274(d) of the Code, compounded quarterly.
Notwithstanding any other provisions of this Agreement, if you either (i)
bring any action to enforce your rights pursuant to this Agreement, or (ii)
defend any legal challenge to your rights hereunder, you shall be entitled to
recover reasonable attorneys' fees and costs incurred in connection with such
action from the Company, payable on a monthly basis, regardless of the outcome
of such action; provided, however, that in the event such action is commenced by
you, the court finds the claim was brought in good faith.
17. You acknowledge that, in executing this Agreement, you have had the
opportunity to seek the advice of independent legal counsel, and have read and
understood all of the terms and provisions of this Agreement.
Please indicate your agreement with the above terms by signing below.
Sincerely,
Aspect Communications Corporation
/s/Beatriz Infante
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Beatriz Infante
Title: Chief Executive Officer and President
Address: 1310 Ridder Park Drive
San Jose, CA 95131
Facsimile Number: (408) 325-2261
My signature below signifies my agreement with the above terms.
<PAGE>
By: /s/ Gary L. Smith
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Address: 3901 Wood Lake Drive, Plano TX 75093
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Facsimile Number: (972) 398-0899
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<PAGE>
RELEASE
[NOTE: INCLUDES ADEA LANGUAGE]
Certain capitalized terms used in this Release are defined in the letter
agreement between me and the Company dated ______________, (the "Agreement")
which I have executed and of which this Release is a part.
I hereby confirm my obligations under the Company's Confidentiality
Agreement.
Except as otherwise set forth in this Release, I hereby release, acquit and
forever discharge the Company, its parents and subsidiaries, and their officers,
directors, agents, servants, employees, shareholders, successors, assigns and
affiliates, of and from any and all claims, liabilities, demands, causes of
action, costs, expenses, attorneys fees, damages, indemnities and obligations of
every kind and nature, in law, equity, or otherwise, known and unknown,
suspected and unsuspected, disclosed and undisclosed (other than any claim for
indemnification I may have as a result of any third party action against me
based on my employment with the Company), arising out of or in any way related
to agreements, events, acts or conduct at any time prior to the date I execute
this Release, including, but not limited to: all such claims and demands
directly or indirectly arising out of or in any way connected with my employment
with the Company or the termination of that employment, including but not
limited to, claims of intentional and negligent infliction of emotional
distress, any and all tort claims for personal injury, claims or demands related
to salary, bonuses, commissions, stock, stock options, or any other ownership
interests in the Company, vacation pay, fringe benefits, expense reimbursements,
severance pay, or any other form of disputed compensation; claims pursuant to
any federal, state or local law or cause of action including, but not limited
to, the federal Civil Rights Act of 1964, as amended; the federal Age
Discrimination in Employment Act of 1967, as amended ("ADEA"); the federal
Employee Retirement Income Security Act of 1974, as amended; the federal
Americans with Disabilities Act of 1990; tort law; contract law; statutory law;
common law; wrongful discharge; discrimination; fraud; defamation; emotional
distress; and breach of the implied covenant of good faith and fair dealing;
provided, however, that nothing in this paragraph shall be construed in any way
to release the Company from its obligation to indemnify me pursuant to the
Company's indemnification obligation pursuant to agreement or applicable law.
In giving this release, which includes claims that may be unknown to me at
present, I acknowledge that I have read and understand Section 1542 of the
California Civil Code which reads as follows: "A general release does not extend
to claims which the creditor does not know or suspect to exist in his favor at
the time of executing the release, which if known by him must have materially
affected his settlement with the debtor." I expressly waive and relinquish all
rights and benefits under that section and any law of any jurisdiction of
similar effect with respect to my release of any unknown or unsuspected claims I
may have against the Company.
I acknowledge that I am knowingly and voluntarily waiving and releasing any
rights I may have under ADEA. I also acknowledge that the consideration given
under this Agreement for the waiver and release in the preceding paragraph
hereof is in addition to anything of value to
<PAGE>
which I was already entitled. I further acknowledge that I have been advised by
this writing, as required by the ADEA, that: (A) my waiver and release do not
apply to any rights or claims that may arise on or after the date I execute this
Release; (B) I have the right to consult with an attorney prior to executing
this Release; (C) I have twenty-one (21) days to consider this Release (although
I may choose to voluntarily execute this Release earlier); (D) I have seven (7)
days following the execution of this Release by the parties to revoke the
Release; and (E) this Release shall not be effective until the date upon which
the revocation period has expired, which shall be the eighth day after this
Release is executed by me.
By:
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Date:
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<PAGE>
April 6, 2000
Mr. Gary L. Smith
3901 Wood Lake Drive
Plano, TX 75093
Dear Gary:
I am pleased to extend this invitation to you to join Aspect Communications
Corporation in the capacity of Chief Operating Officer, reporting directly to
me, with an anticipated start date of April 7, 2000. This position is an
elected corporate executive officer and you will be identified in Aspect's
shareholder and other communications as an Executive Officer of the company;
hence you are subject to SEC disclosure requirements on your compensation, stock
options and ownership position and any financial arrangements between yourself
and the company.
Your initial job duties will include the following:
. Responsible for achieving operating results in line with financial,
market share, and growth targets.
. Provide direction and tracking on achievement of specific goals in
support of operating plan across all company functions.
. Together with President/CEO, make final decisions on all operating
issues.
. Drive services, distribution, and geographic expansion strategies in
support of development of company's 3-year plan.
. Direct line responsibility for company's sales organizations and service
organizations, consisting of customer support, consulting, and customer
education functions.
. Primary responsibility for customers, distributors, and business
alliance partners.
. Responsible for all internal and partner training.
Your compensation will be composed of three elements:
. Your starting salary will be $33,333.34 on a monthly basis ($400,000.00
annual), and will be paid semi-monthly.
. You will be eligible to participate in the Aspect Incentive Plan. Under
this plan you will be eligible to receive a quarterly cash bonus that is
targeted at 100% of your eligible earnings in each quarter. This bonus
will be determined as follows: 80% on performance against revenue,
profitability and bookings goals approved by the Board of Directors and
20% on performance against pre-established MBO's for that quarter. The
payouts on this plan can range from 0%-300%, with no payout for
achieving less than 70% on the revenue, profitability and bookings
goals.
. In addition to your base salary and special and quarterly incentive
bonuses, you will be eligible for up to $5,000.00 per year in executive
expense reimbursement for any combination or the following:
<PAGE>
Mr. Gary Smith
April 6, 2000
Page 2
. Personal income tax preparation
. Financial and estate planning
. Personal physical exam
As part of our offer, if either the company requires you to move or you elect to
move in the first 18 months, we are extending the enclosed relocation package to
you to relocate you and your family from Dallas, Texas to the Bay Area,
California. Details and maximum spending amounts are controlled by this policy.
If you voluntarily terminate your employment with Aspect Communications prior to
2 years of services, you will be required to reimburse the Company for a pro-
rated portion of the relocation package.
In addition to our standard relocation, the following items will be provided,
assuming continued employment:
. Rental or leased vehicle not to exceed $1,500.00 per month for 24
months.
. Fully furnished executive apartment or small home leased for 24 months,
not to exceed $5,000.00 per month.
. $25.00 per diem (Monday through Friday only) for 12 months.
. One roundtrip airfare per month from Dallas to the Bay Area provided for
your spouse.
. A secured seven percent (7%), fixed annual interest loan to cover ninety
percent (90%) of the cost of a Bay Area California home you purchase
with your relocation to the Bay Area for the amount up to $4.5 million.
Three percent (3%) of the interest only will be payable monthly. Four
percent (4%) of the seven percent (7%) interest will be accrued for up
to five years. The principal and accrued interest is due and payable at
the end of year five. The loan would be secured by the Bay Area home
that you purchase and would be due within thirty (30) days should you
leave the company.
You will receive a retention bonus for the amount of $17,500.00 for each of 20
quarters following your relocation to your new Bay Area home conditional upon
your continued active employment with Aspect.
We understand that your current company may require you to reimburse them for
relocation costs incurred. Should this happen, Aspect Communications will cover
those costs (with provided documentation), not to exceed $200,000.00. Should
you decide to voluntarily terminate your employment with Aspect Communications
before 1 year of employment, you agree to reimburse Aspect Communications a pro-
rated amount of those costs.
Gary, I intend to recommend to the Board of Directors of Aspect Communications
Corporation that you be granted a stock option to purchase two hundred fifty
thousand (250,000) shares of
<PAGE>
Mr. Gary Smith
April 6, 2000
Page 3
Aspect Communications Corporation Common Stock. The stock option will be
recommended for the approval to the Board on your actual first day as an Aspect
employee. You will receive your stock option package one week after the Board of
Directors has approved your option. The grant price will be the closing price on
the date the grant is issued as quoted in the Wall Street Journal. The option
will vest over four years: twenty-five percent (25%) will become exercisable on
the first anniversary of your full time employment, and the balance will vest in
equal increments monthly over the remaining three-year period. Should your
employment terminate for any reason, your option will cease to continue to vest
as of your termination. Complete details of the stock option agreement will be
provided to you upon approval of your option.
You are also eligible to participate in Aspect's comprehensive benefits plans,
including health, dental, vision, life and disability insurance plans in
accordance with the terms and conditions of subject plans as outline in the
Aspect Personal Choice Benefits brochure which will be provided upon the
commencement of your employment.
As an inducement to accept this offer, and in acknowledgment that you will
forfeit certain elements of value to you in leaving your current employment, you
will be eligible to receive a total of $100,000.00 in a special cash bonus,
payable in four elements of $25,000.00 each, as you achieve preset milestones
during the first nine months with the company. We will discuss and set these
milestones within 30 days of your employment with Aspect. Additionally, Aspect
will guarantee a minimum of 100% of your quarterly bonus target payout, for your
first year of employment, provided the company achieves at least 70% of it's
revenue profitability and bookings targets for each quarter.
This offer of employment is contingent upon the following:
. Your ability to provide and maintain the proper and necessary
documentation required for you and Aspect to comply with all applicable
United States immigration laws and regulations. Please be prepared on
your first day of employment to show specific documentation to certify
your legal right to work in the United States. Enclosed is a complete
listing of acceptable forms of documentation. If you are a foreign
national requiring work authorization to begin employment, you must
contact the Aspect Immigration Department at (408) 325-4102 or
krista.evanger@aspect.com to initiate the visa process. Aspect will
submit a petition on your behalf to obtain employment authorization, and
will file visa applications for your immediate dependent family members.
Aspect will pay the legal fees and costs related to these filings.
Because the number of work visas available each year is limited by the
U.S. government, Aspect reserves the right to withdraw or suspend this
offer if the Company is not able to obtain work authorization for you in
a reasonable period of time. Please note that if you currently have
employment authorization such as practical, curricular or academic
training (F-1 or J-1), you must contact the Aspect Immigration
Department before beginning employment.
<PAGE>
Mr. Gary Smith
April 6, 2000
Page 4
. Your execution (signature) of the Aspect Employee Agreement, which
protects the intellectual property and confidential information of
Aspect, and prohibits the unauthorized use of the intellectual property
and confidential information of any other company.
. The satisfactory review and/or verification of background information,
including, but not limited to, education, Department of Motor Vehicle,
Social Security, and criminal records. A credit check will be conducted
due to the Aspect loan provision provided to you in your relocation
package.
Gary, I am looking forward to working with you at Aspect, being part of a
company that provides great value to its customers and employees. I believe
that you have much to offer and much to gain -- personally, professionally, and
financially -- in joining us. I look forward to a favorable decision and your
acknowledgment and assent to the terms of this letter by April 7, 2000. If you
have any questions regarding this offer or the enclosed documents, please
contact me at (408) 325-2040 or e-mail me at beatriz.infante@aspect.com
Please indicate your acceptance of this offer by signing and returning it to
Corporate Staffing immediately.
This letter is the complete and entire expression of our offer of employment and
supersedes all other information, whether written or oral, concerning your
employment offer with Aspect Communications Corporation.
Sincerely,
/s/ Beatriz Infante
---------------------------------
Beatriz Infante
President and CEO
<PAGE>
Mr. Gary Smith
April 6, 2000
Page 5
I accept this offer. I understand that my employment by Aspect is for an
indefinite term and is on an "at-will" basis, which means that either Aspect or
I may terminate the employment relationship at any time for any reason and under
no circumstances will I be employed under a contract of employment. While other
terms and conditions of my employment contained in various policies and programs
are subject to change with or without notice, I understand that this "at-will"
relationship can be changed only by written agreement expressly for that
purpose, signed by the Company's Chief Executive Officer. I acknowledge and
agree that this paragraph constitutes the complete and entire understanding
between Aspect and me on the subject of how and when our employment relationship
can be terminated, and supersedes any and all prior discussions, agreements and
understanding between Aspect and me, whether oral, written or implied.
/s/ Gary L. Smith April 7, 2000
------------------------ --------------------------
Gary L. Smith Date
Start Date: April 7, 2000
Enclosures
<PAGE>
Mr. Gary Smith
April 6, 2000
Page 6
SUMMARY CUSTOMARY PROVISIONS OF EMPLOYMENT FOR EXECUTIVE OFFICERS
-----------------------------------------------------------------
At the inception of your employment, you will be required to sign a statement
agreeing to hold the company's proprietary information confidential during and
after your employment, and that you have not brought any former employer's
proprietary information or any of their clients' proprietary information with
you. You will also sign an inventions agreement that assigns to the company any
patentable inventions that you create through your work with the company.
As an employer based in the United States, Aspect is required to verify that its
employees are eligible to work in the United States. On your first day of
employment, you will be required to certify that you are a citizen or lawful
permanent resident or an alien authorized to work in the U.S.
By accepting this letter offer of employment, you will be indicating to the
company that you are acknowledging that you will become an Executive Officer of
the company, as the Securities and Exchange Commission defines that term. As
such, the company may be obligated to publicly report your compensation, your
stock options and ownership position, and other facts relating to your
employment. Generally, such disclosure would not occur before March 2000 and
annually thereafter. You will need to report directly to the SEC any open market
Aspect stock purchases, sales, gifts and grant or exercises of options and these
reports became a matter of public record.
As an officer of the company it is important for you to know that there are
certain obligations of all executive officers and directors to avoid trading the
company's stock while in possession of material inside information and to avoid
combining purchase and sale transactions within a six month period ("short-
swing" transactions.) All executive officers and directors have agreed to abide
by a standard set of policies to avoid personal liability and potential
embarrassment to the company regarding their own stock transactions. A key
provision of this policy is a voluntary prohibition against buying or selling
Aspect stock during certain windows of time, generally the last month of each
quarter through two days following the release of earnings early the following
quarter. You will be asked to sign an agreement to uphold this policy.
As an officer of the company, you will be offered the opportunity to enter into
a change of control employment agreement with the company that would provide you
immediate vesting of any unvested Aspect options and salary continuation for up
to a two year period if there were a change of control of the company before
February 2001 and within one year of the change of control event, your job were
eliminated or substantially reduced, you were involuntarily terminated or
required to relocate.
---------------------------------
(Initials) Gary L. Smith