BUSINESS OBJECTS S.A. CHANGE OF CONTROL SEVERANCE AGREEMENT
Exhibit 10.78
This Change of Control Severance Agreement (the “Agreement”) is made and entered into by and
between (the “Employee”) and the employer, Business Objects S.A. (the “Company”),
effective as of (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 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 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.
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 4 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 at the earlier of the following
events:
(a) Upon termination of the employment agreement between the Company and the Employee (the
“Employment Agreement”), if such termination is not relating to a Change of Control;
(b) Upon termination of this Agreement by mutual consent of the parties; or
Change of Control Template (localized for French employees) — October 2006
(c) Upon the date that all of the obligations of the parties hereto with respect to this
Agreement have been satisfied.
The Employee shall not be entitled to any payments, benefits, damages, awards or other
compensation provided by this Agreement in case of termination of this Agreement mentioned in
paragraphs (a) and (b) above.
2. Employment Agreement. The Company and the Employee acknowledge that the Employee’s
employment is and shall be governed by the French labor law and the terms of the Employment
Agreement.
3. Severance Benefits.
(a) Involuntary Termination Other than for Cause or Voluntary Termination for Good Reason
Following a Change of Control. If within twelve (12) months following a Change of Control (i)
the Employee has “Good Reason” (as defined herein) (á) to terminates his or her Employment
Agreement or (e) to consider that he or she was terminated according to applicable French law
criteria; or (ii) the Company terminates the Employment Agreement for other than “Cause” (as
defined herein), the Employee shall receive the following severance benefits from the Company:
(i) Severance Payment. The Employee shall be entitled to receive a lump-sum severance
payment (less applicable withholding taxes and social charges) equal to 100% of the Employee’s
annual base salary (as in effect immediately prior to (A) the Change of Control, or (B) the
Employment Agreement termination, whichever is greater) plus 100% of the Employee’s target bonus
for the fiscal year in which the Change of Control or the Employment Agreement termination,
whichever is greater. This amount includes the non-competition indemnity and any eventual statutory
severance indemnity set by French labor law, the Employment Agreement and/or the Collective
Bargaining Agreement (Convention Collective).
(ii) Options;. All of the Employee’s then outstanding options to subscribe or
purchase shares of the Company’s shares (the “Options”) shall immediately vest and become
exercisable. The Options shall remain exercisable following the termination for the period
prescribed in the respective option agreements. For the Company’s shares underlying Option that are
subject to an holding period obligation, such holding period obligation shall be immediately
cancelled. The Employee, hereby, acknowledges and agrees that this Agreement, amends the stock
options agreement(s) signed by the Employee and the Company.
(iii) Company’s shares allocated under sections L.000-000-0 et seq. of the French Commercial
Code: If Company’s shares allocated to the Employee, according to sections L.000-000-0 et seq. of
the French Commercial Code, are cancelled due to Employment Agreement termination during the
vesting period, the Employee shall receive an indemnity amount equal to the number of allocated
Company’s shares, multiplied by the closing price of one Company’s share on Eurolist by Euronext
TM the trading day before the termination date of the Employment Agreement, multiplied
by the number of whole months since the allocation date and divided by the number of months of the
vesting period.
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(iv) Continued Employee Benefits. Company-paid medical insurance and life insurance
coverage at the same level of coverage as was provided to the Employee immediately prior to the
Change of Control, except coverage for for professional invalidity and incapacity
(invalidité et incapacité du travail), and at the same ratio of Company premium payment to
Employee premium payment as was in effect immediately prior to the Change of Control (the
“Company-Paid Coverage”) will continue as set out in this subparagraph. If such coverage included
the Employee’s dependents immediately prior to the Change of Control, such dependents shall also be
covered at Company expense. Company-Paid Coverage shall continue until the earlier of (i) twelfe
(12) months from the date of termination, (ii) the date upon which the Employee and his dependents
become covered under another employer’s group medical insurance and life insurance plans that
provide Employee and his or her dependents with comparable benefits and levels of coverage, (iii) .
the date upon which the Employee ceases to be eligible for such medical insurance and life
insurance coverage, according to French Social Security Code and/or the insurance agreement.
(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 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 any payments, benefits, damages, awards or other compensation provided by this
Agreement. The Employee shall be entitled to receive severance and any other benefits only as may
then be established under French law, the Employment Agreement and/or the Collective Bargaining
Agreement..
(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 not by entitled to any payments,
benefits, damages, awards or other compensation provided by this Agreement. The Employee shall be
entitled to receive severance and any other benefits only as may then be established under French
law, the Employment Agreement and/or the Collective Bargaining Agreement.
(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
include the non-competition indemnity and any eventual statutory severance indemnity set by French
labor law, the Employment Agreement and/or the Collective Bargaining Agreement and 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. Definition of Terms. The following terms referred to in this Agreement shall have
the following meanings:
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(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:
(i) Any physical person or entity, acting alone or in concert, becomes the
beneficial owner, directly or indirectly, of securities of the Company
representing fifty percent (50%) or more of the total voting rights
represented by the Company’s then outstanding voting securities; or
(ii) Any action or event occurring within a two-year period, as a result
of which fewer than a majority of the directors are Incumbent Directors.
“Incumbent Directors” shall mean directors who either (A) are directors of
the Company as of the date hereof, or (B) are elected, or nominated for
election, to the Board with the affirmative votes of at least a majority
of the Incumbent Directors at the time of such election or nomination (but
shall not include an individual whose election or nomination is in
connection with an actual or threatened proxy contest relating to the
election of directors to the Company); or
(iii) The consummation of a merger or consolidation of the Company with
any other corporation, other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or
by being converted into voting securities of the surviving entity) at
least fifty percent (50%) of the total voting power represented by the
voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation; or
(iv) The consummation of the sale, lease or other disposition by the
Company of all or substantially all the Company’s assets.
(c) Good Reason. “Good Reason” means without the Employee’s express
written consent (i) a substantial reduction of the Employee’s duties, title,
authority or responsibilities, relative to the Employee’s duties, title, authority or
responsibilities as in effect immediately prior to such reduction, or the assignment
to Employee of such reduced duties, title, authority or responsibilities; provided,
however, that a reduction in duties, title, authority or responsibilities solely by
virtue of the Company being
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acquired and made part of a larger entity (as, for
example, when the Chief Financial Officer of the Company remains the Chief Financial
Officer of the subsidiary or
business unit substantially containing the Company’s business following a Change of
Control) shall not by itself constitute grounds for a “Voluntary Termination for Good
Reason;” provided, further, that Employee’s acceptance of a new position on or after
a Change of Control shall not in and of itself constitute express written consent
that such position does not constitute a substantial reduction in Employee’s duties,
title, authority or responsibilities; (ii) a substantial reduction of the facilities
and perquisites (including office space and location) available to the Employee
immediately prior to such reduction; (iii) a reduction by the Company in the base
compensation of the Employee as in effect immediately prior to such reduction; (iv) a
material reduction by the Company in the kind or level of benefits to which the
Employee was entitled immediately prior to such reduction with the result that such
Employee’s overall benefits package is significantly reduced; (v) the relocation of
the Employee to a facility or a location more than thirty-five (35) miles from such
Employee ‘s then present location. Notwithstanding the foregoing, Good Reason shall
not exist based on conduct described above unless Employee provides the Company with
written notice specifying the particulars of the conduct constituting Good Reason,
and the conduct described (if reasonably susceptible of cure) has not been cured
within thirty (30) days following receipt by the Company of such notice.
5. Successors.
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 5 or which becomes bound by the terms
of this Agreement by operation of law.
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6. Notice.
(a) General. All notices and other communications required or
permitted hereunder shall be in writing, shall be effective (a) on the day of first
presentation by French Postal Service, (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 6(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.
8. Miscellaneous Provisions.
(a) Accounting and Tax treatments. 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 and any temporary or final Treasury
Regulations and IRS guidance thereunder.
(b) No Duty to Mitigate. The Employee shall not be required to
mitigate the amount of any payment contemplated by this Agreement, nor shall any such
payment be reduced by any earnings that the Employee may receive from any other
source.
(c) Waiver. No provision of this 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 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.
(d) Headings. All captions and section headings used in this
Agreement are for convenient reference only and do not form a part of this Agreement.
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(f) Entire Agreement. This Agreement constitutes the entire agreement of the
parties hereto and supersedes in their entirety all prior representations,
understandings, undertakings or agreements (whether oral or written and whether
expressed or implied) of the parties with respect to the subject matter hereof,
including but not limited to the [ ] Agreement dated [ ] between [ ] and [
].
(g) Termination of [ ] Agreement. The [ ] Agreement is hereby
terminated as of the Effective Date, and shall have no further force or effect.
(h) Choice of Law. The validity, interpretation, construction and
performance of all aspects of this Agreement relating to whether a Change of Control
has occurred shall be governed by and construed in accordance with the applicable
laws of the Republic of France. French courts shall have exclusive jurisdiction and
venue over all controversies in connection with this Agreement.
(i) Severability. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of any
other provision hereof, which shall remain in full force and effect.
(j) Withholding. All payments made pursuant to this Agreement will be
subject to withholding of applicable income and social security taxes.
(k) Counterparts. This 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.
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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 below.
| COMPANY | BUSINESS OBJECTS S.A. | |||||
| By: | ||||||
| Xxxx X. Xxxxxxx | ||||||
| Title: | Chief Executive Officer | |||||
EMPLOYEE
|
By: | |||||
| Title: | ||||||
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