<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________
FORM 10-Q
(Mark One)
[x] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the quarterly period ended March 31, 1999
or
[_] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the transition period from ______to ______
Commission file number: 0-18391
ASPECT TELECOMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its charter)
California 94-2974062
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1730 Fox Drive, San Jose, California 95131-2312
(Address of principal executive offices and zip code)
Registrant's telephone number: (408) 325-2200
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No ___
-----
The number of shares outstanding of the Registrant's Common Stock, $.01 par
value, was 47,748,837 at April 23, 1999.
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ASPECT TELECOMMUNICATIONS CORPORATION
INDEX
<TABLE>
<CAPTION>
Description Page Number
- ------------------------------------------------------------------------------------- -----------
<S> <C> <C>
Cover Page 1
Index 2
Part I: Financial Information
Item 1: Financial Statements
Condensed Consolidated Balance Sheets as of March 31, 1999 and December 31, 1998 3
Condensed Consolidated Statements of Operations for the Three Month Periods Ended March 31, 1999
and 1998 4
Condensed Consolidated Statements of Cash Flows for the Three Month Periods Ended March 31, 1999
and 1998 5
Notes to Condensed Consolidated Financial Statements 6
Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations 9
Item 3: Qualitative and Quantitative Disclosures About Financial Market Risk 14
Part II: Other Information
Item 6: Exhibits and Reports on Form 8-K 15
Signature 16
</TABLE>
2
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ASPECT TELECOMMUNICATIONS CORPORATION
Part I: Financial Information
Item 1. Financial Statements
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
----------- -----------
ASSETS (unaudited) **
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 74,304 $ 67,071
Short-term investments 134,431 129,040
Accounts receivable, net 96,224 132,818
Inventories 22,329 18,916
Other current assets 25,239 14,820
---------- ------------
Total current assets 352,527 362,665
========== ============
Property and equipment, net 68,999 69,192
Intangible assets, net 114,051 119,052
Other assets 9,499 9,750
---------- ------------
Total assets $545,076 $560,659
========== ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 14,969 $ 18,239
Current portion of notes payable 1,899 3,300
Accrued compensation and related benefits 18,709 21,049
Other accrued liabilities 35,721 34,729
Customer deposits and deferred revenue 36,525 27,171
---------- -----------
Total current liabilities 107,823 104,488
Deferred taxes 3,660 4,270
Convertible subordinated debentures 156,036 153,744
Commitments and contingencies
Shareholders' equity:
Preferred stock, $.01 par value:
2,000,000 shares authorized, none outstanding -- --
Common stock, $.01 par value:
100,000,000 shares authorized, shares outstanding:
48,858,507 in 1999 and 49,309,383 in 1998 135,970 142,132
Accumulated other comprehensive loss (1,578) (420)
Retained earnings 143,165 156,445
---------- ----------
Total shareholders' equity 277,557 298,157
---------- ----------
Total liabilities and shareholders' equity $ 545,076 $560,659
========== ==========
</TABLE>
** Derived from audited financial statements.
See notes to the condensed consolidated financial statements.
3
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ASPECT TELECOMMUNICATIONS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data - unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
-----------------------------
1999 1998
----------- ----------
<S> <C> <C>
Net revenues:
Product $ 51,196 $ 77,332
Customer support 48,889 36,125
---------- ----------
Total net revenues 100,085 113,457
---------- ----------
Cost of revenues:
Cost of product revenues 17,740 24,372
Cost of customer support revenues 35,654 24,170
----------- ----------
Total cost of revenues 53,394 48,542
----------- ----------
Gross margin 46,691 64,915
Operating expenses:
Research and development 19,501 12,830
Selling, general and administrative 45,943 31,084
----------- ----------
Total operating expenses 65,444 43,914
----------- ----------
Income (loss) from operations (18,753) 21,001
Interest income (expense), net (219) 1,413
----------- ----------
Income (loss) before income taxes (18,972) 22,414
(Provision) benefit for income taxes 5,692 (8,517)
----------- ----------
Net income (loss) $ (13,280) $ 13,897
=========== ==========
Basic earnings (loss) per share ($0.27) $ 0.28
Weighted average shares outstanding 49,156 50,146
Diluted earnings (loss) per share ($0.27) $ 0.26
Weighted average shares outstanding-
assuming dilution 49,156 53,071
</TABLE>
See notes to the condensed consolidated financial statements.
4
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ASPECT TELECOMMUNICATIONS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited - in thousands)
<TABLE>
<CAPTION>
Three Months Ended March 31,
-----------------------------
1999 1998
-------------- ------------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) ($13,280) $ 13,897
Reconciliation of net income to cash provided by
operating activities:
Depreciation and amortization 10,278 6,710
Noncash interest expense on debentures 2,292 --
Deferred taxes (1,666) 3,908
Changes in assets and liabilities:
Accounts receivable 34,187 (7,928)
Inventories (3,603) (978)
Other current assets and other asset (7,974) (1,858)
Accounts payable (3,307) 2,714
Accrued compensation and related benefits (3,519) 1,407
Accrued intellectual property settlement -- (14,000)
Other accrued liabilities 1,287 (4,696)
Customer deposits and deferred revenue 9,088 7,310
------------ ------------
Cash provided by operating activities 23,783 6,486
Cash flows from financing activities:
Repurchase of common stock (9,751) --
Other common stock transactions - net 3,530 2,192
Payment on note payable (1,401) (250)
------------ ------------
Cash provided by (used in) financing activities (7,622) 1,942
Cash flows from investing activities:
Short-term investment purchases (35,110) (75,988)
Short-term investment sales and maturities 29,718 28,915
Property and equipment purchases (5,084) (9,006)
------------ ------------
Cash used in investing activities (10,476) (56,079)
Effect of exchange rate changes on cash and cash equivalents 1,548 1,168
------------ ------------
Increase (decrease) in cash and cash equivalents 7,233 (46,483)
Cash and cash equivalents:
Beginning of period 67,071 106,046
------------ ------------
End of period $ 74,304 $ 59,563
============ ============
</TABLE>
See notes to the condensed consolidated financial statements.
5
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ASPECT TELECOMMUNICATIONS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Basis of Presentation
The consolidated financial statements include the accounts of Aspect
Telecommunications Corporation (Aspect or the Company) and its wholly-owned
subsidiaries. All significant intercompany accounts and transactions have been
eliminated.
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
notes required by generally accepted accounting principles for annual financial
statements. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the three months ended March 31, 1999 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 1999. For further information, refer to the consolidated financial
statements and notes thereto included in the Company's 1998 Annual Report to
Shareholders attached as an appendix to the Proxy Statement for the 1999 Annual
Meeting of Shareholders.
Inventories
Inventories, stated at the lower of cost (first-in, first-out) or market,
consist of:
(in thousands)
March 31, December 31,
1999 1998
--------- ------------
Raw materials $ 8,720 $ 9,494
Work in progress 4,514 4,829
Finished goods 9,095 4,593
------- -------
Total $22,329 $18,916
======= =======
Notes Payable
A note relating to the 1995 acquisition of TCS was payable on October 31, 1998.
In November 1998, $1.2 million was paid on this note and in February 1999 the
Company paid an additional $1.4 million. Payment of the remaining $1.9 million
on the note is being delayed pending resolution of various tax matters relating
to periods prior to the Company's acquisition of TCS.
Convertible Subordinated Debentures
In August 1998, the Company completed a private placement of approximately
$150 million ($490 million principal amount at maturity) of zero coupon
convertible subordinated debentures due 2018. These debentures are priced at a
yield to maturity of 6% per annum and are convertible into Aspect Common Stock
any time prior to maturity at a conversion rate of 8.713 shares per $1,000
principal amount. Holders can require Aspect to repurchase the debentures on
August 10, 2003, August 10, 2008 and August 10, 2013 for cash; or at the
election of Aspect, for Aspect Common Stock, if certain conditions are met.
Aspect can redeem the debentures any time on or after August 10, 2003. The
debentures are not secured by any Aspect assets and are subordinated in right
of payment to all of Aspect senior indebtedness and effectively subordinated
to the debt of the Company's subsidiaries. On October 30, 1998, the Company
filed a registration statement
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ASPECT TELECOMMUNICATIONS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
with the Securities and Exchange Commission to register the debentures and
shares of Aspect Common Stock issuable upon conversion for resale. The
registration statement was declared effective on February 2, 1999.
Per Share Information
Basic earnings (loss) per share is computed using the weighted average number of
common shares outstanding during the period. Diluted earnings (loss) per share
further includes the dilutive impact of stock options. Basic and diluted
earnings (loss) per share for the three months ended March 31 are calculated as
follows (in thousands, except per share data):
<TABLE>
<CAPTION>
Three Months Ended March 31
---------------------------
1999 1998
-------------- -----------
<S> <C> <C>
Basic EPS:
Weighted average shares outstanding 49,156 50,146
Net income (loss) ($13,280) $13,897
Basic earnings (loss) per share $ (0.27) $ 0.28
========= =======
Diluted EPS:
Weighted average shares outstanding 49,156 50,146
Dilutive effect of options -- 2,925
Weighted average shares issuable upon conversion of debt -- --
--------- -------
Total 49,156 53,071
Net income (loss) ($13,280) $13,897
Diluted earnings (loss) per share $ (0.27) $ 0.26
========= =======
</TABLE>
As of March 31, 1999, the Company had 0.7 million common stock options
outstanding which could potentially dilute basic earnings per share in the
future, but were excluded from the computation of diluted earnings per share for
the three month period ended March 31, 1999 because inclusion of these shares
would have had an anti-dilutive effect as the Company had a net loss for that
period. Similarly, the Company had 8.7 million options outstanding that were
excluded from the computation of diluted earnings per share as the exercise
prices were greater than the average market price of the common shares for the
three month period ended March 31, 1999. Additionally, as of March 31, 1999,
there were 4.3 million shares of common stock issuable upon conversion of
debentures. These shares and the effect of accrued interest expense on the
debentures was not included in the calculation of diluted earnings per share for
the three month period ended March 31, 1999 because this inclusion would have
been anti-dilutive.
Contingencies
The Company is from time to time involved in litigation or claims that arise in
the normal course of business. The Company does not expect that any current
litigation or claims will have a material adverse effect on the Company's
business, operating results, or financial condition.
Comprehensive Income (Loss)
In the first quarter of 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income," which requires
an enterprise to report the change in net assets during the period from non-
owner sources. For the three months ended March 31, 1999, comprehensive loss
was
7
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ASPECT TELECOMMUNICATIONS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
$14,438,000. Comprehensive income for the same period of the prior year was
$13,023,000. Comprehensive income (loss) represents net income (loss) for these
periods and changes in unrealized gains on securities and accumulated
translation adjustments.
Share Repurchase Program
In October 1998, the Company's Board of Directors approved a stock repurchase
program to acquire up to five million shares of its common stock. The shares
may be purchased in the open market or through private transactions. The number
of shares to be purchased and the timing of purchases will be based on several
conditions, including the price of the Company's common stock, general market
conditions and other factors. No time limit was set for the completion of the
program. In the quarter ended March 31, 1999, 1,250,000 shares were repurchased
at an average acquisition price of $7.80 per share. A total of 3,260,000 shares
have been repurchased to date under this program at an average acquisition price
of $12.68 per share. The Company has retired all shares repurchased.
8
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ASPECT TELECOMMUNICATIONS CORPORATION
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The following discussion should be read in conjunction with the unaudited
condensed consolidated financial statements and notes thereto included in
Part I - Item 1 of this Quarterly Report and the audited consolidated financial
statements and notes thereto and Management's Discussion and Analysis in the
Company's 1998 Annual Report to Shareholders.
Overview
Aspect Telecommunications Corporation (Aspect or the Company) is a provider of
integrated software suites designed to enable companies to deliver responsive
and cost-effective customer service using call center solutions to interact with
their customers via voice, data, the Internet, and e-mail. Aspect also
consults, trains, and delivers systems integration services to help
organizations effectively plan, integrate, and manage call centers. The Company
markets its products and services worldwide to enterprises in a broad array of
industries including financial services, government, health care, retailing,
technology, telecommunications, and transportation.
In May 1998, the Company completed the acquisition of Voicetek Corporation
(Voicetek), a leading supplier of interactive voice response (IVR) and
Intelligent Networks (IN) applications, based in Chelmsford, Massachusetts. The
transaction was intended to augment Aspect customer premise IVR product
offerings, strengthen the Company's position in the network service provider
marketplace, and extend the Company's original equipment manufacturers (OEM)
sales channel capabilities. The transaction was accounted for as a purchase. The
Company paid approximately $72 million in cash for all Voicetek common and
preferred shares outstanding and converted all outstanding Voicetek options into
options to purchase approximately 450,000 shares of Aspect common stock with a
fair value of approximately $11 million plus transaction costs of approximately
$3 million, and assumed certain operating assets and liabilities. The Company
recorded a one-time charge of $10 million in the second quarter of 1998 for
purchased in-process technology related to two development projects that had not
reached technological feasibility, had no alternative future use, and for which
successful development was uncertain. The conclusion that each in-process
development effort, or any material subcomponent, had no alternative future use
was reached in consultation with engineering personnel from both Aspect and
Voicetek.
In August 1998, the Company completed a private placement of approximately $150
million ($490 million principal amount at maturity) of zero coupon convertible
subordinated debentures (convertible subordinated debentures) due 2018. The
convertible subordinated debentures are priced at a yield to maturity of 6% per
annum and are convertible into Aspect common stock anytime prior to maturity at
a conversion rate of 8.713 share per $1,000 principal amount. Holders can
require Aspect to repurchase the debentures on August 10, 2003, August 10, 2008
and August 10, 2013, for cash, or at the election of Aspect, for Aspect common
stock, if certain conditions are met. The debentures are not secured by any
Aspect assets and are subordinated in right of payment to all of Aspect senior
indebtedness and effectively subordinated to the debt of Aspect subsidiaries. On
October 30, 1998, the Company filed a registration statement with the Securities
and Exchange Commission to register the debentures and shares of Aspect Common
Stock issuable upon conversion for resale. The registration statement was
declared effective on February 2, 1999.
Except for historical information contained herein, the matters discussed in
this report are forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended, Section 21E of the Securities and
Exchange Act of 1934, as amended, and the Private Securities Litigation Reform
Act of 1995, and are made under the safe-harbor provisions thereof. Such
forward-looking statements are subject to certain risks and uncertainties that
could cause actual results to differ materially from those projected. See
"Business Environment and Risk Factors" discussed in the Company's Annual Report
and Form 10-K
9
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ASPECT TELECOMMUNICATIONS CORPORATION
for the fiscal year ended December 31, 1998. Readers are cautioned not to place
undue reliance on these forward-looking statements, which reflect management's
analysis only as of the date hereof. The Company undertakes no obligation to
publicly release the results of any revision to these forward-looking statements
which may be made to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events.
Results of Operations
Net Revenues
Total revenues decreased by 12% to $100.1 million for the first quarter of 1999
from $113.5 million for the first quarter of 1998.
Product revenues for the first quarter of 1999 were $51.2 million, a decrease of
34% from product revenues of $77.3 million for the first quarter of 1998
primarily due to a decline in revenue from sales of new call center systems and
add-ons in the United States, partially offset by revenue associated with
Voicetek. International product revenues in the first quarter of 1999 decreased
modestly from the first quarter of the prior year reflecting increased revenue
in Germany offset by a decline in the United Kingdom.
Customer support revenues for the first quarter of 1999 were $48.9 million, an
increase of 35% over support revenues of $36.1 million for the same period of
1998. Growth in customer support revenues resulted primarily from increases in
maintenance revenues as a result of the growth in the Company's installed base,
including the installed base added through acquisitions and expanded revenue
from consulting and systems integration projects in North America. Customer
support revenues include fees for providing contractually agreed-upon system
service and maintenance (which typically commence twelve months from the date a
system is installed and, accordingly, are primarily affected by growth in the
installed base); installation of products; systems integration revenues; and
other support services.
Gross Margin on Product Revenues
Product gross margin was 65.3% for the first quarter of 1999 compared to 68.5%
for the first quarter of 1998. The decline in product gross margin from 1998 to
1999 primarily reflects the increased proportional impact of amortization and
other fixed production costs due to decreased revenue, as well as an increased
mix of revenue from third party products included as part of system integration
projects in the most recent quarter (which typically have lower margins). On a
forward-looking basis, the Company expects that the following factors, among
others, could have a material impact on product gross margins: the shift in the
Company's business focus to becoming a provider of customer relationship
solutions; variations in the mix and volume of products sold; the channel of
distribution; the portion of systems revenues related to accounts purchasing
multiple systems; the mix and level of third-party product included as part of
systems integration projects; the results of recently acquired subsidiaries; and
cross-licensing or royalty arrangements with third parties.
Gross Margin on Customer Support Revenues
Customer support gross margin was 27.1% for the first quarter of 1999 compared
to 33.1% for the first quarter of 1998. The decrease in customer support
margins between the periods reflects customer support revenues not growing
proportionately with the costs associated with providing the related services,
in particular costs associated with consulting and systems integration projects.
On a forward-looking basis, the Company anticipates that customer support
margins will fluctuate from period to period due to fluctuations in customer
support revenues (since many of the costs of providing customer support do
10
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ASPECT TELECOMMUNICATIONS CORPORATION
not vary proportionately with customer support revenues), ongoing efforts to
expand the Company's customer support infrastructure and fluctuations in the
level of consulting and systems integration revenue.
Research and Development Expenses
Research and development (R&D) expenses were $19.5 million for the first quarter
of 1999, an increase of 52% over $12.8 million for the first quarter of 1998.
R&D expenditures reflect the Company's ongoing efforts to remain competitive
through both new product development and expanded features for existing
products. The increases across the period presented reflect increased staffing,
associated infrastructure costs, and the inclusion of Voicetek's R&D expenses in
1999, including amortization costs associated with developed and core technology
intangible assets. As a percentage of net revenues, R&D spending was 19% for the
first quarter of 1999 compared to 11% for the first quarter of 1998. Excluding
amortization of acquired intangible assets, R&D expenses were $18.4 million for
the first quarter of 1999 while the same period of 1998 did not include similar
expenses. The Company continues to believe that significant investment in R&D
is required to remain competitive and anticipates, on a forward-looking basis,
that such expenses in 1999 will increase in absolute dollars, although such
expenses as a percentage of net revenues may fluctuate between periods.
Selling, General and Administrative Expenses
Selling, general and administrative (SG&A) expenses were $45.9 million for the
first quarter of 1999, an increase of 48% over $31.1 million in the first
quarter of 1998. The increase between these two periods was primarily caused by
increased staffing levels, infrastructure expansion, and increased amortization
expenses related to the acquisition of Voicetek, partially offset by a decline
in legal expenses. SG&A expenses as a percentage of net revenues were 46% for
the first quarter of 1999 and 27% for the first quarter of 1998. Excluding
amortization of acquired intangible assets, SG&A expenses were $43.1 million and
$30.1 million for the first quarters of 1999 and 1998, respectively. The
Company anticipates, on a forward-looking basis, that SG&A expenses will
continue to increase in absolute dollars for 1999, when compared with 1998,
although such expenses as a percentage of net revenues may fluctuate between
periods.
Net Interest Income (Expense)
Net interest expense was $219,000 for the three months ended March 31, 1999
compared to net interest income of $1.4 million for the three months ended March
31, 1998. This decline resulted from interest expense associated with the
issuance of approximately $150 million of convertible subordinated debentures in
August 1998 (approximately $156 million in principal and accrued interest at
March 31, 1999), the utilization of cash associated with the Company's stock
repurchase program and generally lower interest rates earned on invested cash.
Income Taxes
The Company's effective tax rate was a benefit of 30% for the first three months
of 1999 compared with a provision of 38% in the same period of 1998. The rate in
1999 is lower primarily due to the nondeductible goodwill amortization from
prior years' acquisitions which reduces the amount of tax benefit that can be
recognized in a loss period. The Company has sufficient prior year taxable
income to allow recognition of the tax benefit.
Liquidity and Capital Resources
At March 31, 1999, the Company's principal source of liquidity consisted of
cash, cash equivalents, and short-term investments totaling $208.7 million,
which represented 38% of total assets. The primary sources
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ASPECT TELECOMMUNICATIONS CORPORATION
of cash for the first three months of 1999 were cash provided by operating
activities of $23.8 million and proceeds from the issuance of common stock under
various stock plans of $3.5 million.
The primary uses of cash for the first three months of 1999 were net purchases
of short-term investments of $5.4 million, $9.8 million used for the stock
repurchase program, $5.1 million for the purchase of property and equipment, and
$1.4 million for payments on a note payable.
At March 31, 1999, the Company's outstanding borrowings, including current
portions of notes payable, totaled $158 million, and comprised $156 million of
convertible subordinated debentures and $1.9 million remaining on a $4.5 million
note payable incurred in connection with the acquisition of TCS in 1995. Payment
of the remaining balance is being delayed pending resolution of various tax
matters relating to periods prior to the Company's acquisition of TCS.
The Company believes, on a forward-looking basis, that its cash, cash
equivalents, short-term investments, and anticipated cash flow from operations
will be sufficient to meet the Company's presently anticipated cash requirements
during at least the next twelve months.
Year 2000 and Proximate Dates
The information provided below constitutes a "Year 2000 Readiness Disclosure"
for purposes of the Year 2000 Readiness Disclosure Act.
Many computer systems are expected to experience problems handling dates around
the Year 2000 (Y2K). Described below are the actions we have taken or plan to
take to address the potential problems that could result as systems attempt to
handle dates around the millennium.
State of Readiness: The Company's Y2K activities include the following phases:
gathering data and taking inventory; testing systems and products to discover or
confirm Y2K compliance; execution of remediation activities to fix non-compliant
products and systems; and ongoing monitoring and testing of products and
systems. The major business areas impacted are as follows:
. Products and Installations: The Company is visiting customers to install Y2K
solutions and has furnished test facilities and equipment to allow customers
to verify compliance. The Company believes that substantially all of the
Company's products are Y2K compliant, or that upgrades available to make them
Y2K compliant.
. Procurement: The Company has surveyed the Y2K readiness of critical and sole-
source suppliers. The Company is monitoring these critical suppliers and will
continue to follow up with them on their Y2K readiness. Risk assessments and
contingency plans are being prepared for critical suppliers.
. Manufacturing: Certain of the Company's manufacturing is outsourced to two
primary suppliers and the Company is monitoring their Y2K readiness. The
Company's assembly and test equipment is scheduled for ongoing upgrades to
Y2K compliant configurations through September 1999. The Company's primary
manufacturing application software has been upgraded to a version that has
successfully passed Y2K testing.
. Information Technology Systems: The Company has conducted a survey of its
information technology hardware and software and has a Y2K project team
focusing on testing and remediation of necessary components. The Company
expects that substantially all nonY2K compliant hardware and software will be
upgraded or replaced by September 1999.
. Facilities and Infrastructure: An assessment of the Y2K readiness of owned
and leased assets was substantially completed in January 1999. The Company is
currently confirming compliance status and upgrading components as necessary.
The Company anticipates that substantially all non-Y2K compliant facilities
components will be upgraded or replaced by September 1999.
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ASPECT TELECOMMUNICATIONS CORPORATION
Costs: The estimated costs of Y2K compliance efforts are not expected to be
material to the Company.
Risks: Many computer systems are expected to experience problems handling dates
around the year 2000. The Company believes the most reasonably likely worst case
Y2K scenarios include the following:
. Customers could change their buying patterns in a number of ways, including
accelerating or delaying purchases of, or replacement of, the Company's
products and services.
. The Company could experience a disruption in service to its customers as a
result of the failure of third party products, including the following:
-Third party products which are non-compliant and are incorporated into the
Company's products could cause such products to fail;
-A breakdown in telephone, e-mail, voicemail, Web or file transfer programs
could impact the responsiveness of the Company's help desk;
-Y2K problems at a number of the Company's suppliers including banks,
telephone companies and transport and mail services could have a pervasive
impact on business as a whole; and/or
-Product features that rely on date parameters, such as scheduled operating
procedures and operating reports, could malfunction.
The Company's products may not contain all of the necessary date code or other
changes to operate in the Y2K. Any failure of such products to perform could
result in:
. Claims and lawsuits against the Company;
. Significantly impaired customer satisfaction resulting in customers
withholding cash owed to the Company and delaying or canceling orders; and/or
. Managerial and technical resources being diverted away from product
development and other business activities.
Any of the above stated consequences, in addition to others that management
cannot yet foresee, could have a significant adverse impact on the Company's
business, operating results or financial condition.
Contingency Plans: The Company is currently developing contingency plans for
critical business processes, suppliers, and systems. The Company presently
anticipates that contingency plans will be complete by October 1999. Once
contingency plans are implemented, however, management cannot be certain that
such plans will prevent significant Y2K problems from occurring.
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ASPECT TELECOMMUNICATIONS CORPORATION
Item 3. Quantitative and Qualitative Disclosures About Financial Market Risk
Reference is made to the information appearing under the caption "Quantitative
and Qualitative Disclosures About Financial Market Risk" on pages F-11 through
F-12 of the Registrant's 1998 Annual Financial Report to Shareholders attached
as an appendix to the Registrant's 1999 Proxy Statement, which information is
hereby incorporated by reference.
14
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ASPECT TELECOMMUNICATIONS CORPORATION
Part II: Other Information
Item 6. Exhibits and Reports on Form 8-K
A. Exhibits
Exhibit 10.59 Severance Agreement between the Registrant and Robert A. Blatt,
dated March 25, 1999
Exhibit 10.60 Employment Agreement between the Registrant and Deborah E.
Barber, dated March 1, 1999.
Exhibit 10.61 Employment Agreement between the Registrant and James R.
Carreker, dated March 1, 1999.
Exhibit 10.62 Employment Agreement between the Registrant and Kathleen M. Cruz,
dated March 1, 1999.
Exhibit 10.63 Employment Agreement between the Registrant and Beatriz V.
Infante, dated March 1, 1999.
Exhibit 27 Financial Data Schedule
B. Reports on Form 8-K
No reports on Form 8-K filed during the quarter ended March 31, 1999
15
<PAGE>
ASPECT TELECOMMUNICATIONS CORPORATION
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Aspect Telecommunications Corporation
(Registrant)
Date: April 29, 1999
By /s/ Eric J. Keller
-------------------
Eric J. Keller
Senior Vice President, Finance and Chief Financial
and Accounting Officer (Duly Authorized and
Principal Financial and Accounting Officer)
16
<PAGE>
[Aspect Letterhead]
EXHIBIT 10.59
March 25, 1999
Robert A. Blatt
4262 Newberry Court
Palo Alto, CA 94602
Dear Robert:
This letter is to confirm the agreement between you and Aspect
Telecommunications Corporation ("Aspect" or the "Company") regarding your
separation from employment with the Company.
You will resign your position as an officer of the Company effective March 31,
1999. Commencing on March 31, 1999 and continuing through and until the
earlier of: (a) September 30, 1999, or (b) the date you accept full time
employment with another company (the "Termination Date"), Aspect shall retain
you as a part-time employee (the "Transition Period"). Your title for internal
record keeping purposes will be Executive Advisor. During this Transition
Period, you will be available to provide services to Aspect as requested, not
to exceed 40 hours a month. During the Transition Period, Aspect will pay you
a monthly salary of $18,750, less applicable withholdings and any other employee
benefits that you are eligible to receive with the following exceptions: after
March 31, 1999, you will not be eligible to participate in the accrual of
flexible time off hours and the Employee Incentive Plan.
You agree that, except for any compensation, if any, you may have earned during
the first quarter of 1999 under the Executive Incentive Plan, the only payments
and benefits that you are entitled to receive from the Company in the future are
those specified in this letter.
You will receive outplacement services to a maximum amount of $10,000.00 which
shall be paid directly to one executive outplacement firm of your choice for
services before September 30, 1999.
In consideration for receiving the Transition Period payments and outplacement
services described above, you waive and release and promise never to assert any
claims or causes of action, whether or not now known, against the Company or its
predecessors, successors, subsidiaries, officers, directors, agents, employees
and assigns, with respect to any matter, including but not limited to, any
matter arising out of or connected with your employment with the Company or the
termination of that employment, including without limitation, claims of wrongful
discharge, emotional distress, defamation, fraud, breach of contract, breach of
the covenant of good faith and fair dealing, any claims of discrimination or
harassment based on sex, age, race, national origin, disability or on any other
basis, under Title VII of the Civil Rights Act of 1964, as amended, the
California Fair Employment and Housing Act, the Age Discrimination in Employment
Act of 1967, as amended, and all other laws and regulations relating to
employment.
<PAGE>
Robert Blatt
03/31/99
Page2
You expressly waive and release any and all rights and benefits under Section
1542 of the Civil Code of the State of California (or any analogous law of any
other state), 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."
Nothing contained in this letter shall constitute or be treated as an admission
by you or the Company of liability, of any wrongdoing, or of any violation of
law.
At all times in the future, you will remain bound by Aspect's Proprietary
Information and Invention Agreement signed by you, a copy of which is attached
hereto as Exhibit A. You further agree that personally, or through your agents,
you will not engage in any conduct or communication, whether written or verbal,
which is, or could be, injurious to Aspect's business reputation or to the
reputation of any officer or director of the Company. Likewise the Company
agrees not to engage in any conduct or communications, whether written or verbal
, which could be injurious to your personal or professional reputation. The
Company agrees that all requests for references on your behalf will be referred
to me. You agree that from now and until one year following your Termination
Date, you will not solicit, or attempt to solicit any Aspect employee or
consultant to cease their relationship with Aspect for any reason.
The Company agrees that at all times in the future, it shall indemnify you for
all losses arising out of your discharge of duties with the Company to the full
extent required under California Labor Code section 2802.
You may not disclose to others the fact or terms of this letter, except that you
may disclose such information to your attorney or accountant in order for such
individuals to render services to you, and you may also disclose such
information to your spouse.
Based on information provided by Aspect's stock administrator, and assuming no
stock option exercises from this date until March 31, 1999, you currently hold a
combination of Incentive Stock Options and Non-Statutory Stock Options under the
Company's 1989 Stock Incentive Plan (the "Plan") for 234,636 shares (the
"Options"). It is expected that as of September 30, 1999, 184,633 shares of
these options will be vested and 50,003 shares will be unvested. Pursuant to the
terms of the existing stock option agreements for your Options and provisions of
the Plan to which your Options are subject, your Options will cease vesting on
the Termination Date. You will have thirty days from the Termination Date to
exercise the Options to the extent vested. All of the other terms, conditions,
and limitations applicable to your Options pursuant to the option agreements and
the Plan will remain in full force and effect. You also agree that you have no
other stock rights in the Company (or any parent or subsidiary) other than those
rights enumerated in this paragraph.
You agree that except as expressly provided in this letter, this letter renders
null and void any and all prior agreements between you and the Company.
This agreement shall be construed and interpreted in accordance with the laws of
California.
<PAGE>
Robert Blatt
03/25/99
Page 3
You have up to twenty-one (21) days after receipt of this letter within which to
review it, and to discuss it with an attorney of your own choosing regarding
whether or not you wish to execute it. Furthermore, you have (7) days after you
have signed this letter during which time you may revoke this agreement.
If you wish to revoke this agreement, you may do so by delivering a letter of
revocation to me and you must also return to me the severance payment made to
you pursuant to paragraph 1 above. Because of this revocation period, you
understand that the agreement set forth in this letter shall not become
effective or enforceable until the eighth day after the date you sign this
letter.
Please indicate your agreement with the above terms by signing below.
Sincerely,
/s/ James R. Carreker
- ---------------------
James R. Carreker
Chairman, President and Chief Executive Officer
My agreement with the above terms is signified by my signature below.
Furthermore, I acknowledge that I have read and understand this letter and that
I sign this release of all claims voluntarily, with full appreciation that at no
time in the future may I pursue any of the rights I have waived in this release.
/s/ Robert A. Blatt
Dated: March 31, 1999 ______________________________
Robert A. Blatt
<PAGE>
EXHIBIT 10.60
[ASPECT LETTERHEAD]
March 1, 1999
Deborah E. Barber
Sr. Vice President, Human Resources & Corporate Services
Dear Deborah:
This letter agreement (the "Agreement") is to confirm the terms of your
ongoing employment with Aspect Telecommunications Corporation (the "Company").
1. This Agreement will commence on the date hereof and continue for a term
of two (2) years (the "Original Term"), unless extended for one or more
-------------
additional one-year terms upon mutual written agreement of the parties or unless
terminated pursuant to the terms described herein. In the event that the
Company has entered into discussions with a third party regarding a Change of
Control (as defined below) transaction and such Change of Control discussions
are ongoing at the end of the Original Term, this Agreement shall be
automatically extended pending consummation of such transaction.
2. You are employed as Sr. Vice President, Human Resources & Corporate
Services of the Company, and as such report to the Company's Chief Executive
Officer. Your job duties and responsibilities are described on Exhibit A
---------
attached hereto. You agree to the best of your ability and experience that you
will, to the reasonable satisfaction of the Company and its Board of Directors
(the "Board"), at all times loyally and conscientiously perform all of the
duties and obligations required of you pursuant to the terms of this Agreement.
You will comply with and be bound by the Company's operating policies,
procedures and practices from time to time in effect 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. If your
employment terminates for any reason, you will not be entitled to any payments,
benefits, damages, award or compensation other than as provided in this
Agreement. The rights and duties created by this paragraph may not be modified
in any way except by a written agreement executed by 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 within twelve (12) months of a Change of Control (as
defined below), you will be entitled to receive payment of severance benefits
equal to your regular monthly salary (subject to any applicable tax withholding)
until the earlier of (i) twelve (12) months following the termination date or
(ii) the date on which you commence comparable employment (as defined below)
with another employer (the "Severance Period"). Such payments will be made
ratably over the
<PAGE>
Severance Period according to the Company's standard payroll schedule. Health
insurance benefits with the same coverage provided to you prior to the
termination (e.g. medical, dental, optical, mental health) and in all other
respects significantly comparable to those in place immediately prior to the
termination will be provided at the Company's cost over the Severance Period. In
addition, and except as otherwise determined below, each stock option and share
of restricted stock you hold that is not otherwise fully exercisable or vested
(released from the Company's repurchase option) as of the termination date shall
become immediately exercisable or vested in full as of such date.
5. In the event it is determined by the Board, upon consultation with
Company management and the Company's independent auditors, that the enforcement
of paragraph 5 of this Agreement, which allows for the acceleration of vesting
of option shares and restricted stock upon an involuntary or constructive
termination following a Change of Control, would preclude accounting for any
proposed business combination of the Company involving a Change of Control as a
pooling of interests, and the Board otherwise desires to approve such a proposed
business transaction which requires as a condition to the closing of such
transaction that it be accounted for as a pooling of interests, then such
paragraph shall be null and void. For purposes of this paragraph, the Board's
determination shall require the unanimous approval of the non-employee Board
members.
6. In the event that the severance and other benefits provided to you by
this Agreement constitute "parachute payments" within the meaning of Section
280G of the Internal Revenue Code of 1986, as amended (the "Code") and, but for
this paragraph, would be subject to the excise tax imposed by Section 4999 of
the Code, the Company shall reduce the aggregate amount of such payments and
benefits such that the present value thereof (as determined under the Code and
the applicable regulations) is equal to 2.99 times your "base amount" as defined
in Section 280G(b)(3) of the Code. The payment of severance and other benefits
provided for in this Agreement shall be subject to all applicable income and
employment tax rules and regulations.
7. For purposes of this Agreement, the following definitions will apply:
(a) "Cause" for your termination will exist if the Company terminates
-----
your employment for any of the following reasons: (i) you willfully fail
substantially to perform your duties hereunder (other than any such failure due
to your physical or mental illness), and such willful failure is not remedied
within 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 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 contender to a crime that constitutes a
felony, 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 10 business days after written notice
from the Company's Chief Executive Officer, which written
-2-
<PAGE>
notice shall state that failure to remedy such conduct may result in an
involuntary termination for cause.
(b) "Change of Control" will mean the occurrence of any of the
-----------------
following events: (i) 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) or
(ii) a sale of all or substantially all of the assets of the Company
(collectively, a "Merger"), so long as in either case the Company's shareholders
------
of record immediately prior to such Merger will, immediately after such Merger,
hold less than 50% of the voting power of the surviving or acquiring entity.
(c) "Comparable Employment" will mean employment or consulting that
---------------------
provides compensation, benefits and duties that, in the sole discretion of the
Board, are deemed to be generally comparable to those pertaining to your
position with the Company at the time of termination of your employment.
(d) "Constructive Termination" will be deemed to occur if (A) (i)
------------------------
your duties and responsibilities as Sr. Vice President, Human Resources &
Corporate Services of the company are materially diminished without your prior
written consent; and/or (ii) any reduction in the total value of your base
compensation and benefits occurs; and/or (iii) your new business office location
is more than 50 miles or greater than current commute (whichever is greater)
from your current business office location. Construction termination does not
occur when your reduction in duties, position or responsibilities solely results
by virtue of the company being acquired and made a part of a larger entity; and
(B) within sixty (60) days immediately following such material change in duties
or reduction or refusal to relocate you elect to terminate your employment
voluntarily.
8. You have signed a Confidential Information and Invention Assignment
Agreement (the "Confidentiality Agreement") substantially in the form attached
-------------------------
hereto as Exhibit B. You hereby represent and warrant to the Company that you
----------
have 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.
9. You represent that your performance of all the terms of this Agreement
will not breach any other agreement to which you are a party. You have not, and
will not during the term of this Agreement, enter into any oral or written
agreement in conflict with any of the provisions of this Agreement.
10. Any successor to the Company (whether direct or indirect and whether
by purchase, lease, merger, consolidation, liquidation or otherwise) to all or
substantially all of the Company's business and/or assets will assume the
obligations under this Agreement and agrees expressly to perform the obligations
under this Agreement in the same manner and to the same
-3-
<PAGE>
extent as the Company would be required to perform such obligations in the
absence of a succession. The terms of this Agreement and all of your rights
hereunder will inure to the benefit of, and be enforceable by, your personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.
11. This Agreement, including any Exhibits hereto, constitutes the sole
agreement of the parties and supersedes all oral negotiations and prior writings
with respect to the subject matter hereof.
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 or by a
nationally-recognized delivery service (such as Federal Express or UPS), or 48
hours after being deposited in the U.S. mail as certified or registered mail
with 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 renegotiate 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, (ii) the balance of the
Agreement will be interpreted as if such provision were so excluded 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 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. The Company agrees to
pay, on a monthly basis, the reasonable attorney fees, costs and expenses (as
determined by the arbitrator) incurred by you in good faith in connection with
the arbitration, regardless of the outcome. You agree that punitive damages
will not be awarded. This paragraph will not apply to the Confidentiality
Agreement.
-4-
<PAGE>
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 Telecommunications Corporation
/s/ James R. Carreker
By:_______________________________
Title: Chairman, President &
Chief Executive Officer
My agreement with the above terms is signified by my signature below.
/s/ Deborah E. Barber
----------------------------
Deborah E. Barber
-5-
<PAGE>
EXHIBIT A
---------
DESCRIPTION OF JOB DUTIES
AND RESPONSIBILITIES
Senior Vice President Human Resources and Corporate Services- Deborah E. Barber
- --------------------------------------------------------------------------------
This position is responsible for overseeing the activities of Human Resources
and Facilities and Corporate Services functions. These functions encompass
world-wide responsibilities for program design and implementation of policy and
programs that are cost effective, competitive and conform to applicable local
standards and regulations.
<PAGE>
EXHIBIT B
---------
CONFIDENTIAL INFORMATION AND
INVENTION ASSIGNMENT AGREEMENT
<PAGE>
EMPLOYEE AGREEMENT
In exchange for my becoming employed (or my employment being continued)
by Aspect Telecommunications Corporation, or its subsidiaries,
affiliates, or successors (hereinafter referred to collectively as the
"Company"), I hereby agree as follows:
EMPLOYMENT AT WILL
I agree that this Agreement is not an employment contract and that I
have the right to resign and the Company has the right to terminate my
employment at any time, for any reason, with or without cause. This is
the full and complete agreement between myself and the Company and no
employee or representative of the Company has any authority to enter
into any agreement to the contrary.
I will perform for the Company such duties as may be designated by the
Company from time to time. During my period of employment by the
Company, I will devote my best efforts to the interests of the Company
and will not engage in other employment with any Aspect competitor,
customer or supplier without the prior written consent of the Company. I
will not accept a position with any other company if the time demands of
the position will impair my ability to fulfill my obligations to the
Company.
DEFINITIONS
As used in this Agreement, the term "Inventions" means designs,
trademarks, discoveries, formulae, processes, manufacturing techniques,
trade secrets, inventions, improvements, ideas, original works of
authorship or copyrightable works, including all rights to obtain,
register, perfect and enforce these proprietary interests.
As used in this Agreement, the term "Confidential Information" means
information pertaining to any aspects of the Company's business which is
either information not known by actual or potential competitors of the
Company or is proprietary information of the Company or its customers or
suppliers, whether of a technical nature or otherwise.
ASSIGNMENT OF INVENTIONS
Without further compensation, I hereby assign and agree to assign to the
Company or its designee, my entire right, title, and interest in and to
all Inventions made by me during the period of my employment, unless the
Invention was developed entirely on my own time without using the
Company's equipment, supplies, facilities, or trade secret information;
and (a) the Invention does not relate at the time of conception or
reduction to practice of the Invention to the Company's business, or the
Company's actual or demonstrably anticipated research or development;
and, (b) the Invention does not result from any work performed by me for
the Company, whether or not during normal working hours. No rights are
hereby conveyed in Inventions, if any, made by me prior to my employment
with the Company which are identified on the back of this Agreement or
on a sheet attached to and made a part of this Agreement, if any. I
acknowledge that all original works of authorship which are made by me
(solely or jointly with others) within the scope of my employment and
which are protectable by copyright are "works made for hire," as that
term is defined in the United States Copyright Act as in effect as of
this date.
I agree to perform, during and after my employment, all acts deemed
necessary or desirable by the Company to permit and assist it, at its
expense, in obtaining and enforcing the full benefits, enjoyment, rights
and title throughout the world in the Inventions hereby assigned to the
Company. Such acts may include, but are not limited to, execution of
documents and assistance or cooperation in legal proceedings.
This Agreement does not apply to an Invention, the assignment of which
to the Company would violate applicable law, including an Invention
which qualified fully under Section 2870 of the California Labor Code. I
agree to disclose in confidence to the Company all Inventions made by me
to permit a determination as to whether or not the Inventions should be
the property of the Company.
<PAGE>
CONFIDENTIAL NONDISCLOSURE
I agree to hold in confidence and not directly or indirectly to use or
disclose, either during or after termination of my employment with the
Company, any Confidential Information I obtain or create during the
period of my employment, whether or not during working hours, except to
the extent authorized by the Company, until such Confidential Information
becomes generally known. I agree not to make copies of such Confidential
Information except as authorized by the Company. I will return or deliver
to the Company all tangible forms of such Confidential Information in my
possession or control, including but not limited to drawings,
specifications, documents, records, devices, models or any other material
and copies or reproductions thereof.
I represent that my performance of all the terms of this Agreement and as
an employee of the company does not and will not breach any agreement to
keep in confidence proprietary information, knowledge or data acquired by
me in confidence or in trust prior to my employment with the Company, and
I will not disclose to the Company, or induce the Company to use, any
confidential or proprietary information or material belonging to any
previous employer or others.
NO SOLICITATION
I agree that for a period of twelve (12) months immediately following the
termination of my relationship with the Company for any reason, I shall
not either directly or indirectly solicit, induce, recruit or encourage
any of the Company's employees to leave their employment or attempt to
solicit, induce, encourage or recruit employees of the Company, either
for myself or for any other person or entity.
NO CONFLICT
I agree not to enter into any agreement either written or oral in
conflict with the provisions of this Agreement. I certify that, to the
best of my information and belief, I am not a party to any other
agreement which will interfere with my full compliance with this
Agreement.
SURVIVABILITY
This Agreement (a) shall survive my employment by the Company, (b) does
not in any way restrict my right or the right of the Company to terminate
my employment, (c) inures to the benefit of successors and assignees of
the Company, and (d) is binding upon my heirs and legal representatives.
COMPLIANCE
I certify and acknowledge that I have carefully read all of the
provisions of this agreement and that I understand and will fully and
faithfully comply with such provisions.
EMPLOYEE
Deborah E Barber /s/ Deborah E Barber
----------------------- -----------------------
Print Name Signature
April 13, 1998
-----------------------
Date
ASPECT TELECOMMUNICATIONS CORPORATION
Jen Rios /s/ Jen Rios
----------------------- -----------------------
Print Name Signature
Ben Analyst
-----------------------
Title
<PAGE>
Exhibit 10.61
[ASPECT LETTERHEAD]
March 1, 1999
James R. Carreker
Chairman, President & Chief Executive Officer
Dear Jim:
This letter agreement (the "Agreement") is to confirm the terms of your
ongoing employment with Aspect Telecommunications Corporation (the "Company").
1. This Agreement will commence on the date hereof and continue for a term
of two (2) years (the "Original Term"), unless extended for one or more
-------------
additional one-year terms upon mutual written agreement of the parties or unless
terminated pursuant to the terms described herein. In the event that the
Company has entered into discussions with a third party regarding a Change of
Control (as defined below) transaction and such Change of Control discussions
are ongoing at the end of the Original Term, this Agreement shall be
automatically extended pending consummation of such transaction.
2. You are employed as Chairman, President & Chief Executive Officer of
the Company, and as such report to the Company's Board of Directors. Your job
duties and responsibilities are described on Exhibit A attached hereto. You
---------
agree to the best of your ability and experience that you will, to the
reasonable satisfaction of the Company and its Board of Directors (the "Board"),
at all times loyally and conscientiously perform all of the duties and
obligations required of you pursuant to the terms of this Agreement. You will
comply with and be bound by the Company's operating policies, procedures and
practices from time to time in effect 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. If your
employment terminates for any reason, you will not be entitled to any payments,
benefits, damages, award or compensation other than as provided in this
Agreement. The rights and duties created by this paragraph may not be modified
in any way except by a written agreement executed by 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 within twelve (12) months of a Change of Control (as
defined below), you will be entitled to receive payment of severance benefits
equal to your regular monthly salary (subject to any applicable tax withholding)
until the earlier of (i) twelve (12) months following the termination date or
(ii) the date on which you commence comparable employment (as defined below)
with another employer (the "Severance Period"). Such payments will be made
ratably over the
<PAGE>
Severance Period according to the Company's standard payroll schedule. Health
insurance benefits with the same coverage provided to you prior to the
termination (e.g. medical, dental, optical, mental health) and in all other
respects significantly comparable to those in place immediately prior to the
termination will be provided at the Company's cost over the Severance Period. In
addition, and except as otherwise determined below, each stock option and share
of restricted stock you hold that is not otherwise fully exercisable or vested
(released from the Company's repurchase option) as of the termination date shall
become immediately exercisable or vested in full as of such date.
5. In the event it is determined by the Board, upon consultation with
Company management and the Company's independent auditors, that the enforcement
of paragraph 4 of this Agreement, which allows for the acceleration of vesting
of option shares and restricted stock upon an involuntary or constructive
termination following a Change of Control, would preclude accounting for any
proposed business combination of the Company involving a Change of Control as a
pooling of interests, and the Board otherwise desires to approve such a proposed
business transaction which requires as a condition to the closing of such
transaction that it be accounted for as a pooling of interests, then such
paragraph shall be null and void. For purposes of this paragraph, the Board's
determination shall require the unanimous approval of the non-employee Board
members.
6. In the event that the severance and other benefits provided to you by
this Agreement constitute "parachute payments" within the meaning of Section
280G of the Internal Revenue Code of 1986, as amended (the "Code") and, but for
this paragraph, would be subject to the excise tax imposed by Section 4999 of
the Code, the Company shall reduce the aggregate amount of such payments and
benefits such that the present value thereof (as determined under the Code and
the applicable regulations) is equal to 2.99 times your "base amount" as defined
in Section 280G(b)(3) of the Code. The payment of severance and other benefits
provided for in this Agreement shall be subject to all applicable income and
employment tax rules and regulations.
7. For purposes of this Agreement, the following definitions will apply:
(a) "Cause" for your termination will exist if the Company terminates
-----
your employment for any of the following reasons: (i) you willfully fail
substantially to perform your duties hereunder (other than any such failure due
to your physical or mental illness), and such willful failure is not remedied
within 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 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 contender to a crime that constitutes a
felony, 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 10 business days after written notice
from the Company's Chief Executive Officer, which written
-2-
<PAGE>
notice shall state that failure to remedy such conduct may result in an
involuntary termination for cause.
(b) "Change of Control" will mean the occurrence of any of the
-----------------
following events: (i) 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) or
(ii) a sale of all or substantially all of the assets of the Company
(collectively, a "Merger"), so long as in either case the Company's shareholders
------
of record immediately prior to such Merger will, immediately after such Merger,
hold less than 50% of the voting power of the surviving or acquiring entity.
(c) "Comparable Employment" will mean employment or consulting that
---------------------
provides compensation, benefits and duties that, in the sole discretion of the
Board, are deemed to be generally comparable to those pertaining to your
position with the Company at the time of termination of your employment.
(d) "Constructive Termination" will be deemed to occur if (A) (i)
------------------------
your duties and responsibilities as Chairman, President & Chief Executive
Officer of the company are materially diminished without your prior written
consent; and/or (ii) any reduction in the total value of your base compensation
and benefits occurs; and/or (iii) your new business office location is more than
50 miles or greater than current commute (whichever is greater) from your
current business office location. Construction termination does not occur when
your reduction in duties, position or responsibilities solely results by virtue
of the company being acquired and made a part of a larger entity; and (B) within
sixty (60) days immediately following such material change in duties or
reduction or refusal to relocate you elect to terminate your employment
voluntarily.
8. You have signed a Confidential Information and Invention Assignment
Agreement (the "Confidentiality Agreement") substantially in the form attached
-------------------------
hereto as Exhibit B. You hereby represent and warrant to the Company that you
----------
have 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.
9. You represent that your performance of all the terms of this Agreement
will not breach any other agreement to which you are a party. You have not, and
will not during the term of this Agreement, enter into any oral or written
agreement in conflict with any of the provisions of this Agreement.
10. Any successor to the Company (whether direct or indirect and whether
by purchase, lease, merger, consolidation, liquidation or otherwise) to all or
substantially all of the Company's business and/or assets will assume the
obligations under this Agreement and agrees expressly to perform the obligations
under this Agreement in the same manner and to the same
-3-
<PAGE>
extent as the Company would be required to perform such obligations in the
absence of a succession. The terms of this Agreement and all of your rights
hereunder will inure to the benefit of, and be enforceable by, your personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.
11. This Agreement, including any Exhibits hereto, constitutes the sole
agreement of the parties and supersedes all oral negotiations and prior writings
with respect to the subject matter hereof.
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 or by a
nationally-recognized delivery service (such as Federal Express or UPS), or 48
hours after being deposited in the U.S. mail as certified or registered mail
with 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 renegotiate 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, (ii) the balance of the
Agreement will be interpreted as if such provision were so excluded 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 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. The Company agrees to
pay, on a monthly basis, the reasonable attorney fees, costs and expenses (as
determined by the arbitrator) incurred by you in good faith in connection with
the arbitration, regardless of the outcome. You agree that punitive damages
will not be awarded. This paragraph will not apply to the Confidentiality
Agreement.
-4-
<PAGE>
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 Telecommunications Corporation
By: /s/ Deborah E. Barber
__________________________________________
Title: Sr. Vice President, Human Resources &
Corporate Services
My agreement with the above terms is signified by my signature below.
/s/ James R. Carreker
------------------------
James R. Carreker
-5-
<PAGE>
EXHIBIT A
---------
DESCRIPTION OF JOB DUTIES
AND RESPONSIBILITIES
Chairman, President and CEO - James R. Carreker
This position is responsible for overseeing all corporate functions and
directing the company to ensure attainment of sales and profit goals and maximum
return on invested capital. Subject to the approval of the Board of Directors,
the position is responsible for the formulation of current and long-range plans
and objectives, and represents the organization in relations with its customers
and all of its stakeholders.
<PAGE>
EXHIBIT B
- ---------
CONFIDENTIAL INFORMATION AND
INVENTION ASSIGNMENT AGREEMENT
-2-
<PAGE>
ASPECT TELECOMMUNICATIONS CORPORATION
EMPLOYEE AGREEMENT
In exchange for my becoming employed (or my employment being continued)
by ASPECT TELECOMMUNICATIONS CORPORATION, or its subsidiaries, affiliates, or
successors (hereinafter referred to collectively as the "Company"), I hereby
agree as follows:
1. I will perform for the Company such duties as may be designated
by the Company from time to time. During my period of employment by the Company,
I will devote my best efforts to the interests of the Company and will not
engage in other employment or in any activities detrimental to the best
interests of the Company without the prior written consent of the Company.
2. As used in this Agreement, the term "Inventions" means designs,
trademarks, discoveries, formulae, processes, manufacturing techniques, trade
secrets, inventions, improvements, ideas, original works of authorship or
copyrightable works, including all rights to obtain, register, perfect and
enforce these proprietary interests.
3. As used in this Agreement, the term "Confidential Information"
means information pertaining to any aspects of the Company's business which is
either information not known by actual or potential competitors of the Company
or is proprietary information of the Company or its customers or suppliers,
whether of a technical nature or otherwise.
4. Without further compensation, I hereby agree promptly to disclose
to the Company, and I hereby assign and agree to assign to the Company or its
designee, my entire right, title, and interest in and to all Inventions (a)
which pertain to any line of business activity of the Company, (b) which are
aided by the use of time, material or facilities of the Company, whether or not
during working hours, or (c) which relate to any of my work during the period of
my employment with the Company, whether or not during normal working hours. No
rights are hereby conveyed in Inventions, if any, made by me prior to my
employment with the Company which are identified in a sheet attached to and made
a part of this Agreement, if any (which attachment contains no confidential
information). I acknowledge that all original works of authorship which are made
by me (solely or jointly with others) within the scope of my employment and
which are protectable by copyright are "works made for hire," as that term is
defined in the United States Copyright Act as in effect as of this date.
5. I agree to perform, during and after my employment, all acts
deemed necessary or desirable by the Company to permit and assist it, at its
expense, in obtaining and enforcing the full benefits, enjoyment, rights and
title throughout the world in the Inven-
<PAGE>
tions hereby assigned to the Company as set forth in paragraph 4 above. Such
acts may include, but are not limited to, execution of documents and assistance
or cooperation in legal proceedings.
6. I agree to hold in confidence and not directly or indirectly to
use or disclose, either during or after termination of my employment with the
Company, any Confidential Information I obtain or create during the period of my
employment, whether or not during working hours, except to the extent authorized
by the Company, until such Confidential Information becomes generally known. I
agree not to make copies of such Confidential Information except as authorized
by the Company. Upon termination of my employment or upon an earlier request of
the Company I will return or deliver to the Company all tangible forms of such
Confidential Information in my possession or control, including but not limited
to drawings, specifications, documents, records, devices, models or any other
material and copies or reproductions thereof.
7. I represent that my performance of all the terms of this
Agreement and as an employee of the company does not and will not breach any
agreement to keep in confidence proprietary information, knowledge or data
acquired by me in confidence or in trust prior to my employment with the
Company, and I will not disclose to the Company, or induce the Company to use,
any confidential or proprietary information or material belonging to any
previous employer or others. I agree not to enter into any agreement either
written or oral in conflict with the provisions of this Agreement.
8. This Agreement (a) shall survive my employment by the Company,
(b) does not in any way restrict my right or the right of the Company to
terminate my employment, (c) inures to the benefit of successors and assignees
of the Company, and (d) is binding upon my heirs and legal representatives.
9. This Agreement does not apply to an Invention, the assignment of
which to the Company would violate applicable law. I agree to disclose all
Inventions made by me in confidence to the Company to permit a determination as
to whether or not the Inventions should be the property of the Company.
10. I certify that, to the best of my information and belief, I am
not a party to any other agreement which will interfere with my full compliance
with this Agreement.
11. I certify and acknowledge that I have carefully read all of the
provisions of this agreement and that I understand and will fully and faithfully
comply with such provisions.
ASPECT TELECOMMUNICATIONS EMPLOYEE
CORPORATION
By Craig W. Johnson By James R Carreker
--------------------- ----------------------
Title Secretary Dated: 9/20/85
------------------ ------------------
-2-
<PAGE>
ATTACHMENT
----------
List of Inventions
------------------
<PAGE>
EXHIBIT 10.62
[ASPECT LETTERHEAD]
March 1, 1999
Kathleen M. Cruz
Sr. Vice President, Information Technology &
Chief Information Officer
Dear Kathy:
This letter agreement (the "Agreement") is to confirm the terms of your
ongoing employment with Aspect Telecommunications Corporation (the "Company").
1. This Agreement will commence on the date hereof and continue for a term
of two (2) years (the "Original Term"), unless extended for one or more
-------------
additional one-year terms upon mutual written agreement of the parties or unless
terminated pursuant to the terms described herein. In the event that the
Company has entered into discussions with a third party regarding a Change of
Control (as defined below) transaction and such Change of Control discussions
are ongoing at the end of the Original Term, this Agreement shall be
automatically extended pending consummation of such transaction.
2. You are employed as Sr. Vice President, Information Technology & Chief
Information Officer of the Company, and as such report to the Company's Chief
Executive Officer. Your job duties and responsibilities are described on
Exhibit A attached hereto. You agree to the best of your ability and experience
- ---------
that you will, to the reasonable satisfaction of the Company and its Board of
Directors (the "Board"), at all times loyally and conscientiously perform all of
the duties and obligations required of you pursuant to the terms of this
Agreement. You will comply with and be bound by the Company's operating
policies, procedures and practices from time to time in effect 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. If your
employment terminates for any reason, you will not be entitled to any payments,
benefits, damages, award or compensation other than as provided in this
Agreement. The rights and duties created by this paragraph may not be modified
in any way except by a written agreement executed by 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 within twelve (12) months of a Change of Control (as
defined below), you will be entitled to receive payment of severance benefits
equal to your regular monthly salary (subject to any applicable tax withholding)
until the earlier of (i) twelve (12) months following the termination date or
(ii) the date on which you commence comparable employment (as defined below)
with
<PAGE>
another employer (the "Severance Period"). Such payments will be made
ratably over the Severance Period according to the Company's standard payroll
schedule. Health insurance benefits with the same coverage provided to you
prior to the termination (e.g. medical, dental, optical, mental health) and in
all other respects significantly comparable to those in place immediately prior
to the termination will be provided at the Company's cost over the Severance
Period. In addition, and except as otherwise determined below, each stock
option and share of restricted stock you hold that is not otherwise fully
exercisable or vested (released from the Company's repurchase option) as of the
termination date shall become immediately exercisable or vested in full as of
such date.
5. In the event it is determined by the Board, upon consultation with
Company management and the Company's independent auditors, that the enforcement
of paragraph 4 of this Agreement, which allows for the acceleration of vesting
of option shares and restricted stock upon an involuntary or constructive
termination following a Change of Control, would preclude accounting for any
proposed business combination of the Company involving a Change of Control as a
pooling of interests, and the Board otherwise desires to approve such a proposed
business transaction which requires as a condition to the closing of such
transaction that it be accounted for as a pooling of interests, then such
paragraph shall be null and void. For purposes of this paragraph, the Board's
determination shall require the unanimous approval of the non-employee Board
members.
6. In the event that the severance and other benefits provided to you by
this Agreement constitute "parachute payments" within the meaning of Section
280G of the Internal Revenue Code of 1986, as amended (the "Code") and, but for
this paragraph, would be subject to the excise tax imposed by Section 4999 of
the Code, the Company shall reduce the aggregate amount of such payments and
benefits such that the present value thereof (as determined under the Code and
the applicable regulations) is equal to 2.99 times your "base amount" as defined
in Section 280G(b)(3) of the Code. The payment of severance and other benefits
provided for in this Agreement shall be subject to all applicable income and
employment tax rules and regulations.
7. For purposes of this Agreement, the following definitions will apply:
(a) "Cause" for your termination will exist if the Company terminates
-----
your employment for any of the following reasons: (i) you willfully fail
substantially to perform your duties hereunder (other than any such failure due
to your physical or mental illness), and such willful failure is not remedied
within 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 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 contender to a crime that constitutes a
felony, 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 10 business days after written notice
from the Company's Chief Executive Officer, which written
-2-
<PAGE>
notice shall state that failure to remedy such conduct may result in an
involuntary termination for cause.
(b) "Change of Control" will mean the occurrence of any of the
-----------------
following events: (i) 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) or
(ii) a sale of all or substantially all of the assets of the Company
(collectively, a "Merger"), so long as in either case the Company's shareholders
------
of record immediately prior to such Merger will, immediately after such Merger,
hold less than 50% of the voting power of the surviving or acquiring entity.
(c) "Comparable Employment" will mean employment or consulting that
---------------------
provides compensation, benefits and duties that, in the sole discretion of the
Board, are deemed to be generally comparable to those pertaining to your
position with the Company at the time of termination of your employment.
(d) "Constructive Termination" will be deemed to occur if (A) (i)
------------------------
your duties and responsibilities as Sr. Vice President, Information Technology &
Chief Information Officer of the company are materially diminished without your
prior written consent; and/or (ii) any reduction in the total value of your base
compensation and benefits occurs; and/or (iii) your new business office location
is more than 50 miles or greater than current commute (whichever is greater)
from your current business office location. Construction termination does not
occur when your reduction in duties, position or responsibilities solely results
by virtue of the company being acquired and made a part of a larger entity; and
(B) within sixty (60) days immediately following such material change in duties
or reduction or refusal to relocate you elect to terminate your employment
voluntarily.
8. You have signed a Confidential Information and Invention Assignment
Agreement (the "Confidentiality Agreement") substantially in the form attached
-------------------------
hereto as Exhibit B. You hereby represent and warrant to the Company that you
----------
have 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.
9. You represent that your performance of all the terms of this Agreement
will not breach any other agreement to which you are a party. You have not, and
will not during the term of this Agreement, enter into any oral or written
agreement in conflict with any of the provisions of this Agreement.
10. Any successor to the Company (whether direct or indirect and whether
by purchase, lease, merger, consolidation, liquidation or otherwise) to all or
substantially all of the Company's business and/or assets will assume the
obligations under this Agreement and agrees expressly to perform the obligations
under this Agreement in the same manner and to the same
-3-
<PAGE>
extent as the Company would be required to perform such obligations in the
absence of a succession. The terms of this Agreement and all of your rights
hereunder will inure to the benefit of, and be enforceable by, your personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.
11. This Agreement, including any Exhibits hereto, constitutes the sole
agreement of the parties and supersedes all oral negotiations and prior writings
with respect to the subject matter hereof.
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 or by a
nationally-recognized delivery service (such as Federal Express or UPS), or 48
hours after being deposited in the U.S. mail as certified or registered mail
with 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 renegotiate 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, (ii) the balance of the
Agreement will be interpreted as if such provision were so excluded 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 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. The Company agrees to
pay, on a monthly basis, the reasonable attorney fees, costs and expenses (as
determined by the arbitrator) incurred by you in good faith in connection with
the arbitration, regardless of the outcome. You agree that punitive damages
will not be awarded. This paragraph will not apply to the Confidentiality
Agreement.
-4-
<PAGE>
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 Telecommunications Corporation
/s/ James R. Carreker
By:____________________________
Title: Chairman, President &
Chief Executive Officer
My agreement with the above terms is signified by my signature below.
/s/ Kathleen M. Cruz
----------------------
Kathleen M. Cruz
-5-
<PAGE>
EXHIBIT A
---------
DESCRIPTION OF JOB DUTIES
AND RESPONSIBILITIES
Senior Vice President and Chief Information Officer- Kathleen M. Cruz
- ---------------------------------------------------------------------
This position is responsible for directing the organization's internal
information systems function and data processing functions, including all
systems design, systems programming, application programming and networks. The
position oversees the acquisition and maintenance of all information processing
equipment.
<PAGE>
EXHIBIT B
---------
CONFIDENTIAL INFORMATION AND
INVENTION ASSIGNMENT AGREEMENT
<PAGE>
ASPECT TELECOMMUNICATIONS CORPORATION
EMPLOYEE AGREEMENT
In exchange for my becoming employed (or my employment being continued) by
Aspect Telecommunications Corporation, or its subsidiaries, affiliates, or
successors (hereinafter referred to collectively as the "Company"), I hereby
agree as follows:
EMPLOYMENT I will perform for the Company such duties as may be designated
by the Company from time to time. During my period of employment
by the Company, I will devote my best efforts to the interests
of the Company and will not engage in other employment with any
Aspect competitor customer or supplier without the prior consent
of the Company. I will not accept a position with any other
company if the time demands of the position will impair my
ability to fulfill my obligations to the Company.
DEFINITIONS As used in this agreement, the term "inventions" means designs,
trademarks, discoveries, formulae, processes, manufacturing
techniques, trade secrets, inventions, improvements, ideas,
original works of authorship or copyrightable works, including
all rights to obtain, register, perfect and enforce these
proprietary interests.
As used in this Agreement, the term "Confidential Information"
means information pertaining to any aspects of the Company's
business which is either information not known by actual or
potential competitors of the Company or is proprietary
information of the Company or its customers or suppliers,
whether of a technical nature or otherwise.
ASSIGNMENT OF Without further compensation, I hereby agree promptly to
INVENTIONS disclose to the Company, and I hereby assign and agree to assign
to the Company or its designee, my entire right, title, and
interest in and to all Inventions (a) which pertain to any line
of business activity of the Company, (b) which are aided by the
use of time, material or facilities of the Company, whether or
not during working hours, or (c) which relate to any of my work
during the period of my employment with the Company, whether or
not during normal working hours. No rights are hereby conveyed
in Inventions, if any, made by me prior to my employment with
the Company which are identified on the back of this Agreement
or on in a sheet attached to and made a part of this Agreement,
if any (which attachment contains no confidential information).
I acknowledge that all original works of authorship which are
made by me (solely or jointly with others) within the scope of
my employment and which are protectable by copyright are "works
made for hire," as that term is defined in the United States
Copyright Act as in effect as of this date.
I agree to perform, during and after my employment, all acts
deemed necessary or desirable by the Company to permit and
assist it, at its expense, in obtaining and enforcing the full
benefits, enjoyment, rights and title throughout the world in
the Inventions hereby assigned to the Company. Such acts may
include, but are not limited to, execution of documents and
assistance or cooperation in legal proceedings.
<PAGE>
This Agreement does not apply to an Invention, the assignment of
which to the Company would violate applicable law, including an
Invention which qualified fully under Section 2870 of the
California Labor Code. I agree to disclose in confidence to the
Company all inventions made by me to permit a determination as
to whether or not the Inventions should be the property of the
Company.
CONFIDENTIAL I agree to hold in confidence and not directly or indirectly to
NONDISCLOSURE use or disclose, either during or after termination of my
employment with the Company, any Confidential Information I
obtain or create during the period of my employment, whether or
not during working hours, except to the extent authorized by the
Company, until such Confidential Information becomes generally
known. I agree not to make copies of such Confidential
Information except as authorized by the company. Upon
termination of my employment or upon an earlier request of the
Company I will return or deliver to the Company all tangible
forms of such Confidential Information in my possession or
control, including but not limited to drawings, specifications,
documents, records, devices, models or any other material and
copies or reproductions thereof.
I represent that my performance of all the terms of this
Agreement and as an employee of the Company does not and will
not breach any agreement to keep in confidence proprietary
information, knowledge or data acquired by me in confidence or
in trust prior to my employment with the Company, and I will not
disclose to the Company, or induce the Company to use, any
confidential or proprietary information or material belonging to
any previous employer or others.
NO CONFLICT I agree not to enter into any agreement either written or oral
in conflict with the provisions of this Agreement. I certify
that, to the best of my information and belief, I am not a party
to any other agreement which will interfere with my full
compliance with this Agreement.
SURVIVABILITY This Agreement (a) shall survive my employment by the Company,
(b) does not in any way restrict my right or the right of the
Company to terminate my employment, (c) inures to the benefit of
successors and assigns of the Company, and (d) is binding upon
my heirs and legal representatives.
COMPLIANCE I certify and acknowledge that I have carefully read all of the
provisions of this Agreement and that I understand and will
fully and faithfully comply with such provisions.
ASPECT TELECOMMUNICATIONS EMPLOYEE
CORPORATION
By /s/ Erin Avila By /s/ Kathleen M. Cruz
----------------------------- -------------------------
Title HR Analyst Dated 17 June 1996
-------------------------- -----------------------
<PAGE>
EXHIBIT 10.63
[ASPECT LETTERHEAD]
March 1, 1999
Beatriz V. Infante
Executive Vice President, Products & Services
Dear Beatriz:
This letter agreement (the "Agreement") is to confirm the terms of your
ongoing employment with Aspect Telecommunications Corporation (the "Company").
1. This Agreement will commence on the date hereof and continue for a term
of two (2) years (the "Original Term"), unless extended for one or more
-------------
additional one-year terms upon mutual written agreement of the parties or unless
terminated pursuant to the terms described herein. In the event that the
Company has entered into discussions with a third party regarding a Change of
Control (as defined below) transaction and such Change of Control discussions
are ongoing at the end of the Original Term, this Agreement shall be
automatically extended pending consummation of such transaction.
2. You are employed as Executive Vice President, Products & Services of
the Company, and as such report to the Company's Chief Executive Officer. Your
job duties and responsibilities are described on Exhibit A attached hereto. You
---------
agree to the best of your ability and experience that you will, to the
reasonable satisfaction of the Company and its Board of Directors (the "Board"),
at all times loyally and conscientiously perform all of the duties and
obligations required of you pursuant to the terms of this Agreement. You will
comply with and be bound by the Company's operating policies, procedures and
practices from time to time in effect 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. If your
employment terminates for any reason, you will not be entitled to any payments,
benefits, damages, award or compensation other than as provided in this
Agreement. The rights and duties created by this paragraph may not be modified
in any way except by a written agreement executed by 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 within twelve (12) months of a Change of Control (as
defined below), you will be entitled to receive payment of severance benefits
equal to your regular monthly salary (subject to any applicable tax withholding)
until the earlier of (i) twelve (12) months following the termination date or
(ii) the date on which you commence comparable employment (as defined below)
with
<PAGE>
another employer (the "Severance Period"). Such payments will be made
ratably over the Severance Period according to the Company's standard payroll
schedule. Health insurance benefits with the same coverage provided to you
prior to the termination (e.g. medical, dental, optical, mental health) and in
all other respects significantly comparable to those in place immediately prior
to the termination will be provided at the Company's cost over the Severance
Period. In addition, and except as otherwise determined below, each stock
option and share of restricted stock you hold that is not otherwise fully
exercisable or vested (released from the Company's repurchase option) as of the
termination date shall become immediately exercisable or vested in full as of
such date.
5. In the event it is determined by the Board, upon consultation with
Company management and the Company's independent auditors, that the enforcement
of paragraph 4 of this Agreement, which allows for the acceleration of vesting
of option shares and restricted stock upon an involuntary or constructive
termination following a Change of Control, would preclude accounting for any
proposed business combination of the Company involving a Change of Control as a
pooling of interests, and the Board otherwise desires to approve such a proposed
business transaction which requires as a condition to the closing of such
transaction that it be accounted for as a pooling of interests, then such
paragraph shall be null and void. For purposes of this paragraph, the Board's
determination shall require the unanimous approval of the non-employee Board
members.
6. In the event that the severance and other benefits provided to you by
this Agreement constitute "parachute payments" within the meaning of Section
280G of the Internal Revenue Code of 1986, as amended (the "Code") and, but for
this paragraph, would be subject to the excise tax imposed by Section 4999 of
the Code, the Company shall reduce the aggregate amount of such payments and
benefits such that the present value thereof (as determined under the Code and
the applicable regulations) is equal to 2.99 times your "base amount" as defined
in Section 280G(b)(3) of the Code. The payment of severance and other benefits
provided for in this Agreement shall be subject to all applicable income and
employment tax rules and regulations.
7. For purposes of this Agreement, the following definitions will apply:
(a) "Cause" for your termination will exist if the Company terminates
-----
your employment for any of the following reasons: (i) you willfully fail
substantially to perform your duties hereunder (other than any such failure due
to your physical or mental illness), and such willful failure is not remedied
within 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 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 contender to a crime that constitutes a
felony, 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 10 business days after written notice
from the Company's Chief Executive Officer, which written
-2-
<PAGE>
notice shall state that failure to remedy such conduct may result in an
involuntary termination for cause.
(b) "Change of Control" will mean the occurrence of any of the
-----------------
following events: (i) 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) or
(ii) a sale of all or substantially all of the assets of the Company
(collectively, a "Merger"), so long as in either case the Company's shareholders
------
of record immediately prior to such Merger will, immediately after such Merger,
hold less than 50% of the voting power of the surviving or acquiring entity.
(c) "Comparable Employment" will mean employment or consulting that
---------------------
provides compensation, benefits and duties that, in the sole discretion of the
Board, are deemed to be generally comparable to those pertaining to your
position with the Company at the time of termination of your employment.
(d) "Constructive Termination" will be deemed to occur if (A) (i)
------------------------
your duties and responsibilities as Executive Vice President, Products &
Services of the company are materially diminished without your prior written
consent; and/or (ii) any reduction in the total value of your base compensation
and benefits occurs; and/or (iii) your new business office location is more than
50 miles or greater than current commute (whichever is greater) from your
current business office location. Construction termination does not occur when
your reduction in duties, position or responsibilities solely results by virtue
of the company being acquired and made a part of a larger entity; and (B) within
sixty (60) days immediately following such material change in duties or
reduction or refusal to relocate you elect to terminate your employment
voluntarily.
8. You have signed a Confidential Information and Invention Assignment
Agreement (the "Confidentiality Agreement") substantially in the form attached
-------------------------
hereto as Exhibit B. You hereby represent and warrant to the Company that you
----------
have 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.
9. You represent that your performance of all the terms of this Agreement
will not breach any other agreement to which you are a party. You have not, and
will not during the term of this Agreement, enter into any oral or written
agreement in conflict with any of the provisions of this Agreement.
10. Any successor to the Company (whether direct or indirect and whether
by purchase, lease, merger, consolidation, liquidation or otherwise) to all or
substantially all of the Company's business and/or assets will assume the
obligations under this Agreement and agrees expressly to perform the obligations
under this Agreement in the same manner and to the same
-3-
<PAGE>
extent as the Company would be required to perform such obligations in the
absence of a succession. The terms of this Agreement and all of your rights
hereunder will inure to the benefit of, and be enforceable by, your personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.
11. This Agreement, including any Exhibits hereto, constitutes the sole
agreement of the parties and supersedes all oral negotiations and prior writings
with respect to the subject matter hereof.
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 or by a
nationally-recognized delivery service (such as Federal Express or UPS), or 48
hours after being deposited in the U.S. mail as certified or registered mail
with 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 renegotiate 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, (ii) the balance of the
Agreement will be interpreted as if such provision were so excluded 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 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. The Company agrees to
pay, on a monthly basis, the reasonable attorney fees, costs and expenses (as
determined by the arbitrator) incurred by you in good faith in connection with
the arbitration, regardless of the outcome. You agree that punitive damages
will not be awarded. This paragraph will not apply to the Confidentiality
Agreement.
-4-
<PAGE>
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 Telecommunications Corporation
/s/ James R. Carreker
By:_____________________________
Title: Chairman, President &
Chief Executive Officer
My Agreement with the above terms is signified by my signature below
/s/ Beatriz V. Infante
------------------------
Beatriz V. Infante
-5-
<PAGE>
EXHIBIT A
---------
DESCRIPTION OF JOB DUTIES
AND RESPONSIBILITIES
Executive Vice President, Products and Services - Beatriz Infante
- -----------------------------------------------------------------
This position is responsible for overseeing all functions relating to product
development and delivery of product support and customer education and
consulting services. The position is responsible for directing the unit to
ensure the attainment of profit and operations goals.
<PAGE>
EMPLOYEE AGREEMENT
In exchange for my becoming employed (or my employment being continued)
by Aspect Telecommunications Corporation, or its subsidiaries,
affiliates, or successors (hereinafter referred to collectively as the
"Company"), I hereby agree as follows:
EMPLOYMENT AT WILL
I agree that this Agreement is not an employment contract and that I
have the right to resign and the Company has the right to terminate my
employment at any time, for any reason, with or without cause. This is
the full and complete agreement between myself and the Company and no
employee or representative of the Company has any authority to enter
into any agreement to the contrary.
I will perform for the Company such duties as may be designated by the
Company from time to time. During my period of employment by the
Company, I will devote my best efforts to the interests of the Company
and will not engage in other employment with any Aspect competitor,
customer or supplier without the prior written consent of the Company. I
will not accept a position with any other company if the time demands of
the position will impair my ability to fulfill my obligations to the
Company.
DEFINITIONS
As used in this Agreement, the term "Inventions" means designs,
trademarks, discoveries, formulae, processes, manufacturing techniques,
trade secrets, inventions, improvements, ideas, original works of
authorship or copyrightable works, including all rights to obtain,
register, perfect and enforce these proprietary interests.
As used in this Agreement, the term "Confidential Information" means
information pertaining to any aspects of the Company's business which is
either information not known by actual or potential competitors of the
Company or is proprietary information of the Company or its customers or
suppliers, whether of a technical nature or otherwise.
ASSIGNMENT OF INVENTIONS
Without further compensation, I hereby assign and agree to assign to the
Company or its designee, my entire right, title, and interest in and to
all Inventions made by me during the period of my employment, unless the
Invention was developed entirely on my own time without using the
Company's equipment, supplies, facilities, or trade secret information;
and (a) the Invention does not relate at the time of conception or
reduction to practice of the Invention to the Company's business, or the
Company's actual or demonstrably anticipated research or development;
and, (b) the Invention does not result from any work performed by me for
the Company, whether or not during normal working hours. No rights are
hereby conveyed in Inventions, if any, made by me prior to my employment
with the Company which are identified on the back of this Agreement or
on a sheet attached to and made a part of this Agreement, if any. I
acknowledge that all original works of authorship which are made by me
(solely or jointly with others) within the scope of my employment and
which are protectable by copyright are "works made for hire," as that
term is defined in the United States Copyright Act as in effect as of
this date.
I agree to perform, during and after my employment, all acts deemed
necessary or desirable by the Company to permit and assist it, at its
expense, in obtaining and enforcing the full benefits, enjoyment, rights
and title throughout the world in the Inventions hereby assigned to the
Company. Such acts may include, but are not limited to, execution of
documents and assistance or cooperation in legal proceedings.
This Agreement does not apply to an Invention, the assignment of which
to the Company would violate applicable law, including an Invention
which qualified fully under Section 2870 of the California Labor Code. I
agree to disclose in confidence to the Company all Inventions made by me
to permit a determination as to whether or not the Inventions should be
the property of the Company.
<PAGE>
CONFIDENTIAL NONDISCLOSURE
I agree to hold in confidence and not directly or indirectly to use or
disclose, either during or after termination of my employment with the
Company, any Confidential Information I obtain or create during the
period of my employment, whether or not during working hours, except to
the extent authorized by the Company, until such Confidential Information
becomes generally known. I agree not to make copies of such Confidential
Information except as authorized by the Company. I will return or deliver
to the Company all tangible forms of such Confidential Information in my
possession or control, including but not limited to drawings,
specifications, documents, records, devices, models or any other material
and copies or reproductions thereof.
I represent that my performance of all the terms of this Agreement and as
an employee of the company does not and will not breach any agreement to
keep in confidence proprietary information, knowledge or data acquired by
me in confidence or in trust prior to my employment with the Company, and
I will not disclose to the Company, or induce the Company to use, any
confidential or proprietary information or material belonging to any
previous employer or others.
NO SOLICITATION
I agree that for a period of twelve (12) months immediately following the
termination of my relationship with the Company for any reason, I shall
not either directly or indirectly solicit, induce, recruit or encourage
any of the Company's employees to leave their employment or attempt to
solicit, induce, encourage or recruit employees of the Company, either
for myself or for any other person or entity.
NO CONFLICT
I agree not to enter into any agreement either written or oral in
conflict with the provisions of this Agreement. I certify that, to the
best of my information and belief, I am not a party to any other
agreement which will interfere with my full compliance with this
Agreement.
SURVIVABILITY
This Agreement (a) shall survive my employment by the Company, (b) does
not in any way restrict my right or the right of the Company to terminate
my employment, (c) inures to the benefit of successors and assignees of
the Company, and (d) is binding upon my heirs and legal representatives.
COMPLIANCE
I certify and acknowledge that I have carefully read all of the
provisions of this agreement and that I understand and will fully and
faithfully comply with such provisions.
EMPLOYEE
BEATRIZ V. INFANTE /s/ Beatriz V. Infante
----------------------- -----------------------
Print Name Signature
10/22/98
-----------------------
Date
ASPECT TELECOMMUNICATIONS CORPORATION
Maria Brailas /s/ Maria Brailas
----------------------- -----------------------
Print Name Signature
Staffing Coordinator
-----------------------
Title
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<PAGE>
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<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM (A)
THE CONSOLIDATED BALANCE SHEET AND CONSOLIDATED STATEMENT OF INCOME
INCLUDED IN THE COMPANY'S FORM 10-Q FOR THE PERIOD ENDING MARCH 31, 1999
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH (B) FINANCIAL STATEMENTS.
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<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<EXCHANGE-RATE> 1
<CASH> 55,440
<SECURITIES> 74,304
<RECEIVABLES> 134,431
<ALLOWANCES> 2,039
<INVENTORY> 22,329
<CURRENT-ASSETS> 352,527
<PP&E> 74,276
<DEPRECIATION> 5,277
<TOTAL-ASSETS> 545,076
<CURRENT-LIABILITIES> 107,823
<BONDS> 156,036
0
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<COMMON> 135,970
<OTHER-SE> (1,578)
<TOTAL-LIABILITY-AND-EQUITY> 545,076
<SALES> 51,196
<TOTAL-REVENUES> 100,085
<CGS> 17,740
<TOTAL-COSTS> 53,394
<OTHER-EXPENSES> 65,444
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,461
<INCOME-PRETAX> (18,972)
<INCOME-TAX> (5,692)
<INCOME-CONTINUING> (18,753)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
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<NET-INCOME> (13,280)
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