Exhibit 10.1

 

Aspen Technology, Inc.

 

Executive Annual Incentive Bonus Plan

 

FY13

 

For

 

“NAME”

 

I.                 Purpose

 

The purpose of Aspen Technology’s (“Company”) Executive Annual Incentive Plan
(the “Plan”) is to motivate and reward performance that results in the
achievement of key Company objectives.  The Plan was adopted by the Compensation
Committee of the Company’s Board of Directors in July 2011 and amended by the
Compensation Committee of the Company’s Board of Directors in October 2011.

 

II.             Effective Date of Plan

 

The Plan will operate on a fiscal year basis (“Plan Year”), and is effective
from July 1, 2012 through June 30, 2013.

 

III.         Eligibility

 

Eligibility is afforded to those employees:

 

A.           whose positions are determined by Aspen Technology to have
significant impact on the operating results of the Company; and

 

B.             who have been employed by the Company for six months or more
(pro-rated target awards for employment greater than six months and less than
twelve months).

 

In FY13, the eligible positions include:

 

·                  CEO

·                  EVP, Field Operations

·                  EVP & CFO

·                  EVP, Products

·                  SVP, Marketing

 

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·                  SVP, HR

·                  SVP, Corporate Strategy

·                  SVP & General Counsel

 

Eligibility for the Plan does not guarantee payment of an award.  Payment is
dependent upon performance.  Further, eligibility does not guarantee
continuation of employment.  If employment ends prior to the end of the
performance period any payment eligibility is subject to the Executive Retention
Agreement then in force. Should an Executive voluntarily resign after the
completion of the performance period, he is eligible to receive the earned bonus
in accordance with the Plan.

 

IV.        Target Award

 

The Plan is based on the “Target Award” concept, which bases the award on the
Company’s overall performance.  In order to achieve the Target Award amount, the
Company must achieve 100% of its pre-established objectives by the end of the
Plan Year. The actual award paid to the participant, if any, for a given Plan
Year will be based on the Company’s overall performance, as adjusted for the
overall level of bonus pool funding.

 

The Target Award for each position is the incentive award as defined when 100%
of all Plan objectives are met and the Company attains the necessary level of
performance to fund the bonus pool at 100%.

 

V.            Components of Award

 

“Company Metric Performance” for Plan purposes is based on the accomplishment of
one or more predetermined annual Company financial objectives, which will be
selected each year based on their critical importance to the Company’s success. 
Company Metric Performance for fiscal year 2013 will be measured based on the
achievement of the FY13 Growth in Total License Contract Value “TLCV” and Cash
Flow from Operations.

 

The following summarizes the weighting for the various incentive components for
FY13.

 

FY13 Plan Components

 

Overall Bonus
Weighting

 

On Target Metric

 

Growth in TLCV

 

50

%

$

TBD

 

Cash Flow from Operations

 

50

%

$

TBD

 

 

Company Metric Performance (Growth in TLCV & Cash Flow)

 

The achievement level will then correspond to a bonus plan funding/weighting
percentage by individual metric according to the following table:

 

Actual Performance
Achieved by Metric

 

Funding Level of Metric
Based on Performance

 

< 70% of Target

 

0

%

70% of Target

 

50

%

80% of Target

 

70

%

90% of Target

 

90

%

100% of Target

 

100

%

 

This Plan is capped at 100% funding.

 

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The funding is based on a minimum achievement of 70% of the on target metric. 
At 70% achievement, the plan funds at 50% target and will increase at a 2:1
ratio until 90% achievement.  Achievement between 90% and 100% will fund at a
1:1 ratio.  Each metric is measured and funded independently.

 

VI.        Plan Funding Allocation and Achievement

 

For fiscal year 2013, Plan funding will be based on the attainment of specified
levels of Growth in Total License Contract Value and Cash Flow from Operations. 
Funding is contingent upon and proportional to the Company’s attainment of
required levels (minimum 70% performance).  In FY13, there is the potential for
a mid-year payment as well as a final year-end payment.  The mid-year payment is
based on mid-year performance against the mid-year targets and will not exceed
25% of the annual bonus target.  The year-end payment is based on total annual
performance against the annual performance targets less any payment received at
mid-year.

 

The allocation of target bonus by metric/measurement for each measurement period
is as follows:

 

Measurement

 

% of Annual Bonus

 

Growth in TLCV

 

50

%

Cash Flow

 

50

%

 

Should the mid-year bonus earned be less than the target of 25% of bonus
potential, the unrealized difference (up to the 25% mid-year potential) can be
made up at year-end based on annual achievement against annual goals.

 

VII.         Bonus Calculation

 

A.           Bonus calculation takes into account three components:

 

·                  Growth in TLCV and corresponding funding percentage
(Section V);

·                  Cash Flow from Operations and corresponding funding
percentage (Section V); and

·                  Target Bonus ($) level (as defined in Appendix A).

 

B.             The bonus will be measured on a first half performance at
mid-year and on an annual performance level at year end.

 

First Half (H1) Calculation (Maximum payout of 25% of annual bonus target)

 

Growth in TLCV

 

Annual Bonus Target

X

Metric Weighting 50%

X

Maximum Payout 25%

X

Mid –Year Funding Achievement %

=

H1 Growth in TLCV Bonus Payout

 

Cash Flow from Operations

 

Annual Bonus Target

X

Metric Weighting 50%

X

Maximum Payout 25%

X

Mid -Year Funding Achievement %

=

H1 Cash Flow Bonus Payout

 

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Total H1 Bonus

 

H1 Growth in TLCV Bonus Payout

 

+

 

H1 Cash Flow Bonus Payout

=

Total H1 Bonus Payout

 

End of Year (YE) Calculation

 

Growth in TLCV

 

Annual Bonus Target

X

Metric Weighting 50%

-

H1 Earned

X

Funding Achievement %

=

YE Growth in TLCV Earned Bonus

 

Cash Flow from Operations

 

Annual Bonus Target

X

Metric Weighting 50%

-

H1 Earned

X

Funding Achievement %

=

YE Cash Flow Earned Bonus

 

YE Bonus Funding

 

Growth in TLCV Earned

+

YE Cash Flow Earned

=    Total YE Bonus Payout

 

Illustration

 

The following illustrations demonstrate sample calculations for determining
potential bonus payments using an annual bonus potential of $100,000.

 

H1 Bonus Calculation

 

Category

 

Metric 
Weighting

 

Annual 
Bonus 
Target

 

Maximum 
Payout %

 

H1 Target 
Award

 

Mid-Year
Funding
Achievement
%

 

H1
Bonus
Payout

 

Growth in TLCV

 

50

%

$

100,000

 

25

%

$

12,500

 

90

%

$

11,250

 

Cash Flow

 

50

%

$

100,000

 

25

%

$

12,500

 

70

%

$

8,750

 

H1 Total

 

 

 

 

 

 

 

 

 

 

 

$

20,000

 

 

End of Year Calculation

 

Category

 

Metric
Weighting

 

Annual
Bonus 
Target

 

Annual
Bonus
Target
Award

 

End of Year
(YE) Bonus
Target (minus
H1 Bonus
Payout)

 

Funding 
Achievement
%

 

YE 
Bonus 
Payout

 

Growth in TLCV

 

50

%

$

100,000

 

$

50,000

 

$

38,750

 

80

%

$

31,000

 

Cash Flow

 

50

%

$

100,000

 

$

50,000

 

$

41,250

 

100

%

$

41,250

 

H2 Total

 

 

 

 

 

 

 

 

 

 

 

$

72,250

 

H1 Total

 

 

 

 

 

 

 

 

 

 

 

$

20,000

 

Full Year Total

 

 

 

 

 

 

 

 

 

 

 

$

92,250

 

% of Annual Bonus Target

 

 

 

 

 

 

 

 

 

92.25

%

 

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Note: All Actual Plan awards will be adjusted up/down based on Company bonus
pool funding levels.

 

VIII.         Discretionary Awards

 

In addition to awards based on the performance metrics established herein and
notwithstanding any limitations including caps set forth elsewhere herein, the
Compensation Committee of the Board of Directors may make discretionary awards
to eligible employees in such amounts as the Committee determines are
appropriate and in the best interests of the Company.

 

IX.                 Administration

 

Administration of this Plan will be the responsibility of the CEO or the
Compensation Committee of the Board of Directors. Any interpretation of the
terms, conditions, goals, or payments from this Plan required because of a
dispute will be made solely by the CEO or the Compensation Committee of the
Board of Directors after a full review of the facts, input from the affected
parties, and with appreciation of the overall intent of the Plan and previous
practices.

 

If any term or condition of this Plan is found to be in non-conformance with a
given state or federal law (USA) or local legislation (International locations),
that term or condition will be non-enforceable but will not negate other terms
and conditions of the Plan.  However, Aspen Technology, Inc., will review and
modify the overall Plan to conform to such law.

 

Eligibility and participation in this Plan in no way implies or reflects any
guarantee or contract of employment, except as may be stipulated by applicable
local law.  Aspen Technology, Inc. reserves the right to amend, modify, or
terminate this Plan and the procedures set forth herein at any time.  Any change
to the terms of the Plan will be made in writing by SVP of Human Resources to
all Participants in as far in advance as possible of the effective date of such
change, and will be subject to acceptance by the Participant.

 

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GRAPHIC [g170981kgi001.jpg]

 

Appendix A

 

Employee’s Name:

 

Manager’s Name:
Mark Fusco

 

Organization:

 

Date Prepared:

 

 

 

 

 

 

 

FY13 Compensation

 

Base Salary:$

 

Bonus Target: $

 

OTE: $

 

 

Employee

 

 

Signature :

 

 

Date:

 

 

 

 

CEO

 

 

Signature :

 

 

Date:

 

 

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