Exhibit 10.3


 


Form of Award Agreement –
Supplemental Retention Program


 


To:


 


	
  From:

  	
   

  	
  Joseph L. Cowan

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
  December 8, 2005

  
	
   

  	
   

  	
   

  
	
  Subject:

  	
   

  	
  Supplemental Retention Program

  



 


On
November 1, 2005, the Board of Directors (the “Board”) of Manugistics Group,
Inc. (the “Company”) approved retention awards for certain employees whose
continued commitment and contributions are key to the Company’s success.  Accordingly, we are extending to you the
following retention bonus opportunities under the Supplemental Retention
Program:


 


1.     You will be entitled to a one-time, lump-sum bonus payment in the
amount of $            (           
Dollars) upon the earliest to occur of the following (assuming you remain
employed by the Company immediately before such event):  (i) your involuntary termination of
employment by the Company without Cause or your resignation for Good Reason;
(ii) a Change in Control of the Company; or (iii) November 1, 2006.


 


2.     You have been granted         shares
of Restricted Stock and nonqualified stock options for         
shares under the Company’s Amended and Restated 1998 Stock Option Plan (the “1998 Plan”), with
terms in the grant and award agreements that are being provided to you.


 


For
the purpose of this offer, “Change in Control”, “Cause,”
and “Good
Reason” are defined as follows:


 


A
“Change
in Control” for this purpose means the occurrence of any one or more of the
following events:


 


(i) sale of all or
substantially all of the assets of the Company to one or more individuals,
entities, or groups acting together;


 


(ii) complete or
substantially complete dissolution or liquidation of the Company;


 


(iii) a person, entity, or
group acquires or attains ownership of more than 50% of the undiluted total
voting power of the Company’s then-outstanding securities eligible to vote to
elect members of the Board (“Company
Voting Securities”);


 


(iv) completion of a merger,
consolidation, or reorganization of the Company with or into any other entity unless
the holders of the Company Voting Securities outstanding immediately before
such completion, together with any trustee or other fiduciary holding
securities under a Company benefit plan, retain control because they hold
securities that represent immediately after such merger or consolidation at
least 50% of the combined voting power of the then outstanding voting
securities of either the Company or the other surviving entity or its ultimate
parent;


 


(v) the individuals who
constitute the Board immediately before a proxy contest cease to constitute at
least a majority of the Board (excluding any Board seat that is vacant or
otherwise unoccupied) immediately following the proxy contest; or


 


(vi) during any two year period, the individuals who constitute the
Board at the beginning of the period (the “Incumbent Directors”) cease
for any reason to constitute at least a


 





















 


majority of the Board (excluding any Board seat that is vacant or
otherwise unoccupied), provided that any individuals that a majority of
Incumbent Directors approve for service on the Board are treated as Incumbent
Directors.


 


The Board or the Compensation Committee will have the same authority to
determine the existence of a Change in Control under this definition as it has
under the 1998 Plan.  In addition, if the
1998 Plan would cause a grant of options or stock to terminate or be converted
under its terms and under the authority of the Board or the Compensation
Committee, the 1998 Plan will control.


 


“Cause” means the individual:


 


(i) commits a material
breach of his or her obligations or agreements with respect to the Company;


 


(ii) commits an act of
fraud, material dishonesty, or gross negligence with respect to the Company or
otherwise acts with willful disregard for the Company’s best interests;


 


(iii) fails or refuses to
perform any duties delegated to him or her that are consistent with the duties
of similarly-situated executives or are otherwise required;


 


(iv) seizes a corporate
opportunity for himself or herself instead of offering such opportunity to the
Company if it is within the scope of the Company’s or its subsidiaries’ or
parent’s business; or


 


(v) is convicted of or
pleads guilty or no contest to a felony (or to a felony charge reduced to
misdemeanor), or, with respect to his or her employment, to any misdemeanor
(other than a traffic violation) or, with respect to his or her employment,
knowingly violates any federal or state securities or tax laws.


 


“Good Reason” means:


 


(i) the Company reduces the
individual’s base salary without his or her consent; or


 


(ii) the Company assigns the
individual duties materially inconsistent with, or substantially diminishes,
his or her status or responsibilities without his or her consent.


 


In
addition, if the payments and vesting of the compensation described above
subjects you to the federal excise tax levied on certain “excess parachute
payments” under Section 4999 of the Internal Revenue Code, then the amounts
payable under this Supplemental Retention Program will be reduced to the extent
necessary to avoid such excise tax, unless you, after paying the excise tax,
will be better off by having the larger payment.  In practice, this means that the Company is
offering the compensation described in this memorandum without regard to
whether the deductibility of compensation under such payments (or any other
payments or benefits) would be limited or precluded by Section 280G of the
Internal Revenue Code of 1986 (the “Code”) and without regard to whether such
payments would subject you to the federal excise tax levied on certain “excess
parachute payments” under Section 4999 of the Code; provided, however,
that if the Total After-Tax Payments (as defined below) would be increased by
the reduction or elimination of any payment and/or other benefit (including the
vesting of options and restricted stock) under this Supplemental Retention
Program, then the amounts payable under this Program will be reduced or
eliminated as follows: (i) first, by reducing or eliminating any cash
payments


 





















 


or other benefits (other than the vesting of
the options and stock) and (ii) second, by reducing or eliminating the vesting
of the options and stock that occurs as a result of the Change in Control (as
provided above), to the extent necessary to maximize the Total After-Tax
Payments. The Company’s independent, certified public accounting firm will
determine whether and to what extent payments or vesting under this agreement
are required to be reduced in accordance with the preceding sentence. If there
is an underpayment or overpayment under this agreement (as determined after the
application of this paragraph), the amount of such underpayment or overpayment
will be immediately paid to you or refunded by you, as the case may be, with
interest at the applicable federal rate provided for in Section 7872(f)(2) of
the Code. For purposes of this award, “Total After-Tax Payments” means the total of
all “parachute payments” (as that term is defined in Section 280G(b)(2) of the
Code) made to you or for your benefit (whether made under the agreement or
otherwise), after reduction for all applicable federal taxes (including,
without limitation, the tax described in Section 4999 of the Code).


 


The
retention incentives offered in this agreement are separate and exclusive of
any incentive bonus payments to which you are entitled as part of your annual
incentive plan.


 


Bonus
payments will be made as soon as practicable following the date that triggers
the payment.  In accordance with federal
and state regulations, all bonus payments are subject to appropriate tax
deductions.


 


Nothing
in this Program restricts the Company’s rights or those of any of its
affiliates to terminate your employment or other relationship at any time, with
or without Cause and for any or no reason, subject to such other agreements as
may cover you.


 


Please
signify your acceptance of these bonus terms by signing below.


 


“I acknowledge and accept.”


 


 


	
   

  	
   

  	
   

  
	
  Employee Signature

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Joseph L. Cowan

  	
   

  	
  Date

  
	
  Manugistics Group, Inc.