CHANGE IN CONTROL SEVERANCE AGREEMENT
Exhibit 10.7
Christian Oversohl
THIS
AGREEMENT, dated as of April 26, 2010, is made by and among Sapient Corporation, a
Delaware, U.S.A. corporation (the “Parent”); Sapient GmbH , a limited liability company established
under German law and a wholly owned subsidiary of the Parent (the “Subsidiary”); and Xx. Xxxxxxxxx
Oversohl (the “Executive”).
WHEREAS, the Parent considers it essential to the best interests of its stockholders to xxxxxx
the continued employment of key management personnel of the Parent, the Subsidiary and the Parent’s
other Affiliates (collectively, the “Company”); and
WHEREAS, the Board recognizes that, as is the case with many publicly held corporations, the
possibility of a Change in Control exists and that such possibility, and the uncertainty and
questions which it may raise among management, may result in the departure or distraction of
management personnel to the detriment of the Company and the Parent’s stockholders; and
WHEREAS, the Board has determined that appropriate steps should be taken to reinforce and
encourage the continued attention and dedication of senior members of management of the Company,
including the Executive, to their assigned duties without distraction in the face of potentially
disturbing circumstances arising from the possibility of a Change in Control; and
WHEREAS, the Executive is the Managing Director of the Subsidiary pursuant to the Managing
Director Agreement; and
WHEREAS, the parties hereto intend that the terms of this Agreement shall supersede the terms
of the Managing Director Agreement in certain situations, as set forth in Section 11 hereof.
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WHEREAS, the Board is not aware of a Change in Control or Potential Change in Control
situation with regard to the Parent at the time this Agreement is signed;
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained,
the Parent, the Subsidiary and the Executive hereby agree as follows:
1. Defined Terms. The definitions of capitalized terms used in this Agreement are
provided in the last Section hereof.
2. Term of Agreement. The Term of this Agreement shall commence on the date hereof
and shall continue in effect through December 31, 2012; provided, however, that,
commencing on January 1, 2012 and each January 1 thereafter, the Term shall automatically be
extended for one additional year unless, not later than September 30 of the preceding year, the
Company or the Executive shall have given notice not to extend the Term; and further
provided, however, that if a Change in Control shall have occurred during the Term,
the Term shall expire no earlier than twenty-four (24) months beyond the month in which such Change
in Control occurred.
3. Company’s Covenants Summarized. In order to induce the Executive to remain in the
employ of the Subsidiary and in consideration of the Executive’s covenants set forth in Section 4
hereof, the Parent and the Subsidiary (together, the “Company Parties”) agree, jointly and
severally, under the conditions described herein, that the Company Parties shall pay the Executive
the Severance Payments and the other payments and benefits described herein. No Severance Payments
shall be payable under this Agreement unless there shall have been (or, under the terms of the
second sentence of Section 6.1 hereof, there shall be deemed to have been) a termination of the
Executive’s employment with the Subsidiary following a Change in Control. This Agreement shall not
be construed as creating an express or implied contract of employment with the Parent, the
Subsidiary or any other Affiliate
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included in the Company (collectively, the “Company Entities”) and, except as otherwise agreed
pursuant to the Managing Director Agreement , the Executive shall not have any right to be retained
in the employ of any Company Entity.
4. The Executive’s Covenants. The Executive agrees that, subject to the terms and
conditions of this Agreement, in the event of a Potential Change in Control during the Term, the
Executive will remain in the employ of the Subsidiary until the earliest of (i) the last day of the
Potential Change in Control Period, (ii) the date of a Change in Control, (iii) the date of
termination by the Executive of the Executive’s employment for Good Reason or by reason of death,
Disability or Retirement, or (iv) the termination by the Subsidiary of the Executive’s employment
for any reason. If the Executive’s employment with the Subsidiary is for a fixed-term and the
fixed-term expires during the Potential Change in Control Period, the Executive hereby agrees, if
so requested by the Company Parties, to extend his employment upon the same terms and conditions
previously agreed with the Subsidiary at least until the earliest of the events described in
clauses (i) through (iv) above.
5. Compensation Other Than Severance Payments.
5.1 Incapacity. Notwithstanding the provisions of § 8 (1) of the Managing Director
Agreement, during any period that the Executive fails to perform the Executive’s full-time duties
with the Company following a Change in Control and during the Term, as a result of incapacity due
to physical or mental illness, the Subsidiary shall pay to the Executive, until the Executive’s
employment is terminated by the Subsidiary for Disability: (a) for the first six (6) weeks of such
period, the Executive’s full salary at the rate in effect at the commencement of any such period,
together with all other compensation and benefits payable to the Executive under the terms of the
Managing Director Agreement; and (b) beginning six weeks following the commencement of the
Executive’s incapacity, the amount equal to the difference between the benefits received by the
Executive from his health insurance and the net payment resulting from the Executive’s full salary
and other aforementioned compensation and benefits.
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5.2 Continuation of Compensation and Benefits. If the Executive’s employment shall be
terminated for any reason following a Change in Control and during the Term, the Subsidiary shall
pay the Executive’s full salary to the Executive through the Date of Termination at the rate in
effect immediately prior to the Date of Termination or, if higher, the rate in effect immediately
prior to the first occurrence of an event or circumstance constituting Good Reason, together with
all other compensation and benefits payable to the Executive through the Date of Termination under
the terms of the Managing Director Agreement as in effect immediately prior to the Date of
Termination or, if more favorable to the Executive, as in effect immediately prior to the first
occurrence of an event or circumstance constituting Good Reason.
5.3 Post-Termination Compensation and Benefits. If the Executive’s employment shall
be terminated for any reason following a Change in Control and during the Term, the Subsidiary
shall pay to the Executive the Executive’s normal post-termination compensation and benefits
(including any payments made in connection with either enforcing or waiving the post-contractual
non-compete or non-solicitation covenant under the Managing Director Agreement (the “Non-Compete
Covenant”) pursuant to Section 13 thereof), the compensation agreed in § 13 thereof), as such
payments become due. Such post-termination compensation and benefits shall be determined under,
and paid in accordance with, the Managing Director Agreement as in effect immediately prior to the
Date of Termination or, if more favorable to the Executive, as in effect immediately prior to the
occurrence of the first event or circumstance constituting Good Reason. The severance payments
described in Section 6.1, if any, shall be reduced by any compensation paid to the Executive in
connection with the Subsidiary’s enforcement or waiver of the Non-Compete Covenant.
5.4 Notwithstanding the terms of the Managing Director Agreement, the Executive agrees that,
following a Change in Control and during the Term, he shall forego any severance payments to which
he would otherwise be
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entitled under the Managing Director Agreement (including, without limitation, the severance
payment set forth in § 2 thereof) in consideration for the right to receive, under the
circumstances described in this Agreement, compensation pursuant to this Section 5 and the
Severance Payments pursuant to Section 6 below.
6. Severance Payments.
6.1 Severance Payments Obligation. If the Executive’s employment: (i) is terminated
following a Change in Control and during the Term, other than (a) by the Subsidiary for Cause, (b)
by reason of death or Disability or (c) by the Executive without Good Reason, or (ii) is for a
fixed-term that expires following a Change in Control and during the Term, and the Subsidiary does
not renew the Executive’s employment for a period continuing at least until the second anniversary
of the occurrence of the Change in Control (unless the Subsidiary would have been entitled to
terminate the Executive’s employment for Cause had the fixed-term not expired), then the Company
Parties, jointly and severally, agree to pay the Executive the amounts, and provide the Executive
the benefits, described in this Section 6.1 (“Severance Payments”), in addition to any payments and
benefits to which the Executive is entitled under Section 5 hereof. For purposes of this Agreement,
the Executive’s employment shall be deemed to have been terminated following a Change in Control by
the Subsidiary without Cause or by the Executive with Good Reason, if: (1) the Executive’s
employment is terminated by the Subsidiary without Cause prior to a Change in Control (but only if
a Change in Control occurs no later than six (6) months following the Executive’s termination of
employment) and such termination was at the request or direction of a Person who has entered into
an agreement with the Parent, the consummation of which would constitute a Change in Control, (2)
the Executive terminates his employment for Good Reason prior to a Change in Control (but only if a
Change in Control occurs no later than six (6) months following the Executive’s termination of
employment) and the circumstance or event which constitutes Good Reason occurs at the request or
direction of such Person, (3) the Executive’s employment is terminated by the
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Subsidiary without Cause or by the Executive for Good Reason and such termination, or the
circumstance or event which constitutes Good Reason, is otherwise in connection with or in
anticipation of a Change in Control (but only if such Change in Control occurs no later than six
(6) months following the Executive’s termination of employment), or (4) the Executive’s employment
is for a fixed-term that expires and the Subsidiary, either at the request or direction of such
Person or otherwise in connection with or in anticipation of a Change in Control, (A) does not
renew the Executive’s employment for an additional term ending not less than six (6) months plus
one (1) day after such expiration (unless the Subsidiary would have been entitled to terminate the
Executive’s employment for Cause had the fixed-term not expired) and (B) a Change in Control occurs
no later than six (6) months following such expiration date,
(A) Lump Sum Salary-Based Payment. In lieu of any further salary payments to the
Executive for periods subsequent to the Date of Termination and in lieu of any severance benefits
otherwise payable to the Executive (including, without limitation, any such salary payments and
severance benefits payable pursuant to the Managing Director Agreement), the Company Parties shall
pay to the Executive a lump sum severance payment, in cash, equal to one and one-half (1-1/2) times
the sum of (i) the Executive’s annual base salary as in effect immediately prior to the Date of
Termination or, if higher, in effect immediately prior to the first occurrence of an event or
circumstance constituting Good Reason, and (ii) the Executive’s target annual bonus under any
annual bonus or incentive plan maintained by the Company in respect of the fiscal year in which
occurs the Date of Termination or, if higher, the fiscal year in which occurs the first event or
circumstance constituting Good Reason.
(B) Insurance Benefits Continuation. For the eighteen (18)- month period immediately
following the Date of Termination, the Company Parties shall arrange to provide the Executive and
his dependents life, accident and health insurance benefits substantially similar to those provided
to the Executive and
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his dependents immediately prior to the Date of Termination (if any) or, if more favorable to
the Executive, those provided to the Executive and his dependents immediately prior to the first
occurrence of an event or circumstance constituting Good Reason, at no greater after-tax cost to
the Executive than the after-tax cost to the Executive immediately prior to such date or
occurrence; provided, however, that, unless the Executive consents to a different
method, such health insurance benefits shall be provided through a third-party insurer. Benefits
otherwise receivable by the Executive pursuant to this Section 6.1(B) shall be reduced to the
extent benefits of the same type are received by or made available to the Executive during the
eighteen (18)-month period following the Executive’s termination of employment by a third party,
including the Executive’s new employer or a governmental entity (and any such benefits received by
or made available to the Executive shall be reported to the Company Parties by the Executive);
provided, however, that the Company Parties shall reimburse the Executive for the
excess, if any, of the after-tax cost of such benefits to the Executive over such cost immediately
prior to the Date of Termination or, if more favorable to the Executive, the first occurrence of an
event or circumstance constituting Good Reason.
(C) Accelerated Vesting of Equity Awards. Notwithstanding any provision of any equity
award plan or agreement to the contrary, (i) each outstanding stock option, stock appreciation
right, restricted stock award, restricted stock unit, or other long-term equity incentive award
granted by the Parent and held by the Executive shall vest (whether the vesting criteria are
time-based, performance-based or otherwise) and become non-forfeitable on the Date of Termination
and (ii) each outstanding stock option and stock appreciation right so vested shall remain
exercisable for eighteen (18) months following the Date of Termination (but in no event beyond the
date such stock option or stock appreciation right would have expired had the Executive remained
employed with the Subsidiary).
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(D) Lump Sum Incentive Payment. Notwithstanding any provision of any annual or long
term incentive plan to the contrary, the Company Parties shall pay to the Executive a lump sum
amount, in cash, equal to the sum of (i) any unpaid incentive compensation which has been allocated
or awarded to the Executive for a completed fiscal year or other measuring period preceding the
Date of Termination under any such plan and which, as of the Date of Termination, is contingent
only upon the continued employment of the Executive to a subsequent date, and (ii) a pro rata
portion to the Date of Termination of the aggregate value of all contingent incentive compensation
awards to the Executive for all then uncompleted periods under any such plan, calculated as to each
such award by multiplying the award that the Executive would have earned on the last day of the
performance award period, assuming the achievement, at the target level, of the individual and
corporate performance goals established with respect to such award, by the fraction obtained by
dividing the number of full months and any fractional portion of a month during such performance
award period through the Date of Termination by the total number of months contained in such
performance award period.
(E) Post-Retirement Insurance Benefits. If the Executive would have become entitled
to benefits under any Subsidiary post-retirement health care or life insurance plans, as in effect
immediately prior to the Date of Termination or, if more favorable to the Executive, as in effect
immediately prior to the first occurrence of an event or circumstance constituting Good Reason, had
the Executive’s employment terminated at any time during the period of eighteen (18) months after
the Date of Termination, the Subsidiary shall provide such post-retirement health care or life
insurance benefits to the Executive and the Executive’s dependents commencing on the later of (i)
the date on which such coverage would have first become available and (ii) the date on which
benefits described in subsection (B) of this Section 6.1 terminate.
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(F) Outplacement Services. The Company Parties shall provide the Executive with
outplacement services suitable to the Executive’s position for a period of two years or, if
earlier, until the first acceptance by the Executive of an offer of employment.
6.2 Payments Calculation Notice. At the time that payments are made under this
Agreement, the Company Parties shall provide the Executive with a written statement setting forth
the manner in which such payments were calculated and the basis for such calculations including,
without limitation, any opinions or other advice the Company Parties have received from their tax
counsel, auditors or other advisors or consultants (and any such opinions or advice which are in
writing shall be attached to the statement).
6.3 Timing of Payments. The payments provided in subsections (A), (C) and (D) of
Section 6.1 hereof shall be made not later than the fifth day following the Date of Termination.
6.4 Legal Fees and Expenses. The Company Parties also shall pay to the Executive all
legal fees and expenses incurred by the Executive in disputing in good faith any issue hereunder
relating to the termination of the Executive’s employment, in seeking in good faith to obtain or
enforce any benefit or right provided by this Agreement or in connection with any tax audit or
proceeding any payment or benefit provided hereunder. Such payments shall be made within five (5)
business days after delivery of the Executive’s written requests for payment accompanied with such
evidence of fees and expenses incurred as the Company Parties reasonably may require; provided that
in no event will payment be made for requests that are submitted later than December
15th of the year following the year in which the expense is incurred.
7. Termination Procedures and Compensation During Dispute.
7.1 Notice of Termination. After a Change in Control and during the Term, any
purported termination of the Executive’s employment (other than by reason of death) shall be
communicated by written Notice of Termination from one
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party hereto to the other party hereto in accordance with Section 10 hereof. For purposes of
this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of the Executive’s employment
under the provision so indicated. Further, a Notice of Termination for Cause is required to
include a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters
(3/4) of the entire membership of the Board (acting in its capacity as the governing body of the
Subsidiary’s sole shareholder) at a meeting of the Board which was called and held for the purpose
of considering such termination (after reasonable notice to the Executive and an opportunity for
the Executive, together with the Executive’s counsel, to be heard before the Board) finding that,
in the good faith opinion of the Board, the Executive was guilty of conduct set forth in clause (i)
or (ii) of the definition of Cause herein, and specifying the particulars thereof in detail.
7.2 Date of Termination; Offset of Managing Director Agreement Payments. “Date of
Termination,” with respect to any purported termination of the Executive’s employment after a
Change in Control and during the Term, shall mean (i) if the Executive’s employment is for a
fixed-term, the last day of the fixed-term, or (ii) if the Executive’s employment is for other than
a fixed-term, the date specified in the Notice of Termination (which shall not be less than the
notice period agreed in the Managing Director Agreement), unless the Company has terminated the
employment without notice in accordance with § 626 of the German Civil Code (“Bürgerliches
Gesetzbuch”). Any payments made to the Executive by the Subsidiary during the period between the
Executive’s receipt of the Notice of Termination and the last day of the fixed term or the last day
of the notice period agreed in the Managing Director Agreement (as applicable) shall be offset
against any compensation and Severance Payments to which the Executive may be entitled pursuant to
Section 5 or Section 6 of this Agreement.
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8. No Mitigation. The Company agrees that, if the Executive’s employment with the
Subsidiary terminates during the Term, the Executive is not required to seek other employment or to
attempt in any way to reduce any amounts payable to the Executive by the Company Parties pursuant
to Section 6 hereof. Further, except as specifically provided in Sections 5.3, 6.1(B) and 7.2
hereof, no payment or benefit provided for in this Agreement shall be reduced by any compensation
earned by the Executive as the result of employment by another employer, by retirement benefits, by
offset against any amount claimed to be owed by the Executive to the Company Parties, or otherwise.
9. Successors; Binding Agreement.
9.1 Company Successor Obligations. In addition to any obligations imposed by law upon
any successor to either Company Party, the Company Parties will require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company Parties to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company Parties would be required to
perform it if no such succession had taken place.
9.2 Executive Beneficiaries. This Agreement shall inure to the benefit of and be
enforceable by the Executive’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive shall die while any
amount would still be payable to the Executive hereunder (other than amounts which, by their terms,
terminate upon the death of the Executive) if the Executive had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to the executors, personal representatives or administrators of the Executive’s estate.
10. Notices. For the purpose of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and shall be deemed to have been duly given on
the earliest of the following dates: (A) when actually delivered or received, (B) if given within
the same country, when mailed by
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registered or certified mail, postage prepaid, or (C) if given outside the country, when sent
by internationally recognized air courier priority service. In each case, such notices and
communications shall be addressed: (I) if to the Executive, to the most current address set forth
in the personnel records of the Company; (II) if to the Subsidiary, to the designated address set
forth below (with a copy thereof to the Parent), (III) if to the Parent, to the designated address
set forth below; or, in each case, to such other address as any party may have furnished to the
others in writing in accordance herewith, except that notice of change of address shall be
effective only upon actual receipt:
To the Subsidiary:
Sapient GmbH
Xxxxxxxxxxxx 00
00000 Xxxxxxx
Xxxxxxxxxxx
Attention: Associate General Counsel
Xxxxxxxxxxxx 00
00000 Xxxxxxx
Xxxxxxxxxxx
Attention: Associate General Counsel
To the Parent:
Sapient Corporation
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
X.X.X.
Attention: General Counsel
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
X.X.X.
Attention: General Counsel
11. Miscellaneous.
(A) Effect of Agreement. This Agreement supersedes any other agreements or
representations, oral or otherwise, express or implied, with respect to the subject matter hereof
which have been made by either party; provided, however, that this
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Agreement shall supersede any agreement setting forth the terms and conditions of the
Executive’s employment with the Subsidiary (including the Managing Director Agreement) only in the
event that the Executive’s employment with the Subsidiary (i) is terminated on or following a
Change in Control and during the Term, by the Company other than for Cause or by the Executive for
Good Reason or (ii) is for a fixed-term that expires on or following a Change in Control and during
the Term, and the Subsidiary does not renew the Executive’s employment for a period continuing at
least until the second anniversary of the occurrence of the Change in Control (unless the
Subsidiary would have been entitled to terminate the Executive’s employment for Cause had the
fixed-term not expired). In addition to the foregoing, the parties agree that: (a) this Agreement
shall supersede the terms of the Managing Director Agreement during the period commencing on the
date on which a Change in Control occurs and ending on the last day of the Term of this Agreement;
(b) until such time as the Term of this Agreement expires because the Company has given the
Executive notice pursuant to Section 2 hereof, the Managing Director Agreement is hereby amended by
adding a new Section 17 thereto, captioned “Effect of Change in Control Severance Agreement,” the
text of which reads, “To the extent this Agreement and the Change in Control Severance Agreement
dated as of April 26, 2010 among Sapient Corporation, the Company and the Managing Director (the
“CIC Agreement”) contain inconsistent provisions, the provisions of the CIC Agreement shall
supersede the provisions of this Agreement; however, the remainder of this Agreement shall remain
unaffected thereby” and (c) upon such Term expiration described in clause (b) above, the Managing
Director Agreement amendments described therein shall become null and void.
(B) Other. No provision of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing and signed by the Executive
and such officer as may be specifically designated by the Company Parties to sign on their
respective behalves. No waiver by either the Executive, on the one hand, or the Company Parties,
on the other, at any time of any
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breach by the other party hereto of, or of any lack of compliance with, any condition or
provision of this Agreement to be performed by such other party (or parties), shall be deemed a
waiver of similar or dissimilar provisions or conditions at the same, or at any prior or
subsequent, time. The validity, interpretation, construction and performance of this Agreement
shall be governed by the laws of the Federal Republic of Germany. All references to sections of
statutory laws shall be deemed also to refer to any successor provisions to such sections. Any
payments provided for hereunder shall be paid net of any applicable withholding required under
federal, state or local law and any additional withholding to which the Executive has agreed. The
obligations of the Parent, the Subsidiary and the Executive under this Agreement which by their
nature may require either partial or total performance after the expiration of the Term (including,
without limitation, those under Sections 6 and 7 hereof) shall survive such expiration.
12. Validity. The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this Agreement, which
shall remain in full force and effect; and such invalid or unenforceable provision shall be
reformed and construed so as to be valid and enforceable to the fullest extent compatible with then
existing applicable law.
13. Counterparts. This Agreement may be executed in several counterparts, each of
which shall be deemed to be an original but all of which together will constitute one and the same
instrument.
14. Settlement of Disputes; Arbitration. All claims by the Executive for benefits
under this Agreement shall be directed to and determined by the Board (acting in its capacity as
the governing body of the Subsidiary’s sole shareholder ) and shall be in writing. Any denial by
the Board of a claim for benefits under this Agreement shall be delivered to the Executive in
writing and shall set forth the specific reasons for the denial and the specific provisions of this
Agreement relied upon. The Board shall afford a reasonable opportunity to the Executive for a
review of the decision denying a claim and shall further allow the Executive to appeal to the
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Board a decision of the Board within sixty (60) days after notification by the Board that the
Executive’s claim has been denied. Notwithstanding the above, in the event of any dispute, any
decision by the Company’s shareholders hereunder shall be subject to a de novo review by the
arbitrator in accordance with the process described in Appendix A to this Agreement.
15. Definitions. For purposes of this Agreement, the following terms shall have the
meanings indicated below:
(A) “Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of
the Exchange Act.
(B) “Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under the Exchange Act.
(C) “Board” shall mean the Board of Directors of Sapient Corporation.
(D) “Cause” for termination by the Subsidiary of the Executive’s employment shall mean (i) the
willful and continued failure by the Executive to substantially perform the Executive’s duties with
the Subsidiary (other than any such failure resulting from the Executive’s incapacity due to
physical or mental illness or any such actual or anticipated failure after the issuance of a Notice
of Termination for Good Reason by the Executive pursuant to Section 7.1 hereof) that has not been
cured within 30 days after a written demand for substantial performance is delivered to the
Executive by the Board, acting in its capacity as the governing body of the Subsidiary’s sole
shareholder, which demand specifically identifies the manner in which the Company’s shareholder
believes that the Executive has not substantially performed the Executive’s duties or (ii) the
willful engaging by the Executive in conduct which is demonstrably and materially injurious to the
Company or any Company Entity, monetarily or otherwise. For purposes of clauses (i) and (ii) of
this definition, no act, or failure to act, on the Executive’s part shall be deemed “willful”
unless done, or omitted to be done, by the Executive not in good faith and without reasonable
belief that the Executive’s act, or failure to act,
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was in the best interest of the Company. For the avoidance of doubt, “Cause” pursuant to this
Section 15 shall not have the same meaning as “good cause” for a termination of the Managing
Director Agreement pursuant to § 626 of the German Civil Code (“Bürgerliches Gesetzbuch”).
(E) A “Change in Control” shall be deemed to have occurred if the event set forth in any one
of the following paragraphs shall have occurred:
(I) any Person is or becomes the Beneficial Owner, directly or indirectly, of
securities of the Parent (not including in the securities beneficially owned by such Person
any securities acquired directly from the Parent or its Affiliates) representing forty
percent (40%) or more of the combined voting power of the Parent’s then outstanding
securities, excluding any Person who becomes such a Beneficial Owner in connection with a
merger or consolidation of the Parent or any direct or indirect subsidiary of the Parent
with any other corporation immediately following which the individuals who comprise the
Board immediately prior thereto constitute at least a majority of the board of directors of
(a) any parent of the Parent or the entity surviving such merger or consolidation (b) if
there is no such parent, of the Parent or such surviving entity;
(II) the following individuals cease for any reason to constitute a majority of the
number of directors then serving: individuals who, on the date hereof, constitute the Board
and any new director (other than a director whose initial assumption of office is in
connection with an actual or threatened election contest, including but not limited to a
consent solicitation, relating to the election of directors of the Parent) whose
appointment or election by the Board or nomination for election by the Parent’s
stockholders was approved or recommended by a vote of at least two-thirds (2/3) of the
directors then still in office who either
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were directors on the date hereof or whose appointment, election or nomination for
election was previously so approved or recommended;
(III) there is consummated a merger or consolidation of the Parent any direct or
indirect subsidiary of the Parent with any other corporation or other entity, other than a
merger or consolidation immediately following which the individuals who comprise the Board
immediately prior thereto constitute at least a majority of the board of directors of (a)
any parent of the Parent or the entity surviving such merger or consolidation or (b) if
there is no such parent, of the Parent or such surviving entity; or
(IV) the stockholders of the Parent approve a plan of complete liquidation or
dissolution of the Parent or there is consummated an agreement for the sale or disposition
by the Parent of all or substantially all of the Parent’s assets, other than a sale or
disposition by the Parent of all or substantially all of the Parent’s assets immediately
following which the individuals who comprise the Board immediately prior thereto constitute
at least a majority of the board of directors of (a) any parent of the Parent or of the
entity to which such assets are sold or disposed or (b) if there is no such parent, of the
Parent or such entity.
Notwithstanding the foregoing, a “Change in Control” shall not be deemed to have occurred by virtue
of the consummation of any transaction or series of integrated transactions immediately following
which the record holders of the common stock of the Parent immediately prior to such transaction or
series of transactions continue to have substantially the same proportionate ownership in an entity
which owns all or substantially all of the assets of the Parent immediately following such
transaction or series of transactions.
(F) “Company” shall mean, collectively, the Parent, the Subsidiary and all other Affiliates of
the Parent and shall include any successor to
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the Company’s business and/or assets which assumes and agrees to perform this Agreement by
operation of law, or otherwise.
(G) “Company Entity” shall mean any of the Parent, the Subsidiary or other Affiliates of the
Parent and shall include any successor to the Company Entity’s business and/or assets which assumes
and agrees to perform this Agreement by operation of law, or otherwise.
(H) “Company Parties” shall mean, collectively, the Parent and the Subsidiary and shall
include any successor to the Company Parties’ business and/or assets which assumes and agrees to
perform this Agreement by operation of law, or otherwise.
(I) “Date of Termination” shall have the meaning set forth in Section 7.2 hereof.
(J) “Disability” shall be deemed the reason for the termination by the Subsidiary of the
Executive’s employment, if, as a result of the Executive’s incapacity due to physical or mental
illness, the Executive shall have been absent from the full-time performance of the Executive’s
duties with the Subsidiary for a period of six (6) consecutive months, the Subsidiary shall have
given the Executive a Notice of Termination for Disability, and, within thirty (30) days after such
Notice of Termination is given, the Executive shall not have returned to the full-time performance
of the Executive’s duties.
(K) “Exchange Act” shall mean the U.S. Securities Exchange Act of 1934, as amended from time
to time.
(L) “Executive” shall mean the individual named in the first paragraph of this Agreement.
(M) “Good Reason” for termination by the Executive of the Executive’s employment shall mean
the occurrence (without the Executive’s express written consent which specifically references this
Agreement) after any Change in Control, or prior to a Change in Control under the circumstances
described in clauses
-Page 18 of 26-
(ii) and (iii) of the second sentence of Section 6.1 hereof (treating all references in
paragraphs (I) through (VII) below to a “Change in Control” as references to a “Potential Change in
Control”), of any one of the following acts by the Company Parties, or failures by the Company
Parties to act:
(I) the assignment to the Executive of any duties materially inconsistent with the
Executive’s status as a senior executive officer of the Parent or a substantial adverse
alteration in the nature or status of the Executive’s responsibilities from those in effect
immediately prior to the Change in Control (other than any such alteration primarily
attributable to the fact that the Parent may no longer be a public company);
(II) a material reduction by the Subsidiary in the Executive’s annual base salary as
in effect on the date hereof or as the same may be increased from time to time (except for
across-the-board salary reductions similarly affecting all senior executives of the Parent
and all senior executives of any Person in control of the Parent);
(III) the relocation of the Executive’s principal place of employment (i) to a
location more than fifty-five (55) kilometers from the Executive’s principal place of
employment immediately prior to the Change in Control, or (ii) such that, following the
relocation, the commute between the Executive’s principal residence and principal place of
employment is more than fifty-five (55) kilometers greater than the Executive’s commute
immediately prior to the Change in Control; or,
(IV) the Subsidiary requiring the Executive (i) to be based anywhere other than the
Executive’s principal place of employment immediately prior to the Change in Control (or
permitted relocation thereof) except for required travel on the Company’s business to an
extent substantially consistent with the Executive’s present business travel obligation or
(ii) requiring the Executive to spend a substantially greater percentage of the Executive’s
working time at such principal place of
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employment than that required as of immediately prior to the Change in Control;
(V) the failure by the Company to pay to the Executive any portion of the Executive’s
current compensation or to pay to the Executive any portion of an installment of deferred
compensation under any deferred compensation program of the Company, within seven (7) days
of the date such compensation is due;
(VI) the failure by the Company to continue in effect any material compensation plan
in which the Executive participates immediately prior to the Change in Control which is
material to the Executive’s total compensation, including but not limited to the Company’s
equity-based long term incentive plans and annual incentive plans, or any substitute plans
adopted prior to the Change in Control, unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has been made with respect to such plan, or the
failure by the Company to continue the Executive’s participation therein (or in such
substitute or alternative plan) on a basis not materially less favorable, both in terms of
the amount or timing of payment of benefits provided and the level of the Executive’s
participation relative to other participants, as existed immediately prior to the Change in
Control;
(VII) the failure by the Subsidiary to continue to provide the Executive with benefits
substantially similar to those enjoyed by the Executive under any of the Subsidiary’s
pension, savings, life insurance, medical, health and accident, or disability plans in
which the Executive was participating immediately prior to the Change in Control (except
for immaterial changes or across the board changes similarly affecting all senior
executives of the Parent and all senior executives of any Person in control of the Parent),
the taking of any other action by the Company which would directly or indirectly materially
reduce any of such benefits or deprive the
-Page 20 of 26-
Executive of any material fringe benefit enjoyed by the Executive at the time of the
Change in Control; or
(VIII) the failure of the Parent to obtain the assumption of this Agreement as
described in Section 9.1, prior to the effectiveness of any such succession.
The Executive’s right to terminate the Executive’s employment for Good Reason shall not be
affected by the Executive’s incapacity due to physical or mental illness. The Executive’s
continued employment shall not constitute consent to, or a waiver of rights with respect to, any
act or failure to act constituting Good Reason hereunder; provided that the Executive
provides the Company Parties with a written Notice of Termination within ninety (90) days following
the occurrence of the event constituting Good Reason and the Company does not cure the event
constituting Good Reason within 30 days after a Notice of Termination is delivered by the Executive
to the Company Parties. For the avoidance of doubt, “Good Reason” pursuant to this Section 15
shall not have the same meaning as “good cause” for a termination of the Managing Director
Agreement pursuant to § 626 of the German Civil Code (“Bürgerliches Gesetzbuch”). The existence of
Good Reason shall not constitute cause for terminating or withdrawing from the Non-Compete
Covenant; and, unless waived by the Subsidiary or otherwise mutually agreed between the Subsidiary
and the Executive pursuant to Section 13 of the Managing Director Agreement, the Non-Compete
Covenant shall be enforceable upon the Executive’s termination of his employment for Good Reason.
(N) “Managing Director Agreement” means the contract of employment in place between the
Subsidiary and the Executive dated March 15, 2008, as amended from time to time, and any agreement
made between the Subsidiary and the Executive that amends, replaces or supersedes such contract in
part or in full.
(O) “Non-Compete Covenant” shall have the meaning set forth in Section 5.3 hereof.
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(P) “Notice of Termination” shall have the meaning set forth in Section 7.1 hereof.
(Q) “Parent” shall mean Sapient Corporation and (except in determining under Section 15 hereof
whether or not any Change in Control of the Parent has occurred) shall include any successor to its
business and/or assets which assumes and agrees to permform this Agreement by operation of law, or
otherwise.
(R) “Person” shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified
and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the
Parent or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an
employee benefit plan of the Parent or any of its Affiliates, (iii) an underwriter temporarily
holding securities pursuant to an offering of such securities, or (iv) a corporation owned,
directly or indirectly, by the stockholders of the Parent in substantially the same proportions as
their ownership of stock of the Parent.
(S) “Potential Change in Control Period” shall mean the period commencing on the occurrence of
a Potential Change in Control and ending upon the occurrence of a Change in Control or, if earlier
(i) with respect to a Potential Change in Control occurring pursuant to Section 15(T)(I),
immediately upon the abandonment or termination of the applicable agreement, (ii) with respect to a
Potential Change in Control occurring pursuant to Section 15(T)(II), immediately upon a public
announcement by the applicable party that such party has abandoned its intention to take or
consider taking actions which if consummated would result in a Change in Control or (iii) with
respect to a Potential Change in Control occurring pursuant to Section 15(T)(III) or (IV), upon the
one (1)-year anniversary of the occurrence of such Potential Change in Control (or such earlier
date as may be determined by the Board).
(T) “Potential Change in Control” shall be deemed to have occurred if the event set forth in
any one of the following paragraphs shall have occurred:
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(I) The Parent enters into an agreement, the consummation of which would result in the
occurrence of a Change in Control;
(II) The Parent or any Person publicly announces an intention to take or to consider
taking actions which, if consummated, would constitute a Change in Control;
(III) any Person becomes the Beneficial Owner, directly or indirectly, of securities
of the Parent representing 15% or more of either the then outstanding shares of common
stock of the Parent or the combined voting power of the Parent’s then outstanding
securities (not including in the securities beneficially owned by such Person any
securities acquired directly from the Parent or its Affiliates); or
(IV) the Board adopts a resolution to the effect that, for purposes of this Agreement,
a Potential Change in Control has occurred.
(U) “Retirement” shall be deemed the reason for the termination by the Executive of the
Executive’s employment if such employment is terminated and the Executive retires from work after
the Date of Termination.
(V) “Severance Payments” shall have the meaning set forth in Section 6.1 hereof.
(W) “Subsidiary” shall mean Sapient GmbH, a limited liability company established under German
law and a wholly owned subsidiary of the Parent, and shall include any legal successor thereto.
(X) “Term” shall mean the period of time described in Section 2 hereof.
-Page 23 of 26-
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.
| SAPIENT CORPORATION |
||||
| By: | /s/ Xxxx X. Xxxxxxx | |||
| Xxxx X. Xxxxxxx, President & | ||||
| Chief Executive Officer | ||||
| SAPIENT GmbH Represented by its sole shareholder SAPIENT Corporation |
||||
| Represented by: | /s/ Xxxx X. Xxxxxxx | |||
| Xxxx X. Xxxxxxx, President | ||||
| & Chief Executive Officer of Sapient Corporation |
||||
| EXECUTIVE: |
||||
| /s/ Xx. Xxxxxxxxx Oversohl | ||||
| Xx. Xxxxxxxxx Oversohl | ||||
-Page 24 of 26-
Appendix A
ARBITRATION AGREEMENT
1. Arbitration. All disputes arising in connection with the Change in Control
Severance Agreement dated as of April 26, 2010, among Sapient Corporation, Sapient GmbH and Xx.
Xxxxxxxxx Oversohl or its validity shall be finally settled in accordance with the Arbitration
Rules of the Chamber of Industry and Commerce Frankfurt am Main (IHK Frankfurt am Main) without
recourse to the ordinary courts of law.
2. Place of Arbitration. The place of arbitration is Frankfurt am Main.
3. Applicable Laws. The substantive law of the Federal Republic of Germany shall be
applicable to the dispute.
4. Language. The language of the arbitral proceedings is English.
-Page 25 of 26-
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.
| SAPIENT CORPORATION |
||||
| By: | /s/ Xxxx X. Xxxxxxx | |||
| Xxxx X. Xxxxxxx, President & | ||||
| Chief Executive Officer | ||||
| SAPIENT GmbH Represented by its sole shareholder SAPIENT Corporation |
||||
| Represented by: | /s/ Xxxx X. Xxxxxxx | |||
| Xxxx X. Xxxxxxx, President | ||||
| & Chief Executive Officer of Sapient Corporation |
||||
| EXECUTIVE: |
||||
| /s/ Xx. Xxxxxxxxx Oversohl | ||||
| Xx. Xxxxxxxxx Oversohl | ||||
-Page 26 of 26-
