AMENDED AND RESTATED CHANGE OF CONTROL AGREEMENT
Exhibit 99.2
AMENDED AND RESTATED CHANGE OF CONTROL AGREEMENT
This Amended and Restated Change of Control Agreement (the “COC Agreement”) is effective as of
December 18, 2007 (the “COC Agreement Date”) by and between Xxxx Xxxx (the “Employee”) and Sybase,
Inc., a Delaware corporation (the “Company”).
RECITALS
A. The Employee presently serves at the pleasure of the Board of Directors of the Company (the
“Board”) as the Chairman of the Board, President and Chief Executive Officer of the Company and
performs significant strategic and management responsibilities necessary to the continued conduct
of the Company’s business and operations.
B. The Employee and the Company previously entered into an Amended and Restated Change of
Control Agreement dated June 11, 2001 which was amended March 30, 2006 setting forth the benefits
to which the Employee is entitled upon a Change of Control (as defined below) of the Company.
C. The Board has determined that it remains 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.
D. The Board believes that it is imperative to provide the Employee with benefits following a
Change of Control which are competitive in the market place and which provide sufficient incentive
and encouragement to the Employee to remain with the Company, and the Board therefore has
determined that it is in the best interests of the Company to amend and restate the terms
applicable upon a Change of Control.
E. In order to accomplish the foregoing objectives, the Board has directed the Company, upon
execution of this COC Agreement by the Employee, to agree to the terms provided herein.
F. Certain capitalized terms used in the COC Agreement are defined in Section 3 below.
In consideration of the mutual covenants herein contained, and in consideration of the
continuing employment of Employee by the Company, the parties agree as follows:
1. Term of Employment. The Company and the Employee acknowledge that the
Employee’s employment is at will, as defined under applicable law, except as may otherwise be
provided under the terms of any written employment agreement between the Company and Employee that
is signed on behalf of the Company and now or hereafter is in effect. If the Employee’s employment
terminates for any reason, the Employee shall not be entitled to any payments, benefits, damages,
awards or compensation other than as provided by this COC
Agreement, together with any written employment agreement then in effect between Employee and
the Company, and as may otherwise be available in accordance with the Company’s established written
employee plans and written policies which are in effect at the time of termination or as is
required by law.
2. Change of Control Benefits.
(a) Upon the occurrence of a Change of Control, and regardless of whether Employee has been
terminated, the Employee shall be entitled to receive a payment in an amount equal to the sum of
(A) twice the Employee’s annual base salary at the time of the Change of Control, plus (B) twice
the average of (x) the annual cash bonus, if any, received or deferred by the Employee in respect
of the most recently completed fiscal year (or, if such bonus, if any, has been earned but not yet
received or deferred, the annual cash bonus, if any, to be received or deferred with respect to
such fiscal year), and (y) the annualized annual cash bonus that Employee is then eligible to
receive for the Company’s fiscal year in effect on the date of the Change of Control (which shall
be calculated by annualizing the objective performance milestones based on the completed fiscal
quarters in such fiscal year, and by assuming 100% “on target” satisfaction of any subjective
performance milestones); provided, however, that if such Change in Control occurs prior to the
completion of the first fiscal quarter, then Employee shall instead receive a payment in the amount
described in clause (A) above plus twice the average of the annual cash bonuses, if any, received
or deferred by the employee in respect of the two most recently completed fiscal years (or, if such
bonus, if any, has been earned but not yet received or deferred with respect to the most recently
completed fiscal year, the average of the prior fiscal year’s annual cash bonus and the annual cash
bonus, if any, to be received or deferred with respect to the most recently completed fiscal year);
provided further, however, notwithstanding the above, if the amount calculated under Clause (B)
above is less than two times the Employee’s target annual incentive compensation for the Company’s
fiscal year in effect at the time of the Change of Control (the “Current Year”), then the amount
under Clause (B) shall instead be deemed to be two times the Employee’s target annual compensation
for the Current Year. Any payments to which the Employee is entitled pursuant to this section shall
be paid in a lump sum within thirty (30) days of the Change of Control. In addition, if within the
eighteen (18) month period following any Change of Control the Employee’s employment terminates for
any reason other than Cause, the Company shall be obligated for the twenty four (24) month period
following the date of termination to continue to make available to the Employee and to reimburse
premiums for the Employee and his or her covered dependents within thirty (30) days of the premium
due date for all health, dental, vision, life, dependent life, long-term disability, accidental
death and dismemberment and other similar insurance plans existing on the date of the Employee’s
termination; provided, however, that such reimbursements shall be delayed six months and one day
from the date of Termination (and then paid in full in arrears) to the extent required to avoid the
imposition of additional tax under Internal Revenue Code Section 409A (“Code Section 409A”). The
Company shall “gross-up” Employee for any income and employment taxes required to be imputed by
virtue of providing the benefits set forth in the preceding sentence, such that the net economic
result to the Employee will be as if such benefits were provided on a tax-free basis. In addition,
any outstanding equity awards (including but not limited to stock options, restricted stock,
restricted stock units and stock appreciation rights) held by the Employee under the Company’s
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equity compensation plans, under the Company’s subsidiaries’ equity compensation plans and
under the equity compensation plans of corporations that have merged with or into the Company shall
automatically have its vesting accelerated (including, for restricted stock, accelerated lapse of a
right of repurchase by the Company) as to 100% of the unvested portion of such equity awards on the
date of the Change of Control.
(b) Termination Apart from Change of Control. In the event of a Change of Control,
Employee shall be entitled to the severance benefits specified in this COC Agreement and shall not
be entitled to any other severance payments in connection with any termination of employment
occurring within eighteen months following a Change of Control. If the Employee’s employment is
terminated for any reason other than a Change of Control (e.g. more than 18 months after a Change
of Control) then the Employee shall be entitled to receive severance and any other benefits only as
may then be established under the Company’s existing written severance and benefit plans and
written policies and under any written employment agreement in effect at the time of such
termination or as is required by law.
(c) Internal Revenue Code Section 409A. Notwithstanding any other provision of this
Agreement, if the Employee is a “key employee” under Code Section 409A and a delay in making any
payment or providing any benefit under this Agreement is required by Code Section 409A and any
Treasury Regulations, and IRS guidance thereunder, or necessary in the good faith judgment of the
Company, to avoid the Employee incurring additional tax under Section 409A, such payments shall not
be made until the end of six (6) months following the date of the Employee’s separation from
service in accordance with Code Section 409A. In the event any payment or the provision of any
benefit to Employee is delayed by reason of this paragraph, in addition to the delayed payment or
benefit, the Employee shall also be entitled to receive interest on the such payment or benefit
determined using the rate in effect from time to time under Section 1274(b)(2)(B) of the Code.
3. Definition of Terms. The following terms referred to in this COC Agreement shall
have the following meanings:
(a) Change of Control. “Change of Control” shall mean a (i) change in ownership of
the Company, (ii) change in effective control of the Company, or (iii) change in the ownership of a
substantial portion of the Company’s assets (with an asset value change in ownership exceeding more
than 50% of the total gross fair market value replacing the 40% default rule), all as defined under
Code Section 409A and the final Treasury Regulations thereunder.
(b) Cause. “Cause” shall mean (i) any act of personal dishonesty taken by the
Employee in connection with his or her responsibilities as an employee and intended to result in
substantial personal enrichment of the Employee, (ii) the conviction of a felony, (iii) a willful
act by the Employee which constitutes gross misconduct and which is injurious to the Company, and
(iv) continued violations by the Employee of the Employee’s obligations as an employee of the
Company which are demonstrably willful and deliberate on the Employee’s part after there has been
delivered to the Employee a written demand for performance from the Company which describes the
basis for the Company’s belief that the Employee has not substantially performed his or her duties.
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4. Excise Tax. In the event that the severance and other benefits provided for in
this COC Agreement or otherwise payable to the Employee (i) constitute “parachute payments” within
the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) and (ii)
but for this Section 4, would be subject to the excise tax imposed by Section 4999 of the Code (the
“Excise Tax”), then the Employee shall receive (a) a payment from the Company sufficient to pay the
Excise Tax plus (b) an additional payment from the Company sufficient to pay the Excise Tax and
federal and state income and employment taxes arising from the payments made by the Company to the
Employee pursuant to this sentence. Unless the Company and the Employee otherwise agree in
writing, the determination of the Employee’s Excise Tax liability and the amount required to be
paid under this Section 4 shall be made in writing in good faith by a “Big Four” national
accounting firm selected by the Company (the “Accountants”), in good faith consultation with the
Employee. For purposes of making the calculations required by this Section 4, the Accountants may
make reasonable assumptions and approximations concerning applicable taxes and may rely on
reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the
Code. The Company and the Employee shall furnish to the Accountants such information and documents
as the Accountants may reasonably request in order to make a determination under this Section. The
Company shall bear all costs the Accountants may reasonably incur in connection with any
calculations contemplated by this Section 4.
5. Successors.
(a) Company’s Successors. Any successor to the Company (whether direct or indirect
and whether by purchase, lease, merger, consolidation, liquidation or otherwise) or to all or
substantially all of the Company’s business and/or assets shall assume the obligations under this
COC Agreement and agree expressly to perform the obligations under this COC 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 COC 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 subsection (a) or which becomes bound by the terms of this
COC Agreement by operation of law.
(b) Employee’s Successors. The terms of this COC Agreement and all rights of the
Employee hereunder shall inure to the benefit of, and be enforceable by, the Employee’s personal or
legal representatives, executors, administrators, successors, heirs, distributees, devisees and
legatees.
6. Notices. Notices and all other communications contemplated by this COC Agreement
shall be in writing and shall be deemed to have been duly given when personally delivered or when
mailed by registered or certified mail, return receipt requested and postage prepaid. In the case
of the Employee, mailed notices shall be addressed to him or her at the home address which he or
she most recently communicated to the Company in writing. In the case of the Company, mailed
notices shall be addressed to its corporate headquarters, and all notices shall be directed to the
attention of its Secretary.
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7. Miscellaneous Provisions.
(a) No Duty to Mitigate. The Employee shall not be required to mitigate the amount of
any payment contemplated by this COC Agreement (whether by seeking new employment or in any other
manner), nor shall any such payment be reduced by any earnings that the Employee may receive from
any other source.
(b) Waiver. No provision of this COC Agreement shall be modified, waived or
discharged unless the modification, waiver or discharge is agreed to in writing and signed by the
Employee and by an authorized officer of the Company (other than the Employee). No waiver by
either party of any breach of, or of compliance with, any condition or provision of this COC
Agreement by the other party shall be considered a waiver of any other condition or provision or of
the same condition or provision at another time.
(c) Entire Agreement. The parties hereby terminate the Amended and Restated Change of
Control Agreement dated July 10, 2001 between the Company and the Employee, and this Agreement
supersedes in its entirety such 2001 Agreement. No agreements, representations or understandings
(whether oral or written and whether express or implied) which are not expressly set forth in this
COC Agreement have been made or entered into by either party with respect to the subject matter
hereof.
(d) Choice of Law. The validity, interpretation, construction and performance
of this COC Agreement shall be governed by the laws of the State of California.
(e) Severability. The invalidity or unenforceability of any provision or provisions
of this COC Agreement shall not affect the validity or enforceability of any other provision
hereof, which shall remain in full force and effect.
(f) Arbitration. Any dispute or controversy arising under or in connection with this
COC Agreement shall be settled exclusively by arbitration in the County of Alameda, California, in
accordance with the rules of the American Arbitration Association then in effect. Judgment may be
entered on the arbitrator’s award in any court having jurisdiction. Punitive damages shall not be
awarded.
(g) No Assignment of Benefits. The rights of any person to payments or benefits under
this COC Agreement shall not be made subject to option or assignment, either by voluntary or
involuntary assignment or by operation of law, including (without limitation) bankruptcy,
garnishment, attachment or other creditor’s process, and any action in violation of this subsection
(g) shall be void.
(h) Employment Taxes. Subject to Section 4, all payments made pursuant to this COC
Agreement will be subject to withholding of applicable income and employment taxes.
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(i) Assignment by Company. The Company may assign its rights under this COC Agreement
to an affiliate, and an affiliate may assign its rights under this COC Agreement to another
affiliate of the Company or to the Company; provided, however, that no assignment shall be made if
the net worth of the assignee is less than the net worth of the Company at the time of assignment.
In the case of any such assignment, the term “Company” when used in a section of this COC Agreement
shall mean the corporation that actually employs the Employee.
(j) Counterparts. This COC Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which together will constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties has executed this COC Agreement, in the case of the
Company by its duly authorized officer, as of the COC Agreement Date.
| SYBASE, INC. | ||||||||
/s/ Xxxx Xxxx
|
By | /s/ Xxxxxx Xxxx
|
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| Vice President, General Counsel and Secretary | ||||||||
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