8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 9, 2005

Aspect Communications Corporation

(Exact name of registrant as specified in its charter)

0-18391
(Commission File Number)

California	94-2974062
(State or other jurisdiction of incorporation)	(I.R.S. Employer Identification No.)

1320 Ridder Park Drive
San Jose, CA 95131
(Address of principal executive offices, with zip code)

(408) 325-2200
(Registrant’s telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)

     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	Item 1.01 Entry into a Material Definitive Agreement
	Item 9.01 Financial Statements and Exhibits.
SIGNATURES
INDEX TO EXHIBITS
EXHIBIT 99.1
EXHIBIT 99.2

Item 1.01 Entry into a Material Definitive Agreement

     On February 9, 2005, the Compensation Committee (the “Committee”) of the Board of Directors of Aspect Communications Corporation (the “Company”) took the following actions with respect to certain compensation matters affecting the Company’s executive officers.

     The Committee approved the Company’s FY2005 Executive Incentive Plan (the “Plan”), which provides for annual cash incentive bonuses to be paid to certain members of the Company’s management team upon achievement of certain corporate financial objectives. Specifically, payment of bonuses under the formulas set forth in the Plan depend upon achievement by the Company of net income and revenue targets, which are weighted in the calculation of bonus amounts at 60% and 40%, respectively; provided that the Plan will not be funded to the extent the Company fails to achieve the net income target. The Plan provides that the net income and revenue targets are to be determined in accordance with generally accepted accounting principles and further provides that the aggregate amount of bonuses may not exceed a specified percentage of the Company’s net income, which percentage is determined in the discretion of the Board. In addition, each participant’s right to receive payment of a bonus under the Plan is contingent upon, among other factors, his or her achieving certain individual performance objectives and ratings for the year. Each participant’s target bonus amount is expressed as a percentage of his or her fiscal year 2005 base salary ranging from 35% to 100% of such salary, with payment in excess of the target percentage capped at 150% of base salary. For fiscal year 2005, our officers who are named executive officers of the Company with respect to our fiscal year 2004 are participating in the Plan as follows:

			Target Percentage of Base
Officer	2005 Base Salary		Salary under Plan
Gary Barnett, Chief Executive Officer	$	425,000		100	%
James Reagan, Chief Financial Officer	$	315,016		70	%

     In addition, the Committee approved the renewal of change of control agreements (the “Change of Control Agreements”) with certain officers of the Company, effective February 28, 2005 through February 28, 2006. Pursuant to the terms of the Change of Control Agreements, as amended in connection with such renewal, each of Messrs. Barnett and Reagan are entitled to certain benefits in the event their employment is terminated without cause or is constructively terminated during the period beginning three months prior to and ending thirteen months following a change of control of the Company. Specifically, if his employment was involuntarily terminated under these circumstances, Mr. Barnett would be entitled to continue to receive payment in 18-month proportionate increments of an amount equal to 18 months’ of his regular base salary plus an amount equal to 1.5 times the average of his three prior years’ actual bonus payments and medical benefits for up to 18 months following such termination, and Mr. Reagan would be entitled to receive payment in 12-month proportionate increments of an amount equal to 12 months’ of his regular

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base salary plus an amount equal to his target bonus for the year times the average of the three prior years’ actual percentage payment under the Company’s executive bonus plans for such years and medical benefits for up to 12 months following such termination. In each case, calculation of the amount of severance attributable to the officer’s bonus is capped at his target bonus for the year in which his employment terminates as specified under the Change of Control Agreement. Both officers would also be entitled to receive full acceleration of the vesting of their stock options or restricted stock holdings. Under the agreements, the Company would have the right to cease payment of these benefits in certain cases where the officer violated his or her obligations to refrain from soliciting employees or customers of the Company or from competing with the Company during an 18-month period following termination of employment.

     Pursuant to the terms of the Company’s FY2004 Executive Incentive Plan, a cash bonus payment will be made to Mr. Barnett of $156,060.

Item 9.01 Financial Statements and Exhibits.

     Exhibits.

99.1	Aspect Communications Corporation FY2005 Executive Incentive Plan
99.2	Aspect Communications Corporation Change of Control Agreement (form)

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Aspect Communications Corporation
Date: February 14, 2005	By:	/s/ Gary E. Barnett
		Gary E. Barnett,
		President and Chief Executive Officer

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ASPECT COMMUNICATIONS CORPORATION
INDEX TO EXHIBITS

Exhibit
Number	Description
99.1	Aspect Communications Corporation FY2005 Executive Incentive Plan
99.2	Aspect Communications Corporation Change of Control Agreement (form)

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EX-99.1

Exhibit 99.1

Aspect Communications Corporation
FY2005 Executive Incentive Plan

1.	Purpose
	The Aspect Communications Corporation FY 2005 Executive Incentive Plan (the “Plan” or “EIP”) is intended to: (i) enhance shareholder value by promoting strong linkages between executive contributions and company performance; (ii) support achievement of the business objectives of Aspect Communications Corporation and its subsidiaries (the “Company”); and (iii) promote retention of participating executives.
2.	Effective Date
	This Plan is only effective for the Company’s 2005 fiscal year beginning January 1, 2005 through December 31, 2005 (the “Plan Year”). This Plan is limited in time and will expire automatically on December 31, 2005 (“Expiration Date”). This Plan also supersedes all prior bonus or commission incentive plans, whether with the Company or any subsidiary or affiliate thereof, or any written or verbal representations regarding the subject matter of this Plan.
3.	Administration

(a)	The Plan shall be administered by the Compensation Committee of the Board of Directors of the Company (the “Administrator”). The Administrator shall have all powers and discretion necessary or appropriate to administer the Plan and to control its operation, including, but not limited to, the power to (a) determine which employees are eligible to participate in the Plan, (b) prescribe the terms and conditions of the EIP payouts hereunder (as further defined in Section 5 below, the “EIP Payouts”), (c) interpret the Plan and the EIP Payouts, (d) adopt rules for the administration, interpretation and application of the Plan as are consistent therewith, and (e) interpret, amend or revoke any such rules. The Company’s Chief Executive Officer and the Vice President of Human Resources will be responsible for implementing the Plan.
(b)	All determinations and decisions made by the Administrator, the Board, and any delegate of the Administrator pursuant to the provisions of the Plan shall be final, conclusive, and binding on all persons, and shall be given the maximum deference permitted by law.
(c)	The Administrator, in its sole discretion and on such terms and conditions as it may provide, may delegate all or part of its authority and powers under the Plan to one or more directors and/or officers of the Company.
(d)	The Company shall provide a copy of the Plan to each Participant (as defined in Section 4 below) and communicate to each Participant his or her EIP Target Percentage as well as provide information about the Plan metrics (as set forth in Section 5 below).

4.	Eligibility
	Any full-time regular executive (Grade Level 40.EX and above) of the Company may be eligible to participate in this Plan, provided he or she is designated by the Administrator as a participant and as to whom the Administrator has not, in its sole discretion, withdrawn such designation (a “Participant”) and he or she meets all the following conditions:

(a)	has signed an Acknowledgement Form in the form attached hereto as Exhibit A;
(b)	is a full-time regular employee of the Company as of both (1) the last day of the Plan Year, and (2) the date the payment is made (subject to Section 6 below);
(c)	is not concurrently participating in a sales incentive or commission plan, or in any other bonus plan operated by or bonus contract with the Company;

(d)	has not entered into an agreement relating to termination of his or her employment with the Company (other than an employment agreement or offer letter, or a change of control agreement, that provides for certain benefits in connection with the Participant’s future termination of employment);
(e)	has not transferred to a position with the Company that either (1) is not eligible for participation in this Plan (as determined in the Administrator’s sole discretion), or (2) is eligible for participation in another bonus program offered by the Company; and
(f)	is not subject to a performance improvement plan or other disciplinary actions, and receives an IP% (as defined in Section 5 below) of greater than 80%.

5.   Plan Metrics

(a)	Subject to Section 5(b), the EIP Payout under this Plan for each Participant will be calculated based upon the following formula (the “Payout Formula”):
	Step 1:

Net Income Factor X 60 % = Weighted Net Income Factor

Step 2:

Revenue Factor X 40 % = Weighted Revenue Factor

Step 3:

Weighted Net Income Factor* + Weighted Revenue Factor = Weighted EIP Factor

*If the Weighted Net Income Factor is zero, the bonus is not funded under the EIP plan.

Step 4:

Budgeted EIP Bonus Pool X Weighted EIP Factor = EIP Pool Funding

Step 5:

EIP Pool Funding / Sum of EIP Targets at 100% = EIP Payout Percentage

Step 6:

Base Salary X EIP Target % X Individual Performance % X EIP Payout % = EIP Payout

The Base Salary is the Participant’s base salary at the time the bonus is paid; provided that such base salary will be pro-rated based on hire or promotion date or to take into account any leaves of absence. Nothing in this Plan, or arising as a result of a Participant’s participation in this Plan, shall prevent the Company from changing a Participant’s Base Salary at any time based on such factors as the Company shall in its discretion determine appropriate.

EIP Target Percentage is a percentage of Base Salary determined by the Administrator according to such factors as it, in its sole discretion, deems appropriate, including based upon job function, individual Participant performance, competitive market data and historical Company compensation.

Individual Performance Percentage (IP%) is a percentage ranging from 0% to 150% assigned by the Participant’s manager and approved by the Chief Executive Officer, or, with respect to the CEO, the Administrator. The Participant’s manager determines the IP% by evaluating the Participant’s level of

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	achievement against assigned goals and objectives, and communicates this percentage at or after the end of the Plan Year. Participants must receive an IP% of greater than 80% to be eligible to receive an EIP Payout.
	Net Income Factor is determined based upon the achievement by the Company of GAAP net income targets established by the Administrator. GAAP net income shall be measured in accordance with generally accepted accounting principles. When the GAAP Net Income Factor falls between the stated targets, the GAAP Net Income Factor will be determined according to the 2005 EIP Bonus Factor table, which reflects a comparison of actual net income results to targeted net income results. GAAP Net Income results are weighted 60% in determining the overall pool funding. The minimum achievement threshold of the GAAP net income target for the Plan Year must be met to fund a bonus under the EIP plan.
	Revenue Factor is determined based upon the achievement by the Company of revenue targets established by the Administrator. Revenue shall be measured in accordance with generally accepted accounting principles. When the Revenue Factor falls between the stated targets, the Revenue Factor will be determined according to the 2005 EIP Bonus Factor table, which reflects a comparison of actual revenue results to targeted revenue results. Revenue results are weighted 40% in determining the overall pool funding. In the event that the Company does not reach the minimum achievement threshold of the GAAP net income target for the Plan Year, the Revenue Factor shall be zero.
	Budgeted EIP Bonus Pool is determined by applying a fixed percentage, which percentage is determined in the sole discretion of the Board of Directors, to targeted 2005 net income.
(b)	All EIP Payouts shall be paid from the general assets of the Company (the “EIP Pool”). In the event that the EIP Pool is not sufficient to cover all EIP Payouts for the Plan Year, the Administrator may, at its sole discretion, (i) provide that the EIP payouts will be pro-rated based on the full amount each employee would have received if the full EIP Payouts were made; or (ii) cancel the grant of the EIP Payouts for the Plan Year, in which case the participants in the Plan shall have no rights to receive any partial or full EIP Payout for the Plan Year.
(c)	Notwithstanding anything to the contrary contained herein, the Administrator (subject in the case of Participants other than the CEO to the approval of the CEO) has the discretion to determine to pay less than the full amount (including to pay zero percent) of the EIP Payout to which any Participant would otherwise be entitled, which determination shall be based upon such factors as the Administrator determines appropriate (including without limitation as a result of the Company’s or a Participant’s failing to achieve one or more objectives with respect to the Plan Year, as a result of which it would be against the best interests of the Company and its shareholders to pay all or any portion of such EIP Payout).
(d)	EIP Payouts shall be unsecured, unfunded obligations of the Company. To the extent they have any rights under this Plan, Participants’ rights shall be those of general unsecured creditors of the Company.
(e)	In the event of a Participant’s death, participation in the Plan will continue for 30 days following the date of death, or the end of the fiscal year, whichever occurs first. Earned prorated EIP Payouts will be paid to the employee’s estate after the end of the Plan Year (as provided in Section 6 below) but only to the extent EIP Payouts are made to other Plan Participants.
(f)	EIP payouts for Participants hired after the start of the plan year will be prorated to reflect actual length of service during the Plan Year (with such pro-ration occurring either through the amount of Base Salary reflected in the Payout Formula or otherwise in order to reflect the appropriate amount of EIP Payout given actual length of service).
(g)	EIP payouts for employees with unpaid leaves of absence during Plan Year 2005 will be prorated to exclude the entire leave of absence.

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6.	Timing and Form of Payment of EIP Payouts
	Subject to the terms and conditions of this Plan, EIP Payouts shall be made on an annual basis by March 15th of year following the Plan Year.
7.	Plan Changes; No Entitlement
	The Administrator may at any time amend, suspend, or terminate this Plan, including may amend any aspect of the Payout Formula or the Performance Graph and may amend the Plan so as to ensure that no amount paid or to be paid hereunder shall be subject to the provision of Internal Revenue Code Section 409A(a)(1)(B). Nothing in this Plan is intended to create an entitlement to any employee for any incentive payment hereunder.
8.	General Provisions

(a)	Tax Withholding. The Company shall withhold all applicable taxes from any EIP Payout, including any federal, state and local taxes.
(b)	No Effect on Employment or Service. Nothing in the Plan shall interfere with or limit in any way the right of the Company to terminate any Participant’s employment or service at any time, with or without cause. Employment with the Company is on an at-will basis only. The Company expressly reserves the right, which may be exercised at any time, to terminate any individual’s employment with or without cause without regard to the effect it might have upon him or her as a Participant under this Plan.
(c)	Nontransferability of Awards. No award granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will, by the laws of descent and distribution. All rights with respect to an award granted to a Participant shall be available during his or her lifetime only to the Participant.
(d)	Severability. In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.
(e)	Governing Law. The Plan and all awards shall be construed in accordance with and governed by the laws of the State of California, but without regard to its conflict of law provisions.
(f)	Entire Agreement. This Plan, and any resolutions of the Compensation Committee of the Board amending the Plan, is the entire understanding between the Company and the employee regarding the subject matter of this Plan and supersedes all prior bonus or commission incentive plans, or employment contracts whether with any subsidiary, or affiliate thereof (including Aspect Communications Corporation) or any written or verbal representations regarding the subject matter of this Plan. Participation in this Plan during the Plan Year will not convey any entitlement to participate in this or future plans or to the same or similar bonus benefits. Payments under this Plan are an extraordinary item of compensation that is outside the normal or expected compensation for the purpose of calculating any extra benefits, termination, severance, redundancy, end-of-service premiums, bonuses, long-service awards, overtime premiums, pension or retirement benefits or other similar payment.

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EXHIBIT A
Acknowledgment Form

I understand that I have been designated a Participant in the Aspect Communications Corporation FY2005 Executive Incentive Plan (the “Plan”). I have received a copy of the Plan document.

I understand that, notwithstanding any other agreements, arrangements or understandings that may exist, my EIP Target Percentage for the Plan Year (FY2005) is ___%.

I hereby agree to the terms and conditions set forth in the Plan. I understand that I have no right to earn any amount under this Plan until all conditions described in the Plan have been met, as determined by the Compensation Committee of the Aspect Communications Corporation Board of Directors, in its sole judgment.

PLAN PARTICIPANT	DATE
[Title of person signing on behalf of Aspect Communications]	DATE

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EX-99.2

Exhibit 99.2

via Inter-office Mail

February 27, 2005

FIRST NAME LAST NAME
TITLE
Aspect Communications
San Jose, CA 95131

Dear «First_Name»:

     This letter agreement (the “Agreement”) is to confirm the terms of your ongoing employment with Aspect Communications Corporation (the “Company”) and supersedes and replaces all prior oral and/or written agreements regarding the subject matter hereof between you and the Company.

     1. This Agreement will commence on the date hereof and continue until February 28, 2006 (the “Original Term”), unless extended for one or more additional one-year terms upon mutual written agreement between you and the Company or unless terminated pursuant to the terms described herein. In no way limiting the foregoing, if the Company has not affirmatively renewed or terminated this Agreement as of the expiration of the Original Term or any extension thereof, this Agreement will be extended for a series of successive one month periods, pending an affirmative decision by the Company to either renew or not renew the Agreement. Affirmative renewal or termination by the Company shall be evidenced by the adoption of resolutions by the Compensation Committee of the Board of Directors of the Company (the “Committee”), or, alternatively, by the Board of Directors. In addition, in the event that the Company has entered into discussions with a third party regarding a Change of Control in the beneficial ownership of the Company (as defined below) and such Change of Control discussions are ongoing at the end of the Original Term or any extension (including any one month extension as provided for above), this Agreement automatically shall be extended until the later of (a) the end of a period of eighteen (18) months following the closing of such Change of Control transaction or (b) the time that the parties have ceased their discussions.

     2. Your title, reporting structure, job duties and responsibilities are described on Exhibit A attached hereto. As a condition to your continuing employment, you agree to execute and comply with the terms of the Confidential Information and Invention Assignment Agreement (the “Confidentiality Agreement”) that is attached to this Agreement as Exhibit B. You agree to the best of your ability and experience that you will, to the reasonable satisfaction of the Company and its Board, at all times loyally and conscientiously perform all of the duties and obligations required of you pursuant to the terms of this Agreement; provided, however, that you shall not be precluded from engaging in civic, charitable or religious activities, or from serving on the boards of directors of other business entities with the prior written approval of the Board of Directors of the Company (the “Board”), so long as such activities or service do not interfere with your responsibilities to the Company hereunder. You will comply with and be bound by the Company’s operating policies, procedures and practices in effect from time to

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time during the term of your employment. You will devote your best efforts to the interest of the Company and will not engage in other employment with any Company customer, competitor or supplier without the prior written consent of the Company’s Board of Directors. You will not accept any other position if such position will impair your ability to fulfill your obligations to the Company.

     3. You acknowledge that your employment is and will continue to be at-will, meaning that your employment with the Company may be terminated by either you or the Company at any time for any or no reason, with or without cause, and with or without notice. 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. Notwithstanding the foregoing, upon the termination of your employment for any reason, you still shall have the right to receive (i) payment of regular base salary and any unpaid target bonus, in either case as earned but unpaid through the date of termination, (ii) payment of all of your accrued and unused vacation through the date of termination, (iii) following your submission of proper expense reports, reimbursement by the Company for all expenses reasonably and necessarily incurred by you in connection with the business of the Company prior to termination, (iv) vested contributions and earnings from the Company’s 401(k) plan, and (v) any post-termination benefits under the Company’s then-applicable employee benefit plans, policies or arrangements in accordance with the terms of such plans, policies and arrangements. Any payments described in this Section shall be made promptly upon termination, but in any event in compliance with applicable law and any applicable terms of the Company’s plans, policies, and arrangements. The rights and duties created by this Section may not be modified in any way except by a written agreement executed by the Chairman of the Board (COB), President & Chief Executive Officer (CEO) and the Board of Directors, as appropriate depending upon your position, on behalf of the Company.

     4. If your employment is terminated by the Company without Cause (as defined below) and other than as a result of your death or disability, or if your employment is terminated by you as a result of a Constructive Termination (as defined below), in either case in the period of time beginning three (3) months prior to the effective date of a Change of Control and ending thirteen (13) months following the effective date of a Change of Control, then, subject to your obligations and such other terms and conditions as described herein, including without limitation those set forth in Sections 8, 18 and 19 below, the Company will provide you with the following severance benefits:

(a)   The Company will pay you a pro-rated amount equal to the sum of (i) your regular base salary (at the rate that is in effect on the date of your termination or as of immediately prior to the effective date of the Change of Control, whichever is greater) for the period specified below, plus (ii) an amount equal to the Bonus Amount (as defined below) [times [B] 1.5 — for CEO only], which aggregate amount shall be paid in equal proportional amounts pursuant to the Company’s regular payroll schedule for a period of [twelve (12)/eighteen (18)] months (the “Severance Period”).

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	The “Bonus Amount” shall be calculated as follows: (1) if you were either not employed by the Company during the year immediately prior to the year in which your employment is terminated or you did not in such prior year hold the position you hold at the time your employment is terminated, then the amount shall be calculated using the three-year average of the actual percentage payment against the Aspect Executive Incentive Plan times your annual target bonus for the year of termination, or (2) if you have been employed by the Company during the prior year in the position you hold at the time of termination, then the amount shall be calculated using the average of your actual annual incentive bonus paid during the three years immediately prior to the year in which your employment terminates (or such shorter period as you have been employed with the Company in the position you occupy at the time of termination, but in any case annualized for a partial year), provided that this average shall not exceed your target bonus for the year of employment termination
(b)	Provided that you make a timely election to continue coverage under the Company’s group medical insurance plans pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), the Company will pay the applicable premiums for you and your eligible dependents for such continued coverage for the lesser of the Severance Period or until you become eligible for comparable group medical insurance benefits from another employer or are otherwise ineligible for COBRA continuation coverage. Nothing in this Section 4 shall restrict the ability of the Company or its successor from changing some or all of the terms of such health insurance benefits, provided that all similarly situated participants are treated the same.
(c)	With respect to any stock option you hold that is not otherwise fully exercisable and vested as of the termination date, such stock options will become fully vested as of immediately prior to the termination of your employment with the Company, and will thereafter become exercisable as to those shares that become vested pursuant to this Section 4(c) over the Severance Period in eighteen (18) equal monthly installments, such that, subject to your continued compliance with the terms of this Agreement throughout the Severance Period, these stock options will be fully vested and exercisable as of the end of the Severance Period. If the Company determines at any point during the Severance Period that you are not in compliance with your obligations pursuant to this Agreement, you will have no right to exercise the stock options as to, and you will forfeit all right, title and interest in or to, any shares which, pursuant to this Section 4(c), have not become exercisable as of the first date on which you were not in compliance with such obligations. In connection

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with this Section 4(c), the Company will amend your current stock options to provide that such awards will be exercisable as to any vested shares following the termination of your employment until the later of ninety (90) days following your termination date, or, if you are eligible for acceleration of vesting and exercisability pursuant to this Section 4(c), until the ninetieth (90^th) day following the date on which the final installment of each respective stock option became exercisable. In no event shall any stock option subject to this Section 4(c) be exercisable following the expiration of the original term of such stock option.

          Notwithstanding the foregoing, you shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise nor, except for your eligibility for COBRA continuation coverage set forth in b.) above and except as set forth in Sections 18 and 19 below, shall the amount of any payment or benefit provided for in this Section be reduced or otherwise affected by any compensation or benefits received by you as a result of employment by another employer or self-employment, by any retirement benefits regardless of source, by offset against any amount claimed to be owed by you to the Company, or otherwise.

          Any severance benefits described herein will be subject to applicable tax withholdings and, except to the extent specifically required by applicable law, you will be responsible for all taxes arising in connection with any severance benefits provided for hereunder and you agree to fully indemnify the Company from and against any tax liability arising as a result of your receipt or entitlement to such severance benefits.

     5. In the event that the severance benefits provided to you by this Agreement (i) constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), or any comparable successor provisions, and (ii) but for this Section would be subject to the excise tax imposed by Section 4999 of the Code, or any comparable successor provisions (the “Excise Tax”), then your benefits hereunder shall be either

(i)	provided to you in full, or
(ii)	provided to you as to such lesser extent which would result in no portion of such benefits being subject to the Excise Tax,

whichever of the foregoing amounts, when taking into account applicable federal, state, local and foreign income and employment taxes, the Excise Tax, and any other applicable taxes, results in the receipt by you, on an after-tax basis, of the greatest amount of benefits, notwithstanding that all or some portion of such benefits may be taxable under the Excise Tax. Unless the Company and you agree otherwise in writing, any determination required under this Section shall be made in writing in good faith by a qualified third party (the “Professional Service Firm”). In the event

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of a reduction of benefits hereunder, the cash benefits provided under Sections 4(a) and (b) shall be reduced first and, to the extent reduction of such cash benefits is insufficient to avoid liability under the Excise Tax in the manner intended under this Section, then the benefits set forth in Section 4(c) shall be reduced to the extent necessary to avoid such liability. For purposes of making the calculations required by this Section, the Professional Service Firm may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of the Code, and other applicable legal authority. The Company and you shall furnish to the Professional Service Firm such information and documents as the Professional Service Firm may reasonably request in order to make a determination under this Section 5. The Company shall bear all costs the Professional Service Firm may reasonably incur in connection with any calculations contemplated by this Section.

          If, notwithstanding any reduction described in this Section, the Internal Revenue Service (“IRS”) determines that you are liable for the Excise Tax as a result of the receipt of the payment of benefits described above, then you shall be obligated to pay back to the Company, within thirty (30) days after a final IRS determination or in the event that you challenge the final IRS determination, a final judicial determination, a portion of the payment equal to the “Repayment Amount.” The Repayment Amount with respect to the payment of benefits shall be the smallest amount, if any, as shall be required to be paid to the Company so that your net after-tax proceeds with respect to any payment of benefits (after taking into account the payment of the Excise Tax and all other applicable taxes imposed on such payment) shall be maximized. The Repayment Amount with respect to the payment of benefits shall be zero if a Repayment Amount of more than zero would not result in your net after-tax proceeds with respect to the payment of such benefits being maximized. If the Excise Tax is not eliminated pursuant to this Section or otherwise pursuant to this Section 5, then you shall pay the Excise Tax and the Company shall not bear any liability to you or any other party for taxes, interest, penalties or additions to tax as a result of your being subject to the Excise Tax. To the extent that the Company becomes liable to any party for any amount as a result of your being subject to the Excise Tax, you shall indemnify the Company for such amount.

          Notwithstanding any other provision of this Section, if (i) there is a reduction in the payment of benefits as described in this Section, (ii) the IRS later determines that you are liable for the Excise Tax, the payment of which would result in the maximization of your net after-tax proceeds (calculated as if your benefits previously had not been reduced), and (iii) you pay the Excise Tax, then the Company shall pay to you those benefits which were reduced pursuant to this Section contemporaneously or as soon as administratively possible after you pay the Excise Tax so that your net after-tax proceeds with respect to the payment of benefits is maximized.

     6. 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 to substantially perform your duties hereunder (other than any such failure due to your

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physical or mental illness), and such willful failure is not remedied within ten (10) business days after written notice, 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 (including, but not limited to, an act of fraud or embezzlement against the Company) that has caused or is reasonably expected to result in material injury to the Company or any of its affiliates, or any act that constitutes any knowing misrepresentation involving or related to the Company’s financial statements, (iii) you are convicted of or enter a plea of guilty or nolo contendere to a crime that constitutes a felony related to your employment with the Company or a crime that materially adversely affects your ability to perform your duties on behalf of the Company, 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 ten (10) business days after written notice from the Company’s Chief Executive Officer or the Board of Directors, which written notice shall state that failure to remedy such conduct may result in an involuntary termination for Cause.

          (b) “Change of Control” will mean (i) a dissolution or liquidation of the Company; (ii) a sale, lease or other disposition of all or substantially all of the assets of the Company so long as the Company’s stockholders of record immediately prior to such transaction will, immediately after such transaction, fail to possess direct or indirect beneficial ownership of more than fifty percent (50%) of the voting power of the acquiring entity (for purposes of this clause 6(b)(ii), any person who acquired securities of the Company prior to the occurrence of such asset transaction in contemplation of such transaction and who after such transaction possesses direct or indirect ownership of at least ten percent (10%) of the securities of the acquiring entity immediately following such transaction shall not be included in the group of stockholders of the Company immediately prior to such transaction); (iii) either a merger or consolidation in which the Company is not the surviving corporation and the stockholders of the Company immediately prior to the merger or consolidation fail to possess direct or indirect beneficial ownership of more than fifty percent (50%) of the voting power of the securities of the surviving corporation (or if the surviving corporation is a controlled affiliate of another entity, then the required beneficial ownership shall be determined with respect to the securities of that entity which controls the surviving corporation and is not itself a controlled affiliate of any other entity) immediately following such transaction, or a reverse merger in which the Company is the surviving corporation and the stockholders of the Company immediately prior to the reverse merger fail to possess direct or indirect beneficial ownership of more than fifty percent (50%) of the securities of the Company (or if the Company is a controlled affiliate of another entity, then the required beneficial ownership shall be determined with respect to the securities of that entity which controls the Company and is not itself a controlled affiliate of any other entity) immediately following the reverse merger (for purposes of this clause 6(b)(iii), any person who acquired securities of the Company prior to the occurrence of a merger, reverse merger, or consolidation in contemplation of such transaction and who after such transaction possesses direct or indirect beneficial ownership of at least ten percent (10%) of the securities of the Company or the surviving corporation (or if the Company or the surviving corporation is a controlled

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affiliate, then of the appropriate entity as determined above) immediately following such transaction shall not be included in the group of stockholders of the Company immediately prior to such transaction); (iv) an acquisition by any person, entity or group within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or any comparable successor provisions (excluding any employee benefit plan, or related trust, sponsored or maintained by the Company or a subsidiary or other controlled affiliate of the Company) of the beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act, or comparable successor rule) of securities of the Company representing at least fifty percent (50%) of the combined voting power entitled to vote in the election of directors; or (v) the individuals who, as of the date of this Agreement, are members of the Board (the “Incumbent Board”), cease for any reason to constitute at least fifty percent (50%) of the Board. If the election, or nomination for election by the Company’s stockholders, of any new director was approved by a vote of at least fifty percent (50%) of the Incumbent Board, such new director shall be considered as a member of the Incumbent Board.

          (c) “Constructive Termination” will be deemed to occur if you resign from any and all positions which you hold with the Company (including any membership on the Company’s Board of Directors) within forty-five (45) days immediately after one or more of the following events: (i) your duties and responsibilities to the Company (or a successor corporation) in the position listed on Exhibit A are materially diminished relative to your duties and responsibilities as in effect at any time from the time immediately prior to the occurrence of a Change of Control or at any time thereafter, without your prior written consent; (ii) you are subject to any reduction in the total value of your base compensation and benefits, provided that an across-the-board reduction in the base compensation and benefits of all other employees or consultants in positions similar to yours by the same percentage amount (or under the same terms and conditions) as part of a general base compensation reduction and/or benefit reduction shall not constitute such a qualifying reduction; or (iii) without your prior written consent, the principal place at which you perform your employment duties and responsibilities is relocated such that your new business office location results in a commute for you that is both (A) longer than your commute prior to the relocation and (B) greater than fifty (50) miles each way. For purposes of this definition and this Agreement, however, a change in title with substantially the same duties and responsibilities shall not be considered a Constructive Termination, should you have continuing responsibilities for the acquirer which are substantially the same as those you had for the Company prior to the Change of Control transaction.

     7. You hereby represent and warrant to the Company that you have, during your employment with the Company, complied with all obligations under the Confidentiality Agreement. You further agree that the provisions of the Confidentiality Agreement will survive any termination of this Agreement or of your employment relationship with the Company.

     8. Upon your involuntary termination of employment other than for Cause or upon your voluntary termination as a result of a Constructive Termination, in either case in the manner set forth in Section 4 above, and as a condition of the

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receipt of any benefits under this Agreement, you shall execute a release of all legal claims against the Company related to your employment on a form prepared by the Company (a “Release”). If you do not execute a Release within the period set forth in the Release (which period shall not be shorter than seven (7) days and shall not be longer than forty-five (45) days), or if you are given the right to revoke such Release and you choose to so revoke such Release within the subsequent seven (7) business day period, you will have no right to receive any of the benefits described in Section 4 above.

     9. You represent that you have not entered into any agreements, understandings, or arrangements with any other person or entity which would be breached by you as a result of, or that would in any way preclude or prohibit you from, entering into this Agreement or performing any of the duties and responsibilities provided for herein.

     10. Any successor to the Company as a result of the occurrence of a Change of Control (whether direct or indirect and whether by purchase, lease, merger, consolidation, liquidation or otherwise) or otherwise which succeeds to all or substantially all of the Company’s business and/or assets shall assume the obligations under this Agreement and agree expressly to perform the obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession. For all purposes under this Agreement, the term “Company” shall include any successor to the Company’s business and/or assets which executes and delivers the assumption agreement described in this Section or which becomes bound by the terms of this Agreement by operation of law.

          The terms of this Agreement and all of your rights hereunder shall inure to the benefit of, and be enforceable by, your personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees or legatees.

     11. This Agreement, including any Exhibits hereto, constitutes the sole agreement of the parties and supersedes all negotiations and prior agreements with respect to the subject matter hereof, i.e., the rights and responsibilities of you and the Company in the event of certain terminations of your employment with the Company relating to the occurrence of a Change of Control.

     12. Any term of this Agreement may be amended or waived only with the written consent of the parties; provided however that you and the Company acknowledge that it is your mutual intent that no benefit arising under this Agreement shall be subject to the provisions of Code Section 409A(a)(1)(B), and you further agree that the Committee shall have the authority (but not the obligation) to amend without your consent the provisions of Section 4 in a manner designed to avoid application of Code Section 409A(a)(1)(B) to any payment arising thereunder; and provided further that the Company shall have no liability for failure to amend this Agreement in the manner specified in the preceding proviso.

     13. Any notice required or permitted by this Agreement will be in writing and will be deemed sufficient upon receipt, when delivered personally, by

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facsimile or email, or by a nationally-recognized delivery service (such as Federal Express or Express Mail), or 72 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 re-negotiate 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, modified or replaced and (iii) the balance of the Agreement will be enforceable in accordance with its terms. Specifically with respect to the covenants contained in Sections 18 and 19 below, the parties intend that such covenants shall be construed as a series of separate covenants, one for each city, county, state, nation and other political subdivision of the Business Area (as defined in Section 19 below). If, in any judicial, mediation or arbitration proceeding, a court, mediator or arbitrator shall refuse to enforce any of the separate covenants (or any part thereof) deemed included in such Sections, then any such unenforceable covenant (or such part) shall be deemed eliminated from this Agreement for the purpose of those proceedings to the extent necessary to permit the remaining separate covenants (or portions thereof) to be enforced by such court, mediator or arbitrator. It is the intent of the parties that the covenants set forth in this Agreement be enforced to the maximum degree permitted by applicable law. Further, in the event that any of the provisions of Sections 18 or 19 should be deemed to exceed the scope, time or geographic limitations of applicable law regarding covenants not to compete, then such provisions shall be automatically reformed to the maximum scope, time or geographic limitations, as the case may be, permitted by applicable laws.

     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 mutually agreed upon by the parties. 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. Except as set forth in Sections 12 and 15, the arbitrator shall not have authority to modify the terms of this Agreement. The Company shall pay the costs of the arbitration proceeding; provided however that each party shall, unless otherwise determined by the arbitrator, bear its, his or her own attorneys’ fees and expenses. 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

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preliminary or interim equitable relief, or to compel arbitration in accordance with this Section, without breach of this arbitration provision.

     17. You acknowledge that, in executing this Agreement, you have had the opportunity to seek the advice of independent legal counsel, that you have done so or knowingly declined to do so, and you have read and understood all of the terms and provisions of this Agreement.

     18. You agree that during the term of your employment (and any concurrent or subsequent consulting relationship) with the Company, and for a period of eighteen (18) months immediately thereafter, you will not either directly or indirectly solicit, induce, recruit or encourage any of the Company’s employees or consultants to terminate their relationship with the Company, or attempt to solicit, induce, recruit, encourage or take away employees or consultants of the Company, either for your own benefit or for the benefit of any other person or entity. Further, during your employment (and any concurrent or subsequent consulting relationship) with the Company and at any time thereafter, you will not use any confidential or proprietary information of the Company to attempt to negatively influence any of the Company’s clients or customers from purchasing Company products or services or to solicit or influence or attempt to solicit or influence any client, customer or other person either directly or indirectly, to direct his, her or its purchase of products and/or services to any person, firm, corporation, institution or other entity in competition with the business of the Company. You acknowledge that upon your breach of this Section 18, the Company would sustain irreparable harm from such breach, and, therefore, you agree that in addition to any other remedies which the Company may have under this Agreement or otherwise, the Company’s obligations to provide the benefits to you as described in Section 4 above shall immediately terminate, you shall have no claim to receive such benefits from the Company, the Release referred to in Section 8 above shall remain in all respects valid and binding, and the Company shall be entitled to obtain equitable relief, including specific performance and injunctions, restraining you from committing or continuing any such violation of this Section 18.

     19. If your employment is terminated under the circumstances set forth in Section 4 above, you agree that for a period of eighteen (18) months immediately following the termination of your employment, you will not (i) enter into or participate in the business of developing, marketing and servicing hardware and software related to contact centers, including those involving voice-over IP, traditional telephony, e-mail, voicemail, Web, fax, and wireless business communications of the type developed, marketed or serviced or being developed or proposed to be developed, marketed or serviced by the Company as of the date of termination of employment (the “Restricted Business”) or (ii) directly or indirectly own, manage, operate, control or otherwise engage or participate in, or become connected as an owner, partner, principal, creditor, salesman, guarantor, advisor, member of the board of directors of, employee of or consultant in any entity or business, or any division, group or other subset of any business, engaged in the Restricted Business. Subject to Section 15 above, the restrictions set forth in this Section 19 shall apply worldwide (the “Business Area”).

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          (a) You acknowledge that upon your breach of this Section 19, the Company would sustain irreparable harm from such breach, and, therefore, you agree that in addition to any other remedies which the Company may have under this Agreement or otherwise, the Company’s obligations to provide the benefits to you as described in Section 4 above shall immediately terminate, you shall have no claim to receive such benefits from the Company, the Release referred to in Section 8 above shall remain in all respects valid and binding, and the Company shall be entitled to obtain equitable relief, including specific performance and injunctions, restraining you from committing or continuing any such violation of this Section 19.

          (b) You agree that you will be able to earn a livelihood without violating the restrictions set forth in this Section 19. You agree that the character, duration and geographical scope of Section 19 are reasonable in light of the circumstances as they exist on the effective date of this Agreement.

     20. You agree not to enter into any agreement, either written or oral, in conflict with the provisions of this Agreement. You certify that, to the best of your information and belief, you are not a party to any other agreement that will interfere with your full compliance with this Agreement.

     21. This Agreement (i) shall survive your employment by the Company (ii) does not in any way restrict your right or the right of the Company to terminate your employment, (iii) inures to the benefit of successors and assignees of the Company, and (iv) is binding upon your heirs and legal representatives.

     22. You certify an acknowledge that you have carefully read all of the provisions of the agreement and that you understand and will fully and faithfully comply with such provisions.

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Please indicate your agreement with the above terms by signing below.

Sincerely,

Aspect Communications Corporation

By:

Date:

Title:

Address:	1310 Ridder Park Drive
	San Jose, CA 95131

Facsimile Number: (408) 325-2261

My signature below signifies my agreement with the above terms.

By:

Address:

Date:

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EXHIBIT A

Description of Title, Reporting Structure,
Job Duties and Responsibilities

FIRST NAME LAST NAME — TITLE

Aspect Communications Corporation

By:

Title:

Date:

Address:	1310 Ridder Park Drive
	San Jose, CA 95131

Facsimile Number: (408) 325-2261

My signature below signifies my agreement with the above terms.

By:

Date:

Address:

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EXHIBIT B

Confidentiality Agreement

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