FORM OF AMENDED AND RESTATED CHANGE OF CONTROL AGREEMENT
Exhibit 99.4
FORM OF AMENDED AND RESTATED CHANGE OF CONTROL AGREEMENT
This Amended and Restated Change of Control Agreement (the “COC Agreement”) is effective as of
(the “Effective Date”) by and between (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 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 a 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 (as defined
below) of the Company.
D. The Board believes that it is imperative to provide the Employee with certain benefits
following a Change of Control which provide the Employee with enhanced financial security and are
competitive in the marketplace.
E. In order to accomplish the foregoing objectives, the Board has directed the Company, upon
execution of this COC Agreement, to commit 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 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 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 pay 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) one and
one-half times 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, subject to the minimum payment obligation set
forth below, Employee shall receive pay in the amount described in subsection (A) above plus one
and one-half times 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 one and one-half 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 one and one-half 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
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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 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.
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(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.
4. Limitation on Payments. 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’s severance benefits under Section 2(a)(i) shall
be either
| (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 the Excise Tax, |
whichever of the foregoing amounts, taking into account the applicable federal, state and local
income taxes and the Excise Tax, results in the receipt by the Employee on an after-tax basis, of
the greatest amount of severance benefits, notwithstanding that all or some portion of such
severance benefits may be taxable under Section 4999 of the Code. Unless the Company and the
Employee otherwise agree in writing, any determination required 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. In the event of a reduction in
benefits hereunder, the Employee shall be given the choice of which benefits to reduce. 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. Remedy. If Employee’s benefits are reduced to avoid the Excise Tax pursuant to
Section 4 hereof and, notwithstanding such reduction, the U.S. Internal
Revenue Service (“IRS”) or other applicable taxing authority determines that Employee is
liable for the Excise Tax as a result of the receipt of severance benefits from the Company, then
Employee shall be obligated to pay to the Company (the “Repayment
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Obligation”) an amount of money
equal to the “Repayment Amount.” The Repayment Amount shall be the smallest such amount, if any,
as shall be required to be paid to the Company so that Employee’s net proceeds with respect to his
or her severance benefits hereunder (after taking into account the payment of the Excise Tax
imposed on such benefits) shall be maximized. Notwithstanding the foregoing, the Repayment Amount
shall be zero if a Repayment Amount of more than zero would not eliminate the Excise Tax. If the
Excise Tax is not eliminated through the performance of the Repayment Obligation, Employee shall
pay the Excise Tax. The Repayment Obligation shall be discharged within 30 days of either (i)
Employee entering into a binding agreement with the IRS or applicable taxing authority as to the
amount of Excise Tax liability, or (ii) a final determination by the IRS or applicable taxing
authority or a court decision requiring Employee to pay the Excise Tax from which no appeal is
available or is timely taken.
6. 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.
7. Notice. 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.
8. 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.
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(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 between the Company and the Employee, and this Agreement
supersedes in its entirety such 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 Alameda County, 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.
(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
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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 Effective Date.
| SYBASE, INC. | ||||||||
| By | ||||||||
| Vice President, Secretary and General Counsel | ||||||||
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