BUSINESS OBJECTS S.A.
SUBSIDIARY STOCK INCENTIVE SUB-PLAN
Amended and Restated Effective as of June 7, 2006
At the 2004 annual shareholders meeting, the shareholders of the Company approved theadoption of this Subsidiary Stock Incentive Sub-Plan as a sub-plan under the Companys 2001 . The Subsidiary Stock Incentive Sub-Plan provides for the grant by the Trustee toSubsidiary Beneficiaries of Restricted Stock or Performance Shares (both as defined below) at thedirection of the Subsidiary Administrator.
The terms and conditions of the Subsidiary Stock Incentive Sub-Plan are set out below.
1. PURPOSES OF THE SUB-PLAN
The purposes of this Sub-Plan are to enable the Subsidiaries to attract and retain the bestavailable personnel for positions of substantial responsibility, to provide additional incentive toSubsidiary Beneficiaries and to promote the success of the Companys worldwide business.
Initially capitalized terms shall have the meanings set forth in Section 2 of the Parent Plan.In addition, the following definitions shall apply when used in this Sub-Plan:
(a) Award means, individually or collectively, a grant under the Sub-Plan of RestrictedStock, or Performance Shares.
(b) Award Agreement means the written agreement setting forth the terms and provisionsapplicable to each Award granted under the Sub-Plan. The Award Agreement is subject to the termsand conditions of the Sub-Plan and the Parent Plan.
(c) Awarded Stock means the shares subject to an Award.
(d) Parent Plan means the 2001 , as amended from time to time.
(e) Performance Share means a performance share Award granted to a Subsidiary Beneficiarypursuant to Section 8.
(f) Restricted Stock means shares granted pursuant to Section 7 of the Sub-Plan.
(g) Shareholders Authorization means the approval on June 10, 2004 of the Companysshareholders regarding (i) the adoption of this Sub-Plan and (ii) the issuance of new Shares, withsubscription reserved for the Trust, as amended by the approval on June 7, 2006 of the Companysshareholders regarding (i) the approval of the amendments to this Sub-Plan; and (ii) the issuance ofnew Shares, with subscription reserved for the Trust.
(h) Sub-Plan means this Subsidiary Stock Incentive Sub-Plan authorized under the ParentPlan.
(i) Sub-Plan Trust or Trust means the Business Objects Employee Benefit Sub-Plan Trustfrom which Awards may be issued to Subsidiary Beneficiaries pursuant to this Sub-Plan and createdunder the trust agreement attached hereto as Exhibit A;
(j) Subsidiary means a subsidiary corporation, whether now or hereafter existing, asdefined in Section 424(f) of the Code. A Subsidiary shall not include a company incorporated underthe laws of France.
(k) Subsidiary Administrator means the Board of Directors of each Subsidiary which shalladminister this Sub-Plan with respect to Subsidiary Beneficiaries of that Subsidiary, or adesignated committee which shall administer this Sub-Plan with respect to Subsidiary Beneficiariesof all Subsidiaries, in accordance with Section 4 of this Sub-Plan.
(l) Subsidiary Beneficiary means any person employed by a Subsidiary. Neither service as aSubsidiary Director nor payment of a directors fee by the Subsidiary shall be sufficient toconstitute employment by the Subsidiary.
(m) Subsidiary Board means the board of directors of a Subsidiary.
(n) Subsidiary Director means a member of the board of directors of a Subsidiary.
(o) Trustee means the trustee of the Sub-Plan Trust.
3. STOCK SUBJECT TO THE SUB-PLAN
3.1. New Shares. Pursuant to the Shareholders Authorization authorizing the Board to issue newShares on one or more occasions to be subscribed by the Sub-Plan Trust for the purpose of grantingAwards under the Sub-Plan, the maximum number of new Shares (aggregated with any repurchased Sharespursuant to Section 3.3 hereof) authorized by the shareholders to be subscribed (or repurchased) bythe Sub-Plan Trust is 3,000,000 Shares per calendar year, provided however that the total numberof shares issued and/or allocated under the nineteenth and the twentieth resolutions of Companysshareholders meeting held on June 7, 2006 shall not exceed 2,500,000 Shares, and provided further thatthe total number of shares issued during each calendar year under the sixteenth, the seventeenth,the eighteenth, the nineteenth and the twentieth resolutions of this general meeting shall notexceed, for each concerned calendar year, 3% of the Companys share capital as of December 31 ofthe previous calendar year.
3.2 Repurchased Shares. Pursuant to the shareholders authorizations approving the share repurchaseprogram of the Company and authorizing the Board to allocate repurchased Shares to the Sub-PlanTrust for the purpose of granting Awards under the Sub-Plan, within the terms, conditions andlimits of the share repurchase program and applicable laws, the Board may allocate repurchasedShares to be acquired by the Trust instead of the issuance and subscription of new Shares mentionedin section 3.1, subject to the limits set forth by this section.
3.3 Forfeited or Repurchased Award. If an Award is forfeited to or repurchased by the Trust, theforfeited or repurchased shares which were subject thereto shall either (i) become available forfuture grant or sale under the Sub-Plan to Subsidiary Beneficiaries of the same Subsidiary (unlessthe Sub-Plan has terminated), or (ii) at the direction of the Subsidiary Administrator, sold on astock exchange with the proceeds paid to the Subsidiary.
3.4 Conversion into ADS. Shares shall be converted into Company ADSs after they have beensubscribed by and issued to the Trust. Awards issued under the Sub-Plan shall cover such CompanyADSs (and may be referred to as shares herein).
4. ADMINISTRATION OF THE SUB-PLAN
4.1 Procedure. The Sub-Plan shall be administered by the Trustee. With respect to suchadministration, the Trustee shall follow the directions of the Subsidiary Administrator.
4.2 Powers of the Subsidiary Administrator. Subject to the provisions of the Sub-Plan, U.S.Applicable Laws and other applicable laws, the Subsidiary Administrator shall have the authority,in their discretion, to instruct and direct the Trustee with respect to the following actions:
|–||to select the Subsidiary Beneficiaries to whom Awards may be granted hereunder;|
|–||to determine whether and to what extent Awards are granted hereunder;|
|–||to determine the number of shares to be covered by each Award granted hereunder;|
|–||to approve forms of agreement for use under the Sub-Plan;|
|–||to determine the terms and conditions, not inconsistent with the terms andconditions of the Sub-Plan, of any Awards granted hereunder. Such terms andconditions include, but are not limited to, the purchase price (if any), vestingschedules (which may be performance based), any vesting acceleration or waiver offorfeiture restrictions, and any restriction or limitation regarding any Award or the shares relating thereto, based in each case on such factors as the SubsidiaryAdministrator, in their sole discretion, shall determine;|
|–||to determine whether and to what extent shares subject to an Award shall bedistributed at a specific time after vesting;|
|–||to construe and interpret the terms of the Sub-Plan and Awards granted pursuant tothe Sub-Plan;|
|–||to prescribe, amend and rescind rules and regulations relating to the Sub-Plan,including rules and regulations relating to sub-plans established for the purpose ofqualifying for preferred tax treatment under applicable tax laws;|
|–||to modify or amend each Award (subject to Section 15.3 of the Sub-Plan);|
|–||to authorize the Trustee to execute on behalf of the Subsidiary any instrumentrequired to effect the grant of an Award previously decided by the SubsidiaryAdministrator;|
|–||to determine the terms and restrictions applicable to Awards, including withoutlimitation the sale of Shares acquired pursuant to an Award during certain periods orupon certain events which the Subsidiary Administrator shall determine in its solediscretion; and|
|–||to make all other determinations deemed necessary or advisable for administeringthe Sub-Plan.|
4.3 Effect of Subsidiary Administrators Decision; Effect of Trustees Decision. The SubsidiaryAdministrators decisions, determinations and interpretations shall be final and binding on theTrustee, subject to the provisions of Section 15.3 of the Sub-Plan. The Trustees decisions,determinations and interpretations in accordance with the Subsidiary Administrators directionsshall be final and binding on all Subsidiary Beneficiaries.
5.1 Neither the Sub-Plan nor any Award shall confer upon a Subsidiary Beneficiary any right withrespect to continuing the Subsidiary Beneficiarys employment with the Subsidiary, the Company orany Affiliated Company, nor shall they interfere in any way with the Subsidiary or the SubsidiaryBeneficiarys right, as the case may be, to terminate such employment at any time, with or withoutcause.
6. TERM OF SUB-PLAN
6.1 The amended Sub-Plan is effective and Awards may be granted as of the date of the Sub-Plansapproval by the Companys shareholders on June 10, 2004. It shall continue in effect so long asthe Parent Plan remains in effect, unless terminated earlier.
7. RESTRICTED STOCK.
7.1 Grant of Restricted Stock. Subject to the terms and conditions of the Sub-Plan, RestrictedStock may be granted by the Trustee to Subsidiary Beneficiaries at any time as shall be determinedby the Subsidiary Administrator, in its sole discretion and as thereafter communicated to theTrustee. The Subsidiary Administrator shall have complete discretion to determine and instruct theTrustee as to (i) the number of shares subject to a Restricted Stock award granted to anySubsidiary Beneficiary, and (ii) the conditions that must be satisfied, which typically willinclude the signature by the Beneficiary of his/her Restricted Stock Award Agreement within 90 daysfrom receipt by the Beneficiary of notification from the Subsidiary Human Resources manager of theRestricted Stock Awards Agreement and principally or solely on continued provision of services, butmay include a performance-based component, upon which is conditioned the grant or vesting ofRestricted Stock. Restricted Stock shall be granted by the Trustee in the form of units to acquireshares from the Trust. Each such unit shall be the equivalent of one share for purposes ofdetermining the number of shares subject to an Award. Until the shares vest and are distributedfrom the Trust, the Trust shall hold the shares subject to an Award.
7.2 Other Terms. The Subsidiary Administrator, subject to the provisions of the Sub-Plan, shallhave complete discretion to determine the terms and conditions of Restricted Stock granted by theTrustee pursuant to the Sub-Plan. Restricted Stock grants shall be subject to the terms,conditions, and restrictions determined by the Subsidiary Administrator and communicated to theTrustee at the time the Restricted Stock is awarded. The Subsidiary Administrator and hence theTrustee may require the recipient to sign a Restricted Stock Award agreement as a condition of the
Award. Any certificates representing the shares of stock awarded shall bear such legends as shallbe determined by the Subsidiary Administrator and communicated to the Trustee.
7.3 Restricted Stock Award Agreement. Each Restricted Stock grant shall be evidenced by anagreement that shall specify the purchase price (if any) and such other terms and conditions as theSubsidiary Administrator, in its sole discretion, shall determine and communicate to the Trustee;provided; however, that if the Restricted Stock grant has a purchase price, such purchase pricemust be paid no more than ten (10) years following the date of grant.
8. PERFORMANCE SHARES.
8.1 Grant of Performance Shares. Subject to the terms and conditions of the Sub-Plan, PerformanceShares may be granted by the Trustee to Subsidiary Beneficiaries at any time as shall be determinedby the Subsidiary Administrator, in its sole discretion and as thereafter communicated to theTrustee. The Subsidiary Administrator shall have complete discretion to determine and instruct theTrustee as to (i) the number of shares subject to a Performance Share award granted to anySubsidiary Beneficiary, and (ii) the conditions that must be satisfied, which typically willinclude the signature by the Beneficiary of his/her Restricted Stock Award Agreement within 90 daysfrom receipt by the Beneficiary of notification from the Subsidiary Human Resources manager of thePerformance Shares Awards Agreement and principally or solely on achievement of performancemilestones but may include a service-based component, upon which is conditioned the grant orvesting of Performance Shares. Performance Shares shall be granted by the Trustee in the form ofunits to acquire shares from the Trust. Each such unit shall be the equivalent of one share forpurposes of determining the number of shares subject to an Award. Until the shares vest and aredistributed from the Trust, the Trust shall hold the shares subject to an Award.
8.2 Other Terms. The Subsidiary Administrator, subject to the provisions of the Sub-Plan, shallhave complete discretion to determine the terms and conditions of Performance Shares granted by theTrustee pursuant to the Sub-Plan. Performance Shares grants shall be subject to the terms,conditions, and restrictions determined by the Subsidiary Administrator and communicated to theTrustee at the time the Performance Shares are awarded which may include such performance-basedmilestones as are determined appropriate by the Subsidiary Administrator. The SubsidiaryAdministrator and hence the Trustee may require the recipient to sign a Performance Shares Awardagreement as a condition of the Award. Any certificates representing the shares of stock awardedshall bear such legends as shall be determined by the Subsidiary Administrator and communicated tothe Trustee.
8.3 Performance Share Award Agreement. Each Performance Share Award shall be evidenced by anagreement that shall specify such other terms and conditions as the Subsidiary Administrator, inits sole discretion, shall determine and communicate to the Trustee.
9. NON-TRANSFERABILITY OF AWARDS
An Award may not be sold, pledged, assigned, hypothecated, transferred or disposed of in anymanner other than by will or by laws of descent or distribution and may be exercised, during thelifetime of the Subsidiary Beneficiary, only by the Subsidiary Beneficiary.
10. LEAVES OF ABSENCE.
Unless the Subsidiary Administrator and Trustee provides otherwise or as otherwise required byApplicable U.S. Laws or other applicable laws, vesting of Awards granted hereunder shall ceasecommencing on the ninety-first day of any unpaid leave of absence and shall only recommence uponreturn to active service.
11. VOTING RIGHTS.
The Trustee shall abstain from voting shares held in the Trust.
12. DIVIDENDS AND TAX CREDITS.
Any dividends or tax credits applicable to Shares underlying Awards that are held in the Trustshall be distributed or forfeited at the same time as the underlying shares according to theirvesting or distribution schedule.
13. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, MERGER OR ASSET SALE
13.1 Changes in capitalization. In the event of the carrying out by the Company of any of thefollowing financial operations:
|–||issuance of shares to be subscribed for in cash or by set-off of existingindebtedness offered exclusively to the shareholders,|
|–||capitalization of reserves, profits, issuance premiums or the distributionof free shares (other than pursuant to this Sub-Plan or similar awards),|
|–||issuance of bonds convertible or exchangeable into shares offeredexclusively to shareholders,|
|–||distribution of reserves in cash or portfolio securities,|
|–||capital reduction motivated by losses, and|
|–||repurchase of its own Shares at a price higher than market value, asdescribed in Article 174-9A of the decree no. 67-236 of March 23, 1967,|
the Company and the Subsidiary Administrator shall effect an adjustment of the number and the priceof the shares (if any) subject to Awards as to be appropriate and equitable or such otheradjustment as may be determined to prevent diminution or enlargement of the SubsidiaryBeneficiarys rights hereunder. The Company shall issue to the Trust the number of Shares to carryout such adjustments within the limits defined by the Shareholders Authorizations.
The number of Shares which have been authorized for issuance under the Sub-Plan as to which noAwards have yet been granted or which have been returned to the Sub-Plan upon cancellation orexpiration of an Award shall be proportionately adjusted in the event the Company effects a sharecapital increase by way of incorporation of reserves, premiums or profits, resulting either in anincrease of the nominal value of the shares or in a free allocation of shares, or effects a reverseor forward stock split or a combination of shares.
13.2 Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of theCompany, the Trustee shall notify each Subsidiary Beneficiary as soon as practicable prior to theeffective date of such proposed transaction. The Subsidiary Administrator in its discretion maydirect the Trustee that any Trust repurchase option or forfeiture rights applicable to any Awardshall lapse 100%, and that the vesting of any Award shall accelerate 100%, provided the proposeddissolution or liquidation takes place at the time and in the manner contemplated. To the extentit has not been previously vested, an Award will terminate immediately prior to the consummation ofsuch proposed action.
13.3 Change in Control Restricted Stock and Performance Shares. In the event of a Change inControl of the Company, each outstanding Restricted Stock and Performance Share award shall beassumed or an equivalent Restricted Stock or Performance Share award substituted by the successorcorporation or a Parent or Subsidiary of the successor corporation (or a trust thereof). In theevent that the successor corporation refuses to assume or substitute for the Restricted Stock orPerformance Share award, the Subsidiary Beneficiary shall fully vest in the Restricted Stock orPerformance Share award including as to shares which would not otherwise be vested. For thepurposes of this paragraph, a Restricted Stock or Performance Share award shall be consideredassumed if, following the Change of Control, the award confers the right to purchase or receive,for each share subject to the Award immediately prior to the Change in Control, the consideration(whether stock, cash, or other securities or property) received in the Change in Control by holdersof Shares for each Share held on the effective date of the transaction (and if holders were offereda choice of consideration, the type of consideration chosen by the holders of a majority of theoutstanding Shares); provided, however, that if such consideration received was not solely ordinaryshares of the successor corporation, or its Parent, the Subsidiary Administrator and Trustee may,with the consent of the successor corporation, provide for the consideration to be received, foreach share and each unit to acquire a share subject to the Award, to be solely ordinary shares ofthe successor corporation or its Parent equal in fair market value to the per share considerationreceived by holders of shares in the Change in Control.
14. DATE OF GRANT
The date of grant of an Award shall be, for all purposes, the date on which the Trustee makesthe determination granting such Award. Notice of the determination shall be provided to eachSubsidiary Beneficiary within a reasonable time after the date of such grant.
15. AMENDMENT AND TERMINATION OF THE PLAN
15.1 Amendment and Termination. The Subsidiary Administrator may at any time amend, alter, suspendor terminate the Sub-Plan.
15.2 Shareholder Approval. The Company shall obtain shareholder approval of any Sub-Plan amendmentto the extent necessary and desirable to comply with applicable laws, rules or regulations,including the requirements of any exchange or quotation system on which the Shares or ADRs arelisted or quoted). Such shareholder approval, if required, shall be obtained in such a manner andto such a degree as is required by the applicable laws, rules or regulations.
15.3 Effect of Amendment or Termination. No amendment, alteration, suspension or termination ofthe Sub-Plan shall impair the rights of any Subsidiary Beneficiary, unless mutually agreedotherwise between the Subsidiary Beneficiary and the Subsidiary Administrator, which agreement mustbe in writing and signed by the Subsidiary Beneficiary and the Subsidiary Administrator.
16. CONDITIONS UPON ISSUANCE OF SHARES
16.1 Legal Compliance. Shares shall not be distributed from the Trust pursuant to an Award unlessthe delivery of such shares shall comply with all relevant provisions of law including, withoutlimitation, the Law, the Securities Act of 1933, as amended, the Exchange Act, the rules andregulations promulgated thereunder, Applicable U.S. Laws and the requirements of any stock exchangeor quotation system upon which the shares may then be listed or quoted.
16.2 Investment Representations. As a condition to the grant or vesting of an Award or the Awardedshares, the Subsidiary Beneficiary may be required to represent and warrant that the shares arebeing purchased only for investment and without any present intention to sell or distribute suchshares if the Trustee and Subsidiary Administrator decide that such a representation is required.
17. LIABILITY OF COMPANY AND SUBSIDIARY
The inability of the Trust to obtain authority from any regulatory body having jurisdiction,which authority is deemed by the Subsidiary Administrator to be necessary to the lawfuldistribution of any Shares hereunder, shall relieve the Company and the Subsidiary of any liabilityin respect of the Trusts failure to distribute such Shares as to which such requisite authorityshall not have been obtained.
18. LAW AND JURISDICTION AND LANGUAGE
This Sub-Plan shall be governed by and construed in accordance with the laws of the nation inwhich the Subsidiary directing the Trustee to grant an Award has its principal place of business.This Sub-Plan has been drafted and approved in the English language.