Unassociated Document








Exhibit 10.1


 


Aspen Technology, Inc.








Amended Executive Annual Incentive Bonus Plan







FY12







For







“NAME”








	
I.

	
Purpose












The purpose of Aspen Technology’s (“Company”) Amended 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, 2011 through June 30, 2012.








	
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 FY12, the eligible positions include CEO, EVP-Field Operations, EVP & CFO, EVP, Products, SVP Marketing, SVP HR, SVP Strategy and 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 2012 will be measured based on the achievement of the FY12 Growth in Total License Contract Value “TLCV” and Cash Flow from Operations.






  





  











  








The following summarizes the weighting for the various incentive components for FY12.


 



	
FY12 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.







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 2012, 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 FY12, 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












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


 



	  	
Target Bonus $

	 	
Achievement

	 	 	
Funding


%

	 	
Bonus Earned


	
Growth in TLCV

	
$100,000 x 50% x 25% = $12,500

	 	 	90	%	 	 	90	%	
$12,500 * 90% = $11,250


	
Cash Flow

	
$100,000 x 50% x 25% = $12,500

	 	 	80	%	 	 	70	%	
$12,500 * 70% = $8,750


	
Bonus Earned

	
 

	 	 	 	 	 	 	 	 	
$11,250 + $8,750 = $20,000











  





  











  








YE Bonus Calculation








	
 

	
Target Bonus $

	 	
YE Target Bonus Less H1 Earned

	 	 	
Percent Achieved

	 	 	
Funding %

	 	
Bonus Earned


	
Growth in TLCV

	
$100,000 x 50% = $50,000

	 	$	38,750	 	 	 	85	%	 	 	80	%	
$38,750 * 80% = $31,000


	
Cash Flow

	
$100,000 x 50% = $50,000

	 	$	41,250	 	 	 	100	%	 	 	100	%	
$41,250 * 100% = $41,250


	
Annual Bonus Earned

	
 

	 	 	 	 	 	 	 	 	 	 	 	 	
$31,000 + $41,250 = $72,250







 

 



	
Total Annual Bonus Earned

	
 

	
Bonus Payment

	
 


	
First Half (H1) Bonus Earned

	
 

	
$

	
20,000

	  
	
End of Year (YE) Bonus Earned

	
 

	
$

	
72,250

	  
	
 

	
 

	
 

	
 


	
Total Bonus Earned for the Plan Year

	
 

	
$

	
92,250

	
 


	
Percent of Annual Bonus Target

	
 

	
92.25

	
%












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.






  





  











  











 


Appendix A








	
Employee’s Name:

	
Manager’s Name:

	
Organization:

	
Date Prepared:


	  	  	  	  
	
FY12 Compensation

	
Base Salary:$

	
Bonus Target: $

	
OTE: $













	
Employee Signature:  

	
  

	
 













	
Date:  

	
  

	
 













	
CEO Signature:  

	
  

	
 













	
Date: