BUSINESS OBJECTS S.A. CHANGE OF CONTROL SEVERANCE AGREEMENT
Exhibit 10.84
This Change of Control Severance Agreement (the “Agreement”) is made and entered into by and
between Xxxxx Xxxxxxx (the “Employee”) and Business Objects S.A. (the “Company”), effective as of
July, 23 2007 (the “Effective Date”).
RECITALS
1. 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. The Board of Directors of the Company
(the “Board”) recognizes that such consideration can be a distraction 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 (as defined herein) of the Company.
2. 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 and to motivate the
Employee to maximize the value of the Company upon a Change of Control for the benefit of its
stockholders.
3. The Board believes that it is imperative to provide the Employee with certain severance
benefits upon the Employee’s termination of employment following a Change of Control. These
benefits will provide the Employee with enhanced financial security and incentive and encouragement
to remain with the Company notwithstanding the possibility of a Change of Control.
4. Certain capitalized terms used in the Agreement are defined in Section 6 below.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties hereto
agree as follows:
1. Term of Agreement. This Agreement shall terminate upon the date that all of the
obligations of the parties hereto with respect to this Agreement have been satisfied.
2. At-Will Employment. The Company and the Employee acknowledge that the Employee’s
employment is and shall continue to be at-will, as defined under applicable law, except as may
otherwise be specifically provided under the terms of any written formal employment agreement or
offer letter between the Company and the Employee (an “Employment Agreement”). If the Employee’s
employment terminates for any reason, including (without limitation) any termination prior to a
Change of Control, the Employee shall not be entitled to any payments,
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(b) Timing of Severance Payments. The severance payment to which Employee is
entitled shall be paid by the Company to Employee in cash and in full, not later than ten (10)
calendar days after the date of the termination of Employee’s employment. If the Employee should
die before all amounts have been paid, such unpaid amounts shall be paid in a lump-sum payment
(less any withholding taxes) to the Employee’s designated beneficiary, if living, or otherwise to
the personal representative of the Employee’s estate.
(c) Voluntary Resignation; Termination for Cause. If the Employee’s employment with
the Company terminates within twelve (12) months following a Change of Control (i) voluntarily by
the Employee other than for Good Reason or (ii) for Cause by the Company, then the Employee shall
not be entitled to receive severance or other benefits except for those (if any) as may then be
established under the Company’s then existing severance and benefits plans and practices or
pursuant to other written agreements with the Company.
(d) Termination Apart from Change of Control. In the event the Employee’s employment
is terminated for any reason, either prior to a Change of Control or after the twelve (12) month
period following 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 benefits plans and practices or pursuant to other written agreements with the Company.
(e) Exclusive Remedy. In the event of a termination of Employee’s employment within
twelve (12) months following a Change of Control, the provisions of this Section 3 are intended to
be and are exclusive and in lieu of any other rights or remedies to which the Employee or the
Company may otherwise be entitled, whether at law, tort or contract, in equity, or under this
Agreement, and the Employee shall be entitled to no benefits, compensation or other payments or
rights upon termination of employment within twelve (12) months following a Change in Control other
than those benefits expressly set forth in this Section 3.
4. Non-Competition/Non-Solicitation.
(a) Non-Competition. Employee acknowledges that the nature of the Company’s business
is such that if Employee were to become employed by, or substantially involved in, the business of
a competitor of the Company during the eighteen (18) months following the termination of Employee’s
employment with the Company (or any parent or subsidiary of the Company), it would be very
difficult for Employee not to rely on or use the Company’s trade secrets and confidential
information. Thus, to avoid the inevitable disclosure of the Company’s trade secrets and
confidential information, and except as otherwise required pursuant to the California Rules of
Professional Conduct pertaining to attorneys, Employee agrees and acknowledges that Employee’s
right to receive or retain the severance payments and benefits set forth in Section 3 (to the
extent Employee is otherwise entitled to such payments and benefits) shall be conditioned upon
Employee, for a period of eighteen (18) months after termination of the Employee’s employment with
the Company (or any parent or subsidiary of the Company), not directly or indirectly engaging in
(whether as an employee, consultant, agent, proprietor, principal, partner, stockholder, corporate
officer, director or otherwise), nor having any ownership interest in or participating in the
financing, operation, management or control of, any person, firm, corporation or business in
Competition (as defined herein) with the Company. Notwithstanding the foregoing, Employee may,
without violating this Section 4, own, as a passive investment, shares of capital stock of a
publicly-held corporation
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the Company at law or in equity, the Company shall be entitled as a matter of right to apply
to a court of competent jurisdiction, in California, for such relief by way of restraining order,
injunction, decree or otherwise, as may be appropriate to ensure compliance with the provisions of
this agreement.
5. Golden Parachute Excise Tax Best Results. In the event that the severance and other
benefits provided for in this agreement or otherwise payable to Employee (a) constitute
“parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended
(the “Code”) and (b) would be subject to the excise tax imposed by Section 4999 of the Code, then
such benefits shall be either be
| (i) | delivered in full, or | ||
| (ii) | delivered as to such lesser extent which would result in no portion of such severance benefits being subject to excise tax under Section 4999 of the Code, |
whichever of the foregoing amounts, taking into account the applicable federal, state and local
income and employment taxes and the excise tax imposed by Section 4999, results in the receipt by
Employee, on an after-tax basis, of the greatest amount of benefits, notwithstanding that all or
some portion of such benefits may be taxable under Section 4999 of the Code. Unless the Company and
the Employee otherwise agree in writing, the determination of Employee’s excise tax liability and
the amount required to be paid under this Section 5 shall be made in writing by the Company’s
independent auditors who are primarily used by the Company immediately prior to the Change of
Control (the “Accountants”). For purposes of making the calculations required by this Section 5,
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 5.
6. Definition of Terms. The following terms referred to in this Agreement shall have
the following meanings:
(a) Cause. “Cause” shall mean (i) an 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) Employee being convicted of, or plea of nolo
contendere to, a felony, (iii) a willful act by the Employee which constitutes gross misconduct
and which is injurious to the Company, (iv) following delivery to the Employee of a written demand
for performance from the Company which describes the basis for the Company’s reasonable belief that
the Employee has not substantially performed his duties, continued violations by the Employee of
the Employee’s obligations to the Company which are demonstrably willful and deliberate on the
Employee’s part which, if curable, continues for a period of not less than thirty (30) days
following delivery to Employee of the written demand of performance.
(b) Change of Control. “Change of Control” means the occurrence of any of the
following, in one or a series of related transactions:
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(a) The Company’s Successors. Any successor to the Company (whether direct or
indirect and whether by purchase, merger, consolidation, liquidation or otherwise) and/or 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 an assumption
agreement described in this Section 7(a) or which becomes bound by the terms of this Agreement by
operation of law.
(b) The Employee’s Successors. The terms of this 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.
8. Notice.
(a) General. All notices and other communications required or permitted hereunder
shall be in writing, shall be effective when given, and shall in any event be deemed to be given
upon receipt or, if earlier, (a) five (5) days after deposit with the U.S. Postal Service or other
applicable postal service, if delivered by first class mail, postage prepaid, (b) upon delivery, if
delivered by hand, (c) one (1) business day after the business day of deposit with Federal Express
or similar overnight courier, freight prepaid or (d) one (1) business day after the business day of
facsimile transmission, if delivered by facsimile transmission with copy by first class mail,
postage prepaid, and shall be addressed (i) if to Employee, at his or her last known residential
address and (ii) if to the Company, at the address of its principal corporate offices (attention:
Secretary), or in any such case at such other address as a party may designate by ten (10) days’
advance written notice to the other party pursuant to the provisions above.
(b) Notice of Termination. Any termination by the Company (or any parent or subsidiary
of the Company), for Cause or by the Employee for Good Reason or as a result of a voluntary
resignation shall be communicated by a notice of termination to the other party hereto given in
accordance with Section 8(a) of this Agreement. Such notice shall indicate the specific termination
provision in this Agreement relied upon, shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination under the provision so indicated, and
shall specify the termination date (which shall be not more than thirty (30) days after the giving
of such notice). The failure by the Employee to include in the notice any fact or circumstance
which contributes to a showing of Good Reason shall not waive any right of the Employee hereunder
or preclude the Employee from asserting such fact or circumstance in enforcing his or her rights
hereunder.
9. Miscellaneous Provisions.
(a) Code Section 409A. The parties agree to amend this Agreement to the extent
necessary to avoid imposition of any additional tax or income recognition prior to actual payment
to Employee under Code section 409A and any temporary or final Treasury Regulations and IRS
guidance thereunder.
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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case
of the Company by its duly authorized officer, as of the day and year set forth above.
COMPANY
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BUSINESS OBJECTS S.A. | ||||
| By: | /s/ Xxxx X. Xxxxxxx | ||||
| Xxxx X. Xxxxxxx Title: Chief Executive Officer |
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EMPLOYEE
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By: | /s/ Xxxxx Xxxxxxx | |||
| Xxxxx Xxxxxxx Title: SVP & General Counsel |
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