Exhibit
10.3


 


MANAGEMENT
CHANGE IN CONTROL AGREEMENT


 


THIS AGREEMENT, dated as of April 6, 2005, is by and
between Concord Communications, Inc., a Massachusetts corporation (the “Company”),
and                        
(the “Employee”).


 


WHEREAS, it is expected that the Company from time to time will consider the possibility of an acquisition by another company or other Change of Control (as defined below). The Board of Directors of the Company (the “Board”) recognizes that such consideration, and the possibility that the Employee’s employment could be terminated by the Company for a reason other than for cause, can be distractions to the Employee and can cause the Employee to consider alternative employment opportunities. The Board has determined that it is in the best interests of the Company and its stockholders to assure that the Company will have the continued dedication and objectivity of the Employee, notwithstanding the possibility, threat or occurrence of a Change of Control of the Company or the termination by the Company of the Employee’s employment for a reason other than for cause;
 
WHEREAS, the Board believes that it is in the best interests of the Company and its stockholders to provide the Employee with an incentive to continue his or her employment with the Company, or a wholly-owned subsidiary of the Company, as the case may be, and to motivate the Employee to maximize the value of the Company for the benefit of its stockholders; and
 
WHEREAS, the Board believes that it is imperative to provide the Employee with certain benefits upon a Change of Control and/or upon the termination by the Company of the Employee’s employment for a reason other than for cause, thereby encouraging the Employee to remain with the Company notwithstanding the possibility of a Change of Control or termination of employment for a reason other than for cause.
 
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Employee hereby agree to amend and restate the Prior Agreement as follows:
 


Section 1


DEFINITIONS


 


Except as may otherwise be specified or as the
context may otherwise require, the following terms shall have the respective
meanings set forth below whenever used herein:


 


“Annual Bonus” shall mean 75% of the Employee’s
target annual bonus established for the fiscal year in which a Change in
Control occurs.


 


“Base Salary” shall mean the annual base rate of
regular compensation of the Employee immediately before a Covered Termination,
or if greater, the highest annual such rate at any time


 





















 


during the 12-month period
immediately preceding the Change in Control until the date of the Covered
Termination.


 


“Board” shall mean the Board of Directors of the
Company.


 


“Cause” shall mean (i) the Employee’s engaging in
willful and repeated gross negligence or gross misconduct, (ii) the Employee’s
breaching of a material fiduciary duty to the Company, or (iii) the Employee’s
being convicted of a felony, in each case, to the demonstrable and material
injury to the Company. For purposes hereof, no act, or failure to act, on the
Employee’s part, shall be deemed “willful” unless done, or omitted to be done,
by the Employee not in good faith and without reasonable belief that any act or
omission was in the best interest of the Company.


 


“Change in Control” shall mean the first to occur,
after the date hereof, of any of the following:


 


(i)
the members of the Board at the beginning of any consecutive twenty-four (24)
calendar-month period (the “Incumbent Directors”) cease for any reason (other
than due to death) to constitute at least a majority of the members of the
Board; provided that any director whose election, or nomination for election by
the Company’s stockholders, was approved by a vote of at least a majority of
the members of the Board then still in office who were members of the Board at
the beginning of such twenty-four (24) calendar-month period, shall be deemed
to be an Incumbent Director;


 


(ii)
any consolidation or merger of the Company where the stockholders of the
Company, immediately prior to the consolidation or merger, would not,
immediately after the consolidation or merger, beneficially own (as such term
is defined in Rule 13d-3 under the Securities Exchange Act), directly or
indirectly, shares of Stock representing in the aggregate 50% or more of the
combined voting power of the securities of the corporation issuing cash or
securities in the consolidation or merger (or of its ultimate parent
corporation, if any);


 


(iii)
there shall occur (A) any sale, lease, exchange or other transfer (in one
transaction or a series of transactions contemplated or arranged by any party
as a single plan) of all or substantially all of the assets of the Company,
other than a sale or disposition by the Company of all or substantially all of
the Company’s assets to an entity, at least 50% of the combined voting power of
the voting securities of which are owned by Persons in substantially the same
proportion as their ownership of the Company immediately prior to such sale or
(B) the approval by stockholders of the Company of any plan or proposal for the
liquidation or dissolution of the Company; or


 


(iv)
Any corporation or other legal person, pursuant to a tender offer, exchange
offer, purchase of stock (whether in a market transaction or otherwise) or
other transaction or event acquires securities representing 40% or more of the
combined voting power of the voting securities of the Company, or there is a
report filed on Schedule 13D or Schedule TO (or any successor schedule,
form or report), each as promulgated pursuant to the Securities Exchange Act,
disclosing that any “person” (as such term is used in Section 13(d)(3) or


 


2





















 


Section 14(d)(2) of the
Securities Exchange Act) has become the “beneficial owner” (as such term is
used in Rule 13d-3 under the Securities Exchange Act) of securities
representing 40% or more of the combined voting power of the voting securities
of the Company.


 


Upon
the occurrence of a Change in Control as provided above, no subsequent event or
condition shall constitute a Change in Control for purposes of this Agreement,
with the result that there can be no more than one Change in Control hereunder.


 


“Code” shall mean the Internal Revenue Code of 1986,
as amended.


 


“Company” shall mean, subject to Section 4.1(a),
Concord Communications, Inc., a Massachusetts corporation and each Subsidiary
which may now or hereafter employ the Employee or, where the context so
requires, the Company and such Subsidiaries collectively.


 


“Covered Termination” shall mean, if within the six (6) month period immediately
following a Change in Control, the Employee (i) is terminated by the Company
without Cause (other than on account of death or Disability) (including,
without limitation, forcing the Employee to retire on any date not of the
Employee’s choosing), or (ii) terminates the Employee’s employment with the
Company for Good Reason.  The Employee
shall not be deemed to have terminated employment for purposes of this
Agreement merely because Employee ceases to be employed by the Company and
becomes employed by a new employer involved in the Change in Control; provided
that such new employer shall be bound by this Agreement as if it were the
Company hereunder with respect to the Employee. 
It is expressly understood that no Covered Termination shall be deemed
to have occurred merely because, upon the occurrence of a Change in Control,
the Employee ceases to be employed by the Company and does not become employed
by a successor to the Company after the Change in Control if the successor
makes an offer to employ the Employee on terms and conditions which, if imposed
by the Company, would not give the Employee a basis on which to terminate
employment for Good Reason.


 


“Date of Termination” shall mean the date on
which a Covered Termination occurs.


 


“Disability” shall mean the occurrence after a
Change in Control of the incapacity of the Employee due to physical or mental
illness, whereby the Employee shall have been absent from the full-time
performance of the Employee’s duties with the Company for six (6) consecutive
months or, in any one (1) year period, for an aggregate of six (6) months.


 


“Good Reason” shall mean, without the express
written consent of the Employee, the occurrence after a Change in Control of
any of the following circumstances:


 


(i)       a material reduction of the Employee’s title,
or the reduction of the Employee’s authority, duties or responsibilities, or
the assignment to the Employee of any duties inconsistent with Employee’s
position, authority, duties or responsibilities from those in effect
immediately prior to the Change in Control;


 


3





















 


(ii)
a reduction in the Employee’s Base Salary as in effect immediately prior to the
Change in Control;


 


(iii)
a material reduction in the Employee’s aggregate compensation opportunity,
comprised only of the Employee’s (A) Base Salary, and (B) bonus opportunity
(taking into account, without limitation, any target, minimum and maximum
amounts payable and the attainability and otherwise the reasonableness of any
performance hurdles, goals and other measures), if any;


 


(iv)
the Company’s requiring the Employee to be based at any office or location more
than 60 miles from that location at which the Employee performed Employee’s
services immediately prior to the occurrence of a Change in Control, except for
travel reasonably required in the performance of the Employee’s
responsibilities;


 


(v)
the failure of the Company to obtain a reasonable agreement from any successor
to assume and agree to perform this Agreement, as contemplated in Section
4.1(a);


 


(vi)
the failure of the Company to pay the Employee any amounts due hereunder;


 


(vii)
the failure by the Company to continue in effect a health, medical, group life
or disability insurance plan in which Employee participates immediately prior
to the Change in Control unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has been made with respect to such
plan, or the failure by the Company to continue the Employee’s participation
therein (or in such substitute or alternative plan) on a basis not materially
less favorable, both in terms of the amount of benefits provided and the level
of Employee’s participation relative to other participants, than existed at the
time of the Change in Control; or


 


(viii)
any other material breach by the Company of this Agreement.


 


“Notice of Termination” shall mean a written
notice given by the Company or Employee, as applicable, which shall indicate
the date of termination and the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Employee’s
employment under the provisions so indicated.


 


“Person” shall have the meaning ascribed thereto by
Section 3(a)(9) of the Securities Exchange Act, as modified and used in
Sections 13(d) and 14(d) thereof (except that such term shall not include (i)
the Company or any of its Subsidiaries, (ii) a trustee or other fiduciary
holding securities under an employee benefit plan of the Company or any of its
Subsidiaries, (iii) an underwriter temporarily holding securities pursuant to
an offering of such securities, (iv) a corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the same
proportion as their ownership of stock of the Company, or (v) such Employee or
any “group” (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act) which includes the Employee).


 


4





















 


“Securities Exchange Act” shall mean the Securities
Exchange Act of 1934, as amended.


 


“Stock” shall mean the common stock, $.01 par value
per share, of the Company.


 


“Subsidiary” shall mean any entity, directly or
indirectly, through one or more intermediaries, controlled by the Company.


 


Section 2


BENEFITS


 


2.1                If a Change in Control occurs, then:


 


(a)      the full vest date(s) set forth in each of the
Employee’s then effective agreements with respect to any and all outstanding
unvested stock options and stock appreciation rights held by the Employee shall
immediately be automatically accelerated by twenty-four (24) months; provided
that nothing in this Section 2.1(a) shall reduce or otherwise adversely affect
the rights under such stock options and stock appreciation rights that the
Employee would have without regard to this Section 2.1(a); and


 


(b)     the full vest date(s) set forth in each of
the Employee’s then effective agreements with respect to any and all
outstanding unvested restricted stock and restricted stock rights then held by
the Employee shall immediately be automatically accelerated by twenty-four (24)
months and become immediately transferable free of restrictions, other than
restrictions imposed by applicable law.


 


2.2                If a Covered Termination occurs then (subject
to the provisions of Section 2.3(b)) the Employee shall be entitled hereunder
to the following:


 


(a)      any and all outstanding unvested stock
options and stock appreciation rights held by the Employee shall immediately
automatically vest and become immediately exercisable in accordance with their
terms; provided that nothing in this Section 2.2(a) shall reduce or otherwise
adversely affect the rights under such stock options and stock appreciation
rights that the Employee would have without regard to this Section 2.2(a);


 


(b)     any and all restricted stock and restricted
stock rights then held by the Employee shall immediately automatically fully
vest and become immediately transferable free of restrictions, other than
restrictions imposed by applicable law;


 


(c)      the Company shall pay to the Employee an
amount in cash equal to one half times (0.5 times) the sum of (i) Employee’s
Base Salary and (ii) the Employee’s Annual Bonus, such amount to be payable in
a single lump sum payment in accordance with Section 2.3;


 


(d)     for a period of six (6) months after such Change in Control, the Company
shall make available to the Employee medical, dental, group life and disability
insurance benefits that are at least at a level (and cost to the Employee) that
is substantially similar in the aggregate to the level of such benefits which
was available to the Employee immediately prior to the Change


 


5





















 


in Control; provided that no type of benefit otherwise to be made available to the Employee
pursuant to this Section 2.2(d) shall be required to be made available to the
extent that such type of benefit is made available to the Employee by any
subsequent employer of the Employee;


 


(e)      the Company shall provide the Employee with
outplacement services through a bona fide outplacement organization reasonably
acceptable to the Employee that agrees to supply the Employee with outplacement
counseling, a private office and administrative support, including telephone
and internet service until the earlier of six (6) months from the Date of
Termination or until such time that Employee secures employment;


 


(f)      the Company shall pay the Employee for any
accrued but unused vacation, any accrued but unpaid Base Salary, and an amount
equal to the product of the Employee’s unpaid targeted annual bonus established
for the fiscal year in which the Covered Termination occurs, multiplied by a
fraction the numerator of which is the number of days elapsed in the fiscal
year in which the Covered Termination occurs, and the denominator of which is
365.


 


2.3      (a) The payments provided for in Section 2.2
shall (except as otherwise expressly provided therein or as provided in Section
2.3(b) or as otherwise expressly provided hereunder) be made as soon as
practicable, but in no event later than thirty (30) days, following the Covered
Termination.


 


(b) Notwithstanding any other provision of this
Agreement to the contrary, no payment or benefit otherwise provided for under
or by virtue of Section 2.2 of this Agreement shall be paid or otherwise
made available unless and until the Company shall have first received from the
Employee (no later than twenty (20) days after the Company has provided to the
Employee estimates relating to the payments to be made under this Agreement) a
valid, binding and irrevocable general release, in form and substance
reasonably acceptable to the Company; provided that the Company shall be
permitted to defer any payment or benefit otherwise provided for in this
Agreement to the fifth day after the later of its receipt of such release and
the time at which the release has become valid, binding and irrevocable.


 


2.4           Following a Change in Control, if Employee’s
employment is terminated (i) voluntarily by Employee without Good Reason, (ii)
involuntarily by the Company for Cause, or (iii) due to death or Disability,
Employee shall be entitled to any
accrued but unused vacation, any accrued but unpaid Base Salary, and in the
case of termination voluntarily by the Employee for Good Reason or due to death
or Disability only, an amount equal to the product of the Employee’s unpaid
targeted annual bonus established for the plan year in which the termination
occurs, multiplied by a fraction the numerator of which is the number of days
elapsed in the fiscal year in which the termination occurs, and the denominator
of which is 365.  Employee’s entitlement to all other benefits shall be
determined in accordance with the Company’s retirement, insurance and other
applicable plans, policies, practices and arrangements.  Thereafter, the Company shall have no further
obligations to Employee hereunder.


 


6





















 


Section 3


PARACHUTE TAX PROVISIONS


 


3.1           Notwithstanding
anything to the contrary in this Agreement, if the Employee is a Disqualified
Individual (as defined in Section 280G of the Code) and if any portion of any
acceleration of vesting, payment or transfer of property under this Agreement
would be an Excess Parachute Payment (as defined in Section 280G of the Code)
but for the application of this sentence, then the amount of such acceleration,
payment or transfer otherwise payable to the Employee pursuant to this
Agreement shall be reduced to the minimum extent necessary (but in no event to
less than zero) so that no portion of such payment, as so reduced, constitutes
an Excess Parachute Payment; provided, however, that no reduction shall be made
if the net economic effect would be disadvantageous to the Employee, taking
into account all the facts and circumstances, including any tax savings
resulting from the reduction.


 


3.2           Except as may otherwise be agreed to by the
Company and the Employee, the amount or amounts (if any) to be reduced under
this Section 3 shall be determined, at the sole cost of the Company, by the
Company’s independent auditors (who served in such capacity immediately prior
to the Change in Control), whose determination or determinations shall be final
and binding on all parties. The Employee hereby agrees to utilize such
determination or determinations, as applicable, in filing all of the Employee’s
tax returns with respect to the payments received hereunder. If such independent
auditors refuse to make the required determinations, then such determinations
shall be made by a comparable independent accounting firm of national
reputation reasonably selected by the Company.


 


Section 4


MISCELLANEOUS


 


4.1 (a) The Company shall require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise)
to all or substantially all of the business or assets of the Company expressly
to assume and agree to perform under the terms of this Agreement in the same manner
and to the same extent that the Company and its affiliates would be required to
perform it if no such succession had taken place (provided that such a
requirement to perform which arises by operation of law shall be deemed to
satisfy the requirements for such an express assumption and agreement), and in
such event the Company (as constituted prior to such succession) shall have no
further obligation under or with respect to this Agreement. Failure of the
Company to obtain such assumption and agreement with respect to the Employee
prior to the effectiveness of any such succession shall be a breach of the
terms of this Agreement with respect to the Employee and shall entitle the
Employee to compensation from the Company (as constituted prior to such succession)
immediately prior to the Change in Control in the same amount and on the same
terms as the Employee would be entitled to hereunder upon the Change in
Control.  As used in this Agreement, “Company”
shall mean the Company as hereinbefore defined and any successor to its
business or assets as aforesaid which assumes and agrees (or is otherwise
required) to perform this Agreement. Nothing in this Section 4.1(a) shall be
deemed to cause any event or condition which would otherwise constitute a
Change in Control not to constitute a Change in Control.


 


7





















 


(b) This Agreement, and the Employee’s and the
Company’s rights and obligations hereunder, may not be assigned by the Employee
or, except as provided in Section 4.1(a), the Company, respectively; any
purported assignment by the Employee or the Company in violation hereof shall
be null and void.


 


(c) The terms of this Agreement shall inure to the
benefit of and be enforceable by the personal or legal representatives,
executors, administrators, permitted successors, heirs, distributees, devisees
and legatees of the Employee. If the Employee shall die while an amount would
still be payable to the Employee hereunder, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement
to the Employee’s devisee, legatee or other designee or, if there is no such
designee, the Employee’s estate.


 


4.2           The Employee shall not be required to
mitigate damages or the amount of any payment or benefit provided for under
this Agreement by seeking other employment or otherwise, nor, except as
expressly provided in Section 2.2(d), will any payments or benefits hereunder
be subject to offset in the event the Employee does mitigate.


 


4.3           The Company shall pay all reasonable legal
fees and expenses incurred in a legal proceeding by the Employee in seeking to
obtain or enforce any right or benefit provided by this Agreement. Such
payments are to be made within twenty (20) days after the Employee’s request
for payment accompanied by such evidence of fees and expenses incurred as the
Company reasonably may request; provided that if the Employee institutes a
proceeding and the judge or other decision-maker presiding over the proceeding
affirmatively finds that the Employee has failed to prevail substantially in
such proceeding, the Employee shall pay Employee’s own costs and expenses (and,
if applicable, return any amounts theretofore paid on the Employee’s behalf
under this Section 4.3).


 


4.4           For the purposes of this Agreement, notice
and all other communications provided for in this Agreement shall be in writing
and shall be deemed to have been duly given when hand delivered or mailed by
United States certified or registered express mail, return receipt requested,
postage prepaid, if to the Employee, addressed to the Employee at his or her
address set forth on the signature page hereto and if to the Company, addressed
as follows:


 


Concord Communications, Inc.


600 Nickerson Road


Marlboro, MA 
01752


Attn: Executive Vice President and General Counsel


 


with a copy to:


 


Kevin M. Barry, Esq.


Bingham McCutchen LLP


150 Federal Street


Boston, MA 
02110-1726


 


8





















 


4.5           Unless otherwise determined by the Company in
an applicable plan or arrangement, no amounts payable hereunder upon a Change
in Control shall be deemed salary or compensation for the purpose of computing
benefits under any employee benefit plan or other arrangement of the Company
for the benefit of its employees.


 


4.6           This Agreement is the exclusive arrangement
with the Employee applicable to payments and benefits in connection with a
change in control of the Company (whether or not a Change in Control), and
supersedes any prior arrangements involving the Company or its predecessors or
affiliates relating to changes in control (whether or not Changes in Control),
including, but not limited to, the Prior Agreement, which is terminated as of
the date hereof. This Agreement shall not limit any right of the Employee to
receive any payments or benefits under an employee benefit or compensation plan
of the Company, initially adopted as of or after the date hereof, which is
expressly contingent thereunder upon the occurrence of a change in control
(including, but not limited to, the acceleration of any rights or benefits
thereunder); provided that in no event shall the Employee be entitled to any
payment or benefit under this Agreement which duplicates a payment or benefit
received or receivable by the Employee under any severance or similar plan or
policy of the Company, and in any such case the Employee shall only be entitled
to receive the greater of the two payments. 
The Employee’s Employee Noncompetition Agreement with the Company, as
well as any and all option agreements, restricted stock agreements and any
other agreements with the Company relating to equity compensation arrangements
shall remain in full force and effect, as may be modified hereby.


 


4.7           Nothing in this Agreement shall confer on the
Employee any right to continue in the employ of the Company or interfere in any
way (other than by virtue of requiring payments or benefits as may expressly be
provided herein) with the right of the Company to terminate the Employee’s
employment at any time.  Employee
understands that the employment relationship between the Employee and the
Company is an “at will” relationship and that the Company may terminate such
relationship with or without cause or for any reason or no reason, subject to
the Employee’s rights and the Company’s obligations hereunder.


 


4.8           The Company shall be entitled to withhold
from any payments or deemed payments any amount of tax withholding required by
law.


 


4.9           Any controversy or claim arising out of or
relating to this Agreement or the breach of this Agreement that is not resolved
by the Company and the Employee shall be submitted to arbitration in Boston,
Massachusetts, in accordance with Massachusetts law and the procedures of the
American Arbitration Association. The determination of the arbitrator(s) shall
be conclusive and binding on the Company and Employee and judgment may be
entered on the arbitrator(s)’ award in any court having jurisdiction.


 


4.10         This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which taken
together will constitute one and the same instrument.


 


4.11         This Agreement may be amended, superseded,
canceled, renewed or extended, and the terms hereof may be waived, only by a
written instrument signed by the parties or, in the case of a waiver, by the
party waiving compliance. No delay on the part of any party in


 


9





















 


exercising any right, power
or privilege hereunder shall operate as a waiver thereof, nor shall any waiver
on the part of any party of any such right, power or privilege nor any single
or partial exercise of any such right, power or privilege, preclude any other
or further exercise thereof or the exercise of any other such right, power or
privilege.


 


4.12         Each provision herein shall be treated as a
separate and independent clause, and the invalidity or unenforceability of any
one provision of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement which shall remain in full force and
effect.  Moreover, if one or more
provisions shall be held to be excessively broad as to scope, activity, subject
or otherwise so as to be unenforceable at law, such provision or provisions
shall be construed by the appropriate judicial body by limiting or reducing it
or them, so as to be enforceable to the maximum extent compatible with the
applicable law as it shall then be in effect.


 


4.13         The
use of captions in this Agreement is for convenience. The captions are not
intended to and do not provide substantive rights.


 


4.14         This Agreement shall be construed,
administered and enforced according to the laws of the Commonwealth of
Massachusetts without regard to principles of conflicts of law, except to the
extent preempted by federal law.  Any
claims or legal actions by one party against the other arising out of the
relationship between the parties contemplated herein (whether or not arising
under this Agreement) shall be governed by the laws of the Commonwealth of
Massachusetts and shall be commenced and maintained in any state or federal
court located in Massachusetts, and both parties hereby submit to the
jurisdiction and venue of any such court.


 


4.15         This
Agreement shall terminate upon
the date that all obligations of the Company and the Employee with respect to
this Agreement have been satisfied.


 


10





















 


IN WITNESS WHEREOF, the parties hereto have signed
their names, effective as of the date first above written.


 


 


	
   

  	
  CONCORD COMMUNICATIONS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EMPLOYEE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  



 


11